What it takes to Succeed in a Career

What really makes one successful in any work environment, and why is it that other people progress their careers, while others falter or even change workplaces time after time? I have spent countless hours trying to observe my colleagues at work and also speaking to individuals that I know to have successfully build their careers from scratch. Following below, I share some of the traits I realize in them; Firstly, it is important to observe other successful people in your workplace and seek to emulate them, at least you will have a role model. By doing so, you will get to learn by observation and guidance from the said individuals. Try to acquire as much knowledge as you can about the industry you work in, if there are any certifications required to practice, make sure you are up to date and be prepared to be a continuous learner(flexibility to learn new material). Teamwork is an important aspect of any workplace and is a skill that you will realize is needed in almost any workplace. Build skills in excellent interpersonal communication skills and learn to relate with your fellow employees, and understand that just because someone is not your supervisor or manager does not mean he/she has no influence at your workplace. Be polite and friendly to the people you work with. Show the commitment and willingness to go the extra mile for your workmates and also to be successful in your assigned role. Lastly, treat every task at the workplace as a learning process. Observe with interest, and ask your colleagues about things you do not know or unable to do, because the experience gained will serve you well as you progress in your chosen career path.

Unique things I have learnt while in Canada

Canadians value diversity: Canada’s commitment to diversity is what really distinguishes it from the rest of the countries. In Canada, you will find people from all over the world. You will be allowed to express yourself and nobody will discriminate you on any grounds be it your race, religion, culture, language, and sexuality.This country welcomes approximately 250,000 immigrants(new people) each year, all excited with the prospect of a quality of life offered by a country that prides itself in diversity.Hence,you will always feel at home, because you will interact with lots of people from various backgrounds,cultures, and upbringing. Courtesy: Have you ever heard of the words, ‘Please” and “Thank You”,and Sorry. Find out what these words mean because you will need them in abundance here. Courtesy is paramount around here, there are no excuses for any sort of rudeness, and even then it doesn't get you anywhere, courtesy will. Time: When I was growing up in Kenya, I used to hear people say African time, Kenyan time etc. That does not work around here, if you have an appointment with anyone, be it a doctor, professor, employer etc, 10 am means exactly that. There is no room for excuses for showing up one hour late here, people value time, after all most people are paid per the hour, in some cases you get penalized for lateness. Appreciation and value of blue collar jobs: Am probably going to receive a lot of stick for saying this, but the truth is people here are proud of their jobs. Back in Kenya, you will hardly hear anyone proudly say, am a watchman or security personnel. All people want to be classified as working in is a white collar job; often you will hear people say they are lawyers, Doctor, Engineer Etc, even if they are not, because it’s cool. Unfortunately, in these parts of the world you will realize that a plumber probably makes more than a banker. People who work in trades, such as carpentry, barber,health care/social work make enough income to enjoy a quality life. It’s okay to work in these industries as long as most of your money is diligently invested. (Don’t get me wrong I am not justifying anything, I don’t work in any of the industries mentioned, BUT it’s the plain truth) The value of women and children; I remember while in primary school (elementary or secondary school, we used to get capital punishment for even a minor mistake. Students would receive a beating; parents would punish their kids mercilessly, etc. Sadly, that doesn't work here; there is no tolerance for such behavior at all. The same case applies for women. Canada is a world leader in the promotion and protection of women’s rights and gender equality. You have to respect and in times of disagreement share opinion with your wife or girlfriend through negotiation as equals. Hard work is rewarded: If you work hard, diligently and stay focused this country offers a fair chance to succeed. Forget about the American dream, Canada has its own dream, not as marketed as the American one, but equally realizable, and I would argue based on present economic conditions, better.You just have to network, be patient and make the most of your opportunities presented.

Understanding economic concepts to help make wise investment decisions

Most of us easily talk about stocks, real estate, savings and all those great terminologies that help grow our money, sadly not many of us take the time to understand the economy and how it affects our daily lives and its impact on our decision making when it comes to investing.When we choose to make an investment decision, we are basically looking to the future and our expectation is to gain. We believe the investment will go up in value and the seller probably believes it will go down. None of us can accurately predict what will happen, but I can assure you that the more informed/educated you are the more you are likely to predict correctly. When choosing to invest, it is important you understand that the global markets are constantly evolving, partly due to technology, competition and changing consumer demands, and this constant changes will mean that you have to continually keep up with the change, revise your investment strategies according to the prevailing market conditions. Hence, the importance of taking time to understand the basic concepts in economics. Once you understand the concepts of economics as an investor, you will be able to analyze economic growth, and areas/industries that have opportunities for growth. These will aid your decision making and investment choices. You will be able to improve and even change your strategies and more importantly understand when to buy and when to sell and at what percentages to hold of certain investments. If you are able to analyze correctly, then chances are your investment will gain higher returns than the average investor. Economics is about trying to understand the choices we make, and how the sum of those choices affects the market economy. There is an interaction between the choices we make and the economy as whole and the prices are determined by the supply and demand. When you choose to go out and buy a phone, laptop, or even groceries, you are faced with plenty of choices. Economics is all about trying to understand why we make those choices, for example, why would you choose an apple stock instead of a Microsoft stock? Below are three economic concepts you need to understand: Interest Rates: This is the rate we pay interest on funds that have been borrowed from a lender. This provides the linkup between the present and the future economic activity. For example, what do you stand to gain by not spending today, and saving the money? Would a higher interest rate on savings account entice you to save more? Would a lower borrowing rate tempt you to borrow more? What if the rates went up? Supply and Demand: How much quantities of a service/product will consumers desire, and how much of the same product and service can the market offer. The interaction between the two reflects the price consumers are willing to pay. The higher the price, the lower the quantity, and likewise the lower the price the more demand. Inflation; this is an important economic concept, because it shows the rate at which the real value of your investment is being eroded, it is about the growth of your money. This concept will allow you understand how inflation impacts your investments and the consequences of your investment decisions.

Investment Club; A beginner’s entry into Investing.

We have recently gone through different investment vehicles, on the assumption that capital is not an issue. In reality, not everyone can afford to raise their own capital to venture into investing, especially those that just finished university/college with little savings (financial base). You most probably will have to borrow funds to get yourself going, and in all honesty you will find it hard with little savings or a security to convince a bank to lend you any money to invest, or even start a venture. Once you walk into a bank, they will most likely be interested in your personal profile and employment background as a way of assessing your ability to pay the loan. Your options become limited, meaning you miss out on great opportunities to grow your money if you do not have savings to start you off, or a high paying job. Even if you manage to be among the lucky few, the banks will probably lend you at a rate higher than the average borrower. This is where; an investment club can bridge the gap for those that intend to get into investing, but do not yet have enough savings to get going. If you have ever bought any sort of investment/property/asset in the past, you will realize how difficult it is to raise the initial capital. If you have like minded relatives, friends, and even neighbors, it may be time for an investment club. An investment club will allow you to save the monthly/bi weekly contributions from which you can invest jointly. You could do investing in Stocks, Real Estate and even other opportunities. The investment could be done in your country of residency, or could also be done in emerging markets. Those people that join the club must have a shared objective, and the pooled resources should be invested in various projects with an aim of getting a profit, or better yield without having to borrow the capital, hence avoid the interest paid for taking a loan to invest. One of the advantages of the investment club would be to promote a regular habit and routine of contributing to savings and also a focus on long-term investing for the club. For those that are not investment savvy, it will allow them to learn from people who are able to do the research and also the exchange of ideas among the members. It will also allow you to reap from being able to buy larger investments that you could not do by yourself. An Investment club is a good way to allow friends, colleagues or professionals with diverse interests, experiences and ways of seeing things to do their investing as long as they share the same values, and are willing to take on responsibilities and ensuring rules are established from the go.

Successfully invest in Kenya’s Stock Market

As I was talking to one of my colleagues recently about investing, we ended up debating on which stock investment strategy, (investing in developed economy like Canada or investing in an emerging and growing market like Africa) will give you the better returns. In the end I realized that a lot of us have perceived Africa to be too risky, than the actual risk that exists. Having successfully invested on the Nairobi Stock Exchange (NSE) market, I have decided to offer my insight on some of the things that one can do to be successful investing in the market. I have a strong interest and affinity in Kenya’s stock market and believe that the following opinions will stimulate your thought process and bring awareness to you as a reader, thus allowing you to go out there and do more research and learn other people’s opinions too. Investing in stocks entails a high degree of risk and there is no guarantee of a positive return whether you are investing in Canada or elsewhere, the reason why you need to asses yourself and how much risk you can take while investing in any market. Kenya is an attractive market for those that want to gain an exposure to the growth that’s taking place in Africa. The African GDP is projected to grow to around, $2.6 trillion in 2020 according to some economists, and Kenya finds itself in a strong position to take advantage of that growth. As the global markets struggle with their economics futures, e.g. Europe, USA, the continent has been growing at an exponential growth rate of 6.6%, while the rest have stalled. Kenya represents a free market economy, where the prices of the goods and services are determined by the market forces. It is one of the most politically stable countries in African with a significant advanced economy, hence why a lot of multinational companies have chosen to set shop in Nairobi. The Nairobi Stock Exchange (NSE) has over forty seven companies listed. The market is small (fourth largest in Africa), but also very speculative, hence there is a minimum amount of shares that you can buy at most of the brokers, set at 100 shares. The first thing you need to do to be successful is to identify the stockbroker that you want to work with. There are quite a number of investment brokers, some of the well known include Dyer & Blair Investment Bank Ltd, Suntra Investment Bank Ltd, and Canadian owned Kestrel Capital (EA) Limited, which charge a broke fee ranging from 2.1%-2.6%. Once you visit a broker, they will help you open an account with the Central Depository Settlement Corporation (CDSC), which is where all shares are held electronically. The Kenyan stock market is highly speculative and for someone that is investing in small scale or is just starting out, it can be very intimidating. I highly recommend that you ensure the following: I have learnt that you have to be constantly in touch with your stock broker, while keeping yourself up to date with the trends emerging in the market. Do not buy a company stock that you do not understand what the company does (what service/product they offer), because you may never understand which companies are undervalued, or even have a potential for growth. Make sure that you have a plan on the length of time you want to invest in the market. You can choose to be a speculative investor, short term, medium term or even long term. Stay in touch with your broker, and make sure they advise you as soon as your stock has either been sold or bought, either through email/phone call or any automated system. You need to have a good working relationship with your broker to succeed in investing in the NSE market. If you are a speculative investor, (sell your stock as soon as a wave of uncertainty hits the market) like most small scale investors on the NSE, then I would suggest buying shares that trade in large volumes. If you look at the trading for the past years, you will realize that prices constantly change for shares that are traded a lot, thus will give you a chance to make a profit when the price shifts and you sell them back.Try and buy low value stocks which also offer dividends. Make sure that when you receive the dividends, you reinvest those to help grow your portfolio. That way, you can hold onto the shares, while getting dividends and once your net worth or portfolio has grown you can then offload those shares at a profit and invest in other stocks. There is no given science to being successful in any stock market, Kenya being no different. It’s a risky affair and you must be willing to adjust accordingly. There are a lot of factors in play; it’s a matter of staying true to your plan knowing that the end result is to create wealth and ensure that your money grows to shield you from inflation and provide you a secure future.

A Case for Studying In Canada:

In business, we say the world has become a global village, and with the continued growth in globalization, there has been an increased number of destinations to undertake your college or university studies. From time to time I receive a couple of requests for information on studying/living in Canada from people I know and friends. Having lived here, some tend to assume that my experiences will be of help them make a decision on where they should head for further studies. Instead of responding to each individual request, I have realized that this platform could be a place to lay out some of that information. Many people are increasingly finding it difficult to make the right choices, and for those already here, I would presume at some stage you have faced similar questions, and forwarding the link to your friends may help them too. Without a doubt, your ability to finance your education is a key factor to consider when you decide to go to college/university, be it in your country or in a foreign country, and I feel the top reason to choose Canada as your destination to study is the low cost associated with the tuition and fees. Canadian Universities and colleges offer high quality education that’s world recognized at a fraction of what it would cost you if you were to go to other countries such as UK and the USA. The living costs are cheaper too. Remember there is employment opportunities while in school. You can apply for a work permit and work while a student and after you complete your studies you can get a post graduate work permit, which will give you up to three years to gain Canadian work experience. If you choose to stay in Canada permanently, there are avenues to apply for that as well, unlikely in most other destinations As a foreign student in Canada, you get free medical (Provincial Health) Coverage from the province that you live in as long as you are a student in a post-secondary education institution. If you ask many other students in the USA/UK, they will tell you that it costs a lot of money to pay for their insurance. If you are a married, your family members (spouse and dependent children) accompanying you while you are on a study permit will be eligible for the health coverage as well. Your spouse also qualifies to get an open work permit while you are a full time student, which helps in terms of getting some income to cover some of your expenses. Another thing to like about Canada is the diversity of the people. There is a lot of people from different countries and hence the opportunity to immense yourself in different cultures, increasing the opportunity to internationalize your potential, especially in a growing and competitive global market. Canada is growing as a destination for international students, and will soon surpass most others as a destination of choice. I would say before you make the decision to apply or travel here, do a lot of research on the school and city you intend to live in because in the end it will affect the quality of your experience in Canada.

Securing Your Financial Wellbeing; Paying Off Consumer Debt

Knowing your financial well being is an important aspect of our daily lives. It does not take a genius to be successful in managing our finances. All it takes is a well laid plan and taking the time to educate ourselves on how to invest and save. If you get the facts about saving and investing and follow through with an intelligent plan, you should be able to gain financial security for years to come, and more importantly secure a great retirement, or even better retire early and starting enjoying the benefits of managing your finances. If you plan on saving and investing your money, you are likely never going to get any returns anywhere near the 19.5% -30% that credit cards charge. Assuming you put your money in an investment account, you are most likely going to get a 2% return at very highest. What the banks do, is they borrow your money, deposited in a savings account, and then in turn lend it to you through either a credit card, line of credit etc at a higher interest. It’s the difference in the margins that creates profits for the banks, and that’s why I emphasize, unless you are investing in an appreciating project/investing and the rate of return is higher than you are paying on the loan, paying off consumer debt has to be one of your top priorities when you start off with savings and investing. If you don’t, then that balance will quickly add up, as we learned about compounding interest. Many people carry credit cards; some of them even maxed out (reached credit limit). It’s funny how credit cards make it easy to buy expensive stuff when you don’t have the cash for the same items. Unfortunately, credit cards are not free money. The truth is that any item purchased on a credit card, and not paid in full will always end up costing you more than original price of purchase, sometimes into double figures depending on how long it takes you to pay the balance, and assuming you never make any other purchase. People seem to buy consumer products now, at the expense of the ability to buy in the future. Why not wait and save the cash before buying? We live in a pressure filled society, where we all want to be like our friends/neighbor/relative. But should the purchases come at your expenses of a decent life when your income earning potential declines in the future? Money is a non renewable resource, you can earn more, but once you spend it, it’s gone. My Advice if you want to get ahead with your finances, any consumer debt such as credit cards should be paid in full. If you can’t pay them in full, then stack those cards away. Don’t use a credit card, unless you have the funds to pay it in full. For once try walking around with cash, and you will realize the feeling is not the same when you make any purchases. Some credit cards have some great benefits, but they are of no use if you are going to pay an interest of 19.99%. Let me show you how you can benefit from a credit card, for example I have two credit cards, for different reasons/benefits, I have the cash back card which I get cash back from most of my purchases, and I also have a platinum card which gives me travel insurance/rental car insurance on the card. When I need to travel or rent a car, I use my Platinum Card, when I do everyday purchases like groceries I use my cash back card. No matter how much of a purchase I make, I don’t think my cash back/insurance would be enough to justify the interest rate on the credit cards, but because I pay the cards in full whenever I use them, I get free cash back and free insurance. Track your financial position every other time. Know where you are and where you intend to go. Pay the credit cards/consumer debt with the highest interest rates first. Pay the most that you can afford each month to those cards, while paying the minimum on the other cards, once the balance is at zero, then focus on the next highest interest debt, follow this routine until you have completely no debt. Once you do that, channel those funds that you were paying towards credit cards, and put them in savings and investments. You will soon realize that you are working the magic towards securing your financial future, without being a genius, but following one of the basics of managing your finances

Investing in Real Estate-Your Questions Answered

In continuation of the real estate subject, I would like to respond to a couple of questions emailed to me by my great friend, and reader of my articles. Instead of answering him directly, I have decided to answer the questions on this platform openly, such that those with similar questions will have any idea on what it is like to invest in real estate particularly Kenya. This was the email; “Great article Jerry. I have three questions what are the mechanics of taking a loan in Kenya how much capital, and how much would the best bank give me. Also how do you know when it is the best time to buy property at home, as in how do you read the market? I know in states for instance property values were very low after the recession, and it was the ideal time to buy. Also how do interest rates affect real estate investors, and does the bank have the power to increase interest on a loan you took before? I love real estate, that's my dream” There are two types of real estate buyers in my book, and understanding yourself before making the purchase is an essential negotiation tool when seeking a bank loan to finance your project. Some people will buy the property purely as an investor, someone that will buy a property for rental yields and capital appreciation while others will buy property as a way of having a residency. Finding the funds to make the purchase can be challenging in Kenya. When you approach the banks, just like in other developed countries, what they look for is your ability to pay the loan. If you are buying the property as an investment (rental yield/capital appreciation), it may be easier to service the monthly payments for the loan because of the extra income coming from the property itself. Most banks will give you a loan of up to 80 per cent of the property value, with a maturity period of 15 years. Majority of the rates are between 19.5%-24% presently. You must be able to put a 20 percent down payment, and also 10% to cover other closing costs, which include stamp duty, legal fees, valuation, arrangement fees and mortgage protection policy premium. The banks have no powers to increase your agreed interest rate, unless the overnight lending rate goes up from the central bank. As you can see, these rates are high, considering that in Canada, you could get a mortgage rate of 3.09%, a secured line of credit at 3.5%, or even unsecured line of credit at 5%. Why not consider borrowing in Canada and investing in Kenya. Never make a decision by comparing the rates here to Kenya; it’s like comparing apples to oranges. There is not an ideal time to get into the real estate market in Kenya. The prices of land and property have appreciated faster because of the rising urbanization and population too. With a lot of people moving from upcountry to the cities has really pushed the prices higher, and I don’t see it abating any time soon. The cost of land and houses will just go higher and higher, therefore just buy as soon as you are able. Just to give you an example, a couple of years back say 2007, a plot in Thika Road that went for like Ksh 600,000($7100), is now at the very least going for Ksh 3,500,000(41,200). Property prices are always rising in Kenya; there is not an ideal time to get into the market My suggestion for you, look into buying apartments that are priced in the Ksh4-7 million ($47,800-$83,400) ranges. You could buy in growing places such as Rongai and Kitengela. These investments have a rental yield that ranges from 6%-11%, which is far much better that Canadian cities. Bear in mind that the property will be still appreciating as the lower middle class is slowly and steadily growing. To get into real estate, requires a lot of financial discipline. It’s supposed to be a long term investment project to build your net worth and portfolio, reason why you need a careful thought and research on the same. Good luck!

Investing: Never take your primary residency as an Investment

As a result of the article “Investing in Real Estate “a couple of days ago, someone emailed me and requested an opinion on how investing in real estate could be used as a saving plan to fund their retirement. With no intent of responding to them directly, I realized the need to bring another perspective into investing in real estate. If you intend to buy a house to live in, do not view it as an investment. A lot of people seem to think buying a house is equivalent to putting away savings that will fund their retirement; some even call it a forced savings plan. It is for these very reasons a lot of people feel that they can afford to live a certain lifestyle now, like visiting exotic locations, using their so called equity to buy consumer products etc with the knowledge that their house will appreciate. They assume that upon selling the house, the profit will serve as savings. There is nothing wrong with that, after all a lot of us have grown up knowing that owning a house is one of the greatest financial assets we can have. Real estate has made a lot of people wealthy, but on the other end of the spectrum, it has also made a lot of people miserable because of the same reasoning as above. This is not meant to be a rent vs. buy debate, but should be treated as another way of looking at buying a house from an investment (financial standpoint) perspective. I want to look at real estate, from a position in which you own the house, live in there and plan to sell the house to make profit and use whatever equity/profit you have to fund your future lifestyle. I have always argued that our future living standards are more important than our current lifestyle especially at a younger age. The problem is not whether the house will decrease or increase, in most markets as I have argued before, the house will appreciate. When you buy a house,( in which you live), The problem is people do not take into account the extra costs that the house will bring, such as insurance, property taxes, maintenance, bank interest (the cost of financing the house)and of course inflation. Take for example, for simplicity purposes, and this no means a accurate assessment. It’s meant to be an eye opener to the way you should look at things before you make that decision to buy a house. For example, if you bought a house in today’s market for $230,000. A few years down, say you decided to sell it. Assuming the house has appreciated at the average market appreciation rates and you sell it for $280,000. Your profit in this case is $50,000. But did you really make $50,000? Well, if we do a hypothetical analysis using the present rates in the market, here is what the true picture looks to me: If you paid property taxes: $3200 per year for 5 years, that would mean $16000, add insurance for five years $4500.00, maintenance $10,000(although some will argue that you can do it yourself), Interest $32,659.83, your initial down payment say 5%, $11,500 and the closing costs say 4%, $ 9200.00. If you add all this costs together, that should total $83,859.89, without even factoring in inflation. If you subtract the two, you will quickly realize that your profit isn’t what it looks like when you first sell the house. There is no disputing that investing real estate is a safe way of building your net worth, but you should never view your primary residence as an investment. Sometimes the social pressure leads us to commit to life changing decisions, leading us to believe that we have made a safe investment. Your home is a place to live and if you buy the house with that in mind, good for you. My stance on investing in n real estate is if you buy property for rent/lease as an avenue to bring in cash flow, or for future capital appreciation. It makes sense to buy a house if you plan to stay at the same place for a minimum of 5 years and your career and your family situation is unlikely to change anytime soon. My financial advice has always been centered on the notion that you should never carry any consumer debt and it makes perfect sense to buy a house if you have no other debt. My advice is simple, if you carry any student loans or consumer debt, do not buy a house. Not everyone likes to hear this but it’s the smart way to do things. Because your primary residence should not be viewed as an investment

Investing: How a medium income can turn you into a millionaire

Whenever I talk to people about saving and investing, quite a number seem to think becoming a millionaire on a modest income is mission impossible. What I realize is a lot of skepticism, people not wanting to manage their finances, some wanting to spend all their money, some just do not want to think it’s possible. In today’s article, I will dedicate a bit of time to show you that it can be done. As I have said in the past, our only obstacle to financial success is our spending habits and our mindset. A lot of people seem to have given up and seem to live life as it comes. We seem to think that millionaires are people who make a lot of money (income); we don’t seem to realize that with a well organized savings and investment plan it can be done. The biggest thing stopping people from becoming millionaires is their spending. When people make higher income, unfortunately that also means higher spending. Imagine when you were in university or college, we were able to navigate through school, and enjoy ourselves with several fun activities while making zero income. I have talked about a variety of investment options that we have in place, and my analysis will be based on the assumption that you have read that article. In order to realize our goals, and in all honesty to get to a million on a modest income, investing in the stock market is essential. I have been investing in mutual funds in the last couple of years, and even though the market has been volatile, an average return has been about 7.7%, which is more than you would get in a traditional savings account. I will use this rate as the basis of my calculation, even though I do know that the average rate of return from the stock market is higher than that in the long term. One of the key strategies to attaining that million is to keep the monthly spending to an absolute minimum. By this I do not mean cutting out things you enjoy completely. But finding cheaper alternatives or strategies to save money on the things you need to buy or do, as I indicated in my prior article. For example before you get insurance on your car or house each year, shop around. If you constantly make your bill payments on time, negotiate with your cable and phone bills to give you the best rates going or any special offers in place. If you use your credit card for shopping, use cash back credit cards, buy a pre owned car instead of a brand new and if you doing groceries shop smart by comparing the prices in the stores or even the free flyers that go round. All this savings will eventually add up, especially if you can do it constantly for several years as you continue to invest and manage your money. It will open up a huge junk of cash flow that you can use to pay down good debt (mortgage) and investing in the stock market and real estate. (See prior articles). Below is an example of how one can come up with a million through investing; Supposing you plan to retire at the age of 65(which is the retirement age in Canada) and you decided to invest $1000 today, thereafter for each month you invested $400 of your income, assuming you get a return of 7.7%. Then your money will look like this: If you start of at age 25, by the time you are 65; you will have $1,310, 513.11. If you started at age 30, by the time you will be 65; you will have $872, 841.71 Am sure most young people spend $400 or so in a month for consumer goods/services and are capable of saving more than I calculated. It’s the spending part that is the key to how much your net worth will be at retirement.I don’t judge anyone for their financial choices. Everyone has their life, and it’s your money to do as you wish. Too often, people choose to think about the present self as opposed to the future self, consoling themselves that life is short, not realizing that when you retire, your life will become long if you didn't plan ahead, and that’s why I continue to advice, start saving and investing because no one will do it for you.

Investing in Real Estate

Investing in real estate is not a decision that you wake up in the morning and decide to pursue. It’s a decision that requires careful thought. It can be a stressing task, especially during the times when the economy is struggling. On the other hand, real estate investing is a great way to grow your wealth if you can manage to do so responsibly with conservative financing and also understanding how the whole process works out. I may not be able to exhaust everything on this one article, but my hope is to introduce you to the factors that you need to consider. I know a lot of people may want to get into debates as we have often done with my friends, whether investing in real estate is better than investing in stocks. I won’t get into that debate. However, I do think real estate is easier to understand for many people as compared to buying stocks. As long as the rent arrives on times, as an investor you are happy. An investment property has many benefits and if chosen carefully can provide solid financial returns. If you choose the right property to invest in, it will most likely deliver greater returns in the future. Say if you bought the house for $320,000, you are more likely to see a significant gain on the house when you sell it back. Not only will you gain in the form of original purchase (capital gain), but also from the rental income. In order to maximize investment return when buying a property, here are some key considerations to make: Choose the right time to buy property: Property market values are constantly moving in cycles, sometimes due to strong market growth, at times stays steady or even at times the prices decline due to certain conditions in the whole economy. Thus as an investor, it’s important to know where the market is at before you secure the property, to ensure that you get the property at the right price. Make sure you choose the right Location: This is one of the key decisions you have to make when you decide to invest in property. If the location is chosen correctly, the chance of gaining higher returns from your investment is far greater than if the location is not desirable and suitable. Some of the things that you should consider include proximity to schools, public transport, public facilities such as medical center, library and lifestyle activities such as restraints, shops and malls etc. In future articles, I will discuss on the opportunity that Africa has in property investment, having invested in property there myself. With rising population, and the rise in various industries and people moving to urban centers, the demand for housing has never been higher and it will continue to rise. Property values are skyrocketing and a property purchased today could give you a return of near 30% in a little as two years. A lot of investors believe that Africa’s real estate provides great opportunity now and also for growth into the future. There are many countries that are in nation building such as Rwanda, Liberia and Sudan and this will all see rise in demand for affordable housing. When you choose an investment property, you one that is most likely to be in high demand for tenants, and even future home buyers. Consider the age group living in that area, do some research and discover the demographics and determine what kind of residents live in the neighborhood. Do enough research on the property market and ensure that it’s the right time to invest. Do not buy a property based on your emotions, or because you’re friends or someone you know has done it. If you do that, then you are likely to end up spending more than you bring in from the rental income of the property , and in the end you will be getting a low rate of return well below the market average. Educate yourself on the income tax and the impact it can have on your investment; whatever property you buy, you will be required to pay tax on income (rent and any other money) which you receive from your property. Educate yourself on taxes such as capital gains taxes, property taxes, land tax etc Decide on how you are going to manage the property because you will need to find tenants, chase rental payments and coordinate maintenance, which is all time consuming. Are you going to self manage the property, request a family member to help out or are you going to hire a property caretaker. Weigh up the facts and consider the benefits and the negatives and make a decision based on those facts and not emotions. In the end, when investing in a property requires you to make enough profit or return to be able to cover the risk that you have taken, interest costs, taxes and maintenance costs for having the property, and careful analysis and research is essential component to that success.

Daily habits that we can change to save money

Many of us desire to save money. I think most people would agree that saving money is something “easier said than done”. Personally, I believe it’s a mind-set that needs to be developed by creating good money-saving habits and today I will give you a few tips on the number of things that we can do to cut our costs. In the past articles, I have stated that to succeed in managing your finances, you have to live within your means, spend less than you make. It’s simple as that. Your income doesn’t determine how rich you are; but it's your net worth(what you keep) that ultimately will work to your favour in whatever lifestyle you choose to live as we continue the journey of our lives. Below are areas that I find we can save money on; Buying Lunch at Work; I have always argued that it’s okay to treat yourself once in a while for lunch, but generally I would say make and bring your own lunch to work. For example, if you spend $ 10.00 for lunch each day, five times a week, in a year you will spend $2600.00. Even if you were to reduce that to three times a week, that is still about $1560.00. As you can see, making your own lunch and bringing it to work, will work in your favour as you can have some of that cost invested in other ways that would give you a return. Use the Public Library to get DVD’s, Magazines/Books: The public library has lots of movies that are free. A lot of popular magazines such as the Economist, Business weekly, Consumer report are all available for free. Why should you go rent a movie for about $7.00 a night when you can get the same movie for free at the public library for seven days? Why would you buy a magazine when you can go into the library and read the magazine for free? You can even place a hold online. If you have too much pride to use free stuff at the library, why not try Netflix which only costs you $7.99 a month. Coffee: For those who are coffee lovers like I do. Invest in a coffee mug. It won’t cost you much but it will save you a lot in purchase of coffee. For example if you bought a coffee for $2.95 three times a day that would amount to about $1076 in a year. If you bought your own mug, spent $20.00 for it, and made your own coffee and carried it, or even use the mug to make coffee at work. That would mean a massive savings from the amount spent on daily coffee. Stick to your budget; I know a lot of us plan budgets, but we fail to follow through because of the occasional disruptions here and there. Stay within the boundaries of your budget. If you realize that you overspending in one area of your budget, cut the expense from another area so that you ensure you are living within your means. It is always good to have goals written down so that you can see them every day and don’t lose focus on your ultimate objectives, be it short term or long term. Other things we can do are, cooking more at home. For those that frequent restaurants, you will quickly realize that an evening out easily runs in the $80-120 a meal and drinks. Suppose you ate out twice a week, which easily translates to $8320-12,480 per year, if you reduced that to once a week then its half of that. Now, supposing you chose to cook most of your meals and decided to treat yourself once a month, that would mean you only spend $960.00 per year, meaning the difference can be used for investments purposes to build on your future. If you have read my past articles, I have been a great advocate of paying your full balance on your credit card. If you cannot afford to pay it in full, then I suggest you stack them away and never use them. You are never going to get ahead financially if you are paying 19.99-30% in interest rates. You are basically giving away free money, when you pay interest on those credit cards. Lastly, do not forget to pay yourself, set up an automatic withdrawal of funds from you chequing account into savings. Again, I argue if you do not carry any credit card balance. There is no point putting money in a savings account getting 1.25% at the very highest, while you are paying credit card companies twenty times or more. They are basically borrowing your funds at that rate and lending it back to you twenty times. In the end, saving money requires a lot of your patience and hard work. As long as you stay focused, you will have yourself to thank when you are no longer able to bring in any income as you let your money work for you while you enjoy your life relaxing and reminiscing the years gone by.

Investing your finances-a beginner's guide

Continuing with the article on investments, I get to explore the various instruments/vehicles that one can use to achieve their financial goals, be it short term or long term. It’s important to recognize that the investment industry is constantly changing, and there will always be new products and services, therefore my listing may not be exhaustive. We will get into future articles, where I will talk about the investment methods individually. I will compare investing in a developed country, emerging markets and developing countries, precisely Africa( buts that’s for the future), lets deal with the now. In investing, there is no such thing as the perfect investment. Before you get started in investment you need to consider your risk tolerance. Ask yourself how comfortable would you be if your investment was drop in value. Say for example, if you invested $100 today, and two months down the line your investment is now valued at $60. How would you react? Another thing you need to consider, as I have always said from my earlier articles is your financial goals, are you investing short term or are you investing long term. When you figure out what your goal is, it will then allow you to determine what rate of return would be ideal for you to achieve your goals, say 2%, 5%, 7% etc. Once you have this essentials figured out, then you can begin to choose how and where you begin to invest, and below are some of the investment vehicles that one can use: Bonds/Debentures: A bond is like a loan, the issuer of the bond (could be government/corporation) is the borrower, while the holder of the bond is the lender. The borrower promises to pay the investor regular scheduled interest payments until maturity when the loan is paid in full. Usually bondholders can claim ownership to company assets should they fail to repay the loan. Typically, debt securities issued by the government are not secured by any physical assets, and hence classified as debentures. Mutual Funds: This is one of the most common investment vehicles used by small scale investors, or should I say start ups. A mutual fund allows a group of investors to pool their savings to invest in different/various investment vehicles. For example, if you just have $1000 to invest, it is a tall order to invest in various blue chip shares, but through a mutual fund, say 100 people contributing $1000, it’s possible to buy those stocks and even spread your risk across a variety of investments. More on these in future articles. Stock Market Buying shares in the stock market is another common investment vehicle. Buying a share in a company represents ownership interest in the net assets of the corporation that you have invested in. The good thing about investing in shares, your liability is limited to the amount invested in capital. Say for example, you invest $1000, and the company goes bankrupt, you will only loose the $1000. Should the company prosper and grow, your shares will increase in value, hence dividends and increased value of your portfolio. On the reverse though, should the share’s value decrease, your portfolio will decrease. There are other complicated investments in the stock markets, such as Options. Call option, which gives you the right to buy a stock at a future date and at a given price, and a put option which gives you the right to sell a stock at a future date. These require extensive experience dealing with stocks; otherwise without enough understanding you may lose your money just like that. Commodities: With this type of investment, you are basically dealing with future contracts such a gold, copper, silver etc. The objective is to sell the contract before the delivery date at a price that’s higher than you originally purchased the contract. This is the closet you can get to gambling, and the losses and gains here are massive, and it’s therefore my advice that unless you have an extensive experience with investing, it’s not for beginners. Real Estate: This is when you buy property for capital gains. This could be an apartment, condominium, duplex or even an undeveloped land. There is always limited supply of land, and with our population growing, its value will always be increasing based on the assumption that we will always need a place to live. I have a few friends of mine who have requested I do an article on real estate, based on my minimum experience and I will be doing an article on this particular subject in the near future. I will look into the opportunities that Africa presents. One area that is often ignored by many in terms of investing is reducing your existing debt. For example if you have a credit card that you are paying 19.99%, its always better to pay that card off than investing in lets says a mutual fund where your annual return could be about 5-6%. Remember in my previous article, I have said it before, if you cannot pay the full balance on your credit card when it’s due, it’s time to stack those cards away and stop using them. Before you get into investments, pay down some of the high interest debt first. Your money will compound faster and you will have the magic of compounding interest work for you, instead of against you. Once you develop a fundamental understanding of the various investment vehicles, it is easy to narrow down your focus on those investments that allow you to achieve your financial goals. And that’s why I have always insisted that we need to continue to educate ourselves, if we are to achieve the goals that we aspire for.

Take ownership in managing your finances-(Investing)

So far, we have gone through the particulars of managing your finances on a day to day basis to ensure you have a solid foundation for success in the long term. In this article, my intent is to simply the art of investing to allow us understand how we can make our money work for us. There has been this common misconception that in order for one to become successful financially, you probably have to make a six figure salary, inherit or even win the lottery. The fact is, that’s not true at all. If we lay out a plan and take time to learn a few principles on how money works, we all have the potential to become financially independent no matter our income levels. To begin with, let me define investing; it is the expending of money (putting away) with the expectation of getting profit or to grow for long term financial gain. Put it this way, if you put away $100.00, you expect it to grow to $150.00 by the time you need to make use of it. Investing is different from savings, in the sense that with savings you are putting away a portion of your income in order to achieve as short term goal. For example you save to buy a car, furniture, vacation or even a wedding. On the other hand, investing is based on long term goals, accomplished by having your money make more money for you. There are many reasons why we invest and of course this reasons vary from individual to individual. Mostly we invest to achieve some financial goals, such as funding college education for our children, retirement (it may seem so far away, but it will come someday) or even enjoy the luxury of retiring early, and enjoying the rest of your life travelling and being on the beautiful beaches across the globe. Lastly, we invest to try and beat inflation (rising prices in goods and services). There are very many ways that one can invest, including stocks, mutual funds, bonds and even real estate.(more on this to come in future articles), but before you take that leap, there are some basic essentials that I would like to share with you. Understand the time value of money; the sooner you start the better it is, the younger you are the better. There are only two things that life gives you, opportunity and time. If you are young and have time on your side, you can invest in small amounts and end up with lots using the power of compounding interest (adding interest to principal). For example if I invest $100 at a rate of 10%, at the end of year one my interest will be $10.00, with compounding interest, you take the $10 and add it to the principal, such that in year two, my principal is now $110.00 Secondly, the rule of 72, what this measures is the time it will take you to double your money. In our example of $100, if say I was getting a return of 5%, it will be 72/5, which gives me 14.4, hence in 14.4 years, my $100 dollars will have doubled to $200.00. The rate of return is a critical factor in building financial security, even a few percentage points could be of great significance in the long run. That’s why it’s important we consider the rate of return we get from our investments. Before you get into the world of investing, ensure that you have a plan with goals that you intend to accomplish. (You can never reach a destination which you do not know), and such setting goals will allow you to stay motivated to accomplish them and also a way to measure your progress. One of my biggest advice is ensuring you are out of debt; it is the biggest enemy for our quest for financial freedom. The power of compounding interest works against you. Most of the credit cards charge interest of between 19.99-30%. You are not going to make such returns in any investments in my book, unless it’s those get rich scams. And that’s why I insist that the quicker you realize this, the better. Secondly, as suggested in my earlier article, avoid the credit card trap; use the cards if you know you have the funds in savings account to pay the amount in full at the end of the month. If you ignore this basic rule you will be helping your bank increase their profits for the shareholders, while you struggle to achieve your financial goals. In the end we need to change our priorities on how we manage our money; if you make $1000 a month and spend, $1200, you are a disaster waiting to happen. Discipline is key, to whatever goals we set. Remember it’s not what you make that matters, it is what you keep that will ensure you have financial independence in the long run.

Platform for financial success (Day to Day Finances).

In follow-up to what I promised in the previous article, “Take ownership of your personal finances”, I would like to start off by giving opinion on how to run and manage one’s finances from a day to day perspective. In life’s journey, we pass through various stages, which are all impacted by how we plan ourselves on a day to day basis. Each day, we incur various challenges and also opportunities to be the masters of our own destiny. Once we learn how to manage our finances daily, that knowledge twill set us up to live comfortable standards and take advantage of other opportunities to save and invest, creating financial security and also accumulating and protecting wealth in the long run. There is no magic to being successful financially, it all involves careful and diligent planning as I will illustrate below. Firstly, we should all take time to review our goals in life now and the future. Create a plan on how you intend to get there. This will be the platform for you to manage your cash flow now, tomorrow and into the future. It will allow you to manage your income and how you spend it. Most of us have bank accounts, I would advice that we review the type of accounts we have and make sure we have accounts that suit our banking needs. Select a chequing or saving account by assessing your usage and needs. A lot of people have the wrong bank accounts, and thus are paying a huge amount of fees to banks, which is obviously helping pay people like me (bank employees) and also shareholders. Nothing wrong with that, but as I said earlier, my purpose of the blog is to educate my friends and colleagues and ensure they get ahead financially. Secondly and more importantly, ensure you have a budget of your expenditure. Plan your future use of any income and ensure that as suggested in my earlier article, spend less than you make. If you are those that are already spending more than you earn, then reduce your spending. Without these, you are headed for a financial meltdown should any unexpected events come up. In addition to that, if you have any debt from previous spending habits, pay the debt down because as you by now may know, the interest rates are ridiculously high. And more importantly, avoid consumer debt (buying stuff that will not bring any value/appreciate in value over the long term),-more on of these on another day. Remember we have got to start somewhere in life, and I believe that the first step is always the most difficult step, but once we get ourselves going then anything is achievable. It doesn’t matter what situation you find yourself in, if you can take into account the above mentioned strategies in managing your day to day running of finances, then I believe you will build a solid foundation that will allow you to successfully navigate the various stages of life’s journey all the way to a happy retirement. Invest in educating yourself financially, and trust me the time and cost will pay off in the long run

Take ownership of your Financial Success

I would like this blog from now and going forward to focus on giving personal opinions on how to be a success in managing and improving your financial situation. I have always wanted to have a platform to reach to all my friends and colleagues and help advice on how to get it done financially. I get a lot of questions here and there when holding discussions with colleagues, how did you do this and that etc, and believe through this platform I will help show you what has worked well for me. We all want to be successful in life one way or another, be it in a career, have a peaceful retirement, travel, complete PhD degrees and even being an entrepreneur (Which I highly recommend etc Let’s be honest, finances are big part of that success story. In the next couple of months, and even years I will go from successfully managing your hard earned money day to day, to investing the money overtime in various financial markets. Some of these things have worked well for me and I believe that recognizing this early on in my life was a key part of that story. Other issues that I will handle include whether to invest in the west or to invest in Africa, buying a house or renting, and ultimately investing in real estate, especially the rising need for housing in Africa and the opportunity that it presents to us. In the end, my aim is to ensure that we are informed to make wise decisions to help us be successful in the long run. This article will assume that we are all planning or investing as individuals, for those that intend to plan their finances as a couple, I always say make sure that the significant other person has the same financial values as you do. I advise those that aren't married as yet, as much as we love our partners, ensure that you share the same financial values, because as you go on with life, finances will begin to play a key factor in most of the things you do in your lives. First things first, how do you get ahead financially and even improve your situation? To me, my take on finances is simple and clear; respect your finances just like you respect anything else. Firstly, you need to spend less than you earn. It doesn't matter how much you make, if you spend more than you bring in, you are going to struggle financially. What I believe in is that it’s always easier to spend less that it is to earn more. If you are going to make a big purchase, like a TV, Car, Furniture etc and you don’t make enough to cover that cost, I would say save and plan for the purchase. Secondly, to get ahead financially we need to ensure that we spend our finances as planned, in other words have a budget and stick to it. If you are going to be flexible with your budget, then you must have a savings account from which you draw from. Often, a lot of people budget and then before they know it they have gone to overspend. Another thing that is going to prevent you from getting ahead financially is credit cards debt. People pay ridiculous amount of interest on their credit card balances, anywhere between 19.99%-30% on store cards. My advice is simple and clear, pay of any credit card balances. If you decide to use a credit card, make sure you have the funds in a savings account to pay off the balance when it’s due. There are very good credit cards that give you cash back, reward points for travel, and to build your credit score. But all of these are worthless if you carry a balance and continue to pay lots of interest. Remember if you pay the minimum payments each month on a credit card, very little if any is going towards the principal. You could use some of those funds for investments (that for another day). Learn to cook. Its sounds simplistic but it is very important. If you start making your meals, you will soon realize that a lot of funds are being saved from groceries, eating out etc, again funds that you can use to save toward retirement and invest for future earnings. A lot of us are mistaken to think that life will stay the same forever. There are lots of changes in life, losing a job, disability, retirement, relocation and divorce/separation. It’s wise that you recognize early that being financial in a strong position if any of these storms come your way is as important as anything else you plan in your life. Believe me, how you live in retirement will be a direct result of how you planned, saved and invested today, something we will focus on in the coming months and years. I hope some of the information here has helped recognize the need for planning our finances. In the end we want the money to work for us, and not us working for it. And planning wisely, living below your means will aid in that financial success story. We are on a journey and we need to help educate one another and the success will follow accordingly.

Bringing Optimism to Africa’s Bright Future

Most of us have been accustomed to devastating news about the extreme poverty levels in Africa as shown in the various media channels across the globe. Even though, this may be true, I do think that the whole story is not told as it should be. Africa has in recent times shown great potential for growth and offers many opportunities for emerging business. The private sector, especially the financial sector has been rapidly evolving in the continent which has allowed Africa to be on the verge of takeoff. I believe that the way out of our poverty levels is for the governments to create better business climate/models that support the emerging entrepreneurial culture in the Continent. The businesses in Africa will create the way out of poverty for its people. We can either get a job in an existing business or create your own business. All in all we need to better the business culture in us. It calls for us to take the risks and join the entrepreneur world. We need to take the risks, and support one another in building our continent. We are beginning to own our development and growth as a continent and these are encouraging signs for the future. We have the collective optimism that if we support our emerging businesses the future is bright indeed for Africa. Our private sector/businesses have played a key role in the continents growth and it’s important that our governments realize that creating the right conditions will not only prosper our growth, but all encourage foreign direct investment into our continent, which can only mean one thing, a way out of poverty for our people. Our governments can do better by improving the infrastructure in place and also by encouraging business by giving them tax cuts, and making sure that business rights are well supported. These businesses are the foundation of our future and I believe we should all aspire to contribute to the growth of our continent

Africa Has Potential Too!

After completing studies in a western country, assessing a plan to achieve our career goals and lifetime dreams is next on the list of objectives. For those of us that have a background from developing countries, deciding whether to return home or stay around must surely be our top dilemma. To focus primarily on Africa, a majority of reports from various media sources indicate that Africa’s countries have been growing consistently at a phenomenal rate that surpasses the so called emerging markets. There is lots of opportunity for those with an entrepreneur mindset and not afraid to take risks. Many young people have struggled to decide whether to return to their motherland, or to stay and build a life in their adopted countries. Those that advocate for a stay cite the poor infrastructure such as roads school and the difficulty encountered to register and run a business. They continue to argue that there is constant interruption in services such as electricity, water, health services and education and therefore do not warrant any consideration/ decision to return. While its unquestionable that we have poor standards, it can also be argued that the level of democracy has increased with lots of people migrating to urban centers which in turn has created a consumer oriented market, and thus paving the way for future growth.The past wars civil wars that affected countries, have created opportunity for entrepreneurship, as those countries try to build the infrastructures. Such countries include Rwanda, Sudan and Liberia. This are case examples of countries that represent opportunity. Just food for thought, Ultimately though, I do think that the decision to stay or head back is a personal choice that is entirely dependent on personal circumstances