Creating Wealth Through Entrepreneurship
AzimaWellness Talks 27/2017
Creating Wealth Through Entrepreneurship
Wealth Consolidation Stage
In our article last week, we discussed wealth accumulation and touched on wealth consolidation. Today we go deeper into wealth consolidation and finish this series with estate planning. We agree from the start that our goal is to setup a strong wealth architecture to build legacy wealth. I will explain how in the next article.
Wealth multiplication should go hand in hand with accumulation. Some people make and spend as it comes. In fact, most people spend in advance. This is dangerous especially in this times of economic uncertainty. Companies are coming down leaving workers with many loans to pay. Resist the temptation to spend in advance or commit your future income to consumer items like a house or a personal car
Wealth accumulation stage is a good school to teach you what works and how. Experience is the best teacher. We learn best by doing not reading about it. Your lasting benefit from wealth multiplication and accumulation stage is not how much you make but the experience you gain. Practical lessons how to grow wealth in a sustainable way. In wealth consolidation stage , you go for safe investments that generate passive income. You convert your business/ consultancy to a business system that works without your direct input. You own the system as a principal shareholder or a non-executive director or chairman. You employ a CEO to run the company with a management team
In this stage you also invest in other companies that have a solid profile and promising future. You require to have skills that will enable you know the financial strengths of the companies you invest in. The most appropriate way is to buy stakes in companies that have not gone to IPO and grow them to go public. This is a good way to make cool money and more to other ventures.
In Azima Wellness we show you how to do this.
Another lucrative way is to form companies, grow them and take them to IPO or sell them as a going concern to other investors. We have had lucrative deals in Kenya and company take overs. Abraaj group and Al-Futtaim have been on a buying spree. These middle East outfits are taking over all the good companies in Kenya.
They bought Java which has 63 outlets now. They bought Avenue Hospital which had grown to 14 locations. They also bought a 10% stake in Brookside Dairy. They own the new kid on the retail block, Carrefour. This is a pretty good way of making money. It takes good calculations when building the company. We will show you how.
Africa is an attractive area for investors. Kenya has attracted deals worth billions of dollars. L’Oréal bought Nice and lovely from founder Paul Kinuthia. Others who have attracted billions in take overs Include but not limited to Universal Corporation who manufacture pharmaceuticals in Kikuyu, Keringet Water to South Africa Breweries (later bought by Coca Cola who now control the water market in Kenya with Dasani water ). There has been many takeovers in the hotel industry in the last 10 years.
The money you make from such deals is what you consolidate. You invest in solid companies at the NSE as a passive investor for dividend. Go for companies that pay good dividend and are solid for long term gains. What you require in this space is good knowledge how to read financial reports and analyze a listed company. A country’s true wealth is traded at the Stocks Exchange. Mastering how the stocks work is a very important skill for all investors .
This is why we teach how to pick shares in Azima Wellness Quadrant training programme .
Wealth consolidation is the right time to invest in real estate for rental income. Most people make a big mistake by starting to invest in property at multiplication and accumulation stage. This is misallocation of valuable capital. Wealth formula does not work this way. Rental property pays very little but it is solid for long term investors. If you are in multiplication and accumulation and deal in property, be a trader. Buy and sell or buy build and sell off. This is multiplication. It works the same way with shares. Enter as a trader who buy, hold and sell when they appreciate. Set up a markup that you hit and exit. You can make cool money this way.
To be continued with more practical examples…….
With profound regards,
Founder and CEO
Azima Wellness Consultants LTD
Conference Speaker & Corporate Trainer in Total Wellness.