CASH STILL RULES EVERYTHING AROUND ME

So I was having some major writer’s block this week for some reason. I think part of the problem was I had way too many topics and ideas in my head I wanted to cover and fasting for Ramadan was not helping as my concentration was waning.

Ok People; let me get focused...

I went and solicited the help of the smartest soon to be six year old I know on this planet, my “Kool Keed” Nene (I actually have (2) Super Intelligent soon to be 6 yr old “Kool Keedz” – hit the cut below for my boy Ash Baba!).

I asked Nene tell me what you know about cash and these were her responses;

• We go to the bank to get CASH!
• We send/ give those we love CASH!
• Every rap song on the radio BOASTS about CASH!
• Girls REALLY LOVE CASH! 

 I told you all she is wise beyond her years…

But when I asked her to tell me what she knew about credit she first drew this big blank stare for a few seconds and then said “oh, it is what my daddy puts on his mobile phone”. Lol… (If you are Nigerian you get it). And there lies my point; if my niece at her age can put together the quick benefits of cash without being prompted but struggle to comprehend the value of credit then I remain firm in my position that the two can never be the same. In fact, my opinion remains “Cash will always reign supreme over Credit”.

By now you have probably figured out that this week’s blog post centers around the old debate Cash vs. Credit. I only bring this up because whenever I turn on the nightly news these days there is some financial analyst giving his take on current economic meltdown here in America. And if you have been keeping up the past couple of weeks, you would have probably heard about the United States getting stripped of its prized AAA credit rating from S&P (Standard & Poor’s) by being downgraded to AA-plus for the first time in history.

Anybody out there know Nigeria’s S&P rating?

Please don’t start cringing or dying of laughter. Well Africa’s most populous and top oil producing nation was rated a B+ as of November 2010. I think am still in shock or denial over that rating self…

So what is the value of having a good credit rating in today’s economy? Simply put, credit ratings are opinions about credit risk and nothing more. S&P’s ratings express the agency’s opinion about the ability and willingness of an issuer, such as a corporation or state or city government, to meet its financial obligations in full and on time. Therefore;

AAA – represents the best quality companies, reliable and stable (Excellence)

AA - quality companies, a bit higher risk than AAA (United States)

B - indicates financial situations varies noticeably (NIGERIA)

One of the principal fundamental differences in the “American mentality” and the “Nigerian way” is how we treat and manage capital. Americans are programmed to borrow or as my brother puts it “Pay as you Go”. On the other hand Nigerians and many others from third world countries have mastered the “Cash & Carry” system where apparently everything has its PRICE. Having seen both up close personally over the years, I actually think both are potentially dangerous if not managed with care.

Cash is the universal language – When have you ever conducted business or negotiated terms of your contract based on the credit rating or score you were being promised? Better yet, can you recall any moment in your work history that you were looking forward to your employer paying you in credit as part of your salary. Simply put, Cash has staying power and still has a place in today’s global economy. It also helps eliminate gray areas and more times than not there are no hidden fees or charges. Better yet if you do not have the means to own or buy an item outright then that means you should “Keep it Moving”. That is what cash does; it forces you to actually rethink what you are spending your hard earned wages on. By no means would I insinuate that there are no drawbacks when people only deal in Cash. I mean who wants there business out there in the streets that they walking around with a boat load of cash on him/herself (These streets do not love you back)? I have also come to experience that some people who go around flaunting their Cash (all for show) turn out to be destitute and even end up homeless as they live a reckless, hard crash and burn lifestyle.

My take on Credit - no matter how great an invention, convenient and easily assessable it can be; this thing has proven to be the death of many. It is a means to mask and cover up one’s financial short-comings. I also believe credit was instituted to give the poor and “have not’s” the ideology that they can continue to keep up with the Joneses (You know; Diddy & them). I hate to really say it but isn’t it a CO-WIN-KA-DINK that it’s generally a certain group of people that have good A+ credit anyways?  You see the whole system is flawed because it is set-up in a way that you have to own some type of credit to do anything in today’s financial climate. As a reminder know this about credit, it does not depend on how much money you actually have which often gets people into debt and in trouble with their finances. Consequently, you become a working man’s slave in the system.

There is a reason why my niece can tell me about the value of cash now but will possibly not grasp the full meaning of a good credit score or rating until probably she enters her mid-20s.

That is why I only do debit.