To most Africans, financial freedom is a practical concept. This is because, maybe unknown to most, they have since the pre-colonial era been saving. Their saving culture was as a matter of fact more thriving than it is today.

It was, however, not determined by efficient market hypotheses, the demand and supply of funds, pricing models, inflation rates or GDP projections. Saving was more of a function of how much one produced. This was again steered by belief systems and cultures.

To most communities, it was a taboo to consume what had just been harvested. Culture highly commanded that produce be spared for future use and what had been stored be used instead. This encouraged many to save and perhaps explains why drought is only a contemporary thought.

Saving was also characterized by lots of wealth stored in non-loss values. Take the example of cattle that, if well grazed, would not only produce real wealth over time if used to render service or milk, but their sale would also be at an extra value. Contrary to this, mutual funds, unit trusts, company shares, Treasury bills or bonds that seem to be thriving today have been marred by poor returns.

The returns on such instruments are so unpredictable today that most investors can’t bet their money with certainty. Worse are bank interest rates on savings, which have remained low whereas those on borrowing are on an upswing.

While returns are always guaranteed on periodic basis with the traditional saving methods, it may take as many as five years to make a considerable return out of, say, a mutual fund. Due to the community setting, liquid assets circulate amongst peers in the popular groups called ‘merry-go-rounds’ or rotational donation among a group of people. This way, they are assured of income that does not have to come in form of a loan, but savings that have cumulated over a period of time. These special arrangements are made by the group members and can be weekly, monthly, bi-monthly, etc.

One advantage of the system is that it does not punish the group by asking for interest on issued funds, but has only a money back guarantee when one needs a lump sum for an activity requiring a large capital outlay. This way of pooling funds is what has come to give birth to the co-operative unions, although the former still thrives. The situation today is quite different. People have moved from huge saving into saving a fraction of their earnings.

Its even worsened by the frivolous credit card bubble, the mortgage and car loan age where people spend three-quarters of a lifetime servicing loans. This is the age of the rat race, where we only have to work for an investment called deficit. Among the most common financial mistakes that ‘Investopedia’ names that people make is living beyond their means.

Buying a car that one can’t afford, according to Jim McWhinney, is buying things one can’t afford. Most people today live from paycheck to paycheck, meaning that one missed paycheck would be disastrous. It would send the typical African into exile. The typical African values wealth that he is fully entitled to and takes no interest in partial ownership. His idea of opportunity is that which he can acquire at first instance without term commitments.

Ask an investment banker about this and he will tell you that this is purely workable – very practical and down to earth. It would therefore be wrong to argue that Africans do not save or that their modes of saving are archaic. If anything, they should be highly encouraged and molded to grow into institutions/investment tools. This is because they are very self-sustaining and survive despite adversities.

In fact, if the ‘merry-go-round’ system were taken as an industry, it would probably be worth more than the banking industry. And if you want to steer yourself into financial independence, perhaps there are some tips to pick out from old-time savers: invest in real assets, monitor your expenses and think carefully about the debts that you’re adding up. To them, the farm is an eternal investment where no debit cards are applicable.