Paul Muhami is a finance management, entrepreneurship and investment advisor. He is also the managing director of Nairobi Success Academy, a personal development and investment consultancy firm.
Building wealth: Learning to pay myself first was my catalyst to meaningful wealth creation. Normally, I’ll tithe 10 per cent of my gross income to my church, and then invest another 10 per cent. Once this is done, I embark on settling my outstanding bills. In investing, I have been focusing on SACCOS with the aim of getting the benefits that come with the compounding nature of saving and investing through SACCOS. I have also ventured into the real estate sector for its capital appreciation as well as the money market for short term liquidity.
Biggest money mistake: When I was young, I handled money like any other typical youth I would spend all that I anticipated way before it landed in my hands. While wisdom would have been to stop digging the hole I was stuck in any deeper, this habit of spending threw me into serious debt. At some point, I figured that I needed to take action if at all my financial health would ever recover. I suspended all new purchases until I cleared all outstanding debts. I also enrolled for financial training courses that helped me know how to handle money. Always remember that money loves company. If you don’t learn to grow your money, you will end up spending it all. Learn as much as you can on how to multiply money and avoid the financial herd mentality. How the other person handles their money is not always the most prudent way!
Financial milestone: In retrospect, becoming money-literate ranks high above my achievements. This is because it forced me to change my attitude on my earning abilities and spending habits. It taught me how to say no to impulse buying and since then, I have been able to live my life on my own financial terms. This is what financial freedom does; but it must be earned!
Biggest career loss: I got retrenched in 2007 and that is when I literary discovered that I came to this world alone! Nearly all my friends abandoned me, yet this turned out to be the best thing that could’ve happened to me, for I learned, through the hard way how to bounce back and never to get carried away by the joys of monthly employment earnings. Retrenchment sinks the roughest money lessons in your life: have financial values, say no to group financial thinking, avoid impulse buying and invest, invest, invest!
If I were to start all over:Â I would have a very clear vision of where I want to end up in life. I would save and invest early and religiously, while avoiding excessive indulgence.
Saving method: Previously, I used banks to save. Today though, I have diversified my saving portfolio into SACCOS, real estate, money market and equities. I run my own portfolio which means that I am fully in charge of my financial journey.
Secret to making it: A clear vision on what you want to achieve, why, and sequential steps towards that vision is the secret. How can you hit a target if you aren’t aiming at it?! The biggest hindrance you can place on yourself is myopia. In fact, this is where many people fail: their vision is about the next meal, next rent, next salary, instead of next 5-30 years!
Entrepreneurship: This is not a gambling game! You must know what you’re doing! You cannot for example open an M-Pesa shop or exhibition next to 10 other similar outlets without float. Always know the risks and opportunities, size of market, target clients, and how much you require to break even!
Thanks bizna for highlighting my article. Let’s continue learning from each other.
God bless you.