Ways entrepreneurs waste their hard-earned money

f entrepreneurs could recover all the time and money they waste, our GNP would soar.

I can’t prove that scientifically—researching the topic would be, well, a waste of time and money—but I’ve seen it often enough, in business plans, on income statements (including my own), during bankruptcy proceedings and just looking around.

To win the startup game, you need to be a miser with your money. You need to spend it on things that will make you a success, not on what will simply make you feel or look like one.

You need to pander to what your customers need, not to what you need. So before you sign that cheque, swipe that credit card or sign that contract, ask yourself, “Will this bring me business?”

If the answer is no, consider it one less dollar you need to beg, borrow or spend.

Based on my experience, here are 10 of the most common ways entrepreneurs waste money:

Custom logos, fancy letterheads and other icons of success. They may make you feel like an entrepreneur, but they don’t bring home the bacon. Instead, design your own with one of the many templates that come packaged with your word processing software. They include matching business cards, letterhead, envelopes and invoices. You can find templates in the Project Gallery of Microsoft Word or the Template Chooser in Apple’s Pages. If you need more choices, HP.com and Avery.com offer free templates for use with their specialty forms and paper.

Fancy offices. Speaking of bacon, maybe the dining room isn’t the ideal office, but working there beats not eating. If you don’t need a formal office, don’t pay for one.

A company car. The latest luxury car doesn’t make you a better businessperson, it makes you a poorer one. If the wheels you have already get you back and forth to the grocery store, new ones are a waste of money. Just be sure to log your business travel so you can deduct the usage.

A slicker-than-you-can-afford website, brochure, sign, ad, etc. In the beginning, good enough is often good enough.

Consultants. Sorry to say, many of them will borrow your watch to tell you what time it is. If it’s not rocket science, figure it out for yourself.

Falling for the pitch “You’ll be getting in on the ground floor.” You’re not in a position to be someone else’s venture capital. If a rep for a new advertising outlet gives you the hard sell about how wonderful it’s going to be, invite them to call you back when they can prove it. Leave the experimenting to others.

Starting a business because your friends love your idea.

It’s one thing to like or even love an idea—it’s an altogether different thing to be willing to plunk down money for it. There’s no substitute for test marketing where real money changes hands.

Basing your marketing strategy on what you think is wonderful. Good chance your customers are nothing like you (or them you). Instead, research your market thoroughly. What do they read? What do they eat? What do they watch on TV? Then craft your message based on what appeals to them, not you.

Underestimating the competition. Or worse, thinking you don’t have any. Any business plan that proudly states it has no competition earns itself an immediate place in my round file. If you don’t understand your direct and indirect competition, you don’t understand your market. And if you don’t understand your market, you may be trying harder and harder to get better and better at something you shouldn’t be doing at all.

Thinking that your product or service is what sells. Here’s the sad truth: A great marketing strategy beats a great product every time. Business owners can (and will) go on and on about their wonderful products or services. The successful ones spend their time scheming about who’s going to buy it and how they’re going to reach them. Products don’t sell, marketing does.

Have power of endurance?

Everywhere around you, people decry their persistent lack of money. Many are seeking financial break through in hope.

Yet there is so much money around, but we do not seem to see it.

This persistent interplay of scarcity and an environment of abundance leaves me wondering whether money is really the problem.

Many cannot see money that they are not skilled to produce let alone managing it.

Far too many people in the world today overvalue talent and celebrity, and they sure have their good reasons.

However, my own account for this is no more than the money they are perceived to procure by their status. Will they keep it?

When successful people like the Facebook ace, Mark Zuckerberg or Lionel Messi getthe recognition they deserve, often what is not recognised is the hours, days, weeks and sometimes years of extremely hard work, dedication, and persistence that got them to the point of recognition.

There are two issues interplaying in this —a simple feasible idea and persistence.

A simple idea that can be turned into cash flow, and the persistence to learn and to master how to turn the first cash flow into more streams.

My humble financial literacy coach, told me, that money is an idea, take yours and turn it into cash flow.

It will take time and dedication to horn the skills for making and keeping money.

Persistence may not be glamorous, but it sure gets the job done!

Think of every super-talented successful person, like Michael Jackson, Will Smith and even our own Ndambuki aka Mwalimu Kinga’ngi whoever strikes a chord with you.

These guys have put plenty of time doing their thing, but first they chose the idea.

They clearly discerned a need in the society and did not let fear of failure take control of them.

In fact fear to fail made Michael Jackson work unusually hard at getting his skills right.

Newt Gingrich once defined persistence as “the hard work you do after you get tired of doing the hard work you already did.”

A good idea alone is not good enough. It is not going to happen by some kind of magic, it is going to take effort, training and practice no matter how talented we are.

Yet most people around are looking for this elusive money, where they won’t find it.

It is the bias for taking action, not talent that separates successful people from failures.

Success is nothing more than a little effort repeated and improved everyday.

Many people give up when they are so close to achieving success.

Many such people are sad and frustrated, because they have given up on themselves and their dreams.

If only they understood the power of persistence, they would learn the refining power that translates dreams into reality!

Mastering money comes from mastering an idea through time.

The person who has what it takes to be persistent is the person who really wants to take action and always finds a way, where others find excuses.

It is human nature to look for excuses to justify failure, rather than dig deep when times are tough and do what you have got to do to get what you really want.

Excuses never got the job done.

When you are financially literate you have the ability to use knowledge, skill and confidence to make responsible financial decision.

Financial literacy is vitally important in the information age, a time of lightning-quick change, fewer guarantees, and more opportunities.

Time and chance present many opportunities in this era, but only the people who have the persisted and mastered their money ideas are ready to exploit them.

The power is in your hands. It is up to you to decide whether you won’t have enough or you will have too much.

The book of proverbs reminds us to go to the ant, observe its way and be wise.

This little animal knows something about producing and saving for the future.

To be successful, alter self-sabotaging behaviours

The road to success is filled with obstacles.

Finding your way around them predicts winning and losing.

Some of the obstacles show up in the form of survival behaviours brought on by the brain’s innate wiring to protect us from the dangers of the world.

The only thing is, the dangers have changed from 200,000 years ago when the wiring evolved, and we have to find a way around it or suffer the consequences of what is called “danger surfing.”

In a previous column, I’ve discussed the concept of danger surfing, wherein the brain surfs the horizon for threats and helps us react properly in order to survive.

Danger surfing often leads to behaviours that can be harmful to achieving your goals.

It’s helpful if you know when you, your colleagues, competitors or clients are danger surfing so you can override it or use it to your own benefit.

The brain is organised primarily to maximise reward and minimise danger, and our behaviours are moulded by these two things.

The danger receptors in our brain are more active than the reward receptors, as we spend a good deal of time danger surfing.

In short, danger surfing sometimes shows up as childish behaviour. There are five basic ways we danger surf.

Recognising them before or as they are happening can help you take steps to avoid them in yourself and others, as well as taking the edge off their damaging effects.

The acronym we’ll use is C.H.A.S.E.

C = Choice. Our brains like choices. Autonomy is one of the things we look for as humans.

If something is presented as an ultimatum, then you can expect stubborn, childish pushback.

Also, if you give a person one choice, you have a 50/50 chance of a “no.” However, when you offer choices, the likelihood of one of the options being chosen goes up tremendously.

Choice Tip: The magic number seems to be three choices. Influence psychology tells us that when you give people options, start with the luxury model first, then midline, then economy. More times than not, the midline will be chosen. But when you start with the economy choice, people tend to split between economy and midline. Make sure all options are ones you can live with if chosen.

H = Hierarchy. Our brain pays a lot of attention to pecking order or status. You see it in a roomful of people when the boss’s boss walks in.

Everyone becomes more polite and less forthcoming. On a one-on-one basis, you can tell when someone feels like their status has been questioned.

It typically happens when you offer advice, make criticisms or give “feedback.” Defensive-toned retorts like “I already knew that,” “I’ve tried that already; it didn’t work,” or a putdown like “What’s your point?” are clues that the other person is danger surfing and is going to shut down. Until they feel their status is restored, the conversation won’t move forward.

Hierarchy Tip: People get into status battles when they feel like others are commenting on the quality of their work or their competence.

Something as innocent as offering someone advice can be seen as a status change because we’re in the driver’s seat as the advisor.

Ask before dispensing advice to ease the danger surfing defensiveness that comes when status is shifted without permission.

A simple “May I give you some thoughts about how I’d approach it?” goes a long way. Another quick tip is that when you go into a meeting, figure out the roles everyone thinks they are playing.

Are they the leader, a participant, a listener, encourager, feedback giver?

If someone else thinks they are the leader of the meeting and you wrestle control from them, essentially becoming the leader, you have a status battle.

Sense of safety

A = Assurance. When things feel uncertain, the brain goes into survival mode, and we begin to think and behave in ways that make us feel safer. In times of uncertainty, you won’t see a lot of extraordinary thinking going on. In fact, people tend to do what they know is a sure thing. That’s why when things at work feel very uncertain because of a merger, acquisition or layoffs, people vigorously protect their turf.

Assurance Tip: When things are shaky, over-communicate the things you know are certain.

Give people a sense of safety so they don’t danger surf too much and fall into auto-pilot, uncreative thinking. If you feel unsure yourself, organise a drawer or your office. The sense of knowing where things are brings down the anxiety from uncertainty.

S = Social. We are a tribal species. Before we established our dominance and lived in caves, we had to take care of each other in order to keep our species around. If you were exiled from the clan, you died.

It still feels the same way when we aren’t included in a group we want to be in.

The next time someone holds a meeting you believe you should have attended, take notice of how you feel about it—probably snubbed.

Dr. Naomi Eisenberger studied inclusion and exclusion at UCLA and found that emotional pain switches on the same part of the brain as physical pain. It hurts to be left out.

When we’re hurt, we don’t communicate as much or as well. We withhold important information, get angry or become agitated and don’t perform as well.

Social Tip: The social realm is dictated by the rules of the group. Have a departmental meeting about the rules the team should live by.

Everything from what’s acceptable dress to how tardy you can be to meetings to expectations about how people behave after hours are all about understanding the social makeup of a team.

The more everyone understands the rules, the less confusion and hurt will result from being treated as an exiled clan member.

E = Equitability. When things feel equitable or fair, the reward part of the brain turns on. Conversely, danger surfing occurs when something doesn’t feel fair.

If you offer someone a proposal with something that feels unfair, they will scan the rest of the proposal more stringently for inequitable items and begin inspecting the relationship for other things that might violate a sense of fairness.

When something feels unfair, we might not always be able to put our finger on it, but our behaviour becomes more cautious and cynical until we pinpoint the inequality and make it right.

Equitability Tip: To discover someone’s definition of fairness on certain issues, simply ask what feels fair to them.

If you’re selling a product or idea and someone asks a lot of questions about one topic, they could be trying to get fairness clarification. Check to see if the issue in question is out of balance in your favour, no matter how trivial you might think it is.

Danger or reward? It’s up to you and your brain.

Mr Halford is the author of ‘Be a Shortcut: The Secret Fast Track to Business Success.’

Stop Acting, Start Getting

The neighborhood you choose can have a powerful impact on how rich you become and how wealthy your children will be.

But the link between where you live and how much you're worth may be different than you expect.

So says wealth myth buster Thomas J. Stanley in his new book, "Stop Acting Rich ... and Start Living Like a Real Millionaire." Stanley is on a mission to change how Americans view money, starting with the blockbuster he co-authored in 1996, "The Millionaire Next Door."

Too many Americans are what Stanley calls "aspirational spenders" — people who spend money to make themselves look richer or more successful than they are.

But their "hyperconsumption" effectively torpedoes any chances they would have at accumulating real wealth, which typically requires spending significantly less than you earn and investing the difference.

In his latest survey of millionaire and nonmillionaire households, Stanley ranked more than 200,000 U.S. neighborhoods for wealth, then followed up by surveying select households, more than half of which were millionaires, which Stanley defines as having $1 million in investments, excluding their homes.

Here's what Stanley found:

The neighborhood in which we live influences a lot of our spending. The more expensive the house, the bigger the mortgage tends to be, and the more we'll spend on heating, cooling, insuring and maintaining the place.

But we also feel pressure to match our neighbors' spending on cars, vacations, furnishings and other trappings.

The "keeping up with the Joneses" mentality means the fancier the neighborhood, the less wealth we may accumulate, Stanley said. The opposite is also true: When our surroundings are more modest, we tend to spend less, regardless of our incomes.

"The propensity to spend," Stanley said, "is directly related to the typical home price in that neighborhood and to the price you paid for the house."

Interestingly, most of the people Stanley surveyed who lived in $1 million-plus homes weren't millionaires.

"They may have a big mortgage," Stanley said. "They don't have a lot of money."

In fact, Stanley found that three times as many millionaires live in homes worth $300,000 or less than live in homes worth $1 million or more.

"People who have a tendency to accumulate wealth live in neighborhoods that are easy to live in," Stanley said. "That's a hallmark of an accumulator."

Whom you hang out with matters. The ideal neighborhood, Stanley said, would be populated with engineers and teachers, two professions he found were associated with higher-than-expected levels of wealth accumulation.

Educators were especially good at turning sometimes below-average incomes into above-average wealth, something Stanley — a university professor for 20 years — credited to the culture in which they work. Frugality and saving for the future are valued in many teaching settings, he said, and that culture can have a profound effect.

"Work with frugal people, and you may become frugal," he writes. "Associate with colleagues who are astute investors, and you may become wealthy one day."

Our neighborhoods influence our kids' future wealth accumulation, too. Stanley asked his survey respondents a simple question: Growing up, were they better off or worse off financially than most of their neighbors?

People who perceived their childhood family's income as below the average for their neighborhood tended to become aspirational spenders and below-average wealth accumulators, Stanley said. They spent more to compensate for childhood feelings of somehow being "less than" their neighbors.

"They said things like, 'I went to high school with kids who had a lot more money,'" Stanley said. "They're making up for that scar."

By contrast, those who felt their families were in the upper half of their neighborhood's wealth hierarchy were more likely to be accumulators, rather than spenders.

"They're not looking for ways to consume to make up for the past," Stanley said.

Most millionaires have just one house. Many people associate a second or vacation home with having arrived. In Stanley's surveys, though, 64 percent of millionaires had never owned a second home. The net worth of second-home buyers at the height of the real-estate boom was actually considerably lower: a median of about $380,000, Stanley estimated.

Houses cost a lot to run and maintain. Stanley postulates that money-savvy millionaires find one home to be enough and prefer not to pour money into a property they may not use often — or might feel pressured to use more often than they want to.

A mere recession won't change Americans' spending habits. Actually, this wasn't a survey finding but is Stanley's own assessment of the long-term impact of the Great Recession on our likelihood of accumulating wealth.

Yes, people have cut back their spending because of job losses, less access to credit and the desire to build up savings, Stanley said. But that cutback is likely to be reversed as the economy improves, he said.

"It's not going to change the fabric of people," Stanley said. "Our whole (economic) structure is based on hyperconsumption."

Passion an essential building block for success

I’m a big believer in following your passions, wherever they might take you. Part of doing that is preparation – saving money, making choices that pave the way – but another part is simply stepping up to the plate and hitting that fat fastball down the middle of the plate when it comes your way.

Gary Vaynerchuk is passionate about wine. He’s one of the best known wine evangelists in the world because he wears it and shares it. He built a $60 million business in the wine industry mostly on the back of sharing his enthusiasm about wine online. Crush It! tells the story about Gary’s experience in translating his passion into a real business.

Gary’s story and advice rings really true because, in many places, it’s a journey I took myself. I did wind up in an area without the mainstream appeal of Gary’s area (sorry, folks, but there aren’t as many frugal people as there are wine fanatics) but most of the elements are strikingly similar.

His conclusions are spot-on, too – but we’ll get to that later.

In the first Chapter the writers tells us that Passion Is Everything. He says, it’s incredibly hard to be successful at something without being passionate at it. Why? Success takes time – a lot of it – and that early time is often filled with a tonne of failure. If you don’t have that true seed of passion that will help you get through those early trials and tribulations, you’ll never make it through. Passion keeps you going even in the face of repeated failure, and it’s only through repeated failure that you build the skillset necessary for success. I agree from experience – I failed as a writer for at least ten years before finding any sort of success with the written word. Without passion for writing, I would have given up and started playing World of Warcraft.

The second thing he says is that Success Is in Your DNA. Think about it. Every single person is unique and brings a unique perspective and set of talents to the table. That unique mix is something that is valued by others if you go through the process of mining it and isolating exactly what you have that’s valuable. It’s a long process, one that’s going to include a lot of failure along the way.

The other one is the branding aspect. What do people think of when they think of you? The stronger you can make that theme, the better off you are. Why? Because if you’re able to conjure up something when people think of you, they’ll already have a strong preconceived notion when they see your name pop up in other places. You’ll be familiar – and if you’ve built a positive (or at least an interesting) brand, you’ll turn something ho-hum into something people want to engage with. This might mean books, products you make, speaking engagements, and countless other things.

Remember that as the costs for starting your own business get lower and lower, it becomes less and less of a sensible proposition for talented and intelligent people to work for other people when they could be using that talent and intelligence to build a business for themselves and collect the rewards from their efforts. The Simple Dollar was started on a shoestring with little more than my spare time invested in it, for example. I could have just signed on to write or produce content for another site – but if I had done that, I would have made much less and had much less control over what happened with my stuff. If you’re passionate, don’t sell that passion to others – ride it yourself.

The secret is to create great content. If you’re not making things that other people want to read or listen to or watch or interact with, no one will pay any attention to you. The keys are straightforward: know what you’re talking about, be excited and passionate about it, and tell a story as you go. Those things work in any medium about any topic that you might be covering.

Also you need to choose your platform. “If you build it, they will come” isn’t true. You have to make sure people know you’re there and are aware of what you’re talking about. Thus, to get started, you have to go where the people are – places like Twitter and Facebook. Go there before you even have a product and join in the conversation. Follow others who are interested in the things you are and converse with them. Ask questions. Say astute things. Get involved in topics of conversation. Eventually, you’ll start accruing followers yourself – and you can start building from there in whatever direction you want. The key thing is that your followers – the people interested in what you have to say – are your platform.

Community building largely revolves around interacting with people, engaging in discussions, answering questions, asking questions, and being involved. You create community when you listen to what people say, focus on topics that people want to hear about, involve yourself in conversations, and so on. Each time you connect with a person, that person becomes part of your internet community. The larger that community is, the more powerful of a support platform it becomes for whatever you choose to do.

Lastly, Once you do decide to start making money (after you have a nice audience, of course), there’s a lot of potential avenues for income – advertisements, affiliate programmes, speaking engagements, consulting, freelance work, writing a book, and on and on and on. All of that (except for perhaps the direct ads) builds on top of establishing a community of followers who are interested in what you have to say. In the end, remember that a lasting legacy is much more valuable than money in hand right now.

Source of income

Don’t sell yourself out for something that you don’t believe in. If you do that and maintain honesty with the people who follow you, they’ll respect and value you far more than if you’re into every money-making opportunity that comes along. If you’ve ever thought you could do what I do, Crush It! is pretty much an essential read.

It outlines quite a lot of the process involved in translating a personal passion into an online-led endeavor that can be your primary source of income. It matches up very well with my own experience in doing much the same thing.

The real key behind it, though, is passion. You need to have a passion before you even start or else the book won’t ever take off for you. If you have a passion and want to share it with others and grow it into something that can financially sustain you, that’s where this book takes over.

-THE SIMPLE DOLLAR

You're bored and Tired of what you do!

You're bored. Tired of what you do. You're not even close to where you hoped your business would be by now. You feel like you're losing ground and don't know how to get energized and ready for the next round.

It happens to nearly everyone. Even though we know it takes most people two to four years to get a business off the ground and making money, we somehow believe we will be the exception to the rule. Or we just forget how long two to four years actually is. It doesn't help that every time we turn on the news, echoes of the declining economy ring in our ears.

Plenty of people are thriving, even in this economy, and you can, too. More important, you can regain your passion for what you do. Follow some of these suggestions to boost your flagging enthusiasm:

1. Become an industry insider. Take the next step to becoming savvier about what's going on in your field. Buy a subscription to that industry magazine you considered a luxury. Become a presenter or simply attend a conference you've always wanted to go to. You can always become more involved, whether it's helping at a local event, writing articles for publication or lobbying for a cause your industry cares about.
   
2. Sharpen your skills. You may be good at what you do. But someone else in your field knows more than you do, has more skills than you do or has that extra edge. Nothing chases away a slump faster than learning something new. Government agencies, businesses and schools all offer tons of e-learning opportunities at low cost. Look for training sessions at local universities or interest groups.
   
3. Find a mentor. One of the best ways to insulate yourself against business failure is to find and work with a mentor, someone with business experience who can guide and assist you. One place to begin is findamentor.org, a free website with a database of mentors and apprentices--a safe community where people can find support for achieving their desires. Find the right people to give you advice at the right stages in your career, be it one person or 20. Nothing is better than having a go-to person with whom to discuss your business ideas and concerns.
   
4. Grow your network. You know you need a professional network of people to help you open doors, get you in someone's office or help you close a deal. But there are other advantages, too. When you find the right group of people and you click, it can be fun. Group events, socializing one-on-one and even commiserating about similar situations and feelings can remind you that you aren't alone and that a new day is just around the corner.
   
5. Dealing with naysayers. Most of us deal with some clients or customers we can't seem to please, no matter what we do. Take their comments in stride and see if what they are saying is honest. If it is, take measures to improve your business. If it's not, focus on the positive testimonials you have gotten. Remind yourself how many people you are helping. Keep a folder of those positive comments and revisit them often. Better yet, add those testimonials to your website. They're great for attracting new clients and are a real mood booster when you're having "one of those days."

Build a Brand Unusual

Successful brand leaders live out loud. They follow their passions and they're willing to take risks regardless of what others say. To live out loud means to do whatever it takes to see your dreams realized.

Richard Branson, best known for his Virgin brand of over 360 companies, is the quintessential example of a brand unusual due to the leader's willingness to live out loud. Just look at the twinkle in Branson's eye: He is constantly forging new business pathways with a spirited and adventurous relentlessness.

Or take a look at the creators of Twitter: Biz Stone, Evan Williams and Jack Dorsey. People originally scoffed at the notion of 140 character "tweets" but their idea has produced a totally original communication platform that's been embraced worldwide. And that originality is a corner-stone of the Twitter brand.

So what happens when a leader is living out loud? You get a brand unusual. When a company has a brand unusual the primary focus of the brand isn't outward (outsmarting the competition); instead it's internal. It's about the brand doing the best it can and recognizing the value it brings to the table, all the while inspiring others along the way and making a difference.

Here are two ways you can start forging your brand unusual.

Set a Higher Standard and Then Live By It
What used to be an afterthought in business practice, operating within the parameters of social responsibility, is now coming of age. This is essential thinking for entrepreneurs and for future business leaders.

At last year's Harvard Business School graduation, more than half of the students volunteered to take a new student-authored MBA Oath. The MBA Oath promises that Harvard MBA's will act responsibly, ethically and refrain from advancing their "own narrow ambitions" at the expense of others.
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How amazing is that? The so-called elite saying greed is no good and demonstrating a passion for spreading their new message.

Since that time more than 200 business schools around the world have added the MBA Oath to their commencement.

One of the three creators of the Oath, Teal Carlock, said, "As a class, we have a real opportunity to come together and set a standard as business leaders."

What you can do

• Challenge yourself and your team to set higher standards by using your brand to define how you want to operate in today's socially conscious business world. It could mean re-evaluating your vision for the future or the way you want to serve your customers. You want to send a clear and powerful message about the positive impact your business brand is having and will continue to have in the future.
  
• What kind of stage have you created for your brand? Visionary leaders create a platform for themselves and their brand. Are your brand story and marketing messages in synch with and supportive of whatever your platform says?

Ask and Answer Your 'Whys'
Marketing expert Simon Sinek is challenging the status quo and inspiring others to make a difference in this world. Sinek's recent book, Start With Why, studied those leaders who have had the greatest influence in the world. He discovered that they all think, act and communicate in very similar ways--the complete opposite of everyone else, that is. These leaders articulate and understand why their organization exists, and why it does the things it does. What's more, these great leaders never try to manipulate or control. They strive to inspire.

"Start seeing things from this different perspective of asking why," Sinek suggests. "Great companies with a strong sense of why are able to inspire their people. Great leaders give their people a purpose or challenge around which to develop ideas."

What you can do

• Start by asking yourself the question, "Why?" Why does my organization exist, why does it behave a certain way? This is a transformative process of discovery. Try it, and then invite your team to do the same. Once you've tapped into the reasons, apply the discoveries to your brand. Does your brand reflect these motivations? If it doesn't it's time to align your brand with your 'whys.'

In 1921, George Bernard Shaw wrote, "You see things, and you say, 'Why?' But I dream things that never were, and I say; 'Why not?'" I challenge all you maverick entrepreneurs to ask yourself two questions: "Why?" and "Why not?" It's time to reignite your passion for your brand and be willing to take risks and stand by them--live by them--every day. There's nothing quite as exhilarating as seeing the demonstration of a brand living out loud. So go for it!

Are you an entrepreneur who is living out loud?

20 Ways to Waste Your Money

Whether a newbie or seasoned budgeter, nearly everyone has spending holes -- leaks in your budget that drain money with you hardly noticing.

These small drips can add up to big bucks. Once you find the holes and plug them, you'll keep more money in your pocket. That spare cash could be the ticket to finally being able to save, invest, or break your cycle of living paycheck to paycheck.

Here are 20 common ways people waste money. See if any of these sound familiar, and then look for ways to plug your own leaks.

How to waste your money

1. Buy new instead of used. Talk about a spending leak -- or, rather, a gush. Cars lose most of their value in the first few years, meaning thousands of dollars down the drain. However, recent used models -- those that are less than five years old -- can be a real value because you get a car that's still in fine working order for a fraction of the new-car price. And you'll pay less in collision insurance and taxes, too.

Cars aren't the only things worth buying used. Consider the savings on pre-owned books, toys, exercise equipment and furniture. (Of course, there are some things you're better off buying new, including mattresses, laptops, linens, shoes and safety equipment, such as car seats and bike helmets.)

2. Carry a credit-card balance. If you have a $1,000 balance on a card charging 18%, you blow $180 every year on interest. That's money you could certainly put to better use elsewhere. Get in the habit of paying off your balance in full each month.

3. Buy on impulse. When you buy before you think, you don't give yourself time to shop around for the best price. Resist the urge to make an impulse purchase by giving yourself a cool-off period. Go home and sleep on the decision. If you still want to make the purchase a day or so later, do your comparison shopping, check your budget and go for it. Oftentimes, though, I bet you'll decide you don't need the item after all.

4. Pay to use an ATM. A buck or two here and there may not seem like a big deal. But if you're frequenting ATMs outside your bank's network, the surcharges can add up quickly. Put that money back in your pocket by using ATMs in a surcharge-free network such as Allpoint or Money Pass.

5. Dine out frequently. A habit of spending $10, $20, $30 per person for dinner can be a huge drain on your wallet. Throw in a $6 sandwich for lunch and a $4 latte in the morning, and you've got quite a leak. Learn to cook, pack your lunch and brew your coffee at home and you could save a couple hundred bucks each month.

6. Let your money wallow. If you are stashing your savings in your checking account or a traditional bank account, you are wasting money. You could put it in a high-interest online savings account and get paid to save. You can even get an interest-bearing checking account through such reputable companies as Everbank, Charles Schwab, E*Trade and ING Direct.

7. Pay an upfront fee for a mutual fund. Selecting no-load funds can save you more than 5% in sales charges. Of course, no matter how well a fund has done in the past, you can't be sure how it will perform in the future. But if you pay a load, you'll begin the performance derby in the hole to the tune of the load. See the Kiplinger 25 for our favorite no-load funds.

8. Pay too much in taxes on investments. Are you investing in a tax-sheltered 401(k) or Roth IRA? If you're not maxing out those accounts before you invest in a taxable account, you're spending too much.

9. Buy brand-name instead of generic. From groceries to clothing to prescription drugs, you could save money by choosing the off-brand over the fancy label. And in many cases, you won't sacrifice much in quality. Clever advertising and fancy packaging don't make brand-name products better than lesser-known brands (see Similar Products, Different Prices).

10. Waste electricity. Of the total energy used to run home electronics, 40% is consumed when the appliances are turned off. Appliances with a clock or that operate by remote are typical culprits. The obvious way to pull the plug on your energy vampires is to do just that -- pull the plug. Or buy a device to do it for you, such as a Smart Power Strip ($31 to $44 at www.smarthomeusa.com, which will stop drawing electricity when the gadgets are turned off and pay for itself within a few months.

11. Pay banking fees. Overdraw your checking account and you'll pay $20 to $30 a pop, so it pays to keep tabs on your balance. Plus, are you still paying for a checking account? Free deals abound -- but make sure they're really free. For instance, will the bank charge a fee if your balance drops below a certain level or if you download your info into a personal-finance software program? That's not free.

12. Buy things you don't use. This sounds like a no-brainer to avoid, but how many times have you seen something on sale and thought you couldn't pass it up? Even if something is 50% off, you're spending too much if you don't use it. href=Couponing, for instance, can be a great way to save on your grocery bills. But if you buy things you wouldn't have purchased in the first place simply for the sake of using the coupon, you're wasting your money. The same goes for buying in bulk. A bargain is no bargain if it sits unused on your shelf or gets thrown away.

13. Own an extra car. Okay, so a car is a necessity for most people. But face it -- cars are a huge drain, from their loan payments to insurance fees to gas and maintenance costs. Own more than one car and you'll double or triple those expenses. Ask yourself if that second or third car is really necessary. Are you holding on to an old car for sentimental reasons? Can you or your spouse carpool, take public transportation or bike to work?

14. Ignore your local dollar store. Shopping at the dollar store can be hit-and-miss, but it's not all kitsch or junk. If you know what to buy, you can find some real bargains. For instance, my local dollar store charges 50 cents for greeting cards versus the $3-plus at a drug store or gift shop. (I have a big extended family so I figure this saves me more than $100 per year.) You can also score a deal on cleaning supplies, small kitchen tools, shampoos and soaps, holiday decorations, gift wrap and balloon bouquets.

15. Keep unhealthy habits. Smoking is not only bad for your health, it burns up your cash. A pack-a-day habit at $6 a pack costs $180 a month and $2,190 a year. A junk-food or tanning-bed habit can be costly as well. Not to mention the money you'll waste on medical bills down the road.

16. Be complacent about insurance. Your bill arrives and you pay it without a second thought. When was the last time you shopped around to determine whether you're getting the best deal? Rates vary widely from insurer to insurer and year to year. Reshopping your auto, home or renters insurance might save you hundreds of dollars.

It also pays to evaluate your insurance needs. For instance, upping your out-of-pocket deductible from $250 to $1,000 can save you 15% or more on your car insurance. Consider using the same insurer for your home and auto insurance -- you could snag up to 15% off for a multiple-line policy. And make sure you're not paying for insurance you don't need. For instance, you need life insurance only if someone is financially dependent upon you (such as a child).

17. Give Uncle Sam an interest-free loan. If you get a tax refund each April, you let the government take too much money in taxes from your paycheck all year long. Get that money back in your pocket -- and put it to work for you -- by adjusting your tax withholding. With a little discipline, you can use that extra cash each month to get started saving or pay down debt (or make ends meet to avoid going into debt in the first place). You can file a new Form W-4 with your employer at any time.

18. Pay for something you can get for free. Dust off your library card and check out books, music and movies for free (or dirt-cheap). Don't pay to receive your credit report when you're allowed to get it at no charge by law. Take advantage of kids-eat-free promotions. And dial 1-800-FREE-411 for free directory assistance.

19. Don't use a flexible-spending account. Your employer may allow you to set aside pretax dollars to pay for medical costs not covered by insurance. You can use the money for expenses such as therapy, contact lenses, insurance co-payments and over-the-counter drugs. You may be able to do the same for child-care costs.

20. Pay for unnecessary services. How many cable channels can a person watch? Do you really need all those extra features for your cell phone? Are you getting your money's worth out of that gym membership? Are you taking full advantage of your subscriptions (such as Netflix, TiVo or magazines)? Take a look at what you're paying for and what your family is actually using. Trim accordingly.

Copyrighted, Kiplinger Washington Editors, Inc.

The Investment Secrets in Common Stocks and Uncommon Profits

In his book, Fisher laid out fifteen things that a successful investor should look for in his or her common stock investments. Here’s a rundown of what they are. (Do yourself a favor. Run out to your local store or navigate to your favorite online book retailer and pick up a copy of Common Stocks and Uncommon Profits – this basic summary of the book can’t possibly do justice to all of the excellent information in its pages.)

1. Does the company have products or services with sufficient market potential to make possible a sizeable increase in sales for at least several years?
2. Does the management have a determination to continue to develop products or processes that will still further increase total sales potential when the growth potential of currently attractive product lines have largely been exploited?
3. How effective are the company’s research and development efforts in relation to its size?
4. Does the company have an above-average sales organization?
5. Does the company have a worthwhile profit margin?
6. What is the company doing to maintain or improve profit margins?
7. Does the company have outstanding labor and personnel relations?
8. Does the company have outstanding executive relations?
9. Does the company have depth to its management?
10. How good are the company’s cost analysis and accounting controls?
11. Are there other aspects of the business somewhat peculiar to the industry involved that will give the investor important clues as to how the company will be in relation to its competition?
12. Does the company have a short-range or long-range outlook in regard to profits?
13. In the foreseeable future, will the growth of the company require sufficient financing so that the large number of shares then outstanding will largely cancel existing shareholders’ benefit from this anticipated growth?
14. Does the management talk freely to investors about its affairs when things are going well and “clam up” when troubles or disappointments occur?
15. Does the company have a management of unquestioned integrity?

Fisher also had five “don’t” rules for investors, which were:

1. Don’t buy into promotional companies
2. Don’t ignore a good stock just because it is traded over-the-counter
3. Don’t buy a stock just because you like the tone of its annual report.
4. Don’t assume that the high price at which a stock may be selling in relation to its earnings is necessarily an indication that further growth in those earnings has largely been already discounted in the price?
5. Don’t quibble over eighths and quarters

Finding Good Stocks to Buy

Compare Stocks to Peers, Industry Sector to Measure Performance

By Ken Little, About.com

It is never easy picking good stocks, however during very difficult economic times it becomes more important than ever.

When the economy and the market are racing for the bottom, they can drag down good companies along with the bad.

A troubled economy tends to strip away any growth weak companies enjoyed in previous growth cycles.

However, because good companies may suffer also, investors need a way to judge a company’s performance.

One way investors can take the pulse of a potential investment is to compare how the company is performing relative to its peers.

Yahoo! Finance offers a way you can compare how a company is doing relative to its industry sector and its peers.

Click on the “Investing” tab and choose “Stocks.” On this page, look for the link to “Sector/Industry Analysis.”

This link takes you to a page that compares the various industry sectors. Other online providers may have a different way of identifying sectors.

Here’s how you can use this information.

Let’s say you are interested in IBM. Click on the “Technology” tab. IBM is in the Diversified Computer Systems sub-group.

If you don’t know where a company is classified, look up its quote and go to the Profile page. How Yahoo! classifies a company is listed in its profile.

Click on the Diversified Computer Systems and you will find a list of the companies in that sub-group. Each company will have a number of financial ratios listed.

At the top of the list are the corresponding numbers for the whole Technology sector as well as numbers for the Diversified Computer Systems group.

You can compare IBM or any other company with the sector and sub-group as well as comparing the company with its peers – such as comparing IBM and Hewlett-Packard.

If you want, you can download this information to a spreadsheet such as Microsoft’s Excel.

This is not a recommendation for IBM or Hewlett-Packard and other online providers of financial information offer similar capabilities as Yahoo!.

Always check current news about a potential investment for any late-breaking announcements and so on that may impact your decision.

Investors have a tremendous amount of information at their fingertips. There is no excuse for making investment decisions in the dark.

Know the Difference Between Value Stocks and Cheap Stocks

Investing in Value Stocks Is a Proven Strategy

By Ken Little, About.com

There is a difference between a value stock and a cheap stock. If you don’t know the difference, you may end up owning a stock that will not respond when the market and economy rebound.

A value stock trades below what analysts think it’s worth. Of course, in the middle of a raging bear market it seems like almost every stock fits that definition.

What distinguishes a value stock from a cheap stock is the quality of the company.

Even good companies get beat up when the market is free styling down the price slope. And here is where problems come in for investors.

It is easy to become overwhelmed by the low prices on a large number of stocks.

Those low prices seem to suggest that these are bargains too good to pass up.

However, a cheap stock may not have any bounce left if the company has been severely injured by the economy.

The brutal truth is a number of companies are lost every time the economy takes a strong dip.

These companies suffer a large loss in revenue and customers. Compounding their problems, larger and stronger competitors may take market share.

When the economy recovers and customers begin buying again, these weak companies are so financially decimated they cannot recover.

While both value and cheap stocks may be trading at historic lows during an economic crisis, only the strong companies have a chance to recover.

How do you tell a value stock from a cheap stock?

There is no single magic answer, but here are some indicators that may help:

• Debt is below its sector’s average
• The company is generating enough cash to avoid refinancing
• The company has a successful brand that will survive economic slowdowns
• It should trade at a P/E below industry averages, but not at rock bottom

This article can help you find this comparative information.

Being a good value investor is a proven strategy that has worked in good times and bad, however it takes about the same amount of work no matter what the market and economy are doing.

Reasons You're Not Rich

Many people assume they aren't rich because they don't earn enough money. If I only earned a little more, I could save and invest better, they say.

The problem with that theory is they were probably making exactly the same argument before their last several raises. Becoming a millionaire has less to do with how much you make, it's how you treat money in your daily life.

The list of reasons you may not be rich doesn't end at 10. Caring what your neighbors think, not being patient, having bad habits, not having goals, not being prepared, trying to make a quick buck, relying on others to handle your money, investing in things you don't understand, being financially afraid and ignoring your finances.

Here are 10 more possible reasons you aren't rich:

You care what your car looks like: A car is a means of transportation to get from one place to another, but many people don't view it that way. Instead, they consider it a reflection of themselves and spend money every two years or so to impress others instead of driving the car for its entire useful life and investing the money saved.

You feel entitlement: If you believe you deserve to live a certain lifestyle, have certain things and spend a certain amount before you have earned to live that way, you will have to borrow money. That large chunk of debt will keep you from building wealth.

You lack diversification: There is a reason one of the oldest pieces of financial advice is to not keep all your eggs in a single basket. Having a diversified investment portfolio makes it much less likely that wealth will suddenly disappear.

You started too late: The magic of compound interest works best over long periods of time. If you find you're always saying there will be time to save and invest in a couple more years, you'll wake up one day to find retirement is just around the corner and there is still nothing in your retirement account.

You don't do what you enjoy: While your job doesn't necessarily need to be your dream job, you need to enjoy it. If you choose a job you don't like just for the money, you'll likely spend all that extra cash trying to relieve the stress of doing work you hate.

You don't like to learn: You may have assumed that once you graduated from college, there was no need to study or learn. That attitude might be enough to get you your first job or keep you employed, but it will never make you rich. A willingness to learn to improve your career and finances are essential if you want to eventually become wealthy.

You buy things you don't use: Take a look around your house, in the closets, basement, attic and garage and see if there are a lot of things you haven't used in the past year. If there are, chances are that all those things you purchased were wasted money that could have been used to increase your net worth.

You don't understand value: You buy things for any number of reasons besides the value that the purchase brings to you. This is not limited to those who feel the need to buy the most expensive items, but can also apply to those who always purchase the cheapest goods. Rarely are either the best value, and it's only when you learn to purchase good value that you have money left over to invest for your future.

Your house is too big: When you buy a house that is bigger than you can afford or need, you end up spending extra money on longer debt payments, increased taxes, higher upkeep and more things to fill it. Some people will try to argue that the increased value of the house makes it a good investment, but the truth is that unless you are willing to downgrade your living standards, which most people are not, it will never be a liquid asset or money that you can ever use and enjoy.

You fail to take advantage of opportunities: There has probably been more than one occasion where you heard about someone who has made it big and thought to yourself, "I could have thought of that." There are plenty of opportunities if you have the will and determination to keep your eyes open.

Real Estate Investment Trusts: Are They For You?

If you once invested in the Nairobi Stock Exchange, chances are that you have made excellent returns over a short period of time. Sadly though, you stand the risk of exposure to an array of factors characterized with investing in non diversified portfolio. If you have considered diversifying your investment portfolio but didn’t know which one to go for, then Real Estate Investment Trusts may be an option to consider. But again, you may ask; are they really right for me.

Majority investors today consider investing in real estate as the ultimate investing goal. To the wealthy individual, it is merely an investment like any other; buy today, cash in tomorrow. That just goes as far as direct real estate investing is concerned. But now, there are the Real Estate Investment Trusts, commonly known as REITS.

Simply put a REIT is a pool of funds that is invested in real estate. Funds are drawn from investors and put under the management of a fund manager who then decides on the kind of real estate investment to go for based on the amount raised by subscribers for the trust. REITs will typically invest in real estate or real estate related assets. These can vary from shopping centers to office buildings, hotels and mortgages secured by real estate.

There are three types of REITs but the most common one is an equity REIT. The REIT basically entails having investors’ pool funds by way of buying shares of the REIT and getting an income out of it. This income is mostly paid on an annual basis.

The other type, a mortgage REIT basically entails lending money to owners and developers or investing the money in financial instruments secured by mortgage or real estate.

A hybrid REIT combines both the features of a mortgage REIT and the equity REIT. An investor in this category has his portfolio well diversified against the downturns in each category.

The United States has the most developed REIT market in the world. Other rapidly expanding REIT markets include Australia, France, Japan, Canada, the Netherlands, Singapore and Hong Kong. In Australia, the REIT concept was launched in 1971 with the General Property Trust being the first REIT to be listed in the Australian Stock Exchange (ASX). There are over 60 REITs listed today and Australia has the largest property trust in the world after the United States. Germany planned to introduce REITs in 2007 but the legislation is seemingly yet to be passed. There are already 7 REITs in Hong Kong. In the United Kingdom, 7 companies converted into REITs in 2007 after the Finance Act enacted a legislation allowing them to do so.

In Africa REITs are also gaining popularity in some key African nations where financial markets are well developed. Key in Africa is South Africa which, according to Ernst and Young was the top performer in the world in terms of total return over three year period giving a return of 34%. The number of public REITs in South Africa was 7 by end of 2006. However, the market had the lowest leverage among the key markets in the world.

Kenya’s market is slowly coming of age. Bora Real Estate Investment Limited (BREIL) was launched late last year at a point when Kenyans felt that the property market had completely sidelined the starters in the investment maze. One of the reasons behind setting up BREIL, according to Joe Macharia, the CEO of Bora Capital (the company behind BREIL) was to provide an investment option that works for small savers who cannot afford to put up a payment to acquire property or build a house.

The BREIL structure is a hybrid REIT but private (not listed in any market). Investors invest in the fund by subscribing to shares of BREIL and getting a regular income on an annual basis.

One of the advantages of investing in REITs is the tax advantage enjoyed by the investors. This is so because REIT investing allows for tax rebates on gains.

There is the old saying that you can never go wrong on land. Same applies to property as it can only appreciate in value. An investor therefore looking for gains over the long term would benefit from investing in REIT as it offers stability over ones investment.

One challenge with investing in REIT is that the target groups, mainly those within the age bracket of 25 to 45 are excited about short term gains. This is not a common feature with REITs which are illiquid and have an investment time span of more than one year.

REITs may just be what your investment portfolio needs. However, do observe caution in taking on REITs, contact your Investment Advisor for more information on the risks and benefits to your investment portfolio.

What are the basics of starting an investment club?

Let us begin by understanding what is an investment club. An investment club is a group of people who come together and embark on investment activities, while learning more about investing.

An investment club is not for the get-rich-quick at heart, but for the individuals who want to be financially better in 5-10 years, depending on the club’s long term objectives. An investment club is also not a merry-go-round initiative.

The overall objective of an investment club is to make money using a pool of equal member-contributions.

When establishing an investment club, one of the most important things for the group to decide is its purpose. Without a purpose, there will be as many objectives as there are members.

Whatever the objective, the members should discuss guidelines to selecting and making wise investments, to avoid particular people driving in their personal objectives into the club. For example, investing in the stock market is a long-term proposition and one that should not be taken lightly .

Discuss, agree and document minimum number of members needed at each meeting to make a decision.

At the earliest time possible, the group should establish several ground rules on which to run the club.

Discuss and decide how it will operate - it is best advised that you get registered at some time. Without being registered, it may limit the club’s investment opportunities and/or force the group to conduct their transactions using a person’s name.

With registration, the members need to agree to their club name, which will be used to register the club either as a partnership or social club. Assign a committee to develop the potential club agreement then, review it with members.

This will force you (members) to make decisions that will help the club function well in the future. Matters such as entry requirements for new members or conditions that must be met before a member can officially pull away from a club, could make or break it if dealt with them as they arise.

By all means, let the members sign to an agreed partnership document. In most cases a lawyer will be necessary to finalize the legal partnership agreement.

Having done this, the members can discuss and agree to finer details such as monthly meetings date and place, minimum periodical individual contribution, and penalties if any. Finding a time that works for everyone can be a real challenge, but attendance is important.

Because investment clubs encourage you to invest regularly and knowledgeably, and to understand the various risks associated with investing, they add on your individual financial intelligence that you could use as a family.

Succeeding-Exploiting Your Strenghths and Opportunities

Succeeding-Exploiting Your Strengths and Opportunities

A Keynote Address by Eric Kimani to WordAlive Publishers Retail Partners Seminar on 6th June 2008

I am honored to have been asked to come and speak to people who deal in knowledge- most of you here sell books and material for study.

I was asked to come and speak on how to succeed by exploiting our strengths and opportunities.

To set the mood for this talk I will share a story I read recently about a middle-aged woman who was hospitalized and had a near death experience and in the experience God told her she had another 43 years to live. Upon recovery she decided to have a facelift, liposuction, a tummy tuck and the whole works that made her look like a 25 year old. Unfortunately she was shortly killed in a vehicle accident as she crossed the street. She appeared before God upset and questioned Him “I thought you said I had 43 more years to live?” God replied “I did not recognize you”! God wants you to be who are. Each person here today is unique. When we seek to be like the next person we loose our identity.

I propose we start by defining Success.

How do you define success?

Many people talk about success, but few understand it. Everybody wants to be successful but few get to be successful. Most people want to be successful but few understand how to be successful. Most people want to be successful but few achieve the success. Many equate success with lots of money and high office. True success has evaded men for thousands of years as epitomized by the words of one of the most successful men in history- King Solomon who conceded that everything is meaningless.

So what is success? True success in my humble view is achieving your goals and in the process finding fulfillment. The measure of true success is looking back at your life at the age of 80 and saying a resounding “yes I lived a successful life”. If we accept that true success is fulfillment, then we will not have a problem accepting that there are very successful people living in Kibera and Mathare slums as there are in the up-market Runda and Muthaiga.

What about our strengths and opportunities?

Remember the biblical story of Moses- God did not ask Moses to go look for a complicated piece of equipment to use for his miracles- instead he asked him to use his herdsman staff and converted it to God’s staff of deliverance. Perhaps you are a teacher, manager, cook, etc and God is asking you to release your tools of trade or talent - that is what he needs not what your neighbor has!

Do you know your strengths? Do you believe in them?

We limit God by limiting our thinking and our aspirations. I firmly believe that we can be anything or achieve anything we want to. Mahatma Gandhi said “I claim to be no more than an average man with below average capabilities. I have not the shadow of a doubt that any man or woman can achieve what I have if he or she would put the same effort and cultivate the same hope and faith”. It is our perception that shapes our destiny. Remember the biblical story of the men who were sent out to go and survey Canaan and came back with a report that the Israelites were grasshoppers compared to the giant people they saw there! Caleb perceived them as beatable in the name of God. We run a family micro dairy processing which has survived an industry with a very high business mortality rate in the last 12 years and competing fiercely with the giants. We perceive ourselves as equal to the task! Seven years ago we set out to set up a college and I told some colleagues that I foresee us offering degree courses to Kenyans inside a decade- I see the dream being fulfilled much earlier!

We limit ourselves by wanting to be like others. You are who you are. I cannot begin to narrate to you the many friends I know who have lost it trying to be like others. I remember a friend who, wanting to keep up with his peers and seeing as if they had much head start decided to put his hand in the cookie jar and nearly ended in jail! It is okay to compete with other people but it is silly to want to be like others.

To find success we must remember that opportunity is described as a haughty goddess! The window of opportunity is small and closes fast. We must not procrastinate. We must learn to swim in deep waters and learn to sometimes swim upstream. Many of us give up too easily. When the business does not work for a year or two they give up in search of easier things. We need to teach ourselves perseverance and persistence. In the early 90’s when we decided to invest in milk processing, I recall walking the corridors of many banks and financial institutions looking for financing. I recall one bank manager who sneered at our proposal asking how we intended to compete with the then giant KCC. We persisted and finally found a willing financier. Like someone put it “determination and persistence makes you omnipotent”.

To find success you must adopt an attitude of abundance. Never say to anyone or yourself that “I cannot afford”. Always have a mentality of the ability to afford. I tell people that if you came to me for example and said that East Africa’s largest company, Safaricom is on sale and whether I would be like to buy it, my immediate answer would be yes! I will illustrate to you why.

Where I live I had a neighbor who owned the empty plot next to me. For many years I told him that I would like to buy the plot although I had absolutely no money to buy it! For the many years he assured me that should he decide to sell it he would consider me. I made him an offer every year although I knew I did not have that kind of money. Then he decided to give it to a selling agent who marked up his price by 1.5m shillings. At around that time my now immediate neighbor, a foreign diplomat, was interested in the property and asked me if he could come into my compound to see my house. He explained to me that he had been offered the plot for 7 million shillings and was considering buying it. I explained to him that I could sell it to him for 6 million if he agreed to pay me half million shillings commission. He agreed. I called my friend and made him a cash offer of 6 million. He accepted. This was a win-win situation for all- my friend got his 6 million instead of 5.5; the diplomat paid 6 million instead of 7 million and I got to keep half a million shillings!! The lesson here is that never say you cannot afford anything!!!

Each of us has the potential and opportunity for success. It is our attitude that determines who succeed and who fail. We need to cultivate an attitude of abundance as opposed to one of scarcity. An instructive story is told of two shoe salesmen sent to Africa to prospect the market for shoes. One came back with the report that there was no prospect because “the natives do not wear shoes”. The other returned with a report that there was a huge market for shoes because “the natives do not wear shoes”. One looked at the issue from an abundance perspective while the other looked it with scarcity. Your attitude will fuel or limit your success. How far you go with your business will largely be limited by your vision and abundance or scarcity view of life. Many of you here will tell you that the reason that they are not succeeding in their book retail business is because Kenya has a poor reading culture. This is precisely the reason you must succeed! The opportunity to build a reading culture is great. How many of you know that about 10 years ago yogurt was foreign as a milk product in Kenya and a preserve of only the more financially endowed? People said Kenyans would not drink it until Dalamere Dairies came and proved us wrong! Today every small town has its own home-grown yogurt! Break the barrier in your mind that Kenyans do not read. Make them read and create business- a good sales person is not one who waits for customers to come to him –it is one who convinces a new customer to buy his product! I am sure there are people here more successful than others in the same business and we will rationalize that it is the location, it is the family, or it is the money they have etc but take it from me the most important is the attitude!

How far can one go?

From what you have heard so far I am sure you can gather that how far you go depends on you- You must first believe it is possible; that you can succeed in your plans. I have just concluded a most rewarding career at Sameer Africa limited of “Yana” fame and one of my attractions to the group was to learn some of the reasons behind the phenomenal business success of the founder chairman Mr. Naushad Merali. One who rose from a petty trader and is now undoubtedly one of the top billionaires in Kenya? I sat in many meetings with him. Besides what else people may be said about him, I will tell you this- he has a complete mentality of abundance; he believes everything is possible; that everything is doable. I have watched a whole board of directors hesitate to do things he just feels should be done big time and in due course his optimism was proved right.

To find true success we must not try to cut corners- the shortest route is not necessarily the best. You do not need to cheat your way to win. When I was a younger man I once desired to buy a bicycle and while I was admiring bicycles at a big shop in the city, a gentleman whom I did not know but apparently knew me came over and told me that for what the shop was selling he could secure the same bicycle for me at less than half the price. I was foolishly elated and agreed with him – after all he seemed to know even many of my relatives and was an elder man. I parted with the money foolishly thinking I had struck a great deal and waited for him for hours on end before I realized I had been conned. I wanted to reap where I had not planted. We must understand that the law of the farm or the law of the harvest as it is otherwise referred, is sacrosanct and immutable. Long term success is for those who understand that for one to harvest in the farm one must go through the natural motions of preparing the land, planting, weeding and weeding again before one could hope for a harvest! If someone came to you with a ridiculous offer to supply you books at say half the price- think before you commit to buy. This would violate the law of the farm. My understanding this law has been a key cornerstone in shaping my life in the last decade. It teaches me to have the patience to invest long term; it teaches me to plant trees that take years to grow; it teaches me that this natural law is inviolable and those who dare to violate it pay dearly for it!

I have also discovered that people who make a lot of money are not necessarily initially after money but they succeed looking for solutions to problems of mankind. Bill Gates was looking for a solution! When I speak on entrepreneurship, I remind people that the only long term competitive advantage that a firm or individual may have is innovation. If you want to succeed better at being the best book sellers, you must distinguish yourself from the average book seller by providing your customer with superior solutions to their problems.

To find true success you must learn to compete fiercely but fairly without cutting the line. We must not cut corners. Bribery and scams may produce temporary advantage. Do not for example pay the city council askari to avoid the fine for say failure to have a valid business license – pay the license and if you do not have it pay the fine! Don’t pay the head teacher or some official to get that huge book order. Only last week I read that the government has lost five billion shillings to book scams. I have discovered in my short career that bribery and scams destroy the self-confidence of the giver and the recipient. People who get involved in these scams never have enough. They try to buy respect and recognition with money and die frustrated wondering why the world does not respect and acknowledge them! I often tell the story of our milk delivery trucks at Palmhouse Dairies and our experience with demand for bribes. For all the 12 years we have ferried milk into the city we have never paid a bribe! Initially we got into all manner of trouble with false charges and arraignment in court. This lasted at most for two years. Both the police and our drivers learnt a lesson that has served us well for the next decade! Years ago I knew a businessman who could afford to buy 10 brand new Mercedes Benz vehicles but struggled for years avoiding paying a few thousand shillings for duty and tax! At Palmhouse Dairies we bought milk on credit from some farmers in a place called Kagwe. It became uneconomical to do so due to among other things a very bad road network. We gave them notice and ensured we paid to the last cent at a time when many newly started processors far bigger than ourselves took off with millions of shillings belonging to small scale farmers as they went under!!! To this day some of those farmers travel many kilometers to bring us milk. If you want to succeed at what you do make your word one of honor!

To find true success at what we do it is important to understand the business you operate in. I am delighted for example that those of you here have chosen to attend this partnership training. Many people try to imitate others and do not invest the time needed to learn the business. I have seen multi-million businesses fail because of failure to understand the basics. I tell the story of how a few years ago I invested a sizeable amount of money in a business venture I knew very little about. In about eighteen months I had nearly lost 1.5 million shillings! I learnt a lesson I can share with you that it is foolish to invest your money in a business you do not understand. Attend training if you must. Study if you must. Many people ask me why I studied law and although I joke and tell them it is because I understood the logic behind the saying that “the law is made for the guidance of wise men and the strict adherence by fools” the truth is that I wanted to understand the law to help me in my work and business. I for example wrote the business plan for Palmhouse Dairies in 1995 backed my understanding of law and accountancy; I have incorporated many of our businesses with minimal legal help; I write our business proposals for funding! To succeed at what you do you need to hunger and pursue relevant knowledge.

To find true success you need to surround yourself with able people. You cannot succeed working alone. Many people have asked me how we have managed to run successful multi-million ventures while still employed and doing much more work in the community. I have always told them that those who employ me do so because they trust me to work for them. Why can’t I trust others to work for me in equal measure? We employ almost 100 people directly in the dairy, the school and the college! We trust them to run the business. If you want to succeed you must want others to succeed. Recently we sent one of our managers to India to shop for certain machinery. The idea behind this is to encourage him as well and motivate him to help us succeed! I learnt one of the secrets behind the success of many successful business people is that they gets others, often more intelligent than themselves to work for them!

To find true success we will need to identify the changing trends in our industry and ride the wave of change. We will need to anticipate the changes that will happen in publishing and the education system for us to ride the wave in our industry. Do not wait for change to change you because ordinarily it is painful and unforgiving. Long before the big dairy players in the market encompassed plastic packaging we foresaw that this was the direction that the market would take. We were among the first pioneers and today this is the dominant and growing packaging method in the world. What are the likely things to change in your industry? What are you doing to ride the wave? How are you incorporating technology into your business? Look for trends and changes and ride the wave.

Before I conclude this talk I would like to speak about one of our greatest pitfalls as Kenyan and particularly African business people who I consider have an unnecessary attachment to land. I sit on two financial institutions board and I can share this with you from experience. We make money say as booksellers and as soon as we see a little profit we buy a piece land to the south, another to the east and another to the west- all in the name of not keeping your eggs in one basket! Some will even invest a little in a matatu or two! This lack of focus is a disaster for particularly the African entrepreneur. I recently witnessed the case of a very successful woman who goes to a bank and borrows Ksh 10 million to expand her business. Decides to diversify and buy shares of Ksh 5 million and in effect the business expansion fails for lack of capital. The bank makes a forced sale of her shares at half the original value and takes her properties to recover the balance. It is not necessary to own pieces of land everywhere- their management is not worth the effort. By managing our three family businesses from the same proximity we are able to enjoy economies of scale and a little more focus on management. When we built a second house for rental next to our current house, we had a choice to go and put up a block of flats in the more profitable East of Nairobi but we considered that not only would it cost us in travels to supervise and manage, but overall we must have saved at least 20% of the total costs of construction due to the proximity. I appeal to us to have focus. Plough back your profits for a time to grow the business. Business needs nurturing. It takes time.

I would like to conclude this talk with a true story told to me recently by a friend narrated to him by someone who worked closely with one late African president. The late president was mentor to the narrator and had built his career through the years to rise to one of the top 5 people around him. As befalls all of us, the late president died in a hospital overseas and this gentleman in the company a select few went to pick up the body for return and burial to his country. When they got to the airport, they were delayed unnecessarily by the release order of a junior customs officer who had to certify the coffin. It was unimaginable that the body of the late president who wielded so much power could be held at the whim of a junior customs officer. After a long and irritating wait the customs officer released the coffin and inscribed the following words “Cargo without value, charge no customs duty”. The man who told this story gave his life to Jesus that day!

As we seek success, we must remain focused on the fact that we are but cargo without value and the only true value we can bequeath the world is to ensure we lead impactful and significant lives- to live in the hearts and minds of generations to come.

The secrets to doing this is the subject of another day but I must leave you with an underline that Character and Integrity remains the only proven key to enduring success.

I trust I have provoked our thoughts adequately on this subject.

Thank you and God bless you.

© Eric Kimani 2008

The Top 10 Distinctions Between Millionaires and The Middle Class

The author differentiates Millionaires (M) and the Middle Class (MC) using the 10 distinctions stated in his book. By understanding the differences between the M and the MC, we can stage and position ourselves for greater wealth building and creation. Most important of all, my belief sync with the author's: Success is a journey.

What i find more interesting is the author's reasons of publishing this book. He mentioned 3 reasons for writing this book: Responsibility, Purpose, Legacy, which differentiates him from other authors of similar books - This guy is damned straight forward. The language he'd used is simple, direct, to the point. Most importantly, easy to understand by layman.

After 2 years of acquiring assets in financial education since Dec 2005, I'd realised that I am already a practitioner of some of the distinctions stated in the book. I am sure that I am able to acquire the remaining distinctions using a few more years. I am glad that I am able to move from the MC to the M very soon.

I attempted to sum up what to expect from this book as follows:

Distinction 1: Millionaires ask themselves empowering questions. Middle class ask themselves disempowering questions.

"Ask and you will receive." & "As a man thinks, so is he." - So better ask empowering questions. Learn to ask ourselves questions that stretch beyond your current levels of experience. The questions you ask yourself determine the results you get in your life. Think about questions that expand your mind. Empowering questions ask us what we can do, make us feel good, become a powerful and peaceful person. Questions controls mind, condition it to create success. 9 questions based on "Be, Do, Have" concept offers clarity; Know What you want, Why you want, and the How will naturally follow. Most important question to ask, "What would make my life meaningful?"

Distinction 2: Millionaires focus on increasing their networth. The middle class focuses on increasing its paychecks.

Own assets (have value and earn passive income for us) using our paychecks. It requires new knowledge so study hard to learn how to acquire income-producing assets. Patience, knowledge and wisdom are required to increase our net worth. Wisdom is applied knowledge. Achieve Freedom - the freedom to work because we want to instead of because we have to. Learn to keep our cost of living the same even as we build our wealth. Uncommon wisdom of M: Do not increase spending when income increases, instead increase investing.

Distinction 3: Millionaires have multiple sources of income. The middle class has only one or two.

The more sources of income we can develop, the more likely we will become a M. The trick to developing mulitple sources of income is to focus on making them passive (with minimum management). Build a TEAM and learn to be humble. Employ Intentional Congruence concept - methodical planning, getting each source of passive income to support the other income. Focus on PASSIVE sources of income, build a TEAM, and practice INTENTIONAL CONGRUENCE.

Distinction 4: Millionaires believe they must be generous. The middle class believes it can't afford to give.

Learn to be generous, it feels great when we give from the heart. Being generous is a sure way to be happy. (that's why Keith write books, teach seminars on success - give people the knowledge they can use to make a long-term improvement) Understand the Law of Sowing and Reaping (Law of Causes and Effects in Buddism)

Distinction 5: Millionaires work for profits. The middle class works for wages.

Wages are the pay we receive for the work we do. Profits are the result of buying something for one price and selling it for a higher price. Learn to earn profits, then sky is the limit.

Distinction 6: Millionaires continually learn and grow. The middle class thinks learning ended with school.

Success is a process, a journey. The more money you spend on financial knowledge, the more money you will make. By reading more (even if it is just a concept in each book), we compressed time and learn financial secrets that took others years to discover. M invest in their knowledge with people who have achieved success that they want for themselves. Wisdom is Applied Knowledge. Focus on personal growth, love life. True success involves peace and contentment.

Distinction 7: Millionaires take claculated risks. The middle class is afraid to take risks.

The only way out of the rat race for the MC is to take calculated risks. Calculated Risks means to gain knowledge first, consider the consequences of failing before taking action. 3 fears of the MC: Fear of Failure, Rejection, Loss. Fear can be overcomed with knowledege. Failure is part of the path to success - Embrace it and become wiser. We must want to succeed more than we want the acceptance of other people. Losing is part of winning. Live like you were dying - take more risks, take more time to reflect, do more things that would live on after we are gone. Take action!

Practice risk management with 3 questions:

1. What's the best thing that could happen?

2. What's the worst thing that could happen?

3. What's the most likely thing to happen?

Distinction 8: Millionaires embrace change. The middle class is threatened by change.

"For the timid in our society, change is frightening. For the comfortable, change is threatening. For the truly confident among us, change is opportunity." - Nido Qubein, Mentor of Keith.

Confidence is acquired thru preparation, hard work, result of working on ourselves, believing we can do whatever we choose to. We can choose or wish to be rich but remember that Choice is backed by a belief that we can do it, Wish is backed by a doubt that we can. Fear blinds us to opportunities - so develop confidence, learn to accept change and fear will become False Evidence Appearing Real. People are born to learn and grow. Change is good!

Distinction 9: Millionaires talk about ideas. The middle class talks about things and other people.

"Big people talk about ideas, average people talk about things, and small people talk about other people." What do you spend your time talking about? Ideas, things or people? M do talk about people and things. M compliments people for what they did right. M shares notes and books with each other. The power of our words create the experiences of our life; so change our vocabulary, stop complaining and start learning. Learn to develop gratitude. The lessons of life come to teach us to look at life from new perspectives. This leads to new ideas.

Distinction 10: Millionaires think long-term. The middle class thinks short-term.

Give up scarcity mentality (money is in abundance!). Make long-term thinking a habit to release its power. Thinking long-term requires patience and patience is an asset. Thinking long-term builds relationship. Thinking long-term builds health. Thinking long-term develops perserverance. The secret of M: Do what you love to do to make money.

Keith concludes with the concept of repetition to train our mind to think differently. Remember, Success is a Journey.

Another realization I'd after reading this book is, "Diversification spreads risks. Knowledge reduces risks.". If I want to increase my wealth, I must choose to, commit to, plan to and act to achieve wisdom, not just diverse.

"When I Stop Learning, I Stop Living."

Which Business are you in?

July 17, 2008: What business are you in? This sounds like quite a silly question when taken at face value, especially when it is directed at the chief executive or business owner. Of course he or she knows what business they are in. They wake up every morning, and probably spend sleepless nights, thinking about their business.

It almost seems obvious that every chief executive knows what business they engage in. Perhaps not.

Many corporate leaders are consciously or subconsciously grappling with the question of what business they are in. Many do not actually know what business they are really in.

This conundrum has a significant effect on how they conduct business, how they allocate resources, who they are really competing against and most importantly, how they position their brands to effectively obliterate the competition and thus make a good return to shareholders.

The Postal Corporation of Kenya provides a great example of a business that has been able to successfully grapple with the question of what business it is really in.

This question is ultimately a branding question as getting the answer right defines every business decision and forms the core of the organisation’s brand essence.

It defines the organisation’s promise. To put it another way, organisations are really in the business of building relationships, and brands are all about relationships that secure future earnings for business.

Fond memories

A few of us will remember the giant Kenya Posts and Telecommunication Corporation (KPTC). Even fewer of us will have fond memories of KPTC. That was the organisation that sold us stamps, delivered our letters (slowly), connected us via phone, fax (sometimes) and even regulated the industry (where it was the only real player).

Regulation in those days meant frustrating any effort aimed at development or ensuring no organisation ventured into the businesses it was in. How times change. Come 1998 and the giant bloated organisation was split into three —Postal Corporation of Kenya, Telkom Kenya Limited and the Communications Commission of Kenya. This marked the beginning of real business and real branding decisions for the organisations.

Postal Corporation of Kenya, now branded simply as Posta, found itself at crossroads with the internet era.

Gone were the days when one would have to get a writing pad, write a letter with an actual pen, put the letter in an envelop and take a trip to the post office to purchase a stamp, then helplessly watch as the letter she had worked so hard to put together was swallowed by a cold inanimate red bin.

The bin promised nothing and often kept its promises. If one was lucky, a letter to the United States would take a couple of weeks.

By the time the respondent across the oceans was able to digest the now outdated contents and respond through the same painful process, a full month would easily have elapsed. The internet, and specifically email, changed all this.

As we entered the new millennium one could get a free e-mail address which allowed anybody with access to the internet to send and receive, what would have taken at least a month, within a matter of minutes. Posta obviously had to grapple with its very survival in an era where state subsidies had suffered the same fate as the dodo and there was no holding back the idea of the internet as its time had definitely come.

It was time to go back to the drawing board for Posta to discover what business they were really in. Like many businesses every day rigours seem to take front seat and the strategic outlook becomes blurred. This cancer had struck Posta and it ails many businesses, most of which do not know they actually have this challenge.

Big picture perspective

Thinking from a big picture perspective allows the chief executive an opportunity to position the brand for the long term. Posta wasn’t about stamps and delivering letters. Posta wasn’t about money orders and telegrams.

Posta wasn’t about courier services. The truth about what the Posta brand is really about is now revealing itself. The Posta brand is about distribution and reach. That is the real business Posta is in. Why do I say this?

Posta is now in several strategic alliances with organisations that would hitherto not touch it with a 10-foot- pole because it boasts unparalleled distribution channels countrywide.

That is Posta’s real strategic asset. It is much more than just mail, courier or financial services. The names of Posta’s partners sound like the who is who among Kenyan corporate brands: Safaricom for airtime distribution, GTV for subscription payments, Kenya Power and Lighting (KPLC) for bill payments, among many others.

One gets the feeling Posta’s drive to leverage on its distribution channels has only began and coupled with great service, will be what makes or breaks its brand. Going back to your own business, what business are you really in? The answer may not be as obvious as it seems and this fast moving world has a way of redefining businesses.