my graduation at mnazi mmoja, me and ma group members

©Mkimya Ent.

Financial Stages of Life

As stock markets continue to jump up and down, it’s important to remember some timeless principles through your financial stages in life. Often we need to focus on the basics no matter what stage in life you are at.

Early Accumulation (20’s and 30’s)

Independent life is usually starting at this stage. Many things can happen in your 20’s and 30’s. You may continue your education. You might start working at your first full time job. Your career is just getting under way. You might get married, set roots and even start a family. Often your goals are short term and while you should start setting money away for the future, typically your youth and inexperience cause you to start material accumulation. Chances are you have bought your first home and taken on one of your biggest financial responsibilities. Budgeting will be a key focus at this stage in life. You will have lots of expenditures and hopefully enough income to cover those expenses.

• Watch your debt levels.
• Amortize debt for as short a time frame as possible.
• Always pay off high interest debt
• Get a good credit history
• Start a savings habit (dollar cost average)
• Get your RRSPs started.
• Build an emergency fund
• Consider the benefits of a Tax Free Savings Account (TFSA)
• If you have a family, make sure you have enough life insurance

Mid accumulation (40’s and 50’s)

Your financial plan should be in full swing. In many cases you will be halfway to retirement and you will need to assess your success. Make sure you know your net worth by taking your assets minus your debt. It is likely that you have built up some net worth. If not, you better start getting serious.
As you progress in your accumulation phase, you will continue to reach your peak in earning income. At this stage it is not uncommon to pay off your mortgage and become debt free. While tax planning is important at any stage, you are likely to become more aware of its importance as time moves on. Your focus is really shifting from wealth accumulation to wealth management. Make sure you have some plans and goals in place.

Pre-retirement (50’s and 60’s)

The closer you get to retirement the more realistic it becomes. Your financial goals and needs have changed dramatically. Chances are, your experience in life has caused you to be more conservative and cautious when it comes to investing. You will start shifting from thinking growth and accumulation to safety and creating income from your portfolio. You will need to start planning for changes in cashflow and expenses. You should be ensuring that you enter retirement having little to no debt.

Retirement

That magic date has come. It is now time to retire. You have hopefully prepared yourself already and taken a serious look at retirement income planning and replacing your lost income from employment.Pensions, government benefits, and RRIFs become the key to your financial success. You must take a hard look at lifestyle and determine what you want to do with your time and money. You’ve worked hard to get here so you want to make the best of it. Typically, you will be in the “ACTIVE” retirement stage. You will have the energy and physical ability to enjoy the time freedom. When you retire, it is likely that you have less income but also fewer expenses. Cashflow transition is really the name of the game here.

Stable retirement (70’s and beyond)

You have found your patterns and routines in retirement. You have done and accomplished many things in life. And the things you have not accomplished become less important. Your discretionary expenses are likely to drop but your medical expenses will likely go up. Your friends and peer groups age too. Some of your friends and associates will start dying forcing you to think about your assets. While you needed to plan much earlier, you start thinking about the estate, wills, heirs, life insurance, and long term care. Your housing needs may change and downsizing is a common practice.
As you get older, life can become more limited due to physical constraints. Financially, we are just not spending as much money and if our financial assets have lasted this long, the focus turns to estate preservation and estate maximization.

Summary

As you go through life and walk through these different stages, it is important that you plan ahead. In my opinion, you always need to be thinking at least 5 years ahead with some vision of the next 10 years. Far too often, people start planning after it is too late.

These stages are not described perfectly for everyone. The statements are simply generalization and will not apply universally. The key message is to make sure you take some time to think ahead and plan in advance of getting to these different stages.
©Mkimya Ent.

How to Become Wealthy

Nine Truths That Can Set You on the Path to Financial Freedom

#1: Change the Way You Think About Money

The general population has a love / hate relationship with wealth. They resent those who have it, but spend their entire lives attempting to get it for themselves. The reason a vast majority of people never accumulate a substantial nest egg is because they don't understand the nature of money or how it works.

Cash, like a person, is a living thing. When you wake up in the morning and go to work, you are selling a product - yourself (or more specifically, your labor). When you realize that every morning your assets wake up and have the same potential to work as you do, you unlock a powerful key in your life. Each dollar you save is like an employee. Over the course of time, the goal is to make your employees work hard, and eventually, they will make enough money to hire more workers (cash). When you have become truly successful, you no longer have to sell your own labor, but can live off of the labor of your assets.

#2: Develop an Understanding of the Power of Small Amounts

The biggest mistake most people make is that they think they have to start with an entire Napoleon-like army. They suffer from the "not enough" mentality; namely that if they aren't making $1,000 or $5,000 investments at a time, they will never become rich. What these people don't realize is that entire armies are built one soldier at a time; so too is their financial arsenal.

A friend of mine once knew a woman who worked as a dishwasher and made her purses out of used liquid detergent bottles. This woman invested and saved everything she had despite it never being more than a few dollars at a time. Now, her portfolio is worth millions upon millions of dollars, all of which was built upon small investments. I am not suggesting you become this frugal, but the lesson is still a valuable one. Do not despise the day of small beginnings!

#3: With Each Dollar You Save, You Are Buying Yourself Freedom

When you put it in these terms, you see how spending $20 here and $40 there can make a huge difference in the long run. Since money has the ability to work in your place, the more of it you employ, the faster and larger it will grow. Along with more money comes more freedom - the freedom to stay home with your kids, the freedom to retire and travel around the world, or the freedom to quit your job. If you have any source of income, it is possible for you to start building wealth today. It may only be $5 or $10 at a time, but each of those investments is a stone in the foundation of your financial freedom.

#4: You Are Responsible for Where You Are in Your Life

Years ago, a friend told me she didn't want to invest in stocks because she "didn't want to wait ten years to be rich..." she would rather enjoy her money now. The folly with this school of thinking is that the odds are, you are going to be alive in ten years. The question is whether or not you will be better off when you arrive there. Where you are right now is the sum total of the decisions you have made in the past. Why not set the stage for your life in the future right now?

#5: Instead of Buying the Product... Buy the Stock!

Someone once asked me why they weren't wealthy. They always felt like they were putting money aside, yet never seemed to get any further ahead. The answer is simple. I told them to stop buying the products companies sell and start buying the company itself! A survey of America's affluent (those who make over $225,000 a year or own $3,000,000 in assets) revealed that 27-30% of all the income the wealthy earned went into investments and savings. That isn't a result of being rich, that is why they are rich. When the pain of getting out of the bondage of financial slavery is greater than the pain of changing your spending habits, you will become rich. Either change, or be content to live as you are.

#6: Study and Admire Success and Those Who Have Achieved It... Then Emulate It

A very wise investor once said to pick the traits you admire and dislike the most about your heroes, then do everything in your power to develop the traits you like and reject the ones you don't. Mold yourself into who you want to become. You'll find that by investing in yourself first, money will begin to flow into your life. Success and wealth beget success and wealth. You have to purchase your way into that cycle, and you do so by building your army one soldier at a time and putting your money to work for you.

#7: Realize that More Money is Not the Answer

More money is not going to solve your problem. Money is a magnifying glass; it will accelerate and bring to light your true habits. If you are not capable of handling a job paying $18,000 a year, the worst possible thing that could happen to you is for you to earn six figures. It would destroy you. I have met too many people earning $100,000 a year who are living from paycheck to paycheck and don't understand why it is happening. The problem isn't the size of their checkbook, it is the way in which they were taught to use money.

#8: Unless Your Parents Were Wealthy, Don't Do What They Did

The definition of insanity is doing the same thing over and over again and expecting a different result. If your parents were not living the life you want to live then don't do what they did! You must break away from the mentality of past generations if you want to have a different lifestyle than they had.

To achieve the financial freedom and success that your family may or may not have had, you have to do two things. First, make a firm commitment to get out of debt. To find out which debts should be paid off before you invest and those that are acceptable, read Pay Off Your Debt or Invest?. Second, make saving and investing the highest financial priority in your life; one technique is to pay yourself first.

Purchasing equity is vital to your financial success as an individual whether you are in need of cash income or desire long-term appreciation in stock value. Nowhere else can your money do as much for you as when you use it to invest in a business that has wonderful long-term prospects.

#9: Don't Worry

The miracle of life is that it doesn't matter so much where you are, it matters where you are going. Once you have made the choice to take control back of your life by building up your net worth, don't give a second thought to the "what ifs". Every moment that goes by, you are growing closer and closer to your ultimate goal - control and freedom.Every dollar that passes through your hands is a seed to your financial future. Rest assured, if you are diligent and responsible, financial prosperity is an inevitability. The day will come when you make your last payment on your car, your house, or whatever else it is you owe. Until then, enjoy the process.
©Mkimya Ent.

Dubai tallest building in the world

©Mkimya Ent.

Two Ways to Become Rich

In a free enterprise system, getting rich is everybody’s dream. Some want to become rich for the amenities and the trophies wealth offers: lavish houses, luxury cars, elegant yachts, expensive clothes, dining extravaganzas in the best restaurants in town, and traveling to exotic destinations. Others want to become rich for the financial freedom, the independence, and the security wealth provides: the freedom to spend more time with friends and family and to explore their full potential; the independence to work when they want as much they want, without a boss over their head; and the security, the peace of mind that comes with the creation of a safety net against the uncertainties life saves for them and their families down the road. A third group lusts to become rich for the power and fame wealth brings. A fourth group wants to become rich for the opportunities wealth offers to contribute to society, to indulge philanthropy and help the poor and the needy, to build things that will last beyond this life. But how can one make this dream come true? How can one become rich? What does it take?

In the old industrial economy, people became rich the “company-builder way,” by setting up large companies and having other people work for them. That’s how the “King of Steel” Andrew Carnegie amassed his wealth in the last quarter of the 19^th century. He built the largest steel company in the world and had scores of people working in his steel mills under the close supervision of legendary managers like Bill Jones and Henry Clay Frick who didn’t hesitate to use force to make sure that workers pursued Carnegie’s dream rather than their own. The “King of the Automobile,” Henry Ford (NYSE:F) followed a similar path. He, too, created a large corporation where thousands of people worked in his T-model assembly lines under the close supervision of scores of upper, middle, and lower-level managers within the “scientific management” model invented by his engineer Frederick Taylor; and so did the “King of Oil” John Rockefeller and his Standard Oil Corporation, employing legions of workers in drilling, pumping, refining, and shipping oil.

In the new post-industrial economy, people become rich the “business-builder way,” by building business rather than companies, by helping other people work for themselves, build their own business, become rich, and make them richer in the process. That’s how Silicon Valley scientists-entrepreneurs became rich. Frederick Terman, Robert N. Noyce, Gordon E. Moore, William Hewlett, and David Packard (NYSE:HPQ) amassed their fortunes by helping other high-tech scientists-entrepreneurs amass theirs. Venture capitalists like Ned Heizer, Jim Markkula, Bill Drapper, Eugen Kleimer, Tom Perkins, and Andy Bechtolsheim became wealthy by serving as financiers and mentors to high-tech start-up entrepreneurs. Andy Bechtolsheim helped Larry Page and Sergey Brin become rich by launching Google (NASDAQ:GOOG), a venture that turned him rich, too. In a few years, he saw his $100,000 turn into over billion dollars! Boston’s Route 128 business builders followed a similar path. Georges F. Doriot and the investors of the Boston-based American Research and Development Corporation (ARDC) became rich by making rich Ken H. Olsen, founder of high-tech start-up Digital Equipment Corporation (DEC). In a few years, ARDC’s $70,000 investment in Olsen’s DEC turned into $350 million. Microsoft (NYSE:MSFT) founder Bill Gates and Apple (NASDAQ:AAPL) founder Steve Jobs amassed their own fortunes by helping scores of engineers and marketers become entrepreneurs, who in turn helped other engineers and marketers become their own entrepreneurs, work at their own pace often in their own place, sharing the risks and the rewards with him. Ray Kroc became rich by creating a franchise organization—McDonald’s (NYSE:MCD), helping franchisees build their own business; making money for themselves and for Ray Kroc in the process. Multi-level marketers Richard DeVos and Jay Van Andel became rich by sharing their business experience and expertise with others and helping them build their own business network, others who in turn helped the next layer of people to build theirs, and so on.
©Mkimya Ent.

Oprah Winfrey’s Zero-to-Hero Story

To me it seems Oprah Winfrey is everywhere. On a recent flight I happened to pick up a random magazine and realized Oprah even publishes her own magazine.

There is absolutely no doubt about Oprah Winfrey’s fame, financial status, or impact on the world. My cynical side always associated her personal success with heavy marketing and excessive branding efforts, but whether or not I agree with every marketing tactic, it is impossible to dispute that she has achieved status as a role model to millions. She has taught any of us who were willing learn: “zero to hero” means that, regardless of where or how you begin in life, you can make a difference in the world.

From Zero…

It would be impossible to dispute the odds that were stacked against this young unknown African American child born in Mississippi in the 1950s. Although Oprah Winfrey came into people’s living rooms daily for two-and-a-half decades, she did not start out there. Her own history, and rise to world-renown influence, is quite a story.

Zero, or the starting point for Oprah Winfrey, refers to her youth and childhood as an abused young girl growing-up in the racially torn Deep South. Oprah was born into a series of circumstances which caused her to begin life with what some would categorize as indisputable disadvantages.

Despite the lack of funds that were available to her family living on their farm in Mississippi, despite the fact that Oprah was not protected from sexual abuse at the age of nine, and despite the fact that she may have been seen by some as “less than” for being born with dark skin in 1954, Oprah new that she was destined for greatness. She believed that she could have an impact on the world, and she was willing to work hard in order to do that.

The Journey…

Broadcasting and Communications took her from radio programs to small unknown television shows that seemed to be short on content structure. Oprah knew that she would need to design a format for herself that would keep the audience coming back. In the meantime, authenticity was the key.

Chicago called in the 1980s. Oprah was in her 30s, and ready for the change and challenge. Initially, she still struggled in attempting to find a format. Very quickly, however, Oprah discovered that competing with other “talk shows” that focused on exploitation rather than heart was not the way she wanted to win an audience.

In fact, one of the most powerful ways in which Oprah did choose to differentiate herself was to share some of the most painful and violating experiences that anyone could endure. She shared and recounted these experiences publicly, on an open platform. By doing this, not only did she endear herself to a loyal and growing audience, she developed a safety zone through which communication regarding previously taboo subjects could be vented and purged.

In effect, Oprah created a healing zone for millions of viewers and fans. People began to find themselves gravitating toward the Oprah show as a counseling session of sorts. Eventually, she introduced Dr. Phil as a means to provide an entirely credible and universally recognized authority who would take on the deeper problems of the masses, particularly as an outlet for those without available resources to enlist their own therapist.

Oprah, the Hero

These pivotal turning points began the monumental growth phase of Oprah’s journey forward. This growth phase saw the transition from her local Chicago-based show to a daily program with first National, and then International, reach and appeal. Oprah not only became a brand, and a household name; she became a phenomenon.

Key aspects of the Oprah Winfrey show and legacy, including the Angel Network and the Oprah Book Club, have become anchors of philanthropic movements and standard gauges for quality in literature. These, however, were not anchors that were implemented overnight. In fact, Oprah was in her mid-thirties as the show in Chicago presented itself in her life, and it took time to sprout wings. More than another decade would pass before the Angel Network came into being. Like Rome, after all, the Oprah Winfrey Empire was not built in a day. Neither were her school buildings in Africa.

Oprah has said repeatedly over the past twenty-five years that there are many key things to which she attributes her success. Of course, she has been willing to work hard. She builds teams of people who share her vision and goals, and these people understand how to implement these goals effectively. Also, she carefully monitors all of the finances and financial decisions related to each portion of her enterprises

Lessons We Can Learn From Oprah’s Journey

“I don’t think of myself as a poor deprived ghetto girl who made good. I think of myself as somebody who from an early age knew I was responsible for myself, and I had to make good.”

Among the many lessons to be gleaned from Oprah Winfrey’s profound success story, one relates to the prophetic vision of men like Martin Luther King, Jr.: the power of belief can subsequently create manifestations of greatness.
Oprah Winfrey, in her very heart and soul, knew the level to which she had the capacity to contribute to society. She saw her task positively, as an obligation as much as a possibility.

From among all of the notable accomplishments and accolades to date, what is consistent and over-arching is her effort to uplift people’s spirit. In the midst of the abundance of low-class reality programs that blatantly exploit negative and crass attention-seeking behavior, Oprah has created an entire network that intends to showcase people and events that can uplift and educate.

Whatever you think of Oprah, she has earned her way, step-by-step, and she continues to do things her way. If each of us can be as committed to a personal mission as she is, I believe our life will be well spent.

Live your dreams

©Mkimya Ent.

HOW CHINA IS INFLUENCING AFRICA’S DEVELOPMENT

Over the last 20 years, economic and political power has been shifting towards
emerging economies. A number of developing countries have become centres of strong
growth, raising their shares of global income significantly, which has made them major
players in regional and global affairs. Furthermore, flows of trade, aid and investment
between emerging and developing countries have all intensified.
The Perspectives on Global Development 2010 presents the evidence which documents
these changes, what we call ‘Shifting Wealth’. As the world emerges from the crisis, the
report clarifies this new global reality and what it means for development. Clearly, it implies
that development strategies need to be rethought in the new international environment. The
PGD 2010 suggests ways in which developing countries can best take advantage of the new
economic landscape and supports calls for global governance to be reformed, making it
more inclusive.
The  Perspectives on Global Development has been guided by and contributed to by
eminent scholars from developing and emerging countries, our Non-Residential Fellows. In
this paper, Dr. Martyn Davies, from the University of Pretoria, discusses how the global
financial crisis is accelerating China’s investment in Africa, a region that is becoming more
important to Chinese firms that are beginning to venture out into the global economy. In
particular, he poses three important questions: What contribution will China have on
industrialization efforts in Africa? Does China’s concessional finance model offer a new
mode of developmental finance for Africa’s extractive industries? And will China’s
investment in infrastructure on the continent assist regional integration of African
economies? Combined, these three questions provide an overview of the impact China will
have on the long term developmental prospects of Africa.
©Mkimya Ent.