Tue | Feb 21, 2017

Frustrated by elusive financial goals

Published:Sunday | January 11, 2015 | 12:00 AM

Oran Hall, Personal Financial Advisor

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.

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.