Azima Wellness Talks 15/2018
Your Health Is Your Wealth
I take this early opportunity to thank you for turning up for our talk on Friday at 680. It was my great pleasure hosting you. I hope those who attended got value from the ideas shared. Our theme was on the relationship between health and wealth. I took the audience through wealth mindset and Dr.Njoroge talked on health. There was no doubt that the two go hand in hand. None can exist in isolation.
As I promised last week, we are now ready to dive into practical ways to generate money which is the raw material to create wealth. It is important to understand at this stage that money is not wealth. Money is a derivation of wealth. It is a medium that represent wealth. We spend money not wealth. Money is a measure of value.
The value of a property is represented in money terms but it is not fixed. It varies from time to time. Truth is in today’s economy, you need money to create wealth. During the Agrarian and Industrial age, you could start with assets like land to generate wealth. It is not the same in today’s economy. This is where most of us get it wrong. The raw material for generating wealth is ideas and money not assets like land and buildings. This is what rules silicon valley.
Transformative ideas and deep pocketed venture capitalists or angel investors and multi billion dollar ventures are born. No land or brick and motar assets are required. Think Uber or Airbnb. They are the biggest taxi hailing and accommodation companies without any physical assets we put all our money into.
Truth is the middle class who work and get paid in money use their money to buy assets like plots and houses thinking it is a measure of wealth. This is old school thinking. Today we have many people in the middle class who are about to retire holding onto land assets they cannot liquidate to get money to pay bills. I demonstrate to my mentees in class that what we regard as assets in Kenya is a misconception. It is foolhardy to take liquid money and buy property like land that does not generate any cash flow. This is money misplaced. Any cash money you get is capital that should be deployed to earn more cash flow for you. Cash is king.
Do not commit to any purchase before you calculate the returns from your investment. If it is land, do a run down for one year and find out what it will be generating for you. Compare that with the interests charged on loans in the money market. If it is the same or lower, you better put your money in the money market. Assets like land are not easy to liquidate to cash unlike stocks/ shares or bonds/ treasury bills.
Another good benchmark is to compare what the banks are paying for fixed deposit. If they are paying more than what you get from the plot. I advise you go for them and not the plot or shamba. Forget the lie that land prices appreciate. The records are clear for all to see. The rate of appreciation normally is less than the inflation rate. The average increase in rental income in the last 5 years was 4%. The sale price for houses has been going down due to oversupply since Chinese came into this space. The average inflation rate was at 7.8%. This leaves you with a negative balance.
What is good with money market investment is you can easily convert your investment to liquid cash and invest it in other ventures. Money market is a good holding ground for your savings as you wait for a good business opportunity. It is a good stop gap measure to accumulate money for investment. We teach that you plan before you save your earnings. Before you start saving, have a goal why you are saving. Plan what to do with your savings at every stage.
This calls for a properly structured financial plan that meets your long term financial goals. Problem is most of us spend without a plan. We are emotional spenders. We do not have any financial goals or a roadmap.
To craft a solid financial plan, start by defining how long you want to live. I teach my mentees that wanting to live below 100 years is short changing yourself. There is a mzee in Narok who is 125 years. He is still alive. Sir Charles Njonjo is 98 years, Moi is 94 years and Moody is 90 years. They are still strong and going about their daily activities. Why would you aspire to live to 70 or 80 years only?
The short lifespan people around us are living does not set our limits. It is our behaviors that limit our longevity. The formula to a long radiant life is our lifestyle. Eat right, sleep at the right time, work out and constantly detoxify to reduce acidity in the body and you will add life into your years not just adding years into your life.
To eat healthy, practice and keep yourself happy requires some good money. Lack of money is the beginning of health problems because of stress. Stress is associated with 80% of all diseases. If you are living a stress free life, you can enjoy a long life. This is why in Azima Wellness Consultants we put emphasis on financial wellness. Money is the glue that binds all other pillars of wellness. It is an enabler that actualizes all other pillars.
We will go step by step unpacking the many options available to make money and how to use it to create solid wealth that will keep you comfortable and outlive Ole Serpen. The good book says we should leave inheritance to our children and their childrens’ children. There is a formula to achieve this. Keep it here as we unpack the formula in details.
With profound regards,
Founder and CEO
Azima Wellness Consultants LTD
Conference Speaker & Corporate Trainer in Total Wellness.