How do you become rich in Kenya in 2020?For close to five years I have written several articles regarding wealth creation, improving our saving culture and the general techniques to employ to become rich in Kenya. While I understand it’s uncommon for an average person to increase their net worth to the north of Ksh100 million, observing basic personal and financial habits would be a remedy to your stagnant life.
Before we discuss more, when do you say, “I am now rich? “Ideally, being rich is when you can afford your basic needs… you can live comfortably without working— when you’ve surpassed your financial targets. In other words, your net assets can feed you for the rest of your life without much struggle.
More often, my articles focus on my personal experiences and what I observe around. I try to build the story based on what I know best and not what I read from other blogs. Below are my observations.
- Build your own home
The first thing you should focus is to eliminate rent. We observe that more than three quarter of people living in urban areas live in rented houses. It’s almost impossible to become rich when you live in a rented apartment.So,ensure you have a roof above your head…your own roof
- Develop passive income
Passive income is what makes people millionaires. It includes investment in real estate, stock market, money market, retirement benefit schemes, online affiliate marketing etc. This is the money you earn even when you’re asleep.
The worst mistake you can make is to have your wealth in liquid cash. If you commit this mistake, which is likened to treason, chances are that you will squander the cash and set your life to factory mode.
The first thing to do as you get active income, convert the money into passive income by identifying investment opportunities that would guarantee recurring earnings.I propose that you start saving in Unit Trusts, purchase parcels of land, build rental houses,start doing affiliate marketing etc.
- Live below your means.
The first so-called secret to getting rich is to live below your means. Translation? Don’t spend more money than you make. Period. However, not many people follow this advice. Many are focused on spending as much as possible. Whether it’s to revel in the perception of being more well-off than they actually are, or some other purpose, this is the truth across much of the developing world.
It’s estimated that over 70% of Kenyans living in urban centers live beyond their means.A classic example is when an individual earning Ksh 70,000 owns a car an lives in a Ksh30,000 rental house, all because he wants to please his friends. Living this way leaves nothing for investment…it’s just a poor man’s lifestyle!
- Save before you spend
Millionaires world over understand this: if they spend before they save, their goose is cooked. As an aspiring millionaire, the most critical thing to do is, always set aside money to save before you start budgeting for expenses, it doesn’t matter how much you save ,what matters is whether you save or not. Once you develop the saving culture, it would become a routine and finally your inbuilt habit.
- Meticulously track expenses.
The next step to getting rich? Meticulously track every red cent that you spend. Not just the big expenses. Every single expense that you have should be tracked with a fine tooth comb. Benjamin Franklin once said, “Beware of little expenses. A small leak will sink a great ship.”
As easy as it might seem to ignore the little stuff, so to speak, the more you sweat the details, the better off you’ll be. Cancel that gym membership you haven’t used in six months. Eliminate that costly cable television plan. Stop buying expensive lattes and eating out when you know you can’t afford to do it.
- Eliminate bad debt.
Don’t get me wrong, not all debt is bad. Some debt is good debt to have. Other debt, such as revolving credit card debt and high interest rate loans, is bad debt. You have to eliminate your bad debt. This is especially the case if all you’re doing is paying the monthly payments.
You can’t get rich in life when you spend a large majority of your income paying interest payments on money that you’ve already spent. Take the highest interest rate card or loan and double the minimum payments until it’s paid off. Then, move to the next one. Then the next. Until it’s all gone.
When you’re debt-free from the bad debt (not the good debt like mortgages for investment properties and loans to grow your business, for example), take that money and put it towards your savings. The trick is not to go spending cash and splurging on a vacation or a new car once you’re debt-free. Stay focused.
- Decimate your bad habits.
Bad habits hold us back from achieving many kinds of goals. They stop us from losing weight, making more money, saving, investing and everything in between. The only way you can actually get ahead in life is to decimate those bad habits. You need to quit the bad habits before they lead you down a deathly spiral.
It’s hard to achieve something that takes so much of your energy, such as getting rich, without eliminating your bad habits first. I’m not just talking about poor financial habits; I’m also talking about any other habit that eats away at you, physically, emotionally or mentally.
Obviously, success in anything isn’t just about eliminating the bad habits that hold us back; it’s also about ensuring that we employ some of the best habits in life and the best habits in business to virtually guarantee our future outcomes and make progress on autopilot.
- Set daily goals.
Getting rich is a monumental goal. However, you can’t simply say that you want to be rich. First of all, you need an exact number and you need to have a specific date you’ll achieve that by. That’s the bigger picture. Beyond that bigger picture, you need to set goals on a daily basis.
Daily goal setting provides milestones on your way to your bigger goals. Break the big goal down to achievable daily goals that won’t seem so overwhelming. For example, if you want a Ksh 100 million net worth in the next five or 10 years, figure out what it’s going to take on a daily basis to move closer to that goal.
Obviously, you’ll have a hard time saving towards that massive goal of getting rich when you start out near ground zero or worse. However, compound interest is very powerful, and even if you don’t save your way there, you can leverage the cash that you do make and tuck away to engage in smart investments that will produce high returns.
- Manage your time effectively.
We all have the same amount of time in this world. You don’t have more than the next person and that person doesn’t have more time than another. No matter if they’re a powerful politician, a business magnate or a famous athlete, they don’t have more time than you do. Time is life’s greatest equalizer.
However, what does matter is how effectively the time we do have is used. Those precious moments of every single day can easily be squandered. There’s absolutely no way to get rich by wasting time on trivial pursuits. Manage your time by instituting a smart and effective time management system to stay on track towards your goals.
- Invest in what you know.
If you’re serious about getting rich, you have to invest in what you know. For example, if you’re in the pharmaceuticals business, don’t try to invest in an agriculture business. Get the point? Invest in what you know. If you know pharmaceuticals, get involved in biotech.
The better you know an industry or niche, the more likely you’ll be able to spot ideas that could possibly create massive amounts of income for you in the future. No one else is going to do this for you. And when you do invest in something that you know, be sure to track it vehemently.
It’s okay to put all your eggs in one basket, so to speak, as long as you watch them like a hawk. As soon as you get distracted or lose interest, that’s when things go downhill. Pay acute attention if you’re serious about compounding your wealth.
- Mind your own business.
While you can get rich by working as an employee, it’s far more difficult. Instead, you should start your own business and mind that business. Put all your heart and soul into the business and keep working at it even if you fail. And if you do fail at it, even if that happens repeatedly, learn from those failures and grow.
Henry Ford learned a lot through failure but didn’t give up. Even though he went bankrupt once and was forced out of his second business, he didn’t throw in the towel. He minded his own business. Every successful entrepreneur has failed. But the reason why they succeeded on such a massive scale was because they didn’t give up.
- Plan to quit your 8-5 Job
Salary guaranteed by an employer can be sweet, so sweet what the idea of quitting your job won’t crop up. The more you earn this money, the more your desire to become rich shrinks
Bold people who aim to get rich are never excited about their 8-5 job, they quit.
The moment you find yourself out of your regular income, that’s the time your journey to greatness begins. Wealth creation commandment dictates that you first become your own boss, then the rest will follow.
- Quit betting
Betting sites, for example this one, would create a false impression that one day you will become rich. Once you sign in as a gambler, you automatically purchase a ticket to poverty zone. The only way you can rescue yourself from the jaws of poverty is by quitting gambling and concentrating on reasonable ventures.
From Venas News we wish you all the best