23 C
Saturday, August 8, 2020

Ndindi Nyoro: Saving will not make you rich

Must Read

Kenyan businesses that are making billions despite corona

Top Kenyan Businesses: Nearly five months have passed since Kenya confirmed her first case of the coronavirus disease dubbed...

Awori family raises Sh. 800 million to bail out jailed Grace Wakhungu

The Awori family has raised a whopping Sh. 800 million to bail out 79-year-old Grace Wakhungu who is in...

Tuskys: We need Sh. 2 billion to survive

Tuskys News: Tuskys Supermarket is grasping on straws and needs Sh. 2 billion immediate capital injection to survive. This has been...

In business classes at the university, the take-home message is that a culture of saving is the gateway to financial freedom. However, nothing can be further from the truth. The school of thought that savings lead to wealth is unyielding.

From the economic pedestal, saving is supposed to contribute to a pool of money where investors, industrialists and those who engage in economic activities can borrow. Savings from the great majority are supposed to help those expanding their investments by providing new capital.

Millionaire Ndindi Nyoro: My 3 steps to getting rich easily

Consequently, these investments are supposed to create jobs, more value and spur the economy. However, the modern day hailed call to save, is slavery to doctrines that yield no results. Saving just as a matter of principle leads to a never-ending destination that leads to mediocre lives.

For example, a person who earns Sh.30, 000 and after paying rent and other basic amenities is able to save Sh5, 000. What if this individual is advised to try and save more? This would push him to reduce his expenditure, move to a cheaper house and even park his car at home, in favor of public transport. The other option to more savings would be to cut down on their menu and other such crucial expenditure.

Therefore, increased savings can only happen if the expenditure is condensed. This means relegating your standard of life. When you work so hard, the intrinsic motivation is to lead a good life with trappings of as much as can be afforded. This, unfortunately, is not possible if all you need to do is save.

On the contrary, to lead a good life, one needs to expand their income streams, not constrain the expenditure. To be wealthy is not a determination of saving from the same stream. It is a variable of having more, not spending less. You make no money by saving money.

Money is only made by engaging in more commercial activities. This, in turn, gives one freedom to actually consume more and delight life with more adornments. Therefore, if your income stream only affords you to live in a Sh10,000 per Month rental house, you make no money by moving into a Sh8,000 house.

You only likely end up in a house further from the road and other amenities. It only makes more sense to concentrate on expanding your current income stream and fostering new ones. This will liberate you to move into a Sh20,000 house which will likely be more comfortable. When this happens, economic activities increase and velocity of money is improved.

The effect of this is a robust and vibrant economy. Reducing expenditure on the other side and almost invariably contracts economic activities. We better learn to spend, live large and indulge in the best that life can offer but we must keep replenishing the source by opening up the supply side of resources.

Millionaire Ndindi Nyoro: why you must spend money to make money

If employed, a side hustle will do. To those in business, you have less to do; just expand your lines and open new ones. In other words, the only kind of ‘saving’ that makes sense is that which transits to investments.

And the only investments that are worthwhile are those that create more revenue streams. Wishing you well and you plan to save less or none at all.


Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.


Latest News

Covid-19 hitting Kenya’s small businesses hard, says Facebook report

More than a third of small businesses on Facebook in Kenya have been forced to shut down as a...

Escrow Kenya launches free online marketplace for SMEs

Escrow Kenya has announced the launch of a free-for-all online marketplace in Kenya targeting small business owners looking to give their businesses more visibility...

See List: Top 10 highest paid CEOs in Kenya and their salaries

Highest Paid CEOs in Kenya: Some of Kenya's chief executive officers take hundreds of millions in salaries every year. In this feature, we take...

All teachers, police, civil servants to take salary cuts

Civil Servants Salaries: Teachers, police officers and all civil servants in Kenya are set to take salary cuts. The more than 530,000 civil servants...

UK billionaires partner with Kenyan firm to start new sports betting site

Triple5bet: Kenya’s sports’ betting is headed for interesting times following the entry of a new company with backing from billionaire British investors. Triple5bet, which will...

More Articles Like This