Financial choices in your 20's: Final Part

Advantages of Investing in Your 20’s

Young adults often face financial challenges due to burdensome student loans, relatively low-paying junior-level positions and a lack of budgeting experience. While those in their 20’s know they are supposed to be saving for retirement, the golden years seem unimportant and a long way off compared to the consumer purchases that could be made now. For many young adults, it seems easier to put off any investing decisions until their financial situation becomes, at least theoretically, more stable. Young adults in their 20’s, however, are actually in a prime position to enter the investing world, even with college debt and low salaries or wages.

Time

While money may be tight, young adults have a time advantage. There is a reason that compounding - the ability to grow an investment by reinvesting the earnings - was referred to by Albert Einstein as "the eighth wonder of the world." The magic of compounding allows investors to generate wealth over time, and requires only two things: the reinvestment of earnings and time. The longer money is put to work, the more wealth it can generate in the future. As your savings grow  you increase capital to enable you diversify your investments from liquid to more fixed assets, e.g. buying a piece of land to develop in future of sell with capital gains.

Take on More Risk

An investor's age influences the amount of risk he or she can withstand. Young people, with years of earning ahead of them, can afford to take on more risk in their investment activities. While individuals reaching retirement years may gravitate towards low-risk or risk-free investments, such as bonds, T-Bills and Money Market Funds, Fixed Deposit Accounts, young adults can build more aggressive portfolios that are subject to more volatility, and that stand to produce larger gains.

Learn by Doing

Young investors have the flexibility and time to study investing and to learn from both successes and failures. Since investing has a fairly lengthy learning curve, young adults are at an advantage because they have years to study the markets, and to refine their investing strategies. As with the increased risk that can be absorbed by younger investors, so too can they overcome investing mistakes, because they have the time needed to recover.

Tech Savvy

The younger generation is a tech savvy one, able to study, research and apply online investing tools and techniques. Online trading platforms provide countless opportunities for both fundamental and technical analysis, as do chat rooms and financial and educational web sites. Technology, including online opportunities, social media and apps, can all contribute to a young investor's knowledge base, experience, confidence and, ultimately, expertise.

Human Capital

Human capital, from an individual's perspective, can be thought of as the present value of all future wages. Since the ability to earn wages is fundamental to investing and saving for retirement, investing in oneself - by earning a degree, receiving on-the-job training or learning advanced skills - is a valuable investment that can have strong returns. Young adults often have many opportunities to increase their ability to earn higher future wages, and taking advantage of these opportunities can be considered one of the many forms of investing.

The Bottom Line

Saving for retirement is not the only reason to make well-planned investments. Many investments, such as those made in dividend stocks, can provide an income stream throughout the life of the investment. Young adults in their 20’s have certain advantages over those who wait to begin investing, including time, the ability to weather increased risk and opportunities to increase future wages.

In the next post, we shall explore making healthy investment decisions.

Financial choices in your 20's: Part 2

Invest or have fun first? That is the question

Continued from part 1

Many youth in their 20’s land their first decent paying job out of college and will do one or all of four things i.e. buy a car, move out of home and/or travel (includes shopping spree) and have fun!

I personally wouldn’t mind doing all the above.

However, saving and investing at a young age has always been one of my dreams. Most young people will not understand the golden opportunities from investing unless they talk to people who have experience in investing and have good knowledge about it.

For example if one invests in a piece of property in during their 20's just imagine how much the value of that property would have increased by the time he or she is in their 30’s! 

A writer at Kenyan Daily post wrote an article of 10 great rules that will help someone remain poor. They include;

1.     Never Wake up early.

2.     Never plan to spend your money.

3.     Don’t think of saving until you have very large amount of money.

4.     Don’t engage in activities usually reserved for the uneducated.

5.     Don’t think of starting your own business until an angel comes from heaven and gives you capital.

6.  Complain about everything except your own attitude: Blame the system, the government and the bank that refuses to lend you money. They are all bad and don’t want you to get rich.

7.    Spend more money than you earn. To achieve this, buy consumer products in credit and keep borrowing from friends and employer.

8.    Compete in dressing; Make sure you wear the latest clothes among all the workers in your office. Whenever your neighbour buys a new phone, get one that is more expensive.

9.     Get yourself a nice second- hand car that costs more than three times your gross monthly pay.

10.   Give your children everything they ask for since you are such a loving parent: They should not struggle for anything because you do not want them to suffer. That way, they will grow up lazy and hence poor enough to ensure they cannot help you in your old age.

Young people are full of energy, potential and excellent ideas. Let us not waste time and start saving and investing now. However, as a young investor, don’t rush to start investing without a plan. It is a good idea to have a mentor who will guide you on this.  Always have a goal, what you want to achieve, then put down a strategy and specific activities to help you achieve it. Definitely challenges will be there but when you have the desire to invest for a brighter future, you will make it.

Orison Swett Marden states that “there is no investment you can make which will pay you as well as the effort to scatter sunshine and good cheer through your establishment”.

We wind up this great post by highlighting five advantages of investing in your 20’s.

Financial choices in your 20's: Part 1

Guest post by Young

For most people in their twenties, the idea of saving and investing seems like a lifetime away. Most people don’t start thinking about saving or investing for future until they are well into their 30's. It is important to realise that the choices you make in your 20's play a critical role in your future financial security. Here are some tips that will help you to build a solid foundation for your future.

Focus on your career

In your 20's, getting established in your career and earning a regular income should top the list of your priorities. This is the time to invest in yourself, to acquire and develop those skills that will enhance your career and boost your earnings. You might have good ideas about becoming an entrepreneur and getting rich, but the discipline of earning regular income from a job and sticking to it for a time, will go a long way in preparing you for lasting financial security.

Acquire financial education

Take deliberate steps to improve your understanding of money matters. There is a plethora of information in the media, books, magazines, newspapers, seminars and the internet that will help guide you as you make decisions.

The first step in financial planning is to identify your goals. Your short-term goals (under five years) might include a wedding, buying a car or taking a vacation. Your medium term goals (five to 10 years) may be to build a house or get a mortgage, whilst your long term goals may be to plan for your retirement and children education.

Live within your means

It is very tempting when you first start earning, and particularly where you have few financial responsibilities, for you to spend excessively on clothes, accessories, new gadgets, mobile phone bills. All these can be a serious drain on your finances at this stage if not carefully considered. Look over your income and monthly expenses. Create a budget so that you can see exactly where your money is going and make adjustments where necessary.

Be cautious about borrowing

It is better to borrow for things that have lasting value such as a home or an education rather than for consumables such as gadgets and clothes. Give yourself a deadline by which time you would have paid off or at least reduced the most expensive debt, usually credit card or store card debt. Pay your bills on time so that you can build a solid credit history from now. This will be important when you need to borrow more significantly in the future.

Pay yourself first

Once your debt is under control, automate your saving. Even if money is tight, try to have atleast 10 percent of your monthly income (all that you receive, be it salary, wage or gifts) transferred to savings or to a mutual fund account through a direct debit. Start small; you will be surprised how quickly this builds up. If you are more aggressive, you can push the savings up to 40% and live on 60%, especially when you are young and single.

In your 20's, you have the luxury of time. Even where you make mistakes, there is time to recover as your investment earnings grow over several years; this means that if you are consistent and disciplined, your savings will be able to grow significantly. Remember too, that this is the time to travel, pick up new skills, and have new experiences before you have larger responsibilities to take care of. Time is on your side; so enjoy it.

Start investing to meet your goals

Historically, the stock market has out-performed other types of investments over the long term, but it comes with some risks. If you don’t own any stock, the market continues to present an opportunity to purchase attractive stocks at decent prices. If you don’t have the time or expertise to select stocks and you have only a small sum of money to invest each month, a stock market mutual fund may be the ideal investment to meet your medium and long-term goals. Better still; put your money in real estate. Buy pieces of land within 20 km of cities or near upcoming towns (County HQRs) and speculate. In Kenya, nothing is paying better than this, and in fact real estate has made young millionaires than any other sector within the last decade. It is only difficult when you have not started, or at least, don't know what you want. But before investing in real estate, due diligence is necessary. 

Seek guidance and wise counsel of a trustworthy person who is already investing in the field you want, be it stocks, money market or real estate. However that does not underscore the importance of your own research and seeking knowledge in the field.

It may seem odd to talk about retirement when you have barely got started with work; naturally you are more concerned about your job and not the end of your working life which is decades away. As soon as you start work, you will be eligible to contribute to a Retirement Savings Account (“RSA”) through your Pension Fund Administrator (“PFA”) You have an edge if you start to invest regularly for retirement from now, and you have a better chance of building a significant nest egg with relatively little effort.

Accommodation is often a challenge. Even if you are fortunate enough to have a free roof over your head provided by your parents or other family members and friends, you can contribute to family expenses on items like utility bills. You can also set aside some of the money that you would have had to use for rent to build up equity towards getting a mortgage so that you can own your own home.

Earn your independence

It is the desire of every parent to ease the path for their children and most children will embrace this gladly. Whilst it’s nice to get a lot of help from your parents, don’t let it get in the way of your attaining financial success. Earn your independence and start to take charge of your financial life. Your parents provided you with an education; now you are no longer a child; your finances are your responsibility.

The habit of managing money is more important than the amount. It is not how much you earn that matters, it is how much you keep. The key to building a solid foundation for future financial security is to have a budget, save, invest regularly, and control your debt. The choices you make now, will largely determine how your life will be in the future.

We shall pick up from here in our next post. Please share a link of this blog to any young adult you know. FE might just be the answer they are looking for to shape their financial future.

Opportunity in Crisis

Sometimes back my observant eye while driving along Thika road got me thinking. China man and his modus operandi while constructing the super highway sometimes brought unprecedented problems. What with his not so clear and misplaced signs; like a sign that is meant to inform you to turn left somewhere and it is placed right at the spot where you are supposed to be turning. If you are not that careful or you are the type that would drive under the influence of anti-Mututho laws substances, you’d easily land into a ditch. Like someday I found some very young men whose vehicle had just landed into a ditch on an early freezing morning, I think the fellows were returning from a night of merry making. They were so drunk that they decided to sleep some inside the car, others on top of the car as opposed to struggling to get the car out of the ditch.

Some other day, the china man dug a very big trench somewhere around Kahawa Wendani. The trench covered a long distance oblivious of the places where pedestrian were using to cross from the other side. You could imagine the chaos especially affecting ladies who wanted to cross from one side to the other. Some very ingenuous and quick thinking men realized there was an opportunity to make a few bucks. As opposed to building a temporary bridge, the men would get inside the trench and assist ladies to cross; of course for a small fee of ten shillings. They actually spotted an opportunity in the crisis to make a few coins. This went on for days till China man built the temporary bridge.

In life we sometimes are faced with crisis and we hardly spot opportunities within the crisis. Most people must have really complained about this China man, after all it is all human to think along those lines, yet a more positive person could spot an opportunity.

So what's different for such a person?

Millionaires and billionaires are made in times of crisis; read when economies are on their low. Stock masters will tell you that you make most when you buy at the market’s lowest, literally. Isn't it obvious??

I have heard of many self-made millionaires who bought houses during recession, improves and sells at a small profit, and then repeats the cycle. When the masses are running from the markets, investors run in the opposite direction. It is like the famous Salmon, that swims against the river current to breed in the mountains where water is purest. 

A lot of it comes down to attitude and beliefs. Yes, touchy feely stuff. But I do believe that how we perceive our world impacts our experience. Those who dare to swim against the current get the most rewards. Find a successful person and you'll often meet a positive, focused individual who is all about viewing the glass as half full or even overflowing, who sees opportunity in each and every situation, no matter how dark it may seem. They shine a light into the darkness; to them their world is bright, really bright.

What if adopting a positive viewpoint changes our crisis into opportunity?

In Chinese symbols, crisis shares a common symbol with opportunity. The symbol for 'crisis' contains two words, danger and opportunity. Taken together - the symbols mean 'opportunity in a time of danger'. Imagine that! Inherent in every crisis is the aspect of opportunity.

So what determines the outcome?

When a force intervenes to cause a 'turn for the better', the crisis transforms into an opportunity. We can be the force that causes that turn for the better. We can power the swing from crisis to opportunity.

How about our attitude! When we look at life with a positive attitude - we're more likely to see new opportunities, to think in out-of-the-box ways, to create differently, to believe in our abilities to power a positive outcome. Those are the key ingredients for success - in business or our personal lives.

Are we the positive force that powers opportunity in crisis, or are we part of the crisis?

Rabbit or a Turtle?

We know that classic story of the rabbit (sungura mjanja) and the turtle (mzee Kobe). The two met and agreed to have a race. When they raced for the first round, the turtle was slow as usual but steady, the rabbit was fast, but got distracted, took some rest in between, and explored around the sceneries, and even took a nap in between. Upon his perseverance, the turtle won the race (round one).

The Rabbit

So many businesses jump in the race too quickly where they hurriedly do things and don’t always think things through before they launch a product, service etc. They don’t stick to what their business is all about or they rush through things to beat the others without making sure all the ducks are in a row. To these companies the most important thing is to be front and center.

The Turtle

Then you have the happy, go-lucky turtle company that starts their business off with what they believe is a great model and start to set sail. They think through what they want others to think about their brand, they listen, they adapt while keeping a steady course to the finish line and end goal. They make sure they cover everything and are thorough with their plan. To them they want to finish strong, never take their eye off the goal but keep a steady pace.

How many businesses have you seen that start up and take off in the beginning but quickly deflate because of some issues they have or they didn’t quite think through? And how many businesses have you seen that don’t necessarily stand out at first but as time goes by the word of mouth travels and they are all over the place with a great format and concept? So this leads me to ask: “is your business the rabbit or the turtle?”

Lesson 1:

•For “Turtles”: It is ok to be slow, as long you persevere, don’t give up

•For “Rabbits”: Distraction and arrogance is often times the biggest obstacle of your success.

The rabbit with its ujanja thought to himself, now I know what I have done wrong, if I change my attitude, I should have a chance to win. So, he asked the turtle for the 2nd round; this time, he did exactly what he planned to do: very focused and changed attitude, he won the 2nd round.

Lesson 2:

It is possible to win if we are willing to humble ourselves and learn from the past mistakes. Then Turtle got thinking, “There must be a way I can do this!”. After careful inspecting different routes, he found one route would benefit him greatly. He asked rabbit for the 3rd round race. On this particular route--> there was a river in between. As you can imagine, for the Turtle, it was such an easy race, he swam so fast, outperformed Rabbit quite a bit. Turtle had a triumph!!!

Lesson 3:

When we know our gifts and talents well, and know how to use it wisely; we are unstoppable! By now, Rabbit and Turtle actually started to realize both of them have different strength and weakness. They thought what if they could work together as a team, they might achieve to finish the race faster together. So they decided to give it a try. They chose the exactly the same route of their last race. In some part of the race, since it was all dry land, Rabbit carried Turtle and ran fast, when it came to the river, Turtle let Rabbit sat upon his shell, and he swam fairly quickly. The result, they finished the race together in a much shorter time. They were thrilled!!!

Lesson 4:

When we are able to leverage each other’s strength and unite as a team, the result can be astounding!!! Now as buddies, Turtle and Rabbit put their head together again. They dreamed about helping other animal friends in the woods. Many of their friends had hard time to go from A to B fast enough for food, or had trouble to cross the river when they needed to; what if we could build something to transport them....thus, they built an innovative vehicle and achieved their dream of helping their friends to cross the land and the river safely and quickly. Also, this vehicle could be used by everyone after Rabbit and Turtle showed them how. The whole animal world was full of joy, because their pain/problem is solved!!!

Lesson 5:

An innovative “vehicle” or a “system” which is able to solve the pain/problem oftentimes is from dreamers; those who dare to dream and dream big.

Now think hard and long and deduce whether you are a turtle or a rabbit…by the way both are OK as long as they know their strengths and weaknesses and complement each other.

So you can blow the trumpet?

Guest post by Samuel G. Njenga

One of my many adventurous drives looking for land landed me somewhere in a place called Landless along Thika Garissa road. I can bet that some guys who were landless were settled there. I met Kamau, a land broker who never stops talking and chewing khat, his mouth is always green like that of a goat. The life that these fellows lead is sometimes amazing. And you would be quick to ignore them but you’d be surprised at how resourceful they can be. Think of a diamond in the rough. You see, this Kamau guy sometimes gets me some nice pieces of land and if I buy any of the land, I give him some good commission. The problem is that this fellow drinks himself silly, in fact, if you attempt to call him an hour or so after you pay him any commission, you’ll find him already drunk and talking incoherently; it will be akin to talking to oneself. I think brokers have that mentality that the cash they get from land deals is almost painless or effortless.

Kamau and his problems aside, he showed me some few pieces off Thika Garissa road all the way up to some place called Magogoni, at the foot of Kilimambogo and bordering Ukambani. On our way back he remembered some nice land on sale near Thika Town and we headed there. I liked the land and I therefore, requested to meet the owner, one Momanyi. The broker called him and he said he was too busy to meet me on short notice. He however agreed to meet me a week later.

I called my partner Paul and he agreed to accompany me to go meet Momanyi on that Saturday we were to meet. On our way to Town, I called Momanyi and requested him to meet us at Ambassador Hotel. His response was rather unexpected, “My friend, I don’t go to River Road. If you want to meet me, find your way to Serena”. I relayed the message to Paul and he laughed mischievously. I told him that I smelled a big rat coz I don’t like dealing with fellows who are all over themselves. Paul was insistent that we meet the fellow coz we might learn a few things from him.

When we packed at Serena, I called Momanyi and we linked up. Big bodied middle aged man with an average pot belly, dressed sharply and with designer shades to boot. We shook hands introduced ourselves and ordered some drinks. His first question was whether we were serious we really wanted the land. We nodded to affirm so. He then asked us whether we have viewed the land and we replied in the affirmative. Then he cheekily made a comment to the effect that he hoped we could afford the land.

As we sipped our drinks the guy talked and talked big. Within twenty minutes or so he had mentioned of a very large development project he was undertaking in Karen for some 30 units each costing 30M and how he does it without any financing from a bank. He had mentioned how he finances politicians. “You see from here am dashing to chair a meeting, am financing my brother for the some parliamentary contest somewhere in Kisii. The other day I gave him 7 million for his campaigns. In fact am also supposed to clear some Land Cruisers in Mombasa for the campaigns so you guys better be serious”, he said. It became a monologue and I was really struggling to listen to him.

After his self-adoration session, we asked for the paperwork to the land we were interested in. To our utter shock, the land was not even in his name. When we asked him why he is selling the land which does not bear his name, he said that he bought the land but decided to register it in his brother’s name now that during those days of the former regime big shots like him were being targeted by the powers that be. “Do you have the power of attorney or on what basis are you to sell the land?” we asked him. He did not have but said his brother is only a call away.

When we enquired for the price of the land, he told us it was worth 3M and non-negotiable. When we gave an offer of 2M, the guy was so irritated that he shot up from his seat and retorted; “Young boys, if you don’t have money, please take a walk, Mnafikiria shamba ni mkate? I don’t deal with people with no money “. He then yelled at one of the waiters and demanded for the bill. I realized that our talk was heading and I excused myself to go the gents.

By the time I came back I found Momanyi had already left but Paul had his smile back. “I hope when you become rich, you’ll not be as arrogant as this Momanyi guy”, Paul cautioned me. I however told Paul that my gut feeling was that the guy was a fake. You see, the majority of the filthy rich are generally humble people. You see the rich fellows in big cars are usually on the road very early and they have very good driving habits. After all they have no point to prove and their wealth speaks for itself. I am usually very skeptical of fellows who are always praising themselves. Even the good old book advises us in James 4:10: “Humble yourselves before the Lord, and he will lift you up”

I suspect that most people are only humble simply because they are poor. Give them the money and overnight, they’d transform into very arrogant fellows. Next post we shall deal with a rather interesting concept. “In business, do you act like a rabbit or a wise turtle?”

Njuguna, aren’t you working too hard?: Part 2

Continued from part 1

Njuguna worked quite hard and he must have realized that by working harder he was doing better. He must have have gotten sucked into long working hours maybe without noticing. Most likely other areas of his life got neglected. He was most likely eating poorly and probably never exercising. If this continues unchecked the guy will run into health problems and he’ll wish that he found a better balance in his life.

The biggest error of omission or is it commission is failure to create a system that works for him. How do you create such a system? We can learn a great lesson from the business mogul, the late Njenga Karume (RIP). He planned the succession of his business empires to able to run without him. He needed to have gradually let go of his direct involvement in running the businesses:

1.            You need to spot talents and build a team that shares your dream. The team will get you to your goals faster. He ought to have a manager for the hardware who deals with operational issues. The manager would probably have some sales person, procurement person, a person in charge of delivery, person in charge of receiving cash, etc. Njuguna would maybe be getting some periodic briefings and he’d probably concentrate on looking for new ventures and generally strategizing on the business and where it moves.

2.            But how would Njuguna trust that these fellows won’t steal from him? He ought to create controls at different levels to assist tighten any loopholes in the system.

3.            How about his land business? I see no reason why Njuguna would be chasing clerks at Kajiado when he can get someone to do such errands for him. I am sure he can afford to a person or people to take clients to site, chase documentation at lands office, chase consents with DO, etc. Most of these operational tasks need to be delegated.

4.            He should also take advantage of having people in his team who specialize in some areas. The jack of all trade mentality never works well. Isn't it better to know everything about something as opposed to knowing something small about everything?

5.            At that higher level, Njuguna should be able to organize his days in such a manner that he will cover all the facets of his businesses and spare some time for his family and he should rest more. Probably eat better and exercise. That way he’ll be a more complete person.

Let’s get deeper into what Njuguna ought to be doing?

1.             High Level Strategic planning : Setting realistic goals and tracking the attainment of the goals

2.             Looking for new ventures and investment options: How about going around the outskirts of Nairobi and looking for land…at the state he was in….he thought that the best land deals are only found in Kitengela… How about exploring other areas where timber is available? How about expansion into new areas…replicating the Kitengela success say in Rongai or Ruiru?

3.             Strengthening his team to help achieve his vision faster and spotting new talents. He can also build on the strengths of the existing staff and resolve some weaknesses.

4.             Creation of sales and marketing strategies…after all his business is sales driven.

If all this is in place, I think Friday afternoon he can join a member’s club and play golf. After all this life is short and he can afford the nice things in life.

I never got the chance to talk to him and I am sure this message may have never reached him before he collapses in a heap due to exhaustion and weariness. I hope someday I’ll bump into him and talk some sense into him. I hope he can listen to me...he sounded too arrogant to listen to some young man who may not be as successful as him…

That reminds me of some businessman I met who was so arrogant and was really blowinghis imaginary trumpet….Next post I’ll touch on that topic.

Njuguna, aren’t you working too hard?: Part 1

Guest post by Samuel G. Njenga

I first heard about Njuguna the very first time I landed in Kitengela in search of land. The broker I met was very jovial and excited to meet a young man (I was then) interested in investing in land. As he took me round to view the available options he could not help but tell me about Njuguna, because he felt I could be as successful as him. They were buddies with Njuguna because the broker is the one who would get nice pieces of land for Njuguna to purchase. I was therefore very keen to know more about this Njuguna and probably meet him.

According to the broker, Njuguna had as many as 150 acres of land in a myriad of places, in different sizes around Kitengela. In other words his fortune converted into cash would translate into like 200 Million as per the valuations of that time, quite a tidy sum several years ago. I requested the broker to take me to Njuguna just to have a chat with him because maybe I’d get some tips from him.

I was taken to some timber yard and introduced to Njuguna who happened to be the owner of the yard. Njuguna never in any way looked like what I expected. A man of average height dressed in some blue jeans and some blue t-shirt and in sandals; quite simple and modest. When we shook hands and introductions were done, before we could speak further he was on his phone. From the conversation I figured out he was talking to a guy somewhere in Tanzania and they were discussing about timber delivery or something like that. When he finished the conversation he looked at me and told me that he is usually quite busy. Immediately another call came in and from my little knowledge I could hear he was talking to someone at Lands office in Kajiado and the little I heard it was all about a missing green card.

While still talking, some lady came over and joined us and motioned to us that she wanted to talk to Njuguna and urgently so. When the guy finished talking on his phone, the lady was all over him asking about some timber he was meant to have delivered to her site somewhere in Athi River. He cooled her down and called some guy and instructed him to measure some timber from the yard and deliver to Athi River.

Soon after Njuguna was looking at the broker who brought me to him and asked, “What is it that this Kijana wants? “ The broker was at pains to explain that I was interested in investing in land and wanted to just talk to him and probably get some advice. His reaction was quite a surprise as he looked menacingly at me, “Kijana, you know we cannot talk about some things now. Why don’t you come later at around 6 and over a cup of coffee, we can talk business?” Of course I realized how busy he was and nodded in agreement and then we disappeared into the horizon together with the broker.

Of course I really wanted to know the secrets of Njuguna and how he had made it. I was therefore quite inquisitive and the broker gave me a long story of Njuguna’s life and I realized the following:

1.     He was an extremely hardworking guy and his story was that of ‘from rags to riches’. The timber yard was set up like 15 years ago with a capital of twenty thousand shillings and it had really grown to an extent that he could channel part of his profits to land consistently. He had created a good relationship with Maasais and they’d always bring offers for any land on sale to him.

2.     He used to take charge of almost everything in all his businesses. He was the manager at the hardware, was in charge of sourcing for timber and could spent most of his weekend at the border of Kenya and Tanzania awaiting the lorries from the other side of the border.

3.     As far as land dealings were concerned, he would also take clients to site, chase documentation at lands office, chase consents with DO, and sometimes even go to Survey of Kenya to get maps and so on.

I realized that despite doing quite well, he was too busy and working for long hours, sometimes to the detriment of his health. I therefore concluded that he was not only a workaholic but also his businesses depended entirely on him. Minus him, then the businesses would crumble like a stack of dominos.

He had a big problem trusting anyone else to even do the simplest of errands. He was also a mkono gamu and releasing any of his shillings was a painful ordeal. I actually looked for him several time so that we have the coffee but he always had something that would not allow him to show up. He seemed to have a cluttered life to say the least.

The big question I had on my mind is whether he was working too hard and was he actually working smart? Is it possible that with a different approach, he’d easily get to a higher level of success and probably work less, have time with the family and generally create a reliable system that requires his minimal input and probably at a strategic level?

Are you having problems similar to Njuguna’s and how can you get away from the mindset of working hard and start working smart?

Working too hard can have a really negative effect on your quality of life. Long hours and the pressure to keep doing more can lead to stress, burn out, depression, or just that miserable feeling of is this all there is to life?

Next post we shall explore Njuguna’s weak points and possible ways of dealing withthem. Maybe the dude should even get time to play golf and take the family out, a few holidays here and there….he should enjoy life, or so I have been thinking. After all, what is the motivation of accumulating all this wealth? The religious fellows like me will even ask “Of what use is it if a man gains the whole world and loses his soul?

Of inherited land and selling: Part 2

Continued from part 1

Alex is a smooth talker, no wonder he actually always had a way of convincing even the toughest of the fairer sex and of course his stint as a pastor gave him a chance to horn this attribute. Typical of him to first mention religious matters and keen to know how I was doing in that regard. After laying the base with the religious niceties he dropped the bombshell. Of course I knew of how he sold his inherited property, bought a cheaper plot, build the mabati house and squandered the rest. So when he narrated how he had this nice business idea that I buy a taxi, he runs it, grow the business into a fleet of taxis bla bla; it was never lost on me what he had gone through.

And so I asked him, “How comes you never thought of buying that Taxi with the cash you had after sale of the ½ acre plot?” He was quick to answer, “of course I had thought of that but opted to start the business of importing mitumbas which unfortunately never really kicked off and somehow the cash I had kept diminishing to a point where it dried up mysteriously” I knew I was in a scenario where I had to wriggle my way out because in all fairness I never felt that buying a taxi would amount to a worthwhile venture, not with him as the main guy. Actually, the idea of entrusting my good friend with a business having known his history was the last thing I’d entertain.

However, this was a friend in dire need of help and leaving him in that status would not be good. And so, I floated an idea to him that in my opinion seemed workable and practical. I told him of a housing development we were undertaking and that I’d recommend him to the Project Manager just to assist him source materials. Just to go round looking for the best deal for sand, ballast, quarry stones, cement and any other material the guy could get just for some small commissions. Interestingly, he accepted that idea and as we speak he is a broker sort of and doing just fine. At least he can feed and clothe his family and even educate the kids.

Whenever I speak to him he wishes he’d turn back the hands of time especially due to the lost time but at least he is now much more positive about his life and earns an honest living. He claims he’d can never sell anything he inherits as he is convinced that there is a curse on ‘that land’. Of course he hopes that there is more land to inherit form his mum but it may not be the case.

Someday I asked my old man the reason why anyone who sold inherited land around our village always squandered the cash. He told me that it had an interesting history around it. The land was acquired after the infamous Mau Mau war with the colonial masters. It claimed many lives and some people were maimed and all that. When our great grandfathers got the land, having been active fighters, they pronounced a curse on it; that it must never be sold outside the family and it must be passed on from generation to generation. Any sale had to be within the family. It is therefore the case that anyone who sells to anyone outside the family will therefore never help themselves. An interesting perspective but I opted not to engage my old man further on the matter.

Some very strange stories around my village regarding fellows who have sold inherited land. The funniest was this guy who sold the small piece he inherited. He called the villagers from all walks of life, bought them 5 goats, dug a big trench and jumped over it, leaving the villagers on the other side of the trench. The trench and the subsequent jumping was a symbol of him having the crossed the divide from poverty to riches. He waved the villagers bye and zoomed off into riches leaving them to enjoy the 5 goats to mark the big occasion. Sad part is that he left his family as well only to return back after 1 year having squandered all the cash. Of course he found the wife had already left and got married to someone else and moved on with her life. His only brother accepted him back and gave him some shelter….interestingly it was a story reminiscent of that prodigal son in the bible; I guess these things started way back. Pretty sad that they never learn from other's past experiences. Someone told me that this is tantamount to get bitten by a dog which is chained somewhere.

A friend of mine once told me that the reason these villager have failed to do anything worthwhile with the cash is the fact that they are not used to big money. Obviously if you are playing in the league of maximum ten thousands and all of a sudden you have a windfall of a million, the natural reaction is to assume that you are filthy rich. Most become very generous and get to shopping sprees, get away with some nice girls and assume life will always be like that. Certainly no big money remains big if all you are doing is spending; the net result is a shot back to reality and destitution which is much worse having come from the crest of a sinusoidal wave.

Let our people learn, that whatever you have worked hard for and is acquired through your own sweat, you can freely sell but what you acquired by way of inheritance, you need to pass on to the ones behind you.

Next we shall look at some business practices which are not so good that are attributable to business men who are seemingly doing well; think micromanagement (know when to let go), blowing your own horn as opposed to that of the team, leading as opposed to managing, amongst others.

Of inherited land and selling: Part 1

Guest post by Samuel G. Njenga

I met this friend and neighbor in a burial of my cousin in shags. He had requested for a meeting with me after the burial citing a very important issue he wanted us to discuss. I took him to the local shopping center and we got into a café, ordered tea and some mandazis. I was very eager to hear from this longtime friend of mine.

Alex has been a buddy of mine since we were kids. We were born the same year, grew up in shags together, played childhood games together and went to school together. I vividly remembered how he used to pass by our home early in the morning so that we head to primary school together, carrying our books in paper bags and carrying our food in those Kasuku boxes. Life was hard but we really enjoyed. Simple times and simple days when my biggest ambition was to become a pilot beyond schooling; of course I never became one, but I guess someday I’ll buy a helicopter and learn how to fly.

The Alex in front of me was a former shadow of himself; it seemed life had really harassed him. His was a life of extremes. In his later years of primary school he became a rebel child, beating up other kids and generally misbehaving. He later joined bad company and decided to pull out from school. His mum got so disappointed and kind of gave up on him, after all he never knew a father figure having lost his dad when he was barely two years of age. Alex later graduated into a village thief, stealing chicken and cows and whatever else he came across. Of course he was always being looked for by law enforcers due to his stupid acts of stealing. He survived several attempts to lynch him. After all, the villagers knew him and thought that he would reform at some point.

Things got worse when he started abusing hard drugs. This combined with his criminal tendencies finally landed him in jail where he stayed for four years. By then we had lost contact as I had left shags for my campus life and later got employed. After serving his term, he returned home only to find that the society had sort of rejected him. It was a frustrating life for him up to a point when he attempted to commit suicide. He however never succeeded and was rushed to hospital and survived. When I heard of his suicide attempt, I felt that I needed to do something and went looking out for him. I managed to convince him to join a rehab. Sure enough after several month of rehab he came out a totally changed person.

He started doing menial jobs and joined the church. Being a survivor, he grew in the church and eventually opened his own church. However, the church never lasted for long and it closed down around two years ago.

Alex’s father had left some 3 acre piece of land and the mother held it for sometimes till sometimes last year when she decided to subdivide the land and give each of his 6 sons a piece. My friend Alex got his share of ½ acre somewhere in the interior Kiambu. He is a man of many ideas and life having not gone as planned; he decided to sell his ½ acre. When I asked him why he made such a decision, his explanation was simple. He had planned to purchase some 1/8th acre in a not so prime location with the proceeds of the sale, and then build a mabati house with the balance and whatever remains; he’d start a small business. Sure enough, he bought the plot and built the mabati house. That is the last I heard of him till he started looking for me.

The guy I saw in front of me never looked like he ever came across ‘big money’. He held his chin and started his story. Of course the bug that has bitten so many of my village mates had finally bitten my friend. The last time I went to the village, I found like 70% of my immediate neighbours had sold the small plots and moved. So many new faces around our home area coz majority of the youthful guys have sold the small inherited plots in search of better life and dubious business ventures. So sad….that the story my good friend Alex used to give me of villagers who sold their land and messed up was about to unfold…that proverb about the firewood in the rack laughing at the firewood in the fire, without knowing that it is next in line???…some direct translation here.

Next post, I shall tell you what he told me and I felt like giving him a pin to pinch himself back to reality.