The geographers said that the tropical cyclones, with maximum sustained surface winds of less than 74 miles per hour (mph), are called hurricanes. Simply put, it is a complex storm that destroys people, properties, businesses, and natural resources. The financial experts say financial hurricane is a situation in which the supply of money is outpaced by the demand for money. It therefore means that liquidity is quickly evaporated because available money is withdrawn from banks, forcing banks either to sell other investments to make up for the shortfall, or to collapse.
For most of us, financial hurricane is much more than that. It is like being on a boat at the mercy of the next wave, waiting endlessly. We are unable to meet our immediate needs, much less our long term obligations. We are left with asking the following questions:
- Can our current assets cover our current liabilities?
- Do we have investment portfolio that we can convert to cash without losing value?
- Do we have enough savings to cover the costs of unforeseen crises?
- Do we even have adequate value for what we buy?
So many questions. If you are not affected by the financial hurricane in this part of the world, thank your star, but don’t despise those in need. The financial hurricane is a storm that can unleash a hail of bullets on its victim.
There is a story in the Bible that serves as a good example. Despite all his riches, Job lost all he had. He was in total financial ruin. Financial hurricane is cruel. It is depressing to be in financial mess.
Of recent, the president, Muhammadu Buhari, declared war on poverty when he said, “With leadership and a sense of purpose, we can lift 100 million Nigerians out of poverty in ten years.”
In one of my articles titled “I Am Checking Out of Poverty,” I wrote about poverty and said, “Lack is the cousin of little, and little is the uncle of wretchedness. Penury and insufficiency are not my words. In place of shortage, I embrace abundance. In place of inadequacy, I embrace sufficiency. In place of destitution, I embrace riches. Instead of pauperism, I embrace wealth.”
If we must embrace wealth either as a national or individual, we must begin to imbibe attitudes that are congruent with wealth-creation, attitudes that will stifle financial hurricanes, stopping them from growing. Some of them are:
- Maximise your liquid savings.
- Prepare a budget.
- Minimise your monthly bills.
- Closely manage your bills.
- Take stock of your non-cash assets and maximise their value.
- Look for ways to earn extra cash.
- Keep up with routine maintenance.
Financial hurricane blows in different direction hitting nations, individual or things; it tears nations apart, and if you are not in sync with what the expert said as stated above, you have to come to terms with the fact that success and failures are measured with numbers, and numbers don’t lie.
One thing is certain: a financial hurricane will surely come. But if you are prepared, you will scale through the raging storm. Do not lose hope. The storm is a period of opportunity, as the Chinese proverbs say: “A crisis is an opportunity riding the dangerous wind.” It is during crises that talents are uncovered.
As at now, Nigeria is still generating less than 5,000 megawatt, with a population of almost 200 million people. Congo is till bedevilled with poverty and war. Cote d’Ivoire, Guinea, Sierra Leone are not left out; they are crippled with poverty, corruption and governance. As I write now, Kenya is battling a financial hurricane.
The financial hurricanes are tearing these nations apart. The World Meteorological Organisation uses different names to categorise hurricanes depending on the location where the hurricanes come from. If they occur in the Atlantic Ocean, Gulf of Mexico, and the Eastern Pacific Ocean, they are called hurricanes. If they occur in the Western Pacific Ocean, they are called typhoons. If they occur in the Indian Ocean, the Bay of Bengal, and Australia, these types of storms are called cyclones.
Similarly, financial hurricanes is also given different nomenclature. If a country is poor, we often refer to it as economically depressed. If companies are at the verge of a financial hurricane, we say they are liquidating. If building is weak, we say it will soon collapse. And if an individual lacks money, we often say he is broke.
If we must conquer the dreaded demons called financial hurricanes, we must begin to think. In the words of Voltaire: “No problem can withstand the assault of sustained thinking.”