The mind is the key to financial independence

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Woman hands with coins in glass jar, close up

BY DAVID ONJILI

The average person, according to Robert Kiyosaki is 95% eyes and 5% mind when investing and anyone who wants to stop relying on their paycheck must henceforth train himself or herself to reverse this and be 95% mind and only 5 % eyes. Money gets transferred every day only that physical currency is gradually growing extinct as electronic money reigns supreme and thus anyone seeking to be a top investor must open his or her mind to tap into this.

It is estimated that Safaricom has close to Sh26 million active M Pesa users on its network and with that, a Kenyan roughly transfers an average of Sh113 every day. This indicates that money is available, and plenty of it for that matter, albeit electronically and seeks anyone who cannot only recognize but also nurture and transact it.

The smart investors have trained their minds to distinguish ideas that will need solving and thus reap big from it, and the best investment any individual can ever make is to first seek reliable financial knowledge before jumping into ‘investments’ that end up being Ponzi Schemes. Kenya is no exception, recently a number of citizens were complaining, and not for the first time, of how their hard earned money has gone into the wind after being lured into investments that promised tidy returns of Sh250, 000 every six months upon an initial investment of Sh550, 000 which enabled the ‘investors’ not only acquire land but would also get a greenhouse in the process. Media personalities, Caroline Mutoko whom it’s alleged is a director with the company and Maina Kageni through his breakfast show on Classic fm 105.5 fm, Nairobi had advertised some piece of land in Abedares and Kajiado whose owners, Property Reality Company (PRC) were selling to the masses.

This comes hot on the heels of the quail eggs business of around 2014 that went as fast as it came, many individuals ventured into it for the quick returns yet when the dust settled, a vast majority lost their investment capital. The common denominator in all this is simple, them that are first to ‘invest’ in such projects make tidy if not abnormal returns, and are later used by the schemers of the theft as testimony of the success and viability of the said projects Unsuspecting and get-rich mentality Kenyans, once they read or hear about the so called investments rush without due diligence to invest and as sure as sun rises from the East, they are ripped off and the cycle continues albeit in a different manner.

“The wise store up choice food and olive oil. But fools gulp down theirs,” Proverbs 21; 20 New International Version (NIV)

Loosely translated, a fool and his money are soon parted. Sadly, this is the major phenomenon when it comes to many individuals investing. Their gullibility shows they’re people who have ill or mischievously acquired money and thus exercise no caution as they seek to multiply it greedily. With all humility and due respect, how does a media personality on a breakfast show who is just seeking a commission from advertising a so called investment convince any individual to invest their hard earned money on a project without interrogating it or even seeking help from an investments expert?

The PRC investment promised a return of Sh250, 000 every six months or Sh41, 700 from an initial investment of Sh550, 000. How can this be possible especially comparing an investor who buys a 2 bedroom house worth Sh12 million and can only get Sh35, 000 monthly rent in an area around Imara Daima along Mombasa Road.

While the government must be involved to protect her citizens through licensing and thorough investigations upon full disclosure of most of these investment schemes, the burden of protection is solely on the individual investor. Financial knowledge, however expensive or tough to come by, is no substitute for lack of it before venturing into any business.

The aforementioned quail eggs craze of around the year 2014 in is a prime example, they were hailed as a wonder egg that could cure every ailment from cancer to hypertension. Really! While their retail prices were very high at the time, for around Sh80 compared to chicken eggs that retailed at Sh10, many so called investors failed to fathom that price of commodities are reliable on a number of factors including limited demand for a product that is highly needed and an artificial demand that was generally created by the media as was the case here or even price controls by the suppliers who limit the products out in the market and thus creating an artificial shortage.

Wisely, nothing from the above reasons should allow any would-be investor the right to pump in any huge amounts of currency into a project without seeking investment help. There are several books and the difference between you losing a tidy amount could be a simple Google click away from knowledge. It pays to seek this information.

A business should not be attractive to you as an investor because there is a rising demand in the market for the product, what should guide your investment should be your own ability to meet the demand for the produce you seek to start venturing into and the long term expert projection of the good and service you want to venture into.

While it is human to feel sorry when you read news of individuals losing money from such quick rich schemes, an honest assessment into the habits of Kenyans is a worrying trend; it is one painted with greed, naivety and chasing after quick fixes. There are, however, patient Kenyan businessmen who are making good profits and growing their businesses because they exercise caution, knowledge and proper financial wisdom, which they personally seek.

Speculation is good in business, but making un-informed guesses is not different from placing a bet or gambling in a casino. Let it be known that investments must be interrogated and patience is a virtue for anyone seeking to be an investor to practice. What’s even funny is that your local bank has free advise on investments, all one needs to do is listen carefully and weigh up the options availed to you then make an informed one.