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.

The giant in Safari-com

Safaricom finally breached the KSh7 psychological barrier last week and with supply at almost 6 to 1 against demand, the bottom is not yet been reached so I continue to watch from the sidelines. However, if it does reach below Ksh6, then I must strike come what may. This is to do with Kimunya's exit as well as small investors panicking. So, do you think the big guys are waiting and hovering around like vultures waiting to make a kill after the price dipps enough? I believe all these fund managers wana meza mate tuu.