Once upon a time, in the southern part of Malaysia, there was a young farmer who had just got married and bought a new property with his wife. It was a dream come true as they were both excited to move and settle in this new land. While admiring this piece of real estate, they began to discuss what they would build and when. They began to dream of building a garden planting the most beautiful flowers ever seen, a playground with swings and a pool, a barn full of animals, and even renovating the house. They were so passionate about every dream they had, but the problem was this… Do they have the funds to build them all?
Calculate your cash
After budgeting, they soon realized they could renovate the house or build a barn. The wife wanted to renovate the house and she began to imagine how the living room would be decorated, the best kitchen appliances to cook the sumptuous meals, the luxurious bedroom. She knew the color schemes and even the brand of furniture she wanted. The farm girl listened quietly and had to admit that her plans sounded really impressive! When she finished, he smiled and said that they shouldn’t renovate the house first. He felt that they should use the remaining funds they have to build a barn. She was stunned and upset.
They went back and forth at odds and she yelled, “You mean the animals are more important than us?” The poor husband found himself in a difficult situation and he did not know what to say. Guess who won the argument? Did they renovate the house or build the barn?
Towards the end, the discussion came to a close when the farmer said, “My dear, the reason I want to build this barn first is because I know that this barn will generate income that will help us renovate the house, build a garden, build a swimming pool, and the income generated will help finance whatever dreams we have.
build the barn
Well think about it, as his wife, if you were raising a family, I’m sure you would want the best home to live in. Why? Because that’s where you eat, sleep and live. That sounded totally logical! But the wise young farmer suggested a different plan which was to build a barn because he knew that the house was a liability but the barn was the asset of all profitable activities. The barn is where the animals live, animals that produce milk, eggs and meat. The barn is where the equipment for growing wheat, corn and soybeans are stored. Without the barn, he could generate little income.
Back to reality
In today’s world, whenever an individual receives income, they neglect their barn and focus on beautifying their home. If he neglects his barn and builds on the house, the liability is all he gets. In fact, he will start to accumulate the responsibilities of him with the latest mobile phones, wallets, cars, etc. He builds the barn and the income generated from his barn will help him buy the latest fashion gadgets and equipment.
My personal experience
At the age of twelve, I personally understood the importance of spending my money in ‘barns’. It was back in 1997 when the Nintendo GameBoy was a must for every kid, while the Sega GameGear was the ‘Dream Machine’. Knowing that my parents would never buy me those gadgets, I bought the Sega GameGear with all the savings in my piggy bank. That was probably the best asset I’ve ever invested in! My friends who were admiring my new ‘toy’ started renting my toy and I was renting them at the same rate as video game stores. The only thing different about it was that my ‘customers’ are allowed to take my Sega GameGear home and I don’t have business overhead like hiring employees or renting a shop. Best of all, I got my Sega GameGear investment back in 3 months and the rest was pure profit.
Lesson learned
When you receive money, start listing all the dollars you are spending. Then identify whether the items you’re spending on are an asset or a liability. Next, ask yourself: what do I need to spend or invest in to generate money to finance my expenses?