Soko Analyst: Why the cost of my advice runs up to Sh103,000 an hour

Steve Biko Wafula, who is also known as Soko Analyst

Today, he is one of the go-to people for all things finance and investment. But before he achieved this status, Steve Biko Wafula, better known as Soko Analyst, burnt his fingers on a number of failed ventures.

Not one to give up, he eventually found his footing and now runs the Hidalgo Group, which is a financial, legal and research consultancy. Under its umbrella are Soko Investments, Soko Directory, Sabi Investments, East African Bill Boards, Sobike Solutions and The Team Builder magazine.

Hustle caught up with Steve, 35, as he shared his advice on life and the art of investing at a personal finance event.

You studied law. Why the jump to research and investment?

I found law boring. I don’t know how lawyers do it; it’s not for me.

You say you burnt your fingers quite a bit before finding your way in investment. Tell us about that.

I got involved in business early – many years ago when I was in campus. I got the idea to start a milk packaging business, and when my parents gave me cash to pay my fees, I would use it for the business, make a profit, and then pay my fees and keep the rest.

What many people don’t know is that the Soko Analyst brand has taken a lot of time to build. I was working on it from my days in campus and it failed, but I kept on trying. Even today, I’m still trying to get it right.

Did your parents ever find out about your mischief?

Yes, and unfortunately it was because one time a business deal went wrong and I didn’t recoup the cash. I had to go back to my parents and tell them I had used my fees on business.

That didn’t stop you from engaging in business though, seeing as you run a number of firms.

It has been a journey of ups and downs. As I said earlier, I started a milk packaging business, which failed, but I kept trying and now my company manufactures packaging, and we are in the media space.

We are wrapping up the process of starting a 24-hour business TV station called Soko TV. At the moment, it’s only digital, on YouTube, but we will soon have a channel on a traditional media station.

How long have you been in finance?

More than 10 years.

In those 10 years, what have you learnt about investing that you can share with newbies?

I always tell people to understand their risk tolerance before investing. For example, how comfortable are you losing Sh1 million? Will you be able to drink coffee and sit down and watch cartoons with your children? Determine how much you are comfortable losing, and then proceed.

Can someone successfully invest without consulting experts? Because, let’s be real, finance experts don’t come cheap.

Getting expert advice is expensive, but it’s worth it in the end. Remember, cheap is expensive. People should avoid taking advice from people in the bar and friends who might not know anything about investing.

So how much would I be set back if I came to you for expert advice?

I charge between $150 (Sh15,400) and $1,000 (Sh103,000) per hour.

One might think that this is high, but I recognise that time is valuable. If you just come to me and ask for free advice, I’ll tell you what is at the top of my head and you won’t get that in-depth advice to help you make a good financial decision.

Don’t shy away from paying for advice from experts. If you have Sh2 million to invest, surely you can set aside Sh20,000 to seek advice from an expert, say a lawyer, about a particular property. That is better than plunging into an investment blindly and losing everything.

I don’t have $150 to part with at the moment, but I’ll take you up on that off-the-top-of-your-head generic advice on money and investing.

What I can say simply is money doesn’t like sitting idle. You have to move it from a savings account into active investment.

Another thing is that you always need an exit plan with investment. You cannot invest in perpetuity. If you are in the stock market, know your goal. Your goal determines what investment vehicle to use.

God and money. You have talked about the two being intertwined. In what way?

There is a spiritual aspect in every sphere of life, including business. So if you run a business, I believe it should pay tithe, as should you. You will find that when you give back, you get more.

What advice would you give business owners who are looking for financial success?

Hire professionals. I have about 10 employees in my firm and I have seen the benefits of hiring professionals, including accountants, to ensure everything works well.

You shouldn’t just take out cash whenever you want because you own the business. If you do, you will run into trouble. It’s important to have an accountant who can put you in check.

In my case, I own my company, but I have to write an email to my accountant explaining why I want money whenever I need it. It is frustrating, but it has ensured our systems are streamlined and this will come in handy whenever we need credit from banks and in other business dealings. Professionalism is important.

Give us a closing bite.

Time is a valuable resource and you should use it wisely.

Don’t sit on money, invest it. Before elections, everyone was saying, “Tungoje tuone vile election itaenda kwanza” (Let’s see what happens after the elections before we talk about investing). Now there’s going to be a repeat election and many people will extend that wait-and-see position, which shouldn’t be the case.