What Is Easier - To Walk The Talk Or To Put Your Money Where Your Mouth Is?

When is your word your bond? Is it when you walk the talk or when you put your money where your mouth is? Surprisingly, it could be none of the two. Many times, we put the money directly into our mouths instead and talk-walk away. Read this:

Two guys cut a deal with a manufacturer of some fast-moving consumer goods. They agree with all the terms including that of opening a credit line with the manufacturer's banker.

The first consignment is delivered and they distribute the merchandise successfully. This goes on and on and everyone is happy.

Their trust is put to the test by audacious goals at home when they splash money on expensive cars and huge mortgages in the leafy suburbs. And then the cyclical weather risks take their toll on the sales volumes and as the business momentum wanes, they are pressured by circumstances to stop one of the monthly payments in order to survive the hard times.

If they stop the mortgages, the messy noise at home would be worsened by the bank's threat to stop the business credit line. This in turn would paralyse their commitments and continued business dealings with the manufacturer.

Thus far, they have done well on the: "your word is your bond" part. To get the mortgages and car loans, they put someone else's money where their mouths were but now, their written word at the bank may soon cease to be their bond.

They have walked the talk but both the bank's money and their desires to hold on to these lifestyle-enhancing facilities are at great risk. It is now harder to walk the talk. Their actions are akin to the naive farmer's, who bought land in a semi-arid area during the rains. The allure of the lush greenery was irresistible.

When the tough season's climatic conditions returned, the freshly grown crop withered in the scorching sun and the ignorant owner now sought to answer the question: "why did I plant seeds without first damming the seasonal streams that ran through the farm?" After-the-event consulting never works as it comes after the word: "sorry".

Our two gentlemen hold a lengthy meeting filled with lots of moments of self-reflection and decide to be open about things with the bank. And to their surprise, the bank had factored in the weather risk. The institution advised them to sign up with the manufacturer for an additional product line that moved much faster during such dry times. The bank in the meantime agreed to a six-month moratorium on the car loans.

In short, the bank helped them to keep walking the talk and to keep putting their mouths where their money came from.

Would you have done the same or would the pressure lead you into becoming a financial fugitive? The great lesson here is that no matter how difficult things get, stay honest and maintain the highest levels of enthusiasm possible for your creditors. A smile eases pressure and creates the impression that an empty pocket has or will soon have money. That smile will earn you that crucial extra mile on no gas.

No matter how hard you try to cover up the bad times, it will still show. For the two guys, mid-week dinner outings with their spouses in restaurants and those nice-to-have home services came to an end. "Financial Prudence" suddenly became the new catchphrase.

The spouses were challenged to put some skin in the game and walk the talk alongside their men. They now had to put their available money where their mouths often went to in conversations with friends on the phone and with colleagues at work. The lesson here too is that anything good comes at a higher price especially if the talk had preceded the walk by several miles.

Another set of guys got into a deal that promised those "once-in-a-lifetime" windfalls. They had just borrowed money to venture into business. It was in their area of expertise. Things would surely go like clock-work for they had given it much thought.

But when good amounts get approved by banks, those cheeky outsider types with their fingers on the bank's pulse always know when to strike. Our two friends get approached by suave guys with a gold consignment from the DRC. They need about two million shillings to have it cleared and then hand over the same to a ready client. Every shilling invested in the venture will yield three more.

The risk seems worth it. The thoughts and sounds of six million shillings are quite appealing to the two borrowers. They will quickly pay off their loan in full and then get into business stress-free.

They hand over the money to the two gold dealers. Our two borrowers are asked to wait at some hotel along Ngong road. The waiting seems forever. Both dealers phones were immediately switched off and it has been two years since that incident.

The conmen remain at large but our two friends have since lost out on the opportunity that caused them to borrow the money. At the bank, they keep walking the talk as they painfully pay up from salary deductions.

The lessons here are that you must have a criterion that gets you to tick all the boxes before you trust anyone with money. And never get yourself exposed to a heap of risks that you neither have the expertise nor the backup needed to assess them beyond any reasonable doubt.

There are very few coincidences in life especially when you have just borrowed money. Those who come at you with interesting propositions when the money has checked in, do so on a tip-off. Never change your mind once you borrow any money. Even the Lord hates double-minded people. And it's even better for you if you don't borrow at all.

It is easier to walk the talk on non-financial matters as very few people can consistently put their money where their mouths are, because of its scarcity or its prior but pressing demands. But all in all, your word must be your bond at all times. The secret is rather obvious. Don't spread yourself thin, accept your limitations and live within your means whilst solving other people's problems at a fee. The money shall follow your good solutions and this time around, the bank shall only exist to keep it safe.