Warren Buffet, one of the most celebrated equity investors in the world, in one of his featured presentations advises people especially the young to start investing early.  He gives himself as an example having started investing at the age of 14 and regretting that he never started early enough. 

Very few of people in this world are naturally awarded millionaire status.  Majority have struggled through multinationals whose modus operandi were set while they were still in business schools.  To them, promotion meant sleepless hours in their offices and results were defined by their supervisors' expectations.  Through hard work, they made their way up the organization to finally achieve top levels in the corporate ladder.

On the flipside, we have the few who the society always labels the risk takers.  The few who quit school or their employment to nurture their noble innovations.  At some point, the society will not absorb their idea because they just don't see it work.  Through persistence and an unusual determination, they pursue their dream until they set their hand on anticipated results.  Evidently, it is only the strong that survive; the reason why most of startups never make it to the second year of operation. 

The two illustrations above basically explain why we have different personalities who can never be measured on an equal scale.  Take for example Jack Welch who turned the struggling giant company, General Electric, into a dynamic company that everyone came to admire, increasing its value from a few billions to hundreds of billions.  All this, he did as an employee.  On another hand is Steve Jobs who created a company out of a noble chip idea.  Although one of these had shareholders to satisfy the other had his dream to realize.  Both are examples of success through hard work.

There are a few amongst us who are able to turn their noble ideas into great businesses.  At the same time, there are those who can turn good companies into what Jim Collins defines as "Great Companies".  To me, there is no written rule in achieving any.  It perhaps entails following one’s instinct and not a written rule.  To Steve Jobs, it was persistence, persistence, persistence.  For Welch, it was no nonsense leadership model which gave the company a competitive edge. 

Universities teach us to get jobs. However,  what makes us outstanding is our determination and desire to settle for more than the ordinary. We do not all need to start our own businesses to be a success in future.  Locally, we all consider Titus Naikuni as a great success as the CEO of the national carrier, Kenya Airways.  Still on an equal footing, Jimnah Mbaru is a success, not under employment but running his own company.  The bottom line is, we can all achieve success either as employees or entrepreneurs.  The true measure is the degree of energy, commitment and willpower we put into it. 

Escaping The Debt Trap

I once met a colleague's friend, introduced to me as Miss. Wheeler Dealer.  After a chat with her, I later came to learn that Miss let's call her WD buys and sells money, a trade that most people today refer to as shylock.  However, Miss WD is not the ordinary shylock you hear being discussed in downtown Nairobi, the type that auctions cars, property when the borrower is unable to pay.  She calls her business a professional shylock.

She has a great success story to tell.  Every day, she has borrowers looking for as little as Kshs. 1,000 to as much as Kshs. 50,000.  Majority of her clients are aged between of 25 and 35 and none will borrow money to put into business- 99 percent of the times, its for personal use.

The reason that she is doing booming business is because majority of us within this age bracket are living way beyond our means.  Having interacted with over 5,000 investors on a one on one basis since May 2006, I have learnt the art of reading a person by the way they talk and behave and not the cars they drive.  If you walk across the streets of Nairobi just after dark, you see many young men driving all sorts of cars.  And there is nothing wrong with owning a car.  But it worries me when one buys it to fit in, spends all his salary paying off for the loan, borrows more from a shylock and at 35, has not a single investment.

What complicates the whole equation even more is that most get wooed to investments that do not meet their objectives with the hope that quick money will come their way in due time.  How many times for example have friends confided in you that they borrowed money and gave it all to a pyramid scheme with the hope of doubling returns over a short period of time? 

The first and most important lesson is that one should never  borrow unless he/she is doing it for business.  My lending friend, Miss WD always gets most enquiries on Fridays because majority of her clients want money to spend during the weekend.  The temptation to hold money we have not worked for has driven many to acquire credit cards.

The second is that the most important bill that counts is that of my well being.  My medical insurance is the number one priority, then the insurance of my assets.  For the salaried, this never comes in as a priority; after all, your employer automatically deducts the bill at the end of the month.  Just think of it, if everything burnt down today, what would you do?  Take a loan to start over again or run to your insurance company?  It's less stressing to do the latter.  But it starts now.

Thirdly, you will never have enough capital to do any business you have ever wanted to.  There will always be bills to pay, things to buy, and basic needs to be met.  Focus should be on developing the idea, getting it to work and leveraging on the little resources available.

Fourthly, and a link to the previous point, work your math right.  You cannot borrow money from a bank to repay Kshs. 200,000 per month if you only make Kshs. 200,000 per month.  This will kill the business after one month or get you into a borrowing cycle; Borrow from Sam to Pay the Bank and from Peter to Pay Sam.

Finally, you must be financially literate.  It is one thing to have money and another to utilize it productively.  How many times have you seen people take loans to invest in property even when the repayment lags the monthly income, or bankers venturing into transport business, an industry they know little about?  Majority end up losing their money.  Not to mention the number of people using credit cards without making enough to sustain their repayment.

What you do now is a reflection of what you will be doing ten years from now, unless something changes.  The only person to make that change is you.  Take charge.