DO YOU HAVE A PERSONAL BAILOUT PLAN

0

DO YOU HAVE A PERSONAL BAILOUT PLAN

WHAT DO WE NEED AT A TIME LIKE THIS, STIMULUS PACKAGE OR PERSONAL BAILOUT PLAN (PBP)?

When a business gets into financial distress and its going concern status is under severe threat, to rescue the ailing company and keep it afloat, Accountants mostly use some financial terminologies to describe such rescue operations which they called reconstruction or reorganization. A re-organisation normally involves a fundamental change in the structure of a company or group. This may include downsizing, rightsizing, freezing or cut backs just as some people are already suggesting to the present government as a result of unanticipated bloated public wage expenditure which is causing some nightmares or serious sleepless nights for the in government.

On the other hand, a reconstruction often occurs in an insolvent situation – for example, in order to reach a compromise between creditors, subject to the approval of the court – and may be designed to preserve all or part of the business of the company or group so it can be carried on after the reconstruction by the same or a similar management team.

Individuals or nations just as businesses do stray into financial crisis. I remember some years back when as a result of biting economic conditions in some West African countries due to IMF induced structural Adjustment Programme, people financial position deteriorated so considerably leading to loss of weight. In order to stay healthy and give false impression that the effect of the economic hardship does not have any severe effect on them, some people resulted to taking food supplements like CYPRON, Supradin and some other weight enhancing pills. The interesting part of this stimulant was that the user temporarily looks robust for a while as a result of excessive food consumption because of the stimulant intake. However, within a couple of months down the line, the same person will experience a sudden weight loss so dramatic as if air ran out of over blown balloon because of the inability to sustain the rate of food consumption orchestrated by the stimulus. As you are aware, there is no demanding shrine like our throat, everyday he always asks for a sacrifice.

Between 2008 and 2012, bail out was a popular economic terminologies around the world. This was as an aftermath of the global financial meltdown that caught so many countries unaware. Most countries in the west suffered severe economic downturn as a result of this and for the less financially strong countries it got to a point that they needed some financial assistance from other nations to get their economy running. You will recall, countries like Greece, Portugal and Spain were given some dolls of bail out by rich European countries to keep them and their status as members of EU.

Companies like Citibank’s, General Motors and Ford also had their own fair share of this largess brought about by the sudden economic downturn.  These are organizations or companies that were considered too big to fail because their goods and services are considered by the government to be constant universal necessities in maintaining the nation’s welfare.

Even in some neighboring West Africa countries, some of their banks were given good amount of cash as a bail out ‘’rescue fund’’ to keep them afloat and prevent a run on them as a result of illiquidity.

Government usually do this to prevent systematic problem on one hand and protect their larger interest on the other hand even when those actions were criticized  as corporate welfare that leads to corporate irresponsibility.

A bail out is a colloquial term used when a loan is given to a company or country which faces serious financial difficulty or bankruptcy. It may also be used to allow a failing entity to fail gracefully without spreading contagiously to others like the recent outbreak of ebola virus that necessitated some countries to close their border with other neighboring countries that are reportedly have experienced the deadly disease. This is to prevent wide spread of the killer disease. This is like a quick fix solution to prevent the problem from becoming a systemic one.

The term bail out, is maritime in origin being the act of removing water from a sinking vessel using a smaller bucket.

As a student of the bible, I read an interesting portion in the book of 2kings 6:24-27. There was an amazing cry by a woman as a result of economic embargo plunged the city of Samaria into by king Ben-Herdad that makes the economic condition of the people of Samaria so bad that it becomes virtually  difficult for people to eat. In verse 26 it was stated that, then as the king of Israel was passing by, a woman cried out to him saying “Help, my Lord the King”.

Technically, what the woman was saying here is that she needs the king’s bailout. And the response she got from the Kings to me suggests that there was nothing he could do to help.  And he said if the Lord does not help you, where can l find help for you?  From the threshing floor or from the wine press?

In the face of serious economic hardship like the one we are facing now, the long and short of it is that there is no help anywhere.  Even the king himself needs help. The truth of the matter is that we must wake up to the new economic reality of our times.  The government of the country is doing its best to arrest the situation but the people must also be willing to rise up to the great challenge. There is nowhere in the world government can meet all the expectations of its people. We must wake up to that reality. It is part of God’s agenda for the people to be humbled and remember that He has the final say and He still rule over the affairs of men. This is not issue of party A or Party B in power that is making things hard.  The entire political dimension we are introducing to it may not help our people to appreciate the reality of the situation, we need to be factual in order educate our people to know what to do to come out of the present situation.

What am l trying to say? There is need for individuals to rise up to their personal responsibilities of nation building because responsibility is the price one has to pay for greatness. Either as an individual or as a nation.

There are two interesting proverbs that thought me some deep lessons when I was growing up. The first one says, if you don’t want a pointing tree to hit you right on the face, then you must start avoiding it from afar.

The second one is that if you don’t have a mother to help you should not carry a wound on your back.

What lessons did I learn from these two “village common sense” called proverbs.

First one teaches about planning ahead and the second one teaches us that prevention is far better than cure.

Planning is a fundamental requirement in the success equation.  if you want to be successful in life, business, sports or any human endeavor at all. The most important KSF (key success factor) you may require more than any other thing is planning. Preparation is not planning it is your plan that makes you to prepare adequately for the event or situation.

For those of you that read my articles regularly, you must have noticed the scriptural aspect of my writing. It adds sweetness and flavor to the discussion. Why, because the word of God is full of wisdom. Let me bring something interesting here before I continue Proverbs 30:24-28. ‘’There are four things which are little on the earth but they are exceedingly wise.

The ants are a people not strong, yet they prepare their food in the summer. That is planning.

The rocks badgers are a feeble folk, yet they make their homes in the crags.  Lesson on security.

The locusts have no king, yet they all advance in ranks- orderliness.

The spider skillfully grasps with its hands, and it is in king’s parlances-Focus.

These four creatures though are little in size but amazing in behavior. Each of these God’s creatures has a behavioral trait which I think we must take some relevant lessons from their attitude. You know your attitude plus your aptitude determines your altitude.

The question I asked here is, do you have a personal bailout plan or are you waiting for government stimulus package? If you do have a plan then good for you but if you do not, you may have to take some urgent steps if you don’t want the current economic flood to sweep you away.  I am not a prophet like Elijah who proclaimed a drought at the instance of God.  But one need not to be a prophet or a seer to know that the days we lived in is full of its own challenges and the world economy order is not any way getting better.

The best way out of this economic situation is to take precautionary measures as we were taught in elementary economics that there are three motives for keeping money, transaction, speculation and precautionary, to stay clear of any impending financial drought. Instead of saying God forbid which is an African man’s prayer in replacement of planning.  I will try to do what Naomi did in the holy book to her daughter in law, Ruth when she said to her, shall I not seek security for you that it may be well with you? Ruth 3:1.

When death is taking away our age mates, indirectly he is sending us (EWS) early warning signs like they say in banking that we should be getting prepared.

What are the EWS in the economy today that suggest that we should tighten up our belts for major economic challenges? Increase in unemployment rate, increase in interest rate, volatility in exchange rate against foreign currencies, under pricing of exports, excessive borrowing, instability in prices of staple food items, continuous upward review in prices of public utilities. Etc.

My Bible tells me that since the day of John the Baptist the kingdom of heaven suffers violence it is only those that are violet that takes it by force. It went further to say that everyone must work out his own salvation. Philippians 2:12.

As I was brainstorming to know what solution that may be feasible to help our people out of the current unanticipated economic palava, I decided to look at two similar events close to what we are experiencing in the bible to see if there are benchmarks we can learn from which had been tested and proven in the past. You know we learn from the past in order to shape the future.

I looked at two case studies one from the old and the second from the new testaments. The solutions and approaches adopted still speak for itself in terms of relevance and results achieved. These two case studies followed similar pattern. Like they say in the game of football, you don’t change the winning team. Here we cannot reinvent the wheel.  I studied the way Joseph bail out the land of Egypt from seven years famine and how the Master himself, Jesus Christ fed the 5,000 followers in a disserted place.  There are four step approaches I am recommending to bail ourselves out of the economic logjam. They are simple to understand and easy to adopt.

Knowledge- ability to know what to do.

You must create your own future through effective knowledge. Knowledge is still the way out of any financial difficulty. Knowledge has power over hardship just as the light has power over darkness. When you see people in poverty or suffering economic hardship it is because they don’t know what to do to come out of their predicaments. The words of Gods lend credence to this that my people perish in poverty for lack of knowledge.

When you are faced with hardship, the first question to ask yourself is what should I do to come out of this? When you received the required information through serious search and follow the steps you learnt, the result you will come out with is going to be overwhelming.  Knowledge is too wonderful. We need to increase our capacity through sound knowledge by using the 5 W’s and H approach. What to do, When to do it, where to do it, who to do it, why must I do it before how to do it. This is critical and very vital point to take into consideration now than ever before.  The word of God says ‘’for wisdom is a defense as money is a defense, but the excellence of Knowledge is that it gives life to those who have it’’.

Remember there is no mountain anywhere in man’s life either economic or financial. Every man’s ignorance is his mountain. There is no economic challenge that God has not provided a way of escape. The problem with us or while many are stranded in life is because they cannot see the way out for lack of Knowledge.

Planning is the secret

Next in importance in terms of what is required at a time like this is planning. By Planning, I mean serious strategic plan to stay on top of the current economic position of the country. As I said earlier, everyone must work out his own salvation as the word of God encourages us.  You can create your own personal bail-out plan by building up your cash, freezing your credit and ‘’laying off’’ expenses you don’t really need.  You must have a settled plan to have your needs met whatever the economic situation of our country.  This is a strategy that will always work any day, anytime and anywhere. Plan with what you have and work harder to increase your productivity to gain more. Every goal has laws that guide its fulfillment. Before labour you need sense. It is sense before sweat that guarantees creativity and productivity otherwise the sweat will lack result. Any one that fails to plan at this time has already failed before the whistle of economic belt tightening race is sounded. Planning helps you to locate the real essentials that will enhance your accomplishment, management of resources and ability to generate higher income to stay in the ark. Remember how long it took Noah to plan in order to safeguard himself and his family before the great flood. Our current situation may be termed ‘economic flood’ which is not uncommon to nations, businesses or individuals.

I am not talking of keeping so much money in a safekeeping system like banks, that may be part of planning but money in itself never made a man happy yet, nor will it. There is nothing in its nature to produce happiness. The more a man has the more he wants. Instead of filling a vacuum, it creates one. Benjamin Franklin, that great American philosopher said, ‘’contentment makes poor men rich, discontentment makes rich men poor.” You may want to ask me, how much money does it takes to be content?  The answer is usually just a little bit more.

The planning I am talking about is preparing for the worse. In a worst case scenario situation. The question smart people would ask is. To what extent can this thing get to that I will start feeling the pinch? Is there a way out for me and my family assuming this is not from our government but from God?

Diligence is a key to our bail out

There is no way I will conclude this article without talking about the role of diligence. The book of Proverbs says ‘’He becomes poor that deals with a slack hand, but the hand of the diligent makes rich’’ from time immemorial, one of the key instrument to fight against hunger and poverty is hard work. There is no future for the idle man. People are saying times are hard but I think that is an average person‘s repeated slogan every time. For the rich few or people at the top, they like it this way because this is the differentiator or separator. You know that the eagle feels more comfortable when the storm rages harder.  That is when the eagle demonstrates to other birds that he is the king of the birds.

You have a choice between hard work and a hard life.  If you are not working hard, either in private, public or your personal business, you will not only become poor as the economic storms rages harder but you are also signing up to die poor.

My suggestion here is that if at the current economic situation we are working an average eight hours a day or 40 hours a week.  Therefore, we must change the approach to whatever we are doing. We must as a matter of necessity, increase our working hours by 50%. That is, we take our daily working hours to 12 hours and weekly to 60 hours.  That is the solution and that is the way out. It is not by protesting, going on strike or work to rule that would solve the problem.  We can only get out of the guan mire if all hands are on deck to safe our lives and rescue others who are not so fortunate like us.

As the great inventors like Newton, Ford etc says no one has ever solve any human problem by remaining on the same frequency he was before the problem  and still expected to get a decent result  by remain there. Extra ordinary situation demands extra ordinary solution. Noah worked so many years to get out of the impending flood. Isaac planted that same year after many frustration and economic losses as a result of his well closures by his detractors. Ruth had to work morning till evening to bail herself out of economic hardship. You can do same by knowing what to do, planning for the unexpected and working as if everything depends on you.

There is no mountain anywhere; every man’s ignorance is his mountain.