I may sound political, I’m not. Government like all other, operates like a household. A household has income and expenditure, father and mother. Both receive income and prepare household expenditure. If the expenditure is more than the income, there is a problem. Both go out to borrow money to cover the shortfall. They must repay the borrowed money. The borrowed money accumulate annual interest.
Local people go on election to elect officials to represent them. The politicians then accepts. They’re empowered by, you to collect taxes (income) and provide countries necessities (expenditure), road, transport, schools, hospitals, police, education etc.
The Government then provide more necessities than the amount of taxes they received, reasons are many. They want to provide for needy people. What they forget is that money is a scarce resource. One cannot play around with it. They end up borrowing money from other countries, big business; they are obliged to pay it back with interest at latter stage
In this scenario, may be your country is in serious debt, expenditure exceeds income. It is now bankrupt, same goes for other countries, who don’t have economic plans in place.
Let’s go back to you as an individual. You build business, you extravagantly spend your hard earned income. You don’t pay your financial commitments (monthly bills)
If your business income exceeds your expenditure, you are in trouble, you must go out to borrow money, the business debts increases. You decides to sell your business, and you are free from trouble.
In a situation like government, political leaders cannot sell the country, it does not matter who governs it. Never make mistakes that politicians commit.
When you receive income, pay your debts, do not borrow money to pay debts, rather borrow money to expand your business, or make it generate more income than expenditure
How to avoid your own economic crisis
Never thing too far. The only way to survive any economic/financial hardship is to set up your own income stream. It doesn’t matter whether partime or full time. You must never underestimate the income you make from selling chocolates or soft drinks. Every penny has the potential of generating more pennies.
From my own experience, no one is born rich or wealthy. Your work hard to change your economic situation. You work hard to become a billionaire. Critics say, I tried, failed and quitted. We were all there, we tried many business projects, we failed. But some of us did not quit.
The only first step to financial success is failure. Failing to achieve your economic goal. I may sound too harsh, who wants to fail. No one fails in life because of stupidity. You fail because, you don’t have knowledge of how things are done. Once you grasp the KNOW HOW, you have accomplished the first step to success.
Same goes for countries of this world. Unfortunately they are led by people who don’t care about whether their countries fail or succeed. Don’t reason like them. Learn how things are done, fail, learn from it to become successful.
Word of warning, to those working as government employees, start now researching about additional income opportunities. What if you follow me and learn how you can live life without relying on monthly income. The message I’m trying to convey, is to start building partime income.
Don’t full yourself thinking that retirement investment will save you from future financial difficulties, it won’t. But your own business will do. Don’t wait for retirement age, start now, by the time your reach it. You have your own income to fall back to