Steve Distant, chief of retail sales at JN Bank, has said that becoming wealthy requires a lifestyle change for many people.
“Wealth and financial independence are not achievements one acquires by luck or something you’re simply born with,” Distant told members of the Faculty of Social Sciences during Faculty Day at The University of the West Indies, Mona, recently.
“It is actually something that you can achieve by simply adopting a certain lifestyle,” he said.
The career banker outlined three principles people should adopt to achieve financial wellness. These are being willing to make adjustments, managing credit, and investing wisely.
Relating a life story to underline his first point, Distant emphasised the need to save a portion of one’s income, donate to charity or the Church, and budget the residual income.
“As a young man, after graduating from university and starting my first job, I was paid $300 per month,” Distant told his audience. “My grandmother, who played an important role in my upbringing, looked at me and asked how much I was earning and then said: ‘So where is my $30?'”
He explained that his grandmother’s intention was not to ask him for money, but to underscore that after taxes, 10 per cent of his salary was for saving, and 10 per cent was to be given to the Church or charity.
“In other words, only 50 per cent of my salary really belonged to me!” he said.
He continued: “Therefore, you must be willing to make adjustments. And it’s not too late to start if you haven’t already. Pay yourself first, and take out the other payments before you do anything else so that you don’t even have to consider using it. What you have left can work, particularly if you create a budget to determine how you’ll spend it,” he advised.
Distant recommended that getting a part-time job or using one’s talents to earn can assist with supplementing one’s income, as well as making lifestyle adjustments and being more frugal with one’s spending.
“Take the time to explore prices and shop where you can get bargains. Or consider alternatives for goods that won’t cost as much but will provide the same function, taste and quality,” he counselled the UWI faculty staff.
“Instead of dining out, eat at home or take lunch to work, or instead of a party, invite friends over for games and ask them to contribute an item towards the refreshments. Live within your means. Don’t try to fit into other people’s lifestyles,” he cautions.
The JN Bank chief of retail sales added that managing credit is also crucial to financial independence, pointing out that borrowing is a good way to acquire assets. However, he noted that it must be done wisely by looking for loans that offer the best rates of interest and repayment terms.Where loans can be acquired cheaply, he encouraged persons to borrow for investment purposes and repay in the best time possible.
Credit cards, in particular, must be carefully managed, Distant also cautioned, indicating that credit cards are good financial tools but can be detrimental to one’s financial health if they are poorly managed.
“Your credit card is really a ‘free loan,’ if you use it wisely. Pay it on time, avoid the interest, and keep your credit in check,” he advised, adding that monitoring one’s credit report is also essential to remain in good financial standing.
Distant emphasised the importance of investment, urging persons to invest in appreciating assets such as real estate – not a motor vehicles – to build up their portfolio.
“A motor vehicle begins to lose its value the moment you drive it out of that car lot,” he advised. “Save towards purchasing a house or two houses, or even three and four, from which you can earn an income, not only at your retirement, but now,” he said.
He also encouraged persons to invest in stocks, contribute the maximum sum to their pension, and read voraciously about financial management.
“Adopt those characteristics. You’ll be better off for it!” he quipped.