Investors must take time to study how others became rich

The story in the Business Daily told it all. A Kiambu couple defrauded thousands of investors by promising to double their cash deposits only to disappear and close shop after collecting more than Sh1 billion, witness statements filed in court by victims show.

The promise of getting one’s investment plus returns of up to 80 per cent in just 25 working days with the premium option easily lured several people looking to get rich quick. Investors could also go for the platinum option, which would see their investment grow by 60 per cent in 29 working days.

The first thing I would like to tell the ‘investors’ is poleni sana. But secondly, there is one little book I would highly recommend to them to read.

The book, The Richest Man in Babylon. It has become a classic in financial literature. I first encountered this little book when I was just out of college and was blown away by the simplicity of the story and by the tried-and-true lessons it presented for accumulating wealth.

The story springs from the characters Bansir who was a chariot builder and Kobbi who was a musician. The two had become the best at their craft but yet had no money and were poor. They went out to seek the advice of their childhood friend Arkad who in contrast had grown very rich and amassed fortunes.

The lessons that Arkad provided for his friends was the premise of the book and they are lessons of wealth building habits that I believe every rich person has followed to accumulate their wealth.

The main lesson is the simple fact that money is governed today by the same laws which controlled it thousands of years ago. The principles for making money can be learned. Laws are laws. The law of gravity applied 2000 years ago and it still applies today.

Likewise are the laws of wealth creation. The laws of gravity apply to both black and white, tall and short, nice and nasty.

The second lesson is that investment is work. Make no mistake about that.

It is hard work that comes with constant setbacks and at no point is there ever a guarantee of success. The Richest Man in Babylon says the two most important ways to invest in yourself is: 1) save 10 per cent of everything you earn and 2) increase your ability to earn.

I love that “earn.” Note that Arkad doesn’t say figure out some great ‘get-rich-quick’ scheme or figure out some way to make a quick killing in the market or real estate. He’s saying — increase your value to others.

Prestige Bookshop on Mama Ngina Street built Prestige Mall on Ngong Road; Text Book Centre on Kijabe Street built Sarit Centre in Westlands; Bookpoint Bookstore downtown built the Plaza in which it was housed.

These businesses took time and energy and patience to build, with a strong value proposition.

Many entrepreneurs feel that compared to the sky rocketing Internet companies featured on the covers of business magazines that they are failures. But the statistics show otherwise.

The reality is that most successful companies are built over time. A long time. Take Walmart for example.

Today Walmart is of course the world’s biggest retailer, with 8,500 stores. It is the third most valuable company in the world. It employs more than 2.1 million people. But things weren’t always so rosy.

When Sam Walton started Walmart in 1945 business was slow. In fact, it was seven years before he even built his second store. His period of hyper-growth didn’t even begin until 1970, 25 years later.

It’s important to remember that in business slow growth at first is the norm, not the exception.

Instead of getting into a get-quick-rich scheme, you should prepare yourself for the long haul, and surprise yourself if it develops faster than you think.

Mr Waswa is a management and HR specialist and managing director of Outdoors Africa. E-mail: [email protected]