Career is more than making money. Yet, money has a way of reducing many inconveniences of life. That is why I still find it strange that a young person can attend a university for four or five years and graduate without anyone making a deliberate effort to educate him or her on personal economy and finance.
Yes, universities teach corporate finance, accounting, economics, and broad frameworks on how companies and governments optimize factors of production to create value. But very few systems teach young people how to manage their own money, build assets, allocate capital, and develop long-term financial independence. For me, that remains one of the major gaps in modern education. If education is the liberation of the mind, financial liberation should be a required course.
As a banker, I learned one important lesson early: how much you earn is only a small component of financial success. Many people focus entirely on income while ignoring investment and associated allocation. But wealth is rarely built only from wages; wealth is built from systems, discipline, and compounding capital which is money with direction. Yes, money is a scalar quantity, but capital is a vector quantity, having both magnitude and direction {revisit your Integrated Science notebook in JSS3}.
Interestingly, financial independence requires moving from a static phase to a dynamic phase, like mechanics in physics. In other words, you must take action. And taking action begins with having a plan. In my first month as a banker, I developed what I called the 45-20-20-15 Strategy, a simple portfolio allocation framework I still explain today in Tekedia Mini-MBA when discussing financial planning and personal economy for young professionals.
The structure was straightforward:
- 45% – Self and Family: (Car, accommodation, clothing, family, etc.)
- 20% – Personal Development: (Professional certifications, books, training, conferences, capability development)
- 20% – Others: (Flexibility, lifestyle, emergencies, support systems, miscellaneous obligations)
- 15% – Investments: (Dividend-paying stocks, investable assets, long-term holdings)
Running simple projections using assumptions around dividends, compounding, inflation, and currency stability, I estimated that for every five years of disciplined investing, the portfolio could eventually generate the equivalent of about two years of wages without active work. (This did not turn out well as Naira lost value and messed up my model. Had I done this in US or UK, a bestseller would have emerged).
That realization changed my understanding of money forever. Of course, my allocation system has evolved over time because life itself evolves. But one thing has remained constant: there is always a plan, including to compensate for Naira gyration.
Simply, if you do not allocate your resources consciously, circumstances will allocate them for you. But remember: circumstances are poor fund managers.
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