Maurice Oduor is the former investment manager at Cytonn Investment Management Limited, an investment and real estate company in Nairobi.
Seek professional advice: One mistake I made when I started out was making major financial decisions without understanding the risks involved. I often ventured into areas I knew little about without consulting a professional. I have since learnt that you need to understand what you are investing in before you commit. If you don’t have the requisite expertise, bring in a professional to help you understand what you are getting into, and especially the risks involved. This will save you avoidable losses.
Think outside the box: There are so many investment opportunities you can tap into beyond the traditional stocks and bonds. Alternative investments such as real estate outperform the traditional stocks and bonds by an average of 25 per cent. Think beyond what everyone else is doing if you want to create wealth.
Start early: I used to be a procrastinator who would say, I will invest tomorrow. I have learnt that time is of essence, so it is prudent to start investing early regardless of how little you think your resources are, make decisions faster and basically be an early adopter of new investments.
You don’t need millions to diversify your investments: Investment comes with risk and the old saying that you must never put all your eggs in one basket rings true. Diversifying your investments minimizes losses. However, some people say that they cannot diversify because they don’t have much cash at their disposal. That is not true, even with as low as Sh. 1,000, you will find pooled investment vehicles such as unit trusts and cooperatives that offer diversified investments.
There is no quick and easy route to wealth: A lot of people are looking for the easiest and quickest way to make money, but the truth is that there are no shortcuts. Wealth is created through systematic and regular action. Always set aside some savings from your salary, then set aside what you will invest and finally set aside what you will consume.
Don’t compromise: as far as saving and investment is concerned, be very strict about saving and investing before you consume, and always have a goal in mind. If you are saving, what are you saving for? If you have set aside money for investment, what kind of investment can that amount of money be put in?
Note: Maurice Oduor is now a Senior Manager of the Asset Management business arm of Genghis Capital Ltd.