• Do we change the actual situation (high inflation and interest rates)? But can we really? It is after all, not within our control;
or
• Do we personally change to suite the situation?

The second one depends on how we effectively manage our finances to suite the environment because that is what it really comes down to. This is important to note as there has to be continuity and sustainability in all we do, as the standard of living has to be maintained. Bad as the times might be we need to survive, and just have to weather the storm.

So - how do we deal with this situation? By looking and using various factors around us in order to get to the desired level. Perhaps understanding a few points can help in understanding the money concept; this can then help us determine what course of action to take.

We now live in a world where just about everything that's something has to do with money. Money makes the world go round; so goes the statement. Money is a medium of exchange and a generally acceptable mode of payment. The value of money is based on the confidence that people have, such as monetary authorities, governments and markets, it is for this reason we have currency fluctuations. It is important to understand also that money is not income, as income is reward earned in a production process, and income is calculated and paid in monetary terms. That said it important to note that wealth is not money, wealth consists of assets accumulated over time, however money forms part of wealth, wealth also consist of other assets e.g. fully owned cars, homes, and other valuable assets.

We have mentioned money and how it should be dealt with. We are all and capable of being our own financial managers. Why do I say this? Well the same financial management principles applied in the corporate world can be applied by us personally. Financial managers are tasked with the responsible for creating wealth for shareholders. On a personal level we all want to create wealth for our selves and our families perhaps. Financial management skills are based on two things, the first being; seeking investment opportunities and the second being; seeking financing opportunities. It is that simple as we can take this and apply to our every day activities. Investments can be anything from savings to investments in unit trust, shares and bonds. While there all these opportunities it is always important to note the return obtained from an investment, is what you seek to achieve. In this current environment you want to save more and invest more. Why save more? It is simple financing opportunities may be required for different reasons; maybe for buying a house, a car, or any other item that maybe needed for that matter, currently . The first source of finance is income in the form of wages for most individuals. It is always important to seek less expensive modes of finance.

So we now know what we need to have; (money). Question is, once we have some; how can we go about growing it? To grow money we need start looking at certain aspects that are involved in the decision process. This we will look at from an investment perspective. Common terms that often come up when dealing with finance; are risk, return and portfolio management.

Risk and return are often used together. More often than not we have a misconception about risk, at times we have failed to understand what risk is and how it is managed. Risk usually is the possibility of an unfortunate outcome resulting from a given action. There are different types of risk that are somehow viewed differently. In the investment context this can be viewed in two ways; there is certainty i.e. there is no expectation that the actual outcome will differ from the expected outcome and uncertainty i.e. some probability that the actual outcome will differ from the expected outcome. For example, no rain today would not necessary mean there will be no planting in a farmer's case. In most instances the level of investment risk determines the level of expected return for that particular investment. The question then becomes what is best for me as an individual? Do I always look at what I will get without looking at the risk I take? No only one thing can be a guide with regards to this and that is an investment objective.

To sum everything up, we can do everything from investing and creating wealth for ourselves, this is all dependent on how we manage our portfolios. There sensible thing to do always is to diversify into a number of investments in the expectation that those which are profitable will at least compensate for the loss which may be sustained from those that are not. Decision making is very important as it may determine where we will be in the future.