Dr. Lucy Ndegwa-McKenzie is the co-founder and chair of the women-only diaspora Sacco known as Kenya North America Diaspora Sacco (KNADS Sacco). The Sacco draws membership from women in 23 countries in North America.
I set up the KNADS Sacco together with 8 other women. We started from a Facebook group for women with a basic question of what the 6,000 of us would achieve if we contributed $100 (Sh. 1,100) per month. How much money would we have and what would we do with that kind of money? The Sacco now provides members with a vehicle to save and access low interest loans for both individuals and collective investments. The majority of my co-founders had never met in person. But we had the passion and the determination. You will never know how much as an individual you can be stretched until you are placed in a situation where sleep becomes a luxury, and commitment and selflessness take top priority.
My K-NAD Sacco account is where I primarily save my money. I am able to access quick loans of up to three times my savings when need arises. Having a Sacco account forces me to ensure that I have saved the minimum amount that is required monthly. I have currently put in all the required monthly savings for the period up to December 2022. I prefer to have any other excess monies invested in money market funds, fixed income funds, shares, treasury bonds, or infrastructure bonds.
I used to love seeing the zeros behind the number in my bank balance. But then I figured that these figures weren’t earning me any interest. This is one of the worst ways of saving money. Each dollar should be considered as an employee making you more money, so it is critical that you place it where it will make you that money even as you sleep.
I once lost $40,000 (Sh. 4.4 million) after investing in a company without due diligence. The company had a great story for Kenyans living in the diaspora but there were no deliverables behind the story. The warning signs were there but the overwhelming great investment opportunity caused many of us to suffer significantly from the lies. The loss I took was enough to make me decide not to invest in anything in Kenya. Before you invest, always listen to what those on the ground are saying. Involve a lawyer of good reputation, and check the character of those leading the investment vehicle.
There are five things that I have learned from my parents on money. You must always pay yourself first. You must then set aside at least 10 per cent of your income for investments. You must invest in things that make money and appreciate value. For example, storing money in a bank that earns you zero interest has the same value with storing money under the mattress. You must not be afraid to ask for what you want. You must join other people if you want to go far in life and in wealth creation.
Strong and supportive family and friends are important for your personal development. These are the people who cheer you on. But don’t get caught up in thinking that the only people you can do business with are the ones you have known all your life. There are people who will only be with you for a season. I have come to learn that leadership in any group is very political, both internally and externally. So there are those whose mission is to tear others down and poke holes at every chance they get. There are others who will stick with the objective and mission of the group. Be quick to know the seasons of the people in your life and roll with the punches. Walk away from relations that drain and suck the life out of you. You have a life to live and you cannot spend it trying to appease those who have decided to misunderstand or mistreat you.
This feature was first published in the Saturday Magazine. The Saturday Magazine is a publication of the Nation Media Group.