This past week, I asked my financial literacy class whether anyone of them had taken time to identify the beacons of the great southern by pass in Nairobi, one of the future roads that will transfer wealth from the poor to wealthy in the very near future. Incidentally none knew where it was located, and those with some idea confused it with the Southern by pass which has just been completed.
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The bad news to my class and everyone else is that investors bought their stake around the Great Southern by pass more than 10 years ago, when an acre was about Kenya shillings fifty thousand and are currently selling half acre of it at just over Kenya shilling two million. Effectively, these investors have converted Kenya shillings fifty thousand into four million by the shear passage of time, a rate of return much higher than any passive investment to could earn you in Kenya today. Last year real property return in most parts of Nairobi averaged at about 25%.
These early bird investors applied their knowledge of real estate and trends for demand in an expanding city like Nairobi, a piece of public information, to take positions and that is how things go.
I am reminded of two things that spur wealth especially for those beginning from grass and shooting for grace. The first key thing is that a timely idea can make all the difference. In Kenya and Rwanda, Visions 2030 and 2020 respectively has presented many such opportunities because of the infrastructure development agenda espoused in these strategic statements core. All one now need is to engage an inquiring mind and seek out the company of people who have sharpened their noses for smelling great opportunities while still raw in the eyes of the public.
In other words brethren, I am saying that the universal idiom that luck finds those who are prepared is another way of saying that experiences including those from failure prepares an individual to perceive insights and piece up opportunities that a changing environment is about to present.
The initial investors in the great Southern bypass opportunities have moved from one state of knowledge to another, and have acquired insight on property value drivers, the critical sixth sense in investing.
In “Outwitting the Devil”, a book written by Dr Napoleon Hill in 1938 but published in 2011, he notes that, “failure brings a climax in which one has the privilege of clearing his or her mind of fear and making a new start in another direction.”
Everyone has the benefit of thinking without limitations however that is not the norm. Instead, poor and middle class people are more comfortable with fixated thinking. They natural put caps for the actions they take or do not take and the lessons they learn, rather than should have learn. There is a consisted mass action kind of behavior among the poor, where one does what the other had done to remain safe, rather than stray off to a lone path.
Brethren, when you change you believe, you change what you do and what happens to you. You adopt quickly to change. Financial literacy is acquired through practical learning that change information into tangible financial results over time, and eventually translates into confidence – informed by a set of skills for undertaking similar actions in future. Everything starts in the mind. If you want to be happy adapt the habits of the happy people. If you want to be successful, adapt the habits of successful people. If you want to be an investor adapt the habits of investors.
The second thing that spur wealth is the law of compounding. Give small money enough time to work and it will produce many multiples. This lesson is perhaps the most difficult one for people running their life on a poverty propelled mindset, because they do not have the patience to wait patiently for the new results. For this reason, they never give themselves the opportunity to learn wealth lessons , acquired only through a personal experience with results of own actions that alter the mindset permanently.