We have done some research and compared notes with others who have addressed this subject of investment success and have come up with a list of 5 keys necessary for your financial success.

1. Writing Down Your Goals, Having a Plan

Did you know that about one in every 100 people have written down their financial goals and have a plan to meeting these goals. All of us have what we desire to achieve financially. But unless you put these desires on paper and come up with a plan on how to achieving them, then they remain fantasies and dreams.

In His book “7 Habits of Highly Effective People” Stephen Covey says that the 2^nd habit of people who are highly effective is that they begin with the end in mind. Articulating or writing down what you want to achieve through investing enables you to remain focused and motivated towards getting to your goal. So, take some time out of your routine and write down your financial goals, come up with a plan of fulfilling the goals and periodically review the plan.

2. Desire it, Believe it, See it

It is not enough to just write your goals. You must believe in them. In his book “Think and Grow Rich”, Napoleon Hill states that you financial success starts with the mind. Unless you visualize success and believe that you have what it takes, you will keep giving up or getting derailed along the way. Some of the things that can help you keep the faith include reading books or watching videos that motivate you towards your goals, constantly reviewing your financial goals and plan, looking for and interacting with individuals who are more successful than you financially and who encourage you to your financial goals and participating in talks, courses and forums that keep encouraging you towards your goal.

• Our life is what our thoughts make it. – James Allen
• Whether you think you can or you think you can’t, you’re right. – Henry Ford

3. Understanding the Money World

Robert Kiyosaki, a renowned investment teacher puts it this way – “The difference between those who succeed financially and those who fail is knowledge. He says that the reason many of us fail in investing is because financial literacy is not taught in school and many of us are ignorant about the financial world thus leaving us as victims.

In his book “The Art of War”, Sun Tzu, says that “if you know the enemy and know yourself, you need not fear the result of a hundred battles”. The money world is like war and if you do not understand what you are up against, you will end up being a victim and slaving for those who understand the money war and work it to their advantage. So, for you to be successful, you must understand how the money world works, who are the players and how you can position yourself for success.

4. Get Started and Be Consistent

Once we define our goals and gain an understanding of the financial world, we then need to go ahead and get started in our investment journey. A major key to succeeding financially is being consistent. Investing is more of a lifetime marathon rather than a sprint. There are many people who wait for a deal or some financial breakthrough as their key to success. However, one offs have very little to do with your long term financial success.

In his book “The Richest Man in Babylon”, George Glason states that money laws are like the law of gravity and they work all the time. His 2^nd money law states, “Start thy purse to fattening”. He explains that for you to succeed financially, you must pay yourself first by saving part of your income and thus fatten your purse. In his 3^rd law of money, “Make thy gold multiply”, he explains that you need to know how to multiply your wealth by wisely investing it.

5. Overcoming Failure

In his book “Think and grow rich” the writer says that success is always past failure. In other words, anyone who truly succeeds must have already failed before the success. It is said that on average, you will face a financial challenge that will significantly impact your wealth once every 12 years. Therefore, it is wise to expect failure and protect yourself against the impact of financial crisis. Insurance and having an emergency account is important to protect yourself. You also need to keep getting up once you fail and always know that success is on the other side of failure.

Robert Kiyosaki put it this way, “The key difference between a successful investor and an investor that fails is knowledge”

One of the major key factors that will help you become a successful investor is understanding the investment world. There are various investment products and opportunities available in the market. In today’s article, we will look at some of these products;

• Stocks or Shares

Almost every wealthy and successful investor all over the world has at one point or another invested a significant amount of their wealth in shares or stocks. Shares enable you to own a small piece of a successful listed company and thereby share in the company’s good performance and profits.

However, understanding how shares work is paramount to successfully investing in shares. You need to understand the stock market trends and invest for the mid to long term. Shares are easy to trade and do not require much capital. They can significantly grow your funds. However, they also carry a risk element as your investment can get eroded with lowering share prices.

• Treasury Bills and Bonds

Treasury bills and bonds are investment products that are transacted by the government. When the government wants to borrow funds from the public, they will use these products. Treasury bills and bonds have a low but sure return on your investment. They are ideal when you want to preserve your funds as you cannot lose the funds that you have invested.

• Commercial Papers and Corporate Bonds

When corporates want to borrow funds directly from the public, they will use commercial papers and corporate bonds. These work in a similar way to treasury bills and bonds but they are issued by a company as opposed to the government. They will usually provide interest rates higher than the treasury bills and bonds but they carry a higher risk as the issuing company may be unable to meet its obligations.

• Mutual Funds/ Unit Trusts

Fund managers have products that enable pooling of funds and investing in a collective fund. They work more like “chamas”. The fund managers pool funds and invest in shares, bank deposits, real estates and other products. The profit from the pooled investment is shared out to the members of the mutual fund. Mutual funds are easy to invest as the entry investment is low (about 1000.00). You can also deposit and withdraw funds in a mutual fund at any time.

• Wealth Management/Cash Management

Wealth management, also referred to as cash management, is an investment product offered by fund managers. The fund managers provide a higher, guaranteed interest rate than mutual funds. However, they will have a higher minimum investment amount usually of Ksh 1 Million and the funds will be locked for investment periods of 3 months, 6 months or an year..

• Bank Deposits

Banks will normally provide very low interest rates on funds deposited with them. However, if you have a large amount of money, you can negotiate for high interest rates especially from Tier 2 banks.

• Real Estate

Real estate is one of the most popular and highly effective investment products. With the right strategy, you can make substantive returns on your investment in real estate. There are various real estate strategies including building rentals, building houses for sale, purchase of land for sub-dividing and reselling, purchase of land for speculation and purchase of land for other commercial activities such as farming. However, to profit from real estate, you will need to do some thorough checks and also understand the dynamics of the industry. We will have a more detailed review of real estate investing in one of our subsequent mails.

• Private Equity

Private equity entails owning a percentage of a private business that you are not directly involved in running. It is another effective way of investing and growing your funds. Private equity is not a very developed industry in Kenya. However, there are good opportunities available for partnering with budding businesses so as to profit when the business matures. Rubiani Wealth Management provides advisory on investing in any of the above products. We have also partnered with fund managers, stockbrokers, banks and other financial institutions to facilitate you invest in these opportunities. If you need any further information about any of the above products, please get in touch with us.

invest@rubianiwealth.com

If you want to be successful in investing, one of the things you will need to do is to differentiate between facts and myths. There are many misunderstandings and misinformation in the investment world and this has led to many losing their hard earned cash to fraudulent investment opportunities or avoiding investing all together.

In this article, we will look at some of the common investment myths and see where the truth is.

1. I Do Not Have Enough Money to Invest

A common myth about investing is that you need to have a lot of money to start investing. This is definitely not true. The amount needed to get started in investing in most of the investment products is low thus allowing anyone to be an investor. Below are the amounts needed for some of the investment products;

• Shares (NSE Stocks) – As low as Ksh 500.00
• Mutual Funds (Unit Trusts) – Between Ksh 500.00 and 1,000.00 depending on the fund manager
• Treasury Bond – Ksh 3,000.00

2. Investment Success is About a Big Break

Many individuals in Kenya believe that to make it financially, they need to get a big break or ‘deal’. Many will keep hoping and trying to get a big contract, a big job opportunity, a lottery win or some windfall gain.

However, success in investing has more to do with starting small and being consistent than getting a “breakthrough”. If you gain an understanding of the investment world and develop a habit of investing wisely, you will keep growing your wealth in spite of your income levels or opportunities available.

3. The Higher the Risk, the Higher the Return

Many people have lost a lot of their hard earned money because of getting into get-rich-quick-schemes that promise much but turn out to be fraudulent or fall short of the promise. The lure of quick gains and exorbitant profiting has deceived many to lose their funds.

However, to invest successfully, it is advisable to invest in time tested products that have a sure return. Even when investing in more risky products, ensure that you have done a thorough check and only invest when you fully understand how the investment product works.

4. To Succeed in Investing, You Must be a Miser

Another common investment myth is that to be a successful investor, you must forego all the fun and live a poor boring life so as to save up to become rich. However, this is not true. A success investment plan ensures that you enjoy your wealth both today and tomorrow. The investment plan must include short term, midterm and long term investment goals that will ensure that you continually enjoy the fruits of your wealth.

5. Investing is Complicated and For Experts or Insiders

Over the years, investment advisors and investment reports in the news have used hard language that has made investing look complicated and only for experts and insiders. But investing is easy to understand and information is easily available.

Rubiani Wealth Management seeks to demystify investing and give investment knowledge to as many people as possible in an easy to understand way.

6. Investing is Risky – My Money is Safer in the Bank

Many people shy away from investing because they perceive that investing is risky and that they will lose their funds. However, this is not true. There are many investment products that ensure that you do not lose the funds you have invested. Even for products that do not protect your invested funds, there are ways provided so as to reduce the risk while maximizing your returns. There you have it. We hope this will encourage you get get started and keep progressing in your investment journey.