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‎ADVISORY COLUMN: Frustrated by elusive financial goals

Published:Sunday | January 11, 2015 | 1:00 AM

QUESTION: How do the car sales places expect the average person to find between $40,000 and $70,000 each month to pay for a car loan? What about the food bill, light, water, etc? Also, houses are between $9 million and $15 million. At age 36, when will I be able to find the down payment much less qualify for a loan with only 30 years to repay?

Why does the Jamaican Government keep importing things we do not need? Why do they make it difficult to live here when Barbadian

and Trinidadian citizens are prosperous?

Women want men with their own house and car. It is a lot of pressure on men already, much less to compete with other men who are rich and do illegal things to get money.

Help!

- Harold

FINANCIAL ADVISER: It is clear that you are frustrated because you do not see yourself achieving certain goals. Nothing is wrong with having goals - as long as they are realistic.

The company that you mentioned in your email tends to cater to the higher end of the market, so it is not surprising that the "average person" cannot afford its vehicles. The fact that it is still in business suggests that its clientele is finding a way to finance the vehicles

they purchase.

Companies that offer

financing lend to persons who satisfy them that they can meet their obligations and, frankly, it is up to the borrowers to find a way to take care of their other financial commitments. Businesses operate to make a profit.

Of course, the alternative is to aim to buy a vehicle that is more affordable even if it is quite basic or has been pre-owned. It is best to start where your pocket can reach and move up later when your purchasing power improves.

The price of housing is quite high, I agree, and will continue to climb. The National Housing Trust option and recent moves by the Government to effectively reduce its take on the purchase and sale of houses should make it a little easier for some persons to own their own home. But these still do not help many others, who, perhaps, will never realise the dream of home ownership.

Considering the level of rental rates, home ownership makes sense. But the reality is that many persons will have to abandon that goal.

What you said about the challenge of finding the downpayment, as it stands now, is absolutely correct - notwithstanding recent developments, which should make it easier to afford the deposit. The inability to find the deposit is a major reason why many persons have not been able to purchase a house.

Of course, it is far easier to afford a house when two persons are able to join their resources to make the

purchase and to make the mortgage payments.

I am not sure what you mean when you refer to the Government "importing things we do not need". A substantial portion of what the country imports comes in because its residents are willing to purchase them. Whether they really satisfy a need is another matter. Where there is no effective demand for imported goods, there will not be any imports. Perhaps you could consider to what extent even you use imported goods and whether you really need to.

STRUGGLES EVERYWHERE

You should be careful not to suggest that the residents of Barbados and Trinidad & Tobago are prosperous and the residents of Jamaica are not. Comparatively speaking, their per capita incomes are higher than ours, but in much the same way that there are struggling Jamaicans, there are many persons in those countries who are struggling.

As you suggest, there are Jamaican residents who are managing quite well, just like some Barbadians and Trinidadians.

You have made a very interesting observation about the kind of men that women desire. It would be

useful to learn the source of your information.

Goal achievement would be much more attainable if less attention was paid to other persons. It is important to set realistic goals based on one's own reality. It is not helpful to compete with others, particularly when we consider that resource-wise, some persons are 'more equal than others'.

There is no doubt that some persons have amassed wealth by questionable means, but do not forget that many others have done so by hard work and by taking the kinds of risks that others would never consider taking. Celebrate with those who succeed.

The truth is that many frustrated persons have opted to relocate to other countries which promise a better future. I am sure you know many such persons. I know many - people who attended high school and university with me, for example. Most of them reside abroad. Some are doing well and others are not. Likewise, some who have remained here are doing well and others are not.

We live in a hostile economic environment in Jamaica, I agree. This has forced many to scale back their expectations, but it does not mean you should give up.

There is still the need to set personal and financial goals. It just means we may have to settle for less.

n Oran A. Hall, a member of the Caribbean Financial Planning Association and principal author of 'The Handbook of Personal Financial Planning', offers personal financial planning advice and counsel. Email finviser.jm@gmail.com.