Everybody can succeed financially regardless of his or her status in life and current well-being. Speaking to soldiers of the 12 Engineers Batallion recently, Dr. Philemon Bureti, the Corporate Affairs and Communication Director said personal development is influenced by the choices one makes, and wealth does not discriminate. “A lot of the time,” said Dr. Bureti, “we blame our employers for our failures… if only they paid us more….sometimes we blame the government,” he opened his talk on ‘Strategies of Wealth Creation’. The topic of the day was ‘Preparation for Retirement’, which in Army lingua, its called The Pillar Five of Training. “I chose the topic on wealth creation because it is an important topic that cuts across the economic and social cadres.” Below is his presentation in full.
WEALTH CREATION BY Dr. PHILEMON BURETI : Dip Ed, Bed, Med, Phd, Senior Lecturer,Director Corporate Communication, Mount Kenya University
1. TAKE RESPONSIBILITY
Nobody else can change your situation, but you. The circumstances you find yourself in today are not anybody else’s fault. Many of us have gotten into the habit of blaming other people for the way our lives have turned out. A lot of the time we blame our employers; if only they paid us more….sometimes we blame the government. However, this blame game has to stop, because whenever you shift blame to someone else, you give up you power and responsibility. Take back control. Ask yourself: Now that I’m here, what am I going to do about it?
2. SPEND LESS THAN YOU EARN
Seems obvious enough and we all know we should do this, yet most of us struggle with this. Think about it this way, that little amount that you refrain from spending could go a long way in helping make your financial situation better.
When you loose the comfort of a regular income you realize that the Ksh.300 you spent on 3 bottles of beer daily adds up to Kshs.9,000 per month and kshs.108,000 per year. What can you do with sh108, 000 in savings each year? It could mean that you finally afford to go on that holiday that you have always dreamt of or it helps you pay off your debt faster or make an investment which will put more money in your pocket. Either that, or you can continue spending sh108,000 on drinks every year in lieu of meeting your financial goals.
3. KNOW WHAT PUTS MONEY IN YOUR POCKET AND WHAT REMOVES MONEY FROM YOUR POCKET.
There is a difference between assets and ‘flossets’. Assets increase your money (e.g. investments, businesses) and ‘flossets reduce your money. Ironically, society believes people are wealthy by the amount of flossets they have e.g cars, trendy clothes, latest phones, shoes, houses they live in, lifestyle gadgets, etc. These items have no bearing on how wealthy you are. You need more things that put money in your pocket and less of those that remove it.
4. DO NOT BORROW TO CONSUME.
Do not take a loan to buy ‘flossets’. That’s what we call bad debt and it will take you many steps backward. Good debt i.e. debt that will lead to increased assets will take you forward.
5. MULTIPLY YOUR RESOURCES.
My personal definition of wealth creation is the ability to multiply resources. Start with evaluating how you use the resource called time. Do you spend more time doing things that remove money from your pocket or things that put money in your pocket? Use your time wisely and multiply your knowledge, skills, networks and this will ultimately lead to multiplication of your financial resources. Maybe you don’t have money in your bank account right now but you can still start multiplying these other resources to your benefit.
6. KNOW WHY YOU WANT TO MAKE MONEY.
Making one million shillings will not make you happy? Why? When you do get it, you will want 10 million shillings and so on. You have got to come to terms with why you actually want to make money? A good way to think about it is: if you had all the money in the world, what would you do (after buying all the things you think you would want)? Would you spend more time with family, travel, establish an organisation, help others? Money is a tool to help you achieve these things; it is not in itself what you really want. Identify the deeper reason why you want to become wealthy.
7.KEEP THE RIGHT COMPANY.
Keep the kind of company that provides an environment that is conducive to wealth creation. The people that complain about being broke all the time are not the right company.
8.CASH FLOW IS KING.
Eventually everybody will get to a point where income is his or her most important financial requirement. You may retire and still need an income to sustain your life. You may lose a job along the way and realize the importance of income. You may be unable to work or simply want to be able to make the choice not to work. One day the source of your income will have to move from your ability to work 40-60 hours a week, to your investments. Your investments will need to be generating that income to keep you going. What is your plan to grow or structure your investments so that they can generate the amount of income you need?
9. IT’S NOT ALL ABOUT YOU.
This is the pill that is sometimes hard to swallow. Creating wealth cannot be all about you. A selfish attitude leads to small thinking. When it is all about you: what can you spend, what can you buy, etc., you may end up achieving that but only that. You can do so much more. What you want for yourself is important but when you combine this with a bigger picture that includes family, those around you, your community, etc. You see things in a whole different perspective. The best investments you make may not be those that you made when you were thinking about yourself, but those that you made when you were thinking about the future generation because you were willing to take a long-term view. What do you want to be remembered for?
10. IT’S A PROCESS NOT A ONE-OFF DEAL.
A huge amount of money will not fall on your lap one day and sort all your problems out. You will not get a life-changing deal. The process of wealth creation is choice not chance. Having a vision as opposed to just focusing on survival. Action not just ideas. Empowerment not creating dependence.