When Should I Start Investing?

My Sundays are always occupied by a hell of activities and therefore, today wasn’t any different. Given that Saturday night is “Movie Night” waking up on Sunday morning is usually a big task. However, being ‘staunch” church goers, everyone in the family made it up by 10 am. My 10 am alarm was a bitter reminder that the day had just broken and so I woke up to face my most boring day – Sunday. As usual our mass takes 2 hours and so means by 1.00 pm we are through. Mass is somewhat a boring session for young people but we rarely have a choice. What about following that with a 3 to 4 hour shopping? Pushing the trolley behind your mum/dad as they collect this and that meant to be used in the house?

Despite the many boring activities which fill up my Sundays, it still remains a day I look forward to. Sunday is the only day I get to sit with my dad to ask him question pertaining to investment, family life and employment. This usually happens shortly after shopping, mostly in restaurants, as we gulp a few bottles of sodas. This is the only time we have a father-son chat as the ladies (mum and sis) are busy in the saloon.

Today my dad whispered something into my years. I didn’t get it at first and wondered why he had to whisper it, in the first place. “You should start investing almost immediately….” he repeated upon request. These words stuck me hard; I have only just landed my first employment two months ago and know investment will follow – but not now, of course.

Perhaps you have been asking the question: “when should I start investing?” but, as is expected, have not yet settle on a satisfactory answer.  We are definitely not alone.  Most individuals push investment to the back burner simply because they aren’t sure of when, where or how to initiate the process of building their nest-egg.

As a matter of fact, many people want to start building their investment portfolio, but just aren’t ready to take the plunge. Even if they were ready; they lack the knowledge of where to start. In this post, I am going to focus on the readiness question.

The most apparent answers

People are often reluctant to tie up their money in long term investment until they have accomplished a couple of milestones.

1. High interest debt is paid off: You first priority should be to get rid of your high interest consumer debt before embarking on investment. Some debts are just annoying like the student loan and mortgages. If possible, put your investment plans on hold and clear these loans first.
2. Building Liquid savings Buffer: It is very important to have some money set aside for use in times of need. Therefore, make sure you have enough money saved in a high interest paying savings account before you start investing.

Apart from emergency savings and debt reduction, there other several factors which may influence your investment decisions.

Other important factors to look into:

• Job status: Is your current job stable enough? If you have a stable job, a solid savings and zero (or near zero) high interest debt, then you can start thinking of locking some of your income in your retirement plan. If your job situation is still shaky and you may face the axe any moment, you would rather stash more backup funds into your savings account.
•    Age: There is no precise age to start building your nest-egg. However, the sooner you start the better. Having said that you need to get a stable job, pay all your debts and even have adequate liquid cash in your savings account before you start investing; my argument on age may sound like a contradiction. It is not. If you can satisfy all these pre-requisite conditions, then start investing “almost immediately”. Starting early will help you take advantage of compounding.
•   Children: Having children may tempt you into saving for their education. However, this shouldn’t come ahead of investing or retirement savings. Consider remitting 15% of your monthly income into your retirement scheme before you start saving for children education.
• Insurance policies: It is vital to have the proper type of insurance at each stage of our lives. Our investment decision should not be made without balancing the investment strategy with an insurance coverage appropriate to our situation. Disability insurance health insurance, life insurance cover and long-term cover are all important and should be considered together with the decision to invest.
• Marital Status: My dad’s argument was that it is good to start investing before I get married as this protect me from the “wastefulness”. Women are known for their addiction to spending, sometimes unnecessarily. The old man therefore sees them as a distraction from achieving lifelong investment goals. However, I feel investment decision is a tricky one and therefore you may need a second sound mind to help you through. This does not mean that you should wait till you marry to invest. If you have your better half and you are considering starting any kind of investment, it is better to involve them.

In conclusion

While there are numerous other factors to put into consideration before you start investing, the list above can act as a good foundation and help you start in the right direction.

Making financial decisions require sound reasoning and cautious movement. Always ask questions and consider as many influencing factors as possible. If necessary, consult a professional.

You may also want to read The Three Killer Investment Myths to avoid

Planning your Retirement: The Three Killer Investment Myths to Avoid

Definitely, I don’t know anything about you or what takes most of your time, but I personally spend a bit of time a day planning my retirement. I seriously do.
I dedicate a good number of hours each day to settle on where on this earth I should build my dream beach bungalow. How minutes, hours or even days I will spend surfing against the waves versus the time I will spend idling or sitting in a pub, pretending I can.
How often I will come back to Kenya. That’s if I will come back to Kenya. Whether I would buy an old beat-up Vitz, or just walk the dusty streets of Kampala, Uganda. You definitely know what’s important here.
You may think am crazy….. especially, at this point in time when we are facing the worst bear market of our lifetime.  
In fact your next suggestion or ‘advice’ for that matter would be that I should wake up, stop day dreaming about retirement. I am only in late 20s, that’s time to dust my resume and continue working.
From the analysis of the stock market Warren Buffet noticed that despite the major problems the U.S economy faced in the 20^th century: the two world wars, dozens of recessions, a flu epidemic, and oil shocks; the Dow went up from 66 to 11,497. In fact this observation still holds today and is what Warren used to make his investment decision. He believed that stocks will usually grow your money in the long run. His investment motto was “buy a good stock and hold on to it as long as possible”.  
I know most investors would want to think like Warren Buffet or act like him at times – which is not bad at all. Unfortunately, however, some of us do not have the 10, 15 or so years before retirement. In this case it will be tricky holding on to Buffets advice on investment – I would straight away suggest that you be quick to think of your retirement plans.
But for those of us who still have 10, 15, or 50 years before retirement, you should follow Buffet’s lead and search for these great businesses with powerful moats, selling at competitive prices.
Whatever you choose to do, do not fall prey of any of the following investment myths which have kept people away from their dreams:
Myth 1: It is too early to Start Saving for Your Retirement Plan
Too early to invest into your retirement plan? Hogwash! Imagine Tiger Woods waiting until he is 35 to swing his first golf club or Serena Williams waiting for her first forehand touch at a mature age, possibly 24. Would we be having these two stars now? These two players made it big on the international scene by making the first leap ahead of others and never looking back. Golf has always been known to be the old man’s game – at least in this part of the world. This same belief is held by many whenever they think about planning for retirement.
Back to investment, it is more of a coincidence that Warren Buffet started investing at the age of 11. Does it mean that he did his first investment at quite young age and continued practicing everyday so as to become the most successful investor? I don’t think so.
Then what is the trick? May be avoiding myth no. 2 may help.
Myth 2: The “I can’t Beat Serena Williams” Syndrome
If you have watched Tennis tournaments in the past decade or even in the just concluded 2012 London Olympic then you will certainly believe that no one can beat Serena Williams, not even Maria Sharapova. Likewise, beating Woods on a cool Sunday or otherwise is certainly impossible.
Moreover, it is against all odds that any of us will be a better investor than Warren Buffet. Nor is it likely that we will one day brag of how early we got in and rode to success.
So what? Just because I can’t beat Serena doesn’t mean years of practice, persistence and dedication won’t turn me into a good tennis player or that practicing how to hit the bucket on a daily basis won’t improve my drive.
Similarly, the fact that you can’t match Buffet’s investment success or wealth doesn’t mean you shouldn’t follow his investment style - finding and buying the stocks of those great companies which are selling at lower price.  Unfortunately, most investors think their life changing investment option will only come in through getting an early venture into the next Dell or Sun Microsystems.
Myth 3: It is hard to plan for Retirement
One final thing which holds prospecting investors from achieving their dream goals is the same thing which should help them achieve it – hard work.
There is no source to quote here, but I will be a liar if I’m to tell you that planning for retirement or making any investment is easy. But you will have to commit yourself to this course and make investing a priority today. You may just realize that it is much easier than it would have been.
It is never too late to plan for your retirement or start any form of investment. The earlier you start the better. So start now when there is still time and work hard to make this investment count.

Feelings Aside, True Wealth Require Getting Your Priorities Right

Having money with you is never going to solve anything in your life and is never a guaranteed source of personal fulfillment.  Even if I were to get my magic number (ksh. 4 Billion) today, I will definitely need some other KSh. 5 Billion more and so on.

 So the imaginary feeling of fulfillment will never come; there will always be a new target in front of you and you will consistently find yourself falling short, no matter how much money you have.

Therefore, we need to stop viewing money as a solution, and consider it a tool that can be used to grow us and challenge us to change certain aspects of our character.

Most people want to get the Ksh. 4 Billion without changing anything about themselves, which is really where the hard work is. Circumstances do not make a person; they reveal them, and what they still need to work on.

For instance, to make a “mere” Ksh. 1 million ($125,000), you need to foster financial discipline, and that may be a big lesson your current state of affairs is teaching you. I you cannot manage saving at least Ksh. 5,000 a month, bother to reconcile your bank statement or cut back at least 30 hours from your TV time every week, do not expect to make the Million.

What is the Real Fulfillment?

Without financial discipline, even if you did get the Ksh. 4 billion, you will squander it. This is the reason why those people who get loads of cash overnight lose it within a week (fishermen and gamblers are a good example). Having money doesn’t resolve the core main problems with their character.

 Another thing you will need to consider is that wealth is not a feeling.  Euphoric feelings are flighty and temporary, and unfortunately, most of us are ruled by feelings. You may not feel like cutting expenses, you may not feel like getting up on Saturday morning to be able to attend your investment group meeting. What feels good is not always right.  In the quest to chase what feels good and feel rich, we have got ourselves into major problems with our spending, priorities, debt and so on.

Since the ‘feel good’ factor only lasts a few seconds, we then need to look for something else, like new clothes, a bigger house or car.

Let us focus more on values

Without understanding that feelings should not dictate your actions, you can get your KSh. 4 billion only to spend it on temporary ‘feel good’ items and find yourself with the same problems.

Let your goals and every action be underpinned by values, not just making money for the sake of it. You could work towards building income generating investments so that you can spend time with family.

Your fulfillment will come not so much from the investment but from being able to spend time with your family. You will find that you are being driven not by what you feel but by value. Then the decision to cut down on expenses or spending time to create extra income is not seen as a sacrifice, but a choice.

Courtesy of WECEKE NDUATI-OMANGA - 

The Six Major Groups You Must Avoid To be Succesful

Building strong relationship is an important requirement for the success of your business, career or family.  For example; you may need mentors, role models, financiers, motivators etc. to succeed. However, there is some clique of people you would rather stay away from (if it is possible) or you may have to manage them properly in order to realize any appreciable success.  Everybody has his/her own group of people they consider hindrance to achieving their goals in life. Therefore, it may not be possible to list all of them in such a small space. Having said that, I am going to discuss 6 major groups of people you will need to manage for you to succeed.

1. The confused: They often do not know what they want or how to achieve it and therefore are the last group you would want to rely on for your success. In most cases they do not think clear and fast enough. Confused guys are always disoriented and find difficulty in paying attention, making decision and remembering anything. Some confused people may act aggressively or exhibit some unusual behavior. You need to understand them but never listen to them, especially when you need to make a decision. Because the best they can do is to confuse you. 
2.  The Lazy: These are the lot who just dislike work; they are poor managers of time and resources.  They are champions in blame game, never take responsibility for anything and are always missing in action. Something (if not somebody) must be responsible for their behavior - addictions to drugs, smoking, drinking,  gambling, chocolate, sex, internet, video games and emails are just but a few things they will blame for their inefficiency. Work is work and therefore do not think you can succeed without working. Whether you work smart or hard, you still need to work. Therefore it is very important to stay away from lazy people who will want you to be like them hence distract you from achieving your drams.
3. Procrastinators:  This lot is sometimes considered lazy but they have one striking characteristic – they will always push things to a later date.  They never sit down to anything as they believe “tomorrow never dies” or “tomorrow is another day”.  Procrastinators have a serious confusion of interest, very weak will-power and are never sure of themselves. They are always wary of utterly anything for fear; of success (the one they have baptized fear of failure), fear of new experience or a wide variety of challenges. In our lives we come across these guys and often tolerate them. However, these people are very distracting and therefore destructive to your success ambition. Keep this as your motto: “If it can be done today, do it immediately” 
4.  Haters: Who likes haters, anyway? You sure have some enemies somewhere, some you know but some you do not know. They do not wish you well and your failure is their happiness if not success. Why they want you to fail shouldn’t concern you because you will always have them. So just keep off these people straight away, don’t struggle to please them – you will never succeed. The 48 laws of power recommend this as a strategy; “Pose as friend, Work as a Spy.” This strategy will help you unearth your enemy’s next move against and therefore, help you plan to counter their move before they can put the trap. However, do not concentrate all your energy, resources and time in battling your enemies, consider them as hurdles which must be passed to be successful, up your game and maintain your dash to success.
5. The incompetent: These people cannot do anything right, they are wasteful, unreliable and therefore, not expected to deliver. They are biased against action and often have plenty of reasons to support their decision not to act, reasons to sit and wait for further direction, more options and opinions. They always put the entire focus on small unnecessary things; they rarely commit to anything and lack priorities. Therefore, be it advice, opinion or any form of help you need, do not contact the incompetent. Always be wary of the “arrogantly incompetent”. They claim to know everything but are actually know nothing. Apply all the performance indicators to unearth this “master of all” deceit.
6. Criminals: I have put this as a last point because I think I do not need to explain it more for you to realize the danger posed by criminals. Even with the common knowledge that; “crime does not pay”, many people still resort to crime in their quest to be successful. By crime, I mean any means of breaching the law – evading taxes, corruption, robbery (with or without violence) etc. Success is a long-term goal and requires long-term inputs. You can’t do crime forever- one day the law will catch up with you.  There is no shortcut to success, so keep away from criminals or the temptation to do any crime.