15 REASONS WHY YOU ARE BROKE .

Saturday, 08 October 2011 00:02 BY VALENTINE NJOROGE . .Prev1 of 3Next. Most of us assume that ‘money will sort itself out’. We think that we would be rich if we had more money coming in, so we hustle. Nairobi is a hustlers’ town, most of us do two or three things to make money because you realize at some point that nobody is going to pay you enough to live how you want to live. So there is the guy in accounts who imports cars; the chick in sales who has an ‘exhibition shop’ and the receptionist who sells choice mitumbas in the loo over lunch. But even with all this hustling, most of us are broke – literally two paychecks (and sometimes one) away from bankruptcy. What are we doing wrong? Why are we broke? Humans have studied Wealth Accumulation since the dawn of time. Women wanted the best provider and the prettiest makuti to cover their nethers; while men wanted the prettiest wives and the biggest jembes. Today cars and well placed mansions have replaced makuti and jembes as the real prize but desire and competition still exist. As in all things, we are our worst enemy when it comes to achieving what we say we really want. Enough preamble, here are 15 reasons why you are broke: 1. You have an expensive car – we forget that cars cost to buy, maintain and insure. You may spend Kshs 1M and buy a German car but it will cost you about Kshs 10k a month to maintain and insure – you are literally renting a depreciating asset. 2. You spend too much on rent – Oprah, the billionaire, always says ‘It’s not how much you spend, it’s how much you keep.’ Rent does not actually buy you anything. 3. You spend too much on your entertainment – over the last decade, almost 10 brand new malls have sprung up in Nairobi and more are on the way. Each of these malls is gunning for your paycheck. The Moi Days when there were only about 4 independent restaurants (think Minar, Tin Tin, Foresta Magnetica) and big hotels to dine in, are gone. We are an informal people and nyama joints, Java, Artcafe, Psys, KFC et al know this. “You can wear flip flops and jeans, just come over and spend” is what they seem to say. Kshs 500 on lunch works out to Kshs 10,000 a month and Kshs 1.2M in 10 years. Have you been working for 10 years? Do you think you ate, literally chewed and swallowed the down payment to your house? 4. You got divorced – few things in life will drain you and your finances like divorce, some people end up damn near destitute. There is the obvious lack of a second income and the legal fees to get divorced; then there is our limping justice system that will not garnish child support from your former spouse’s wages even if a judge rules that s/he owes it to you. 5. You do not work with your spouse – money is a touchy and emotional subject but if you can have the uncomfortable conversations and actually form a financial partnership with your wife or husband, you will find that you are greater than the sum of your parts. 6. You are crazed by land – granted you wouldn’t be a real Kenyan if you didn’t want land, soil, a piece of your very own ardhi… but not all land is created equal and purchase of the wrong piece can prove almost worthless (at best) or very costly (at worst). You cannot buy land the way you buy a shirt or a pretty pair of heels, do your research and take your time. 7. You don’t know anything about investments and your huge ego will not let you ask questions. This ego was the bane of the African man, and now some women have acquired this streak of arrogant ignorance. Walk into a bank and ask what it takes to qualify for a loan, don’t posture at the bank, tell them about your dream business - ‘outside catering’, a salon, selling wedding dresses, a travel agency, whatever: just ask. Now walk into an investment firm and see what saving options they have for you. You and your money cannot grow in isolation, talk to the experts, several experts and do your own research. 8. You are with the wrong bank - find a bank that is willing to grow with you then create a relationship with your bank manager. You will find that not all their rules are set in stone and this being Nairobi, most things are negotiable. 9. Your house is too big. You got to 35 and bought a plot for your dream house, it took you five years to build said dream, you moved in just as your kids were going to boarding school and then to university. So now you live in a 7 bedroom mansion with your spouse and the maid. Nice, but your house is not an asset because you intend to live in it so its ‘market value’ is a theory. If however you had a smaller house and an apartment that you leased, you would be more liquid. 10. You have no goals – we all want to be millionaires but short of an inheritance, wealth building is a lifelong activity. You have to have 5 year, 10 year and 20 year strategy and stick to it. 11. You care what the neighbours think – self comparison to your peers and people who have had similar opportunities to you is healthy and inevitable; but it cannot be part of your decision making. You wouldn’t buy shoes in your neighbour’s shoe size, so why would you buy his/her perceived car size? 12. You want to ‘get rich quick’. As several pyramid schemes have shown, there is no such thing. Also, it doesn’t matter how many expensive text messages you send in to competitions this Christmas season, you will not be a millionaire in January… frankly, you are more likely to get struck by lightning, and we know it does not rain in January. 13. You do not negotiate for your salary. If you are one of those hustling Nairobians then forget it, asking for a raise might make your boss pay attention to you, your clandestine activities and consequently fire you. If however you are a hard working Kenyan, don’t be afraid to ask for a raise, a promotion or more responsibility. Ladies, do not be afraid to be called names for being ambitious and assertive. The name callers will always find a name for you but ‘bitches’ have better retirement homes than ‘ass kissers’. 14. You are cheap – you always know a guy, who knows a guy who is the cousin of a guy who can get it from the States, or you know a mechanic at a car dealer who can moonlight on your car; or the cheapest phrase of all ‘I can do it myself’… regardless, cheap is very expensive. You are not an expert on everything, and you cannot be because you just don’t have that kind of time on the planet. 15. You do not take care of your health - the gym may seem expensive but Kshs 5k a month for 20 years works out to 1.2M, this is cheaper than the management of any terminal or long term illness, especially if you add in the emotional and psychological toll an illness takes on an entire family. Spouses and adult children may have to take time off work to take care of you, private home care may have to be hired or you may have to fly overseas for expensive procedures. Save, floss, wear a seat belt and keep fit.