Empty treasure! Empty treasury! Has become
the new chorus to the economic song Nigerians have been hearing on radios,
televisions and gossips. Some state governors with lots of revenue yielding
infrstructures in their states have gone ahead to procure loans from various
sources to pay the backlog of salaries owed her staff. Their actions may sound
saintly but it brings us to the DOs and DONTs of borrowing and the need to
answer the question, 'WHY SHOULD WE BORROW?'
DOs of Borrowing
1. Borrow to invest
There are times in the life of a business
person when a mouth-watering deal may come up but he/she may not have all the
financial muscle to seal it. At such points, it is paramount that he/she
borrows to achieve the goal.
2. Mortgaging
With the rising cost of living and
shrinking economy, every Nigerian should aspire to own a house; if not for
anything, to cut down expenditure. Borrowing from a mortgage bank to fulfil
this dream is a welcome development and highly encouraged.
3. Have a plan to payback
Having a payback plan will not only save
you the shame of defaulting but also make sure that every penny borrowed
justified its purpose. We all know how ugly it gets for some people when it
comes to payback. Some lose their collateral.
4. Borrow from Yourself
Dont make it a habit to always look left or
right when faced with financial challenge. Look for the things you have which
are not of much importance and sell them off. Once a guy approached me that he
is stranded and wants to travel to his village and needs little money. I
weighed him with my eyes and his wrist watch was worth more than I wore. I
shook my head and told him that I dont have money.
DONTs of Borrowing
1. Level up
You wont believe some of the awkward
reasons that make people stretch out their hands insearch for aid; buy exortic
cars, change wardrobe, impress women, pay for a drink etc. If you are one of
these, please have a rethink. Any borrowed money without the potential of
bringing in money should be discouraged.
2. Borrow just the amount you need.
Out of greed, some people will ask for much
more than they need. The excess is wasted and when it comes to repayment, they
cant account for the excess.
3. Borrowing without a concrete financial
plan.
Some people indulge in impulsive borrowing.
They borrow without knowing what they want to do with it and when the money
gets into their hands, they are confused as to what next. A good financial plan
should encompass all the intended expenditures and incomes and map out a time
frame to start paying back.
With this new idea in mind, do you think
our governors are justified in their borrowing?
