Happy Newyear : 2021 Goals now Bad Debt or not?

In accounting there is a terminology known as ‘ Bad Debt.’ It basically refers to an investment that does not give the expected returns.

Thing that make you go,’Mmmm!’

Let’s say for instance that there is a petty trader that takes out a loan from the bank to rent a shop and increase her sales base then suddenly there’s a fire outbreak that razes down the stop with all the items she’s stocked it up with. Does the bank manager say, ‘ She must pay us the money?’

Hahaha. That would be a waste of time once the bank has done some checks. Such checks, I think, would involve asking questions in the lines of:

  • Is the shop insured?
  • Does she have another source of income?
  • Are there pieces of land or property we can take instead ?

And when it doesn’t play out positively in their projections, they may decide to write it off as a bad debt. It’s a bad debt because they don’t see any way she’d be able to pay them back and hounding her for pay back would be major activity in futility.

Now how does reflecting on 2021 goals come in to this? It’s simple. When planning your goals for 2022 , chances are that you would like to bring some of them into the Newyear. Before you do that however, it is important to scrutinise your desires and plans. Are they doable or not?

This is where people tend to get emotional and attached to certain projections even when they have failed to materialise on a consistent basis. If you are one of those people then you need to stop and be honest with yourself: is this doable or it is time to let go? Will it be activity in futility? Then real quickly before you respond: think of the bank in this story. In making a quick decision to move on, they have saved time but lost money. This saved time however will enable them set their gaze on bigger and more fish. In the long term, they have cut their losses but gained something else in the process.

And you -will you be losing just time or will you be losing more time and more money?

The choice really is yours so you need to think more carefully before making a decision.

And oh, before I forget, cheers to a Happy Newyear!


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