HOW YOU CAN LEARN FROM THOSE WHO HAVE FAILED IN YOUR QUEST TO ACHIEVE FINANCIAL SUCCESS
Nelson Nyoro, a facilitator of Mentor Sacco’s members’ education, training and information forums highlights on the principles of financial success
By George Gichuki
Many people strive to achieve financial success. However, it is not a walk in the park. It takes a lot of patience, skills, knowledge and patience to do so. Fortunately, through the guidance of professionals , the journey to financial success becomes easy. Mr. Nelson Nyoro, a financial consultant in the co-operatives sector was the facilitator of the Mentor Sacco members’ education, training and information day in Makuyu electoral area. Its venue was the D.C’s Hall in Kenol town. His presentation mainly focused on the principles of financial success. “ I have been engaged by Mentor Sacco as a facilitator of their MIDs since 2008,” said Mr. Nyoro adding : “ I have therefore witnessed members using the knowledge gained from various facilitators and speakers during MIDs to initiate projects which have transformed their lives , while in the same vein, the attendance has grown significantly over the years.” By and large, this demonstrates that MIDs have helped Mentor Sacco to invest in uplifting the living standards of its members.
Avoiding failure
Mr. Nyoro also focused on the theme of Mentor Sacco’s MIDs this year : ‘ Enhancing members’ financial success through education and information.’ Against this background, he emphasized on the need of learning from individuals who failed to succeed financially during their hey days, yet they had golden opportunities to do so. A good example are those who squander their income in their prime and most productive years, instead of investing it wisely. “ Such individuals end up struggling to make ends meet once they retire which is highly regrettable,” he said. “ Fortunately, when we study their habits, we can identify the pitfalls that contributed to their failure , hence helping us to be cautious in our financial journeys,” he added. To drive this point home, he used a principle that renowned motivational speaker, Brian Tracy advocates for – that by identifying and replicating the habits of successful people, one is able to enhance his or her chances of success. On the flipside, if you copy the habits of those who have failed, you are also likely to fail. Some of the habits that contribute to the failure of individuals who would otherwise have succeeded financially that Mr. Nyoro highlighted in his presentation were : conspicuous consumption and over indulging in leisure.
Principles of financial success
Further, Mr. Nyoro used the story ( and principles ) of Warren Buffet – a renowned American entrepreneur and philanthropist – to educate Mentor Sacco members on how to achieve financial success. Buffet started investing at an early age of eleven years by buying stock. A frugal investor , he has resided in a modest home for sixty five years – he bought it in 1958. From the case study of Buffet, we can learn important principles of achieving financial success. “ The first one is the ability to live within your means ; delaying gratification and unnecessary expenditure in order to accumulate savings,” said Mr. Nyoro. “ Those who live beyond their means end up struggling financially to sustain their lifestyles; they borrow for consumption as opposed to investment,” he emphasized.
The second principle is starting to invest at an early age like Buffet. Indeed, he has consistently invested for more than three quarter of a century – a sign of discipline and dedication as opposed to luck. Even today, at an advanced age of ninety four years , when most of his contemporaries have retired, Buffet is still investing actively. “ We can learn from this principle that investment is a continuous journey ; it is not a destination,” said Mr. Nyoro adding: “ Consistency also means that you should not lose focus – if you have set a goal of saving a certain amount of money for instance, don’t fall into the temptation of withdrawing it before accomplishing your goal.”
The third principle is prudent debt management. ” Debt is a lever and it can propel you to greater heights ,” said Mr. Nyoro adding : “ Debt can take you faster to your goals than savings but if it is poorly managed, it can wipe out all your investments.” He illustrated this point through a case of an ambitious lady who started her journey as an entrepreneur in a small way by selling food at her workplace, before establishing a restaurant and venturing into a very successful dairy business. Unfortunately, she was forced to close down the business when she fell into a debt trap because of indulging in conspicuous consumption.
Avoiding the debt trap
To avoid falling into a debt trap, Mr. Nyoro advised members to mainly use their loans for investments as opposed to consumption. However, these investments should be properly appraised to ensure that their returns are able to service the loans. In the same vein, he cautioned members against taking loans which they cannot service using their incomes. “ If you overstretch your income while servicing a debt, you might end up defaulting and the financier may repossess your collateral,” he said.
He further advised members to avoid using debt as a means of financing lifestyles since that may overstretch their income.
Mentoring members
Mentor Sacco is a strong brand. Its attributes resonate well with the members’ needs – helping and guiding members to achieve their goals so that their lives can be transformed. That is the essence of mentorship. In the spirit of shared prosperity, as the members achieve financial success, they are able to invest more with the Sacco. This is a win- win situation. “ The Sacco appreciates that for it grow, its members should also grow,” said Mr. Nyoro. “ In that regard, it has developed a wide array of innovative products and it has put in place the necessary safeguards so that the members’ funds are well protected,” he added. Most importantly, by offering credit at very competitive rates, the Sacco ensures that members are able to make good returns on their investments.
Mr. Nyoro encouraged the young people to join Mentor Sacco in their bid to achieve financial success at an early age. “ Young people have a high risk appetite ; they can afford to venture into uncharted investments because time is on their side,” he said. “ Should such investments fail to give good returns, then they can exit and venture into new ones altogether by leveraging time,” he added. To begin with, Mr. Nyoro advised the young members of Mentor Sacco to build a lot of savings so that they can have enough capital to invest in future. “ Young members can for instance invest in affordable property in areas which are not developed a lot with a long term view ,” he said adding : “ They can wait for about ten years for the infrastructure in such areas to be developed, and then put up residential or commercial houses .” The advantage of time also allows young people to start small businesses with little capital, ultimately scaling with time.
