Even though the global economic outlook seems bleak, Bahamians are being encouraged to move towards financial security, securing finances for their children’s college education and for their personal retirement.
Creating wealth and becoming financially independent was the theme of an address to the Grand Bahama Chamber of Commerce on Thursday by Chamber’s Director Jenny Barr, Manager of Royal Fidelity Merchant Bank and Trust Limited in Grand Bahama.
The luncheon was held at the Sunrise Resort and Marina.
She said that pensions received from National Insurance and even a private company pension plans alone are not enough to supplement ones retirement, and it would be prudent to begin saving and investing while young to avoid being dependent on others to take care of you when you are old.
"You want to retire comfortably. The lifestyle that you’re living now, you want to be able to maintain that when you’re older – maintain that or better. As you get older, your steps are slower and by age 65 or younger than that, basically, they’re trying to kick you off the job. So after age 65, you have an additional 20 years to live. So where would these funds come from?" she asked.
Ms. Barr said that one of the reasons to create wealth is to educate your children.
"In today’s world, our children will be competing against the brightest and best minds and it is very important that we would save and invest to be able to educate them. You’re looking at them going to a university abroad and you’re looking at least $40,000 per year, and maybe an extra five per cent for inflation," she said.
"Instead of trying to find this money for the child at age 18 and trying to borrow it, it is better that you would save it and invest it over time. It gives you more time," Ms. Barr said.
Further, she said, persons might want to leave an inheritance for family members.
"A good man or woman will leave an inheritance for his children’s children. That is what the good book says. So you want to leave a legacy. The only way you can leave a legacy or make a contribution is if you have created wealth," Ms. Barr continued.
Further, Bahamians should also be prepared for unexpected circumstances.
"Sometimes there’s an accident. There’s a death of a spouse. We look at hurricanes, which we know are expected however, sometimes, when they come up, they are stronger than we would have expected it to be. So you need to be prepared for unexpected events that may come up that you will need to have wealth created for," she said.
Financial security takes planning and commitment and is a journey that takes time and involves timing she added.
"The best time to start is now. That would be today," said Ms. Barr.
In the financial community, some would conclude that 2008 was a rough year and that was because of the economic downturn due to the subprime mortgage dilemma and the collapse of major financial enterprises globally she said.
America’s new President Barack Obama is now seeking a financial bail out package of $825 billion, which the House of Representatives have already passed and that is awaiting passage by the U.S. Senate as part of an economic stimulus recovery plan.
Tourism in the country has already been negatively affected by this economic downturn, resulting in layoffs at major hotels in Nassau and Grand Bahama she said.
Ms. Barr acknowledged that the Central Bank gave a bleak prediction of the economy for 2009 and that Bahamians should make necessary adjustments to their spending habits.
"It is very important that we are extremely cognizant of the times we live in and we make the necessary adjustments in our spending habits and we need to ensure that what we are buying is necessary and the loans we would embrace ourselves with would be to consolidate or acquire assets that would appreciate," she said.
Preparation and planning is vital for Bahamians to make it through these hard times and to undercut the negative effects of the global crisis she continued.
"We will affected by external forces because we live in a global village and have some dependency upon them," Ms. Barr added.
Persons might question whether financial security is achievable even in these hard times, and the answer is yes she encouraged.
"It requires taking smart steps and making wise choices toward achieving them and being committed to these goals. As you commence your journey to financial security, beware that you will be faced with many challenges but continue to seek guidance and advise," Ms. Barr said, referring to many professionals services offered at local financial institutions.
With regard to Royal Fidelity, she said that company manages and administers in excess of $1.3 billion in assets and have raised over $350 million for businesses in The Bahamas.
- Austin DWI - New York DWI