I admit that I have not attended any seminars given by those teaching “financial literacy.” From the outlines there seems to be emphasis on learning about bank accounts and insurance. That is important.
Those who talk about how “God wants you to be rich” also have a place in the discussion. I suppose it may be true. Who am I to say otherwise? However, whether your financial literacy guru is “godly” or “godless,” all such wisdom begins about 3,500 years ago in the biblical book of Genesis.
So Pharaoh said to Joseph (Genesis 41), “I hereby put you in charge of Egypt.” During the seven years of abundance the land produced plentifully. Joseph collected all the food produced in those seven years of abundance and stored it.
The seven years of abundance came to an end, and the seven years of famine began. When the famine had spread over the whole country, Joseph opened all the storehouses and sold grain to the Egyptians. And all the world came to Egypt to buy grain from Joseph, because the famine was severe everywhere.
The key to Joseph’s success was that he managed the Pharaoh’s government as if it were a business. That is why his actions provide such a valuable lesson. Unfortunately, many businesses are managed as if they were “government” and that is not successful.
The basic lesson from the Joseph story is that you accumulate (save) during good times and distribute (spend) during bad times. There is a problem. The gurus always talk about the “save” and rarely about the “spend” except, “don’t spend too much.” You need to know how to prepare for both sides of the cycle and most of literacy conversations do not offer strategies for both feast/famine. The strategies are different.
The Egyptians were not happy that grain prices did not drop during abundance because Joseph was hoarding all the excess grain. Human nature. No one really cared about automobile fuel efficiency until the price of gasoline in the US went from $0.39 in 1973 to $1.31 per gallon in 1981.
There has been talk about how the Philippine government needs to spend more. The conversations leave this out: In the fourth quarter of 2019, total government spending was less than P300 billion. In the second quarter of 2020, that went up to P850 billion and currently holding at P600 billion per quarter.
We now come to the part of the Joseph story no one discusses—Genesis 47—and this part will make you richer. Joseph collected all the money in Egypt in payment for the grain and brought it to Pharaoh’s palace. When the people’s money was gone, Joseph said, “Then bring your livestock.” They brought their livestock to Joseph, and he sold them food. When that year was over, they came to him; “All our money and our livestock now belong to you.” “So Joseph bought all the land in Egypt in exchange for food.”
That is way too harsh but when you are Pharaoh and responsible for “maintaining the cosmic order,” anything goes.
However, as a business owner—or you want to grow your personal wealth—knowing the strategies for prospering during times of famine is critical. If you saved during the good times, go buy a one-year-old car with 8,000 km on the odometer and a 30-40 percent discount.
If you are a company, you should be spending for expansion—from your savings during feast times—and not hiding in the shelter waiting for the typhoon to pass. If you are a stock market investor, you are buying shares of those few companies that are enhancing their business and not downsizing to survive. Be like Joseph.
E-mail me at mangun@gmail.com. Follow me on Twitter @mangunonmarkets. PSE stock-market information and technical analysis provided by AAA Southeast Equities Inc.
