The underworld of Construction: Final Part

Wrong professionals

Continued from part 5

This friend who doubles up as a past customer was rather excited when he called me. He wanted me to pass by his site and see the house he was constructing. From my bust schedule one of the Saturdays I managed to squeeze in some minutes and passed by the site.

From a far the maisonnette looks brilliant, a very eye catching roof and the outer walls were very well done. The guy was not on site at the time I got there but I decided to just get in and view. My eagle eyes were quick to note that the workmanship was superb. My sharp eye further started to see some serious design flaws. The lounge door was positioned at the middle of the lounge rendering the usable space minimal. The lounge was sunken and I quickly realized that the step was too big between lounge and dining. The stairs were done well but there was a huge space, sort of a corridor which again seemed unusable. The worst thing I saw was in the master bedroom. The was a very tiny window despite the room being humongous. Inside the shared bathroom, almost everything was wrongly positioned; the bathroom was one long one and for you to access the water closet, you had to pass the showering area. Obvious mistake is that when one person takes a shower and another person wants to use the toilet, then you must go through the wet area before you reach it. I could go on and on and write about a very long snag list but the long and short of it is that the design work was really poor.

Just before I finished going round the house, the guy appeared together with another dude whom I suspected was the foreman. Upon introductions I realized that the other dude was actually the ‘architect’. In quotes because he later told me that he is originally a structural engineer though he had learnt some design work in his line of business. The puzzle was solved. Here is a structural engineer masquerading as an architect. That explained why the design work was piss poor and the workmanship superb. I realized how we fail before we even start a project. WRONG PROFESSIONALs.

Like that architect who is a one man show is a common scenario. He convinces you that he can not only design the house, but he can also give you a Bill of Quantities (BoQ). He also convinces you that he can play the role of the structural engineer. Heck, he is even very comfortable doing interior design work. Haiyaa, plus he also wants to supply you with materials. I once met this fellow called Mike who talks non-stop; akin to a radio with new batteries. You see he claims to have the answer to all your problems. He knows where to source for everything and anything and he is an architect by profession. And so I asked him, what is your specialty?? I obviously never took him serious.

Where do we get it all wrong?

1.    Let the architect design the house and carry out site inspections to ascertain the quality of work. Nothing more.

2.    Let the structural engineer advise you in as far as the structural issues are concerned. He is a very important professional otherwise your structure could one day come down, if not during construction.

3.    Don’t bring over your relative and assume that they will play the role of clerk of works when they understand nothing about construction. The learning curve is too steep.

4.    And those junk-of-all trade fundis who claim they can do mason work, carpentry, fittings, roofing, plumbing and all manner of works are suspect.

5.    Never ever go for quacks, their costs could be tempting but the price you may end up paying maybe too much. Like that friend of mine whose roof was leaking. Can you imagine he was forced to bring the entire roof down… I once told him that he was like that man who passed several dogs on his way to being bitten by a goat.

Enough of this construction stuff. I hope that we have all learnt something.

We shall shift gears and get back to interesting business concepts. In the next post we shall talk about the powers of a good name…how to profile your customers. They say 'if you want to sell to everybody, you'll most likely sell to no-one'...and other business concepts that will assist us become better business people and investors.

The underworld of Construction: Part 5

Timber theft explained

Continued from part 4

This guy who was measuring my timber at Kawangware spoke in a very soft voice but with a lot of conviction that I believed what he was saying. He actually confessed that the reason he left Rongai was primarily due to threats from one of the customers in the yard he worked for. The said customer after getting conned promised to come for the heads of all those he believed conned him; and that included this young man. Once he heard that the owner of the yard had been accosted by some boys who threatened to have his severed head and balls collected in one of the bus parks, he knew it was time to hit the road.

Without warning he started explaining the all-important tricks and I was all ears. You see that measuring tape is usually tampered with. If you are keen to observe, it will have some feet missing, as in it could move from 1 to 2 to 4 to 5 then to 7 to 8 to 9 to 11 to 12 to 13 then 15 and so on. This essentially means that if that tape indicates 9 feet, in the real sense the correct length is 7 feet. If it indicates 15 then the actual length of the timber is 11 feet and so on. In essence you could be losing 3 feet on average per timber. If you have a quantity of 2000 pieces, then obviously you will have lost as much as 6000 feet and if each foot is costing Kshs 30, then your loss would be as much as 180k. That is just one of the tricks.

The second trick he mentioned was in the recording of the timber as it is measured. You see, the fellows use a piece of paper and a pen and they normally draw tu-small lines depending on the length of the each timber measured. Meaning, there will be a section for 9 feet pieces, 10 feet, 12 feet and so on and a ka-line will be drawn in either of the sections depending on the measured and the ‘shouted aloud’ length. What I suspect happened in my case is that, the guy who was keeping the tally would add imaginary tu-lines whenever my foreman who was to keep an eye on him got distracted. When I flashed back, I remember that there were as many as ten fellows each given a specific role in the set up but some were just meant to distract us.

The other but most unlikely trick is to ensure that the timber is ferried in more than one truck and if you don’t have a trusted guy accompanying the lorry, then they can drop some at designated places on their way. And they’d go to the length of befriending your foreman or fundi in case you send them before the actual purchase and make him part of the squad to defraud you.

The other thing they’d do to novices would be to measure poor quality timber. For an experienced hand, whenever you encounter poor quality timber or one with unusable section(s), the feet are normally discounted or the entire piece is kept aside.

So how are you supposed to safeguard against such tricks. Read below:

1.      Make sure that the measuring tape being utilized is your own. It is better to buy one (they are very cheap) because it will obviously not be tampered with.

2.      Make sure that when the measuring is being done, keep your own tally for later comparison at the end of the measuring. In the event there is a discrepancy, then make it clear that your tally is the correct one. If they insist that it is not, then let the exercise be repeated.

3.      Always make sure you have a trusted hand (preferably your fundi) to verify the quality of the timber and be in charge of ensuring poor quality is set aside or the process of discounting the unusable sections is done and fairly so.

4.      Never trust your fundi or foreman to take charge of the entire process in your absence. Notice how easy it is to co-opt them into the gang and milk you dry. Never ever delegate this fully.

5.      Where possible, let the seller deliver the timber to your site and measure from there. At least in your site you will have absolute control.

I was conned in broad daylight by I told myself that it will never happen again. You see the other day I was purchasing timber and some guy from Ruai attempted to use these tricks on me. The fellow had discounted his prices with the assumption that he’ll apply the tricks on me. I proved a hard nut and after sealing all the loopholes, the measuring was done but at the end of the exercise, the fellow confessed he was to make a ‘loss’ because the prices were unbelievably low and he never managed to steal anything. He even contemplated chasing me away without the timber but I cornered him. The other day I called him and informed him that I need to purchase some more but he declined to sell to me; of course he knows am a bull that cannot be milked.

Be advised and don’t let them con you, least of all with these tricks. By the way, am sure they are probably devising other strategies to steal from unsuspecting Kenyans.

The other day I went to see some guy I had sold to some plot. He is currently constructing his residential house and what I saw on his site was quite sad. I discovered he is using the wrong professionals. Topic for another day, well next post.

The underworld of Construction: Part 4

Timber theft

Continued from part 3

This Momanyi guy found us on the site when we were busy chatting with my foreman and introduced himself. He was all smiles and presented to the foreman his quotation for timber. By the way, some of us who are small-bodied and sometimes dress anyhow without much thinking are mistaken for KYMs on site. That reminds me someday when my brother in-law came to see me on site and this entrepreneurial young man who wanted to enlist the owner of the house for garbage collection service was all over him asking for business and ignoring me…then my brother points at me and advised him that am the owner of the site to his utter shock and subsequent apologies…story for another day.

The quote in comparison to the others was so favourable, I could not believe my eyes; what with prices lower by as much as Kshs 3 to 5 per foot. I asked the guy why that is the case and he explained that they get their timber from Tanzania at very good prices hence the favourable prices to their customers. I swallowed that hook line and sinker and we agreed that we shall visit him at his yard and see the timber.

The day after we drove to Rongai together with my foreman and all the way to Nkoroi where the yard is located. We were loaded with the cash to do the purchase because it was meant to be a cash deal. They had very nice timber and we agreed that we shall buy from there. Immediately we agreed, he called some two transport guys and negotiated the transport on our behalf, a nice dude or so I thought. He thereafter called his men into action; around eight of them to measure the timber. We agreed that my foreman will keep any eye on the recording of the measurements while I keep an eye on the actual measurement, tight controls or so we thought. The timber was measured and loaded without any issues and truth be told I never noticed any anomaly. It was then transported to my site and offloaded.

Something crossed my mind, I thought it was wise to verify the delivery. I thus instructed the fundis to measure the timber again. To my utter shock, what I paid for as compared to what I had on the ground had a discrepancy of 40%; in other words it was 40% less. Wait….so what happened. I thought I had a hawk eye when the measuring was being done and I also accompanied one of the delivery trucks to the site while the foreman accompanied the other. Mystery, mystery…conned in broad daylight…but how??

I swung into action, called the guy and told him that he had conned me. Of course he refused. I insisted that I’ll take up the matter to the cops but he sounded unmoved. I drove back to Rongai the morning after and reported to the police station about the ordeal. The cop serving in the OB section just laughed at me and before I finished my story he asked me whether I had bought the timber from a certain yard owned by Kisiis. He confided in me that they have received so many complains about that yard and they have not managed to do anything because it is hard to prove that the guys actually steal…wait…: ”And why don’t you set a trap to confirm is they steal”, I asked him. Of course they never really bother because in the past despite arresting the owner severally, the guy always found his way out mysteriously. In my thinking this obvious pointed to something bigger and I therefore so no need of pursuing the matter further with the cops.

I went back home dejected and trying to figure out how to deal with the matter. I even contemplated using unorthodox means to recover the loss, like threatening to go for the owner head with them boys. Painful as it was, I decided to cut my losses as opposed to throwing good money in an attempt to recover the loss. How then did they steal from me??

After utilizing the timber which was far less than was needed on site, I decided to shop around and look for a place to top up. My little shopping around landed me in Kawangware where I met a lady who owned a very well stocked yard. We had a chat with her in her office and I told her about the Rongai incidence and she laughed at me. Before I narrated the entire ordeal, she told that it is commonplace and especially in some yards in Rongai to get sellers who underquote but steal from you. She advised me that it is better to pay the market rates and get value for money as opposed to look for cheap stuff and get conned. Anyway I bought timber from her and after confirming the delivery on site, it was tallying with what I paid for. But while her KYMs were measuring the timber, one opened up and confirmed that he once worked in a yard in Rongai and he had no qualms telling me the various ways they were stealing from unsuspecting customers.

It will shock you but in the next post I’ll tell you how it is done and how to arm yourself just in case some fellows have planned to do it on you. I was conned in broad daylight but some things you never wish they happen even to your worst enemy…. Be warned and advised.

Overnight success is just a fallacy, ask any millionaire

Article by Murori Kiunga, Source: Business Daily Posted  Monday, April 16  2012 at  17:35 http://tinyurl.com/bf5mozc

Robert Kiyosaki, an authoritative figure in entrepreneurship says: “Most people are waiting for the perfect time to start a business; they are waiting for all stars to line up and all lights to go green.

Unfortunately, that perfect time will never come. To be an entrepreneur, you must start with what you have on the ground and pick up the rest along the way.”

You do not have to accumulate a lot of capital to start a business in a big way. You don’t have to wait until you have educated all your children, built your own house or paid all your debts before you can venture into that risky venture laced with good prospects.

You can start something that will earn you money right now from where you are. You can start it right in your house while you are working or studying. All you need to do is to be creative and focus on what you have rather than what you don’t have.

One of the greatest enemies of success in business is fear. Often people tell me that they would like to start a business but they fear to fail. I always tell them boldly what I believe; that entrepreneurs don’t fail. It is enterprises that fail.

The first thing you should do from the moment you start the entrepreneurial journey is to disengage yourself from the business in a way. Do not be too emotionally attached to business.

Let your business have its own life. This means that in the event the business collapses, you do not collapse with it.

Don’t venture into business with expectations of becoming fabulously wealthy like some entrepreneurs you know or hear about.

Entrepreneurship is journey; a marathon, not a sprint.

In 2008 a Nigerian entrepreneur Alhaji Aliko Dangote was ranked by Forbes as the richest man in Africa, the position he holds to date.

In 2011 his net worth was estimates at $13.8 billion.

He is also simultaneously the richest person of African descent in the world, surpassing Mohammed Al Amoudi ($12.3 billion) and Oprah Winfrey ($2.7 billion.)

Born in Kano, his grandfather, the late Alhaji Sanusi Dantata provided him with a small capital to start his own business.

He started business in Kano in 1977 trading in commodities and building materials.

He later moved to Lagos and continued trading in cement and commodities. Encouraged by tremendous success and increase in business activities, he incorporated two companies in 1981.

These and others that followed now make up the conglomerate known as Dangote Group.

By any standard this man is qualified to give you advice on entrepreneurship and wealth creation.

These are the words from his own mouth, “I built a conglomerate and emerged the richest black in the world in 2008 but it didn't happen overnight. It took me thirty years to get to where I am today. Youths of today aspire to be like me but they want to achieve it overnight. It’s not going to work. To build a successful business, you must start small and dream big. In the journey of entrepreneurship, tenacity of purpose is supreme.”

Your desire and inspiration should be something higher than money. Oprah Winfrey said, “You know you are on the road to success if you would do your job and not get paid for it.” In other words your motivation in business should be giving your customers with solutions to their problems. Your rewards, not wages will be money.

Mr Kiunga is the author of The 7 Pillars of Financial Success and The Art of Entrepreneurship: Strategies to Succeed in a Competitive Market.

In our next post, Swahili proverb: Haba na haba,hujaza kibaba, practically speaking.

Healthy investment decisions

Guest post by Young

Although it is practically impossible for one to be 100 per cent infallible in predicting a good or bad investment, it is possible to narrow down the playing field by following basic principles while investing. Experts note that this will help ensure beginning or advanced investors a margin of error when investing their funds for a good return earning. It is therefore important for an investor to adopt the basic principles of making good investment decisions if he wishes to trim his risks and make considerable progress in his venture.

Business professionals say whether it is cheap insurance, good insurance or just plain savings bonds, in today’s unstable economy one cannot ever be 100 per cent certain in investing. They, however, note that choosing wisely will definitely be an asset in achieving success or avoiding financial disaster and cutting the risks. Below are simple tips to making excellent investment decisions in an unstable economy.

Take enough time to think

At the moment, third world economy is unstable and harsh to businesses. Businessmen, in separate interviews with this correspondent, often complain of the unfriendly economic policies which they have to contend with in order survive. As a result, they note that whoever wishes to invest in the third world must take enough time to think through what venture he plans to dabble into. According to experts, whenever one has made the decision to invest a certain amount of money, the first thing that needs to be established is that it will take time to devise the following principles and a subsequent financial strategy.

Investing in one’s future is definitely not something to just plunge into without careful thought and consideration. Experts say the lightning-fast nature of the Internet is conducive and geared towards convincing surfers to make quick and impetuous decisions. Consequently, this fact needs to be on one’s mind continuously before making any investment decision as any error might be regretted. Of course, no one loves to regret in business.

How much risk can you take?

You should know how much risk you are willing to tolerate in whatever business you do. Knowing the difference between an average savings/money market account and investment vehicles which form part of a portfolio is vitally important when making successful investment decisions, experts say. So as an investor, are you ready to take risks? Calculated risks should be taken in business to succeed. Every form of investment has its associated risks, and any investor should be ready to undertake such risks, but shrewdly.

Never give up easily

Do not succumb to pressure in business. You must understand that every business has its own pressure and it is not wise to give up easily after encountering some challenges.

Generally, families, friends and the shoe-shine boy on the street will all offer financial advice. Most of it will not be qualified, expert advice. Most of them will know of a cheap insurance policy, promising stock or a well-performing company that has good future potential. Whatever they may advise or try to push, in order to avoid bad investments, it is crucial for a person to not succumb to outside pressure. Put in your best and be wise.

Undertake detailed research before investing

Experts advise that in today’s highly volatile, economic environment, it is primordial to carefully research a particular financial vehicle which carries out one’s financial goals the most. Meticulously checking out the specific investment offers, competitive offers from other sources and how well the investment is performing is a crucial prerequisite. You should ensure detailed research before investing in any form of venture.

Also important is to painstakingly research the reputation, integrity, and track record of the financial institution offering the investment. Experts say this is just as important as the investment itself. Some of the basic tips for this include taking time to implement a savings and/or an investment plan with a diversified portfolio; determining how much risk one is willing to assume: research which investments are insured, non-secured and/or low-risk; and never bow down to friendly advice if it does not adhere to your short, medium or long-range goals.

Are you adventurous?

Many of our entrepreneurs want to sit in a place and expect things to work out fine. Experts notes that you must have a dream and that dream must influence your entrepreneurial vision. “The moment you have that dream, you should understand that it doesn't come easy, you must drive it. What do I mean by driving it? It is not going to be easy. So how do you as an entrepreneur identify your priority? Even in the face of making it, when the returns begin to come in, how do you determine your priority? Do not forget where you are coming from? What informs your taste? You have to be adventurous. When people talk of lack of funds, I laugh. You see, when you talk of lack of funds, I see it as the least of all your problems. The idea that you want to develop as an entrepreneur is key and paramount.”

You need to diagnose the efficacy, relevance, workability and feasibility of your idea. These are the issues that many entrepreneurs tend to push aside and they begin to talk about the issue of funds. “People talk about issues of policies and infrastructure, but these are only essential and secondary, they are not primary,” As an entrepreneur, you must have the drive and understand your dream and idea.

The key question is, “Why are you in this business? Can you explain or is it because your brother, sister, or uncle is doing it? No! If you go into business because of that you have messed up everything and your problem starts from there. So when you have gotten your idea right, you can now talk of money or funding.”

In the next post, let us talk about involving your spouse in financial decision making. 

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.