Reuben Mwangi is the chief executive officer of Century Micro-Finance Bank.
Money mistakes: At the age of 27, I invested over half a million shillings in a pyramid scheme. I had hoped that the investment would make me rich overnight. Being financially naïve, I had fallen for the success stories, pomp and colour that masked the pyramid scheme without conducting due diligence. Consequently, I ended up losing all my investment. I have since learned that there is no shortcut to wealth. Similarly, the biggest money mistake you can make is to splash your money on get-rich-quick schemes. That is not how wealth is made. Always bear in mind that any financial program that promises to turn people into overnight millionaires is most probably a scam.
Greatest financial milestone: Over the years, I have built a decent investment portfolio through stocks and properties. My secret in investments has been patience and due diligence. In fact, when I started out, short term investments on the Nairobi Securities Exchange (NSE) were my most financially challenging ventures. A fundamentally viable investment at the securities market will always reward you in the medium to long term.
Building wealth: I would not have accumulated wealth as I have if I did not get the right investment strategy and consistency when implementing it. I also ensure that I fully involve my family in my investments so that they are able to learn how to invest profitably with or without my being around.
If I could start all over again: I would get a mentor early in life and also be patient especially in regards to my investments at the securities market.
Saving method: I put aside a percentage of my income every month to my investment account. This is the first thing I do every month after receiving my salary. Previously, I used to deposit all my cash in my main bank account and perhaps unsurprisingly, I always had needs and wants that consumed nearly all the cash I got.
Entrepreneurship vs employment: None of these can exist without the other. On one hand, employment will give an employee first hand lessons on how a business should be run, and in the process, they can end up creating their own wealth through aggression and progression in their careers. In the same breathe, establishing a side hustle can turn out to be a formidable buffer in the event of a loss of income. Every employee should consider owning a side business as long as it does not affect their productivity at work. It is also important to note that side hustles may not always have to be physical businesses, but also passive investments like bonds or Treasury Bills that bring in extra income. On the other hand, though, entrepreneurship is usually the better way of building and passing down wealth. It is not easy to run, but is more satisfying especially after breaking even.
The financial comfort zone: Although I have not had major losses in my career, I have observed that one of the things that can derail your progress towards wealth is the couch called the financial comfort zone! You must avoid it at all costs if you want to make it either in entrepreneurship or in your corporate career. Don’t get the illusion that you have earned enough or reached the apex of wealth creation. Building wealth is a continuous project.