This is how to get rich

By JOHN KARIUKI

Wannabe millionaires who deceive themselves by feigning financial contentment are everywhere people look these days. These are the high earners who live a flashy lifestyle by going into debt up to their throats. They sport the latest models of cars, mobile phones and home appliances, and take their children to the best schools around.  But they are often in a horrible financial cycle of borrowing. When they create goals for themselves, they don’t make them big enough to incorporate hard work and a saving culture to live well.

The harsh reality is that people do not simply get rich by using mathematical formulae. Like life itself, there is more to wealth creation than subscribing to some textbook theories and formulae, or saving huge sums of money without a purpose.

If you look at all the people who have made vast fortunes, you will realise they all made fundamental changes in their lives and patiently nurtured their empires from scratch. Riches come from a personality overhaul.

Personal finance experts say that the first step in wealth accumulation is saving. This gives one a no-strings-attached startup. And this starts by analysing one’s spending habits with a view to making cuts.

If one makes a list of things that he or she spends money on, he or she will find numerous ways to save money. Such savings can be put them in a savings account.

Hilda Karani, a personal banker with one financial institution, says that many people do not realise that wealth accumulation abhors time wastage.

“Time is precious and the wealthy do not waste this precious commodity,” she says. Karani further says that only people who have their money priorities right every get rich.

“Be honest with yourself and decide which investments are compatible with your personality, skills and experience and which ones are not,” she says.

Diversify too early

Karani decries a frequent investment mistake that many people make at the crest of their business success.

“Frequently many people diversify too early and in ventures that they know little about, draining all the profits from their core investment which fold up,” says Karani.

She has seen some matatu operators spreading themselves thin by plunging into running private schools, milk cooling plants and even wheat farming when their transport businesses began making a good return. But Karani says this is not the way to get rich.

Dorcas Mwangi, a loans officer with a leading bank, suggests that the habit of starting mpango wa kando, clandestine affairs, by some men and women when their investments begin to prosper could be a major but unrecognised hindrance to wealth creation.

“I have no scientific data to back me up on this claim but in many cases of loan defaults, there is a frequent element of secret lovers getting into the picture,” she says.

Mwangi likens the habits of taking on of secret lovers and their associated cost of maintenance to that of impulse buying of things that really don’t matter in people’s lives; both habits are anathema to wealth creation.

This phenomenon is sometimes so bad that banks are often unable to repossess collateral registered in the secret lovers’ names in the event of loan default due to the legal technicalities involved, adds Mwangi.

To succeed in business, people must be prepared to both ask for favours and give them in return. If one is determined to create a business, he or she needs to understand that they will need to work with others at least for some time.

Yet some people adopt a sour relationship with all their potential clients and partners once the shillings begin trickling in. They wrongly attribute their success to their personal cleverness. Such an attitude can hold some people’s ambitions of creating wealth permanently.

Know-it-all

Successful entrepreneurs often take the suggestions and advice offered by others if they have merit. But when they presume that they know everything or that they cannot learn anything from certain people, they are doomed to fail.

As one strives to get rich, he or she must improve on how he or she thinks, speaks, feels and acts. Once these changes become one’s habit, the rest will be easy.