Simple rules of saving - youths

Simple rules of saving

i. Budget/control your spending. List down all your earnings and expenses

First, put down the amount you earn or your profit, in case of a business, on a piece of paper. If you have more than one source, put all of them. Then, put all the expenses of that day (if your wage is on daily basis) or of that month if you have a monthly salary.  Example below shows a monthly budget and what is left for saving.

Revenue sources(salary, wages, business profit)	Expenses
Salary - KES. 15,000	House rent – 1,500
	Food- 4,500
	Transport-1,800
	Airtime-500
	Emergencies – 1,000
	NHIF-500
Totals-9,800	Totals-9,800
Balance- 5,200	Savings – 5,200

A table showing earnings and expenses of a monthly paid youth

A more realistic budget

NOTE: You can always draft your budget depending on your monthly income and expenses

“When you are dressing on a budget, simplicity is key” – Ne-Yo, American singer, actor and producer

There is 50-30-20 rule that allocates 50% of your earnings towards necessities like food, housing and other monthly bills. 30% goes to wants like entertainment and 20% goes to savings and payment of debt. Though many people follow this, I do not recommend it to you. The least percentage should go to entertainment if there is any- 5-8%. 20-35% should go to savings, whereas 50-60% is okay with daily necessities. Remember that your goal is to save and later invest. Always balance the budget verses your income.

“The cold harsh reality is that we have to balance the budget” – Michael Bloomberg, owner Bloomberg LLC

                            Getting wealthy while young is real

*** Budgeting success tips ***

Ø  NOTE: Never rent a house that exceeds 10% of your salary, even if you are earning millions. This is one rule of money management.

Ø  Always plan for emergencies. This will relieve you shocks associated with unseen expenses. However, if they don’t occur, put this money in savings

Ø  Always control your spending. The more you save, the earlier you will invest (because you will reach your goal faster) or the heavier you invest (you will have more as your working capital)

Ø  If you have not started, start saving today. The earlier, the better.

Ø  Saving requires high level of discipline. If you are not disciplined, you will only save for two to three months, and then you are done. Or else, you start using your savings for other purposes.  Be disciplined!

ii. Open a saving account

               With the list, open a bank/ SACCO account (whichever is your choice), where you will be channeling your savings. Though you can use one account for both your income and savings, it is highly recommended that you open another account, specifically for saving. This will help avoid confusion between the two. However research on the bank or SACCO you want to save with. It should be stable and have a good record. Banks fall; SACCOs are closed day in day out. Your hard earned savings might disappear in one night. This has happened in the past, leaving many people wailing and in tears of anguish.

               While opening, ask if they have mobile banking service or agency banking which will help you save money without going to the bank branch. This will save you time.

Afterwards, start the discipline of saving. It is a culture that you have to cultivate so as you may not save in the first month only. Remember you have a goal. To break-even soon and touch million at or before you attain 30.

*** NOTE: If you have attained 30 already, why not give it a short; do not hit 40 being a pauper. ***

iii. Make an assignment: Do research on the best investment

               While saving, have a goal or make one. Keep researching which investment you can join with certain amount of money and give you the best returns. Even big corporations do research and development (R&D) and pour large amount of money to do it. They know that if they get a good innovation or improvement of an existing product, it will reward them handsomely.  Towards the end of the first topic, “Generate income”, I highlighted a couple of ventures that one can invest in and make a good return. Don’t ever love to be employed the rest of your life. Someone told me that there is no way an employee will ever earn more that his/her boss/ the employer. And it is the employee who does most of the jobs, while the boss only does supervision task. So, NEVER make a mistake of draining all your youthful and energetic life to enrich someone. You can be your own boss too. While I recommend being employed for 5-8 years, you can make it to 10, the furthest. 

*** NOTE: Remember, you don’t have to save till you have enough to invest. Ride on the shoulders of giants. Banks and SACCOs will always be ready to give you a loan based on your savings. ***

*** Easy way to decide a venture ***

a)      List the available ventures you think are possible and make good returns. Agribusiness, a garage, a car wash, shares and Forex trader, real estate business, transport venture and others.

b)      Research for each, noting down what it takes, what is needed, the assumed/ estimated capital

c)       Based on issues like passion, available resources like land in case of agribusiness, market for the products, and others, you will shorten the list, narrowing to what you will at last left with.

d)      Assess the risks involved in that venture, like market problems for a business, poor weather in case of agribusiness, specifically crop farming, disease outbreak for animals and find a way to mitigate them. Always be ready for such cases.

*** NOTE: Doing the above task will not take a single day. It may take    several months ***

               Once you have decided a venture to be in and the capital involved, move ahead. Ask yourself whether you have enough capital to kick-start. If not, organize for a loan. Some ventures are stable in a way that if you pump some loan in your capital, you will be able to repay the loan. For instance, in daily farming, you just need a good, healthy cow that will survive the weather and climate of the region and where to get food. Examine the buying habit, who and who buys that milk and their prices. Choose the best and the stable one. You are good to go. To me, I can pick a loan to venture here.

               Another example is in the transport sector. Buying a matatu and going through all legal measures, is another lucrative business that will never fail you. However, the start capital is relatively higher. To break the barrier, you can organize a friend(s) who has/ have a similar thought of investing and you combine efforts. You can buy a single matatu with very good conditions if not brand new, do search well, if it is second hand, and you are good to go. I can also pick a loan for this. I thought of it back in 2010 when one local bank was financing 80% of the asset to be bought. The downside I had was that, I did not have the remaining 20% and the one to give me told me that he did not have that amount that time.

Many are ventures that once you are in, you will NEVER miss to be employed. Moreover, it is easy to move upwards once you start them.

*** NOTE: Remember that the goal is to hit a million at or before 30. This is even more than possible. Stay tuned.  ***

               When opening a business/ any venture, do a little legal research. Know what legal procedures associated with it, like registering it, how and when to pay taxes, renewal of licenses, among other things. Most agribusiness activities do not require these. View the next several topics to see if there is any that you feel can raise your financial freedom. While some may take a year or two for you to break-even, others will take even 5 years to achieve a sizable and considerable prosperity. With investment, as Ndindi Nyoro, a young, wise investor and entrepreneur, says, you can make millions in a year; all you need is to plan well ahead.

“Opportunity is missed by most people because it is dressed in overalls and looks like work” – Thomas Edison, inventor

***Other Saving success tips ***

Ø  Maximize on your savings.

Ø  Write all your revenues and expenses on a piece of paper. This way, you will be able to track what you spend and note what you will save.  After all, what is crucial here is to save.

Budget what you spend: Save to later invest

2. Budget what you spend: Save to later invest

“When your outgo exceeds your income, the upshot may be your downfall” – Late Paul Harvey, Former ABC Broadcaster

                I have talked to many young people who always tell me that they are paid less than KES 500 a day and cannot be able to save. They can! They only need a guideline and here is the blueprint. This section contains articles that help in budgeting and saving. Without budgeting, it is hard to save. Without saving, there is no money to invest. And without investing, you will be locked in a rat-race; no developments. The author of Rich Dad, Poor Dad, Robert Kiyosaki, says that if one entirely depends on one source of income, job, he or she will live toe work for money. If he stops working, he will run in debts in a matter of days, weeks or months. This is the power of passive income; earning while you are asleep. Surprisingly, it is the only possible when one invests and has more income-generating avenues.

                After securing a job/ have started a business and is performing well, here come another great aspect of a yearning millionaire.  Control your spending and encourage saving and this will catapult a you upward. Do not buy things that you don’t require. Instead, save that money for a future use or investment. Saving alone is not enough to make one a millionaire. For example, you get KES 500 a day; you are able to save KES200. So, in a month, when working casually from Monday to Saturday, you will have about KES 4,800 in your saving account and KES 57, 600 in one year. In such a level, you have a disciplined saving culture! To save KES 1 million, you will work for 17 years and about 3 months. If you started the job at the age 22, you will be 39 by the time you hit that million or even longer. Why? Again, the following situations will always disrupt your saving culture.

•  A member of the family might fall sick and everyone has to contribute towards the hospital bill.
•  A relative or a friend might die and you have to be present in the burial
• You might be fired in the midst of your saving culture or the employer becomes bankrupt and closes his business.
• At 39, you must have married and with kids. They need food, clothes, school fees and other necessities.

             With the above scenarios, having a million in a bank account will demand more than 20 years. By then, you will be 42.  So, to avoid this and to reach the million earlier or sooner, invest. Investment is a vehicle that will rush you to your destiny faster than saving alone. However, you have to save first so as to have something to invest.

 *** NOTE: Saving alone will not make you rich. You will have to save for even decades to touch a million.  Investment will ***

 Next is my simple rules of saving

Grow rich at or before 30: Good for youths

There are over 1001 ways of creating wealth. Just look around and see them! 

About 70% of population of both Kenya and Africa at large is youth. This is a big percentage compared to other developed countries overseas, like Norway. A youth is a person between the ages of 18 years to 35 years. It is also referred to as a transition from the dependence of childhood to independence of adulthood. (UNESCO)  Soon, these youths will be adults and this precisely shows that, the population is not actually degenerating.

However, this big number comes hand in hand with high rate of unemployment the biggest challenge ever. Analysts warn that the issue of high unemployment to these youths is like a time bomb. In Kenya for instance, youths that graduate from public and private Universities every year are about 50,000. Also, from statistics, it shows that every year, Kenya pile up an estimated 2.3 million unemployed youth, according to the Ministry of Education. (Daily Nation Newspaper, 2014) By 2030, the unemployment level will have risen to approximately around 24 million in a population of about 47 million.

So, what do we do to solve this menace and see huge population of youths to be the nation’s and the continent’s great asset, greater than gold and diamond to South Africa and greater than Silicon Valley to U.S.? At personal level, what is it that the youth should do to give his life a meaning? Explore many options and set strategies that will leave you better than you were before.

This book will explore many business ventures, success and risks involved, what it takes to invest in them and how long will you attain a million by investing in them. It also takes into account, many scenarios from Kenya and beyond, to portray and bring out the African challenges and how to deal with them one by one. Also, see many true case studies (local, regional and international) that show success in different industries that will inspire you and see what you can learn from them.  Take advantage of success tips everywhere.

“Despite a voluminous and often fervent literature on ‘income distribution,’ the cold fact is that most income is not distributed: It is earned” – Thomas Sowell, American economist

 We live in the information era, no longer in the industrial era. Gain the relevant information that can help you. As a young person, you need to learn and either diversify or specialize in your field of passion. You also need to learn the role of banks and the government in helping you gain financial freedom. 
       This website is accompanied by popular quotes from popular people who have made it in life. They are either noble investors, great authors, economists, scientists of all time and others who have used tried-and-tested measures to build wealth. Hence, it is well researched. 
       It also has real-life stories that are indeed inspiring and game-changers. Be a game-changer in your life!

See the first article 

generating income: become a millionaire before 30

continue where you stopped... Jumped? View part 1

Another thing to note is how the heart tells us and what we feel we can do better. SteveJobs, Apple main co-founder, said that ‘Follow your heart.’ Your heart seems to know which direction you should be taking. Sometimes, people loose chances because they thought making some moves were more risky than staying on the track they found themselves in. The thoughts of the soldiers were perfect because that is the norm when it comes to entering any battlefield. One must have an escape route. The “what if” is a dilemma that is always put in question. What if the enemy defeats us? Never fight a losing battle. What if many of our soldiers are wounded in such a way that they cannot fight? But general changed the rules, putting all their lives at stake.  It is the same case with mine. What if I don’t get funding on time? What if the stake-holders seem reluctant at first? Know that change is hard to make at first. What if the project takes a longer time than initially imagined? I dropped out without weighing other options, thereby, putting my life at stake also. However, decide we must, because life is a puzzle and a mystery that we will live to discover. Try to discover the chances you may have that will help you make your life better.

If one feels that education will lead the way, pursue it. In today’s world, there is lots of competition in the job market, graduates trying to fill the few job slots available. This has made even made the Universities and Colleges preach an awesome word of hope to their graduates; to become job-creators rather than job-seekers. If, though not always possible, you have the guts to start a business and it succeeds, you should praise your Supreme Deity for that. You will work under no pressure, be your own boss, get the lion’s share of the profits and live the way you imagined.  This makes the drop-outs I discussed earlier, pocket all the profits they make and not to work from 8.00am to 5.00 pm as it would have been if they were in office.

Note that you can do anything legal to make a living. The global population is rising pushing for more production of food. Though I will discuss later, agribusiness is today and forever paying dearly to those youngsters who have ventured in it. Milk is never enough; it always has a ready market. We eat meet wholeheartedly. Farming pigs, rabbits, chicken, and cows for meat is also a lucrative venture. Not to forget farming horticulture, flower-farming (floriculture) and (fish-farming) aqua-culture.

Technical skills of building, masonry, plumbing and automotive skills are also rewarding. A mason pockets KES1, 500 a day. Africa is in the developing mood. Infrastructural improvement and building cities and estates is what is currently happening. Get to know how to drive excavators and bulldozers. Chinese involvement in Africa’s development projects is giving our youths something in their pockets. Note that these developments are not ending soon. 

We cannot shun technology, innovations and Internet. Many youths are using creativity to create valuable products that have market value. Though technology may have arrived in Africa later, in U.S., Silicon Valley remains the most innovative technological hub in the world. It marks the genesis of technology we use today. Many global companies have been developed from there and are performing very well and have employed thousands and thousands of people.  So, if you have an innovative idea, work on it, dream on it, eat it. An innovation dearly pays; I give you examples, later. Also, there are widespread online jobs that do not require special skills like writing jobs, sell goods online, online marketing, matched betting, online foreign currency exchange/ FOREX trading, among others.  You need to just Google “online jobs” or “ways ofmaking money online” to see the available freelance jobs, sign up and start working. The good thing with online jobs is that you can work anywhere provided you have a computer that is internet-connected. You will work at home.

The governments are also trying to put youths in their hearts. For instance, The Government of Kenya has come up with a couple of measures to eradicate unemployment among youths. First, they set Uwezo fund, revolving fund that would held youth groups jump-start their economic projects. Many groups have applied it and have succeeded. Moreover, though I will discuss later, the 30% of all its tenders have been reserved to youths, women and people with disabilities.

Needless to forget, talents are like diamond if not gold today. Comedians are being paid like government ministers today. Are you fun of football? Do you know EPL, La Liga, Bundesliga and other European and International leagues? Those players make million dollars if not billions annually. Other sports like volleyball, basketball, car-racing, athletics and others have made players live a lifestyle of choice. What about music and acting? I know many musicians and actors who own choppers and have more than one mansion. Never underestimate the power of a talent. If you have one, cultivate for it knowing that there is always a way.

Leveraging these options will keep a youth at the top of the game. Not unless someone is lazy, they can do a lot to earn a lot.  If you secure a job paying tens or even hundreds of thousands a month, then, you are lucky. But don’t forget that you can also be a millionaire having started with those little and humble jobs.  Walk with me and see how.

“Overcome your barriers, intend the best, and be patient. You will enjoy more balance, more growth, more income, and more fun!” – Jan Canfield, American author and motivational speaker

***Generating income success tips ***

Ø  At first, do not choose jobs. All you need is to work and save

Ø  What is it that you love? Find a way to earn a living with it.

Ø  If you do not know what you love, work on the available job. Do not waste your youth idling. Do something.

In the next article, I will introduce the basics of budgeting. There is not coin that is little if well budgeted and no money is much if used extravagantly. So, watch out pals! Meet me there

Generating income for youth: be a millionaire before 30

1. Generating Income.

                                                                              

“The longer you’re not taking action, the more money you’re losing” – Carrie Wilkerson, author, the Barefoot Executive

Haven't seen it? You may view the introduction to this site... it gives a good starting.

Due to limited slots in the industry, which makes employers design many schemes to eliminate as many youth graduates as possible, youths locked out of formal employment must do something to generate income to help upkeep themselves and prepare for their yearning future. It becomes so painful to bury oneself in books for more than 20 years only to be viewed as a spectator of the game when it comes to rewarding the players. The youth played his/her game with due diligence and faithfully only to be told, “You missed the mark somewhere.” Not that the person is not qualified to do the job, but because someone else, probably smarter than him/ her, has filled the available slot. After several years of tarmacking, trying to get the reward, this youngster falls in a state of despondency; gives up completely. He has to do menial jobs with meager payments. Now, the problem is not that he cannot do it; the problem lies in the state that he lost many years, which were productive, and which he could have done something else for a living. But time has passed, and he/she wonders where to start at 25, whereas a dropout at high school at age 17 has three healthy pedigree cows and sells milk worth KES 3, 500 a day.  With KES 500 as the expenses, he profits with KES 3, 000 a day and KES 90, 000/ US$ 900 a month. The latter knew that business was the only way to go at an early age, so, he organized himself almost immediately. His friend has two motor-bikes, and each makes KES.500 daily. He earns KES. 1000 a day, translated to KES 30, 000/US$300 per month. The two businessmen have put their bank accounts in order. Any time they feel like purchasing some piece of land somewhere or a plot, the bank does not hesitate to grant their wish. The bank says “...your wish, my command.” But what about our graduate, will he take his only asset, the transcripts, to the bank as a collateral security, to secure a loan? He can argue that he will get a job soon and repay the loan. But the bank will not honor his pleas. It will instead say, “what if you don’t get a job? How will you repay the loan?” It is quite unfortunate for this person who scored grade A’s and B’s compared to even dropouts who never even sat for an exam.

Why are the dropouts successful and the graduates staggering? In the motivational book entitled, “Thin and Grow Rich” by Napoleon Hill, (1937), there is a story instance that Hill uses. There was this general who had an army of soldiers. One day, a war broke between them and their enemy and they had to cross the sea to go and fight the enemy in the enemy’s land. This general thought for a while and came up with an answer as to what they were to do when they arrive at the battlefield. The answer seemed absurd. The day of the battle came. He called his soldiers and told them that when they reach at the shore in the enemy’s land, the first thing to do is to destroy all their boats before attacking.  In fact they all wondered, “What will happen if our enemies surpass and defeat us? Will we have an escape strategy?” He told them “It is either we defeat them or we die. No retreat, no surrender.” They tried to convince him of a pull-back idea when things worsen but he was determined in what he said. Seems he talked the talk and walked the walk. They however did it, half-heartedly, because order is order, no matter the outcome. So, the soldiers attacked and fought the enemies with one heart, either they succeed or they die, no escape route. In the midst of the battle, especially when they felt defeated, many thought of retreating. But there was no escape strategy. What were the available options? Succeed or die. They had to fight for hours and eventually they succeeded.

What made all this success? It is the prime decision of the general. If they had that retreat option, they could have quitted long before they succeed. This is because they could be juggling in between war and pull-back. What made the drop-out succeed is the knowledge that he could not make it in education. Then, what are the available options? Work or die. He chose to work and now has succeeded. The biggest success is not scoring an A in high school; it is having an objective, a goal, a focus and choosing the way to get there. What are the available options? There are only two broad choices in life; succeed or fail.

“I call heaven and earth to record this day against you that I have set before you, life and death, blessing and cursing: therefore, choose life that both thou and thy seed may live.”

 - Deuteronomy 30:19. (Holy Bible- KJV)

So, what do we do? How will we rekindle hope to this hopeless mammal? Should we shun education or encourage our youths to drop-out when they reach high school or? Should we advise all of them to venture into business and hell forget white collar jobs? Then, if so, why then waste time and money trying to get higher education, yet, one will end up in business, and in this case, late? How do we nurture our youth to a happy and hopeful nation?

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