A financial expert has cautioned aspiring entrepreneurs against taking loans to start new businesses, warning that doing so can lead to long-term financial distress if the venture fails.
Speaking on Voices of Change, financial literacy advocate Jacob Komayire emphasized that while entrepreneurship is an important path to financial independence, it should not begin with borrowed money.
“There is always the chance that a new business may not last long,” Komayire explained. “If one takes a loan to start the business and it collapses, you will still need to pay back the loan with interest, which becomes a heavy burden.”
Komayire urged individuals seeking financial freedom to focus on education, discipline, and mindset rather than relying on credit to fund their goals.
“Financial literacy is the ability to understand and manage personal finances effectively, including making informed decisions about earning, saving, investing, and spending money,” he said.
He added that financial success is not determined solely by one’s environment but by the principles a person applies.
“There are principles regarding finances that, when applied, work anywhere,” Komayire noted. “Your mindset, discipline, and habits are what drive financial success. Location may be an advantage, but it’s not the determining factor.”
Komayire also differentiated between saving and investing, stressing that while saving is simply the portion of money not spent, investing involves putting money into assets with potential for growth.
He identified common investment options such as stocks, bonds, and real estate, emphasizing their importance in building long-term wealth.
“The importance of investing your money is that it grows your wealth, helps you achieve financial goals, and secures your future,” he said.
On the topic of budgeting, Komayire described it as a tool for intentional money management.
“Budgeting is about telling your money what you want to use it for,” he explained. “Otherwise, it will finish, and you won’t even know what you’ve used it for.”
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Financial literacy should be added to the basic school curriculum to help in managing individual finances.