Rising Above the Challenges to Build Wealth

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Rising Above the Challenges to Build Wealth

By Lucy Wyndham

Anthony Mwithiga, Chief Investment Officer and Head of Wealth Management at the Commercial Bank of Africa hit the nail on the head when he advised readers to save rather than complain. “Saving has no relationship with the amount of money you earn. You victimize yourself when you say that you cannot save because you are broke. Try to have a percentage and keep increasing it, from at least 10 percent. It should be part of your DNA.” If you aren’t saving enough despite sticking to a budget and living within your means, then you need to up your earnings. In this post we run through this and additional tips to build your wealth.

Getting Over the Employment Crisis

Obtaining a second job may be difficult at a time in which over 70% of Kenya’s population is under 30 years of age. According to experts, Kenya needs approximately one million new jobs every year for the next decade in order to keep up with the rising percentage of youth populations. The World Bank, meanwhile, notes that  “unemployment is almost entirely an urban phenomenon, while underemployment is more widespread and more prevalent in rural areas.”

Obstacles for Potential Workers

There are many barriers to employment, including political and macroeconomic stability and corruption. To make a change, the government must maintain stability, reduce the costs of transport and electricity, and invest in both cities and education, though it is also vital to think of the changes you can make on an individual basis. If you already have a job, you might consider a ‘microjob’; the latter might consist of everything from online tasks to website usability testing. Just because you are employed does not mean you cannot also run a freelance operation. Put your experience and skills to good use, offering your services on a small scale with a view to saving any earnings from microjobs.

Where to Invest Savings?

If you want to build wealth, consider putting your savings into a unit trust (in which your money is pooled with that of other investors). In reality there are a host of interesting products that will garner you a higher interest rate than a savings account. If you have between 15-50K consider joining a chama. By contributing 2K at the commencement of the month, you can watch this amount increase as you continue contributing. Sometimes chamas join up and invest in large projects like real estate and other enterprises, which can provide an impressive ROI.

Investing in More than One Business

The ultimate way to live off more than a salary, is by owning your own business. Entrepreneurship takes a specific personality type. One must have visionary ideas, but also be open to risk. If you manage to build a healthy business, consider investing in other ideas and if you are an entrepreneur, aim to have more than one business in your portfolio. This way, even if one or more fail, others have a chance of rising exponentially, thus building real wealth that can be invested and continue to grow.

Building wealth involves very different strategies depending on your situations. For some, saving a small amount with a view to investing in the future or opening a business, is key. For others, it involves finding the right avenues to invest. Still for others, it means finally venturing out into the entrepreneurial sector. Whichever your aim is, make sure to surround yourself with trusted, educated advisors who can light the path towards economic success.

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Geoffrey Kerosi is a prolific economics writer and an avid reader in economics, finance, business, politics and technology. He holds bachelors' Degree in Economics and Statistics from Kenyatta University. He has over 4 years of extensive experience working as a Policy researcher and Budget Analyst for Civil Society in Kenya. Contact: Email: geoffrey.kerosi@gmail.com Phone: +254 713 639 776 (Whats-app only) Twitter: @gkerosi

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