Walter considered himself successful in his career. He started at the bottom soon after graduation and worked his way up. He had changed employers 3 times over the past 2 decades. He made his way up to senior level management with a very reputable organization.
Walter’s life was not without its challenges. He was married with 5 children. The first born had just joined university. Two children were in high school and two in primary school. His wife of 20 years operated a green grocer kiosk in the neighborhood, having resigned her job early in the marriage to become a stay-at-home mom. He was the bread winner in his family though his wife’s business assisted with expenses such as food and paying the house help.
His widowed mother and younger siblings depended on him. His father died while he was in high school, leaving his unemployed mother with 7 children to bring up on her own. He was the second born in the family, having an older sister. His sister got married soon after completing high school. She made minimal financial contributions to the family.
Taking his younger siblings through school while also providing for his own family had been no easy task. He survived largely on loans. He also had no assets because life had been a struggle all through the years. His family still lived in a rental house.
As if life had conspired against him, his mother developed multiple health complications, pushing his expenses through the roof as her medical expenses grew. None of his siblings contributed much to supporting the mother. He was the only one in the family who was blessed with a good job.
Things Fall Apart
Everything fell apart when the company he worked for reduced staff and he was forced to go for early retirement at age 50. He had debts, which were deducted from his terminal dues. He therefore went home without a pension. His life became a nightmare. He sent job applications everywhere but nothing ever came through. He sold the family car but the money lasted only a few months.
The first one to suffer was his ailing mother. He struggled to sustain her treatment but it proved to be very difficult. He and his siblings organized fundraising to support their mother’s treatment but the money they raised was not adequate. She died within the first year of his losing his job.
Walter’s son dropped out of university because of lack of tuition fees. His other children were in and out of school because of school fees arrears. Conflicts with his wife became the order of the day mainly because of disagreements about money.
It was while Walter was at the lowest of the low and on the verge of giving up that a friend invited him for a business opportunity meeting in the city. He was desperate and ready to do anything that could help him get his life back on track.
When he got to the venue of the meeting, he discovered that it was a network marketing opportunity. He had heard so much negative things about network marketing and would never look at such an opportunity. He felt like his friend had conned him. However, his life was already in a total mess and he was ready to try anything that could help. The saying that beggars cannot afford to be choosers might as well have been spoken about him.
Walter borrowed cash to enroll in the network marketing opportunity. He spent long hours every day learning about the business and attended trainings regularly. He showed the opportunity to everyone in his circles but none seemed enthusiastic about it. Things just did not work out.
Light at the end of the tunnel
After trying to make it work for 6 months, he changed companies. By the time he was one year in the network marketing industry, he was with his 3rd company. That was where his life changed. He benefited from very comprehensive training and mentorship from global leaders. He learned how to grow his networks and how to make those networks work for him. He learned how to package himself and to pitch potential clients.
Above all else he learned about personal development. He invested every coin he could spare on books. He read books by authors such as Napoleon Hill, Tony Robbins and Robert Kiyosaki, among many others.
His mindset changed and his confidence grew. He achieved some level of success in the business but it was the skills that transformed his life. He was able to set up a successful consulting business. He now had the hands-on experience in building a business and he threw all his energies into it.
It is now 5 years since Walter lost his job. He has consistently built his business and his family’s finances are now stable. His wife is his business partner and they have employed 3 staff. He has replaced and exceeded the income he lost and he believes that things will only get better.
Many people put off the idea of getting ready for retirement until it becomes too late to prepare adequately. Living in denial that one will retire some day does not change that fact.
Ideally, one should begin preparing for retirement the minute one begins working. That way, one is always ready no matter what unexpected turns the career takes.
The culture of saving 10% of one’s income then investing that money when it grows should be practiced right from the 20s, whether one has a family or not, whether supporting the extended family or not. The rule of never spending more than 70% of one’s income should be mastered from a young age, from the minute one starts earning income, even if it is allowances as a child.
The Steps to help you Retire in comfort
1. Practice the 70/30 Rule throughout your life
Learn to live on 70 percent of your after-tax income. This must be practiced from the minute you start earning any money, no matter how little it is. The attitude that one does not have any spare money to save is responsible for financial struggles throughout life.
Plan your monthly budget around this amount and always stick to it no matter what happens. If you cannot manage to live on 70% of your income, explore ways to earn extra income to fill in the gaps. Practicing this is critical if you plan to be adequately prepared by the time you retire.
Give back 10% – Charity/Tithes (Depending on what your practice is)
Of the 30 percent not spent, one-third (10%) should go to either charity or tithes. Charity is the act of giving back to the community and helping those who need assistance. Giving trains one to develop a healthy relationship with money and also attracts blessings into one’s life. If you are struggling financially, start giving more.
The act of giving should be taught early, when the amounts are small. It is not very difficult to give out 10 shillings out of 100 shillings. But it’s considerably harder to give away 100,000 shillings out of 1 million shillings. Start early so you’ll develop the habit before the big money comes your way. Plant the seed of giving so that it opens the doors of blessing in your life.
Savings – 10%
Many people work all their lives but they never pay themselves a coin! They toil and labour for other people. All their money is for paying everyone else apart from themselves; the owner of the house they live in, the school their children attend, the supermarket where they shop, the matatu or taxi driver whose vehicle they use to commute, their parents and siblings and many other people.
Nothing remains in their bank account. Is it really a wonder that they retire poor and with nothing?
10 percent should be put into savings. This is what you pay yourself for all the work you do. This is the money that will cushion you when life takes an unexpected turn such as sudden job loss or any other eventualities that make it difficult for your to work such as serious illness or disability.
You should not toil and labour for years only to end up empty handed.
Savings should not be left laying in the bank for long periods of time. That is actually giving bank owners a free loan to use to enrich themselves. This 10% is the money that will train you in handling cash.
Let us demystify this idea of saving long term. Imagine if you were growing beans and you intended to secure your future through the beans. So, every time you harvest 10 kilo of beans, you save 1 kilo. In a year, you would have probably saved 10 or 20 kilos of beans . In 10 years, you would have accumulated 100 or 200 kilos of beans.
What if you planted the beans you saved rather than leaving them in the store? How much beans would you have after the 10 years? You would probably multiply the original beans by 5 or 10 times. That is why leaving money as savings long term is not the best way to secure your future. Growing your money means that you multiply the saved money.
Investigate different ways to invest your money for high returns. Will you put your savings in stocks, in investment packages that mature decades later when you need the money or how will you secure and grow your savings?
Will you eventually turn your savings into investments such as rental houses? Ensure to have savings that is the equivalent of your family’s expenses for 6 months to a year in form of cash that can be easily accessed.
I focus on helping people to learn ways to grow their income by turning their skills and expertise into income. When it comes to career or being successfully self employed, I am a strong believer in putting all the eggs in one basket and watching the basket like your life dependent on it.
Don’t try that if you are taking the investment route. When it comes to investments, you need to spread out the risk. What do I mean by that? I do not believe in being a jack of all trades which actually makes one a master of none.
If you are a doctor for example, it makes sense to focus on the medical profession 100%. Invest in your medical career. Start a clinic, keep investing and grow it to a nursing home and as your investments grow, you can end up with a hospital probably with branches in several towns.
The more you focus on your profession, the more specialized you become and the more you earn. You can create multiple streams of income in the same profession.
If you want to practice your medical profession and invest your money in forex trading, Bitcoin, the stock market or probably government bonds, you need to take time to learn about those investments or you could make bad decisions that could see you lose your money. I believe in investing in what one understands. Knowledge minimizes risk.
When you have invested in your field for years and you are wealthy, you can diversify; buy rental houses, office apartment blocks, beach hotels, etc.
Seed Money – 10%
This is the money that will enable you to become financially independent. With this money you will invest in yourself, increasing your value in the market place. You will use it to acquire new skills, sharpen skills you already possess, expand your networks and invest in yourself.
The seed money will enable you to afford to attend empowerment forums and networking events. Sometimes you will take a resource person out for lunch or coffee so that you can draw from his or her wealth of expertise. You will invest in resource materials such as good books.
You will increase your value in the market place by buying, manufacturing or fixing then reselling and also by packaging your knowledge and expertise into products that people can buy.
Most people wait until they are in a crisis then they try to make money quickly in a sort of crash program. That does not work. It is the reason many lose their money in get-rich-quick schemes, because they are desperate to make money in a hurry.
It is for the same reason that many claim that network marketing is a scam, because they want it to make them millionaires in 3 or 6 months, without even investing in learning the necessary skills. Do not start learning a few years to retirement. That is rather late and the chances of making mistakes and losing all your money are high.
There is a learning curve in everything and you could succeed in your 3rd, 4th or 5th venture. That definitely takes time and also costs money. A few years to retirement will not give you such luxuries.You cannot afford to master anything while you are in a state of panic because you are retiring in the next couple of years.
Practice finding your way in the market place while you are relaxed, while you still have a source of income. Don’t wait to try and learn when you are 40 or 50. By that time your expenses and responsibilities are likely to have grown tremendously and you might find yourself struggling to spare the time and money to enable you experiment and learn.
Do not restrict yourself to the small area that you call ‘your profession’. Aim to become an all-round individual by developing all areas of your life; communication, interpersonal relationships, leadership, public speaking, etc. The way you spend your free time over the years will determine whether you retire to a financially independent and fulfilling life or not.
One day you will retire from your job and you will still have a life, still need income. Do not join the multitudes who become dependent on other people after retirement because all they know is the small area demanded by their job. That is all they invested in throughout their working years. Most of them probably spent all their free time over the years on entertainment and recreation; none on investing in themselves.
Learn survival skills early in life. It is perfectly normal to want comforts in life such as owning your home or a car, living in a beautiful neighborhood or having beautiful furniture and a flat screen TV. The problem comes in with learning to plan to afford the luxuries. Do not buy luxuries from active income such as salary. Invest then you pay for luxuries from passive income.
There is no short cut to success. What if you realized that you could make it in a sports career and chose to be a marathon runner. Would you win a gold medal in marathon the very day you made that decision?
You do not afford something the day you decide that you need it. No. That marks the beginning of the plan to afford it. Design a plan for your life and work your plan. It will take time to accomplish that plan.
2. Set Goals Early
The earlier you set clear long term goals, the better. Set goals while still in your 20s, even before you get a family. Do you plan to get married? Are you planning to get children? How many? What sort of lifestyle do you want for your family; where will your family live, what sort of schools and universities will your children attend?
Will you have responsibilities beyond your immediate family such as supporting aging parents? Ask yourself early in life whether your parents have secured their own future and whether there is a possibility that you might be required to step in.
Do not assume these things only to have unplanned responsibilities land on your lap and destroy your life.
Clarity helps you to work towards your goals. For example, if you are 25 years old and you are employed with a salary of 30,000 shillings a month, will that job progress to an extent that it will enable you to afford the lifestyle you would want for your family? If not, how do you plan to grow your income?
Are you going to get married on a salary of 20 or 30,000 and with no alternative sources of income and if so, how will you afford to take care of your family on such an income? Start planning for your future early.
3. Define Your Retirement
Most people find themselves forced to relocate from the big towns and cities to the rural areas upon retirement mainly because they did not define early how they wanted to spend their retirement.
Are you passionate about farming? Do you want to retire to a life of farming? Where will you retire to? Do you have networks and support systems where you plan to retire? Are there activities to keep you actively engaged there?
Do not forget that it is possible to live another 30 or 40 years after retirement. That is a lot of years if you are going to live a life you do not like, in a place you do not like, surrounded by people you do not like.
Keeping a journal is a great way to keep your life focused through the years. We learn, grow and change over the years so keep your dreams flowing by keeping a journal. What is important to you while you are in your 20s might not be what will be important while you will be in your 40s.
Allow yourself to dream. Put your dreams down in your journal without allowing yourself to worry about the budget; that will come in due course. As you get clarity about what you want in life, you will gradually figure out how to achieve it. Lack of clarity is the number one cause of failure.
Will you want to retire near a beach, in your rural village, on a large farm not far from a big city? Will you want to travel and see the world after retirement? Will you want to volunteer, give back to society?
Your dreams coupled with clear goals will give you clarity in life and minimize surprises such as having to retire to the village against your will.
4. Grow Your Networks
One day I attended the funeral service of the son of a very successful lawyer. He is at that age when most people retire. Some of the people who were in attendance are the who’s who of our country. I listened to speaker after speaker and I could see a pattern.
One speaker would talk about the campus days together with the man who was now his legal counsel. Another one would talk about having grown up together in the same village many decades ago. Another spoke of having been neigbhbors when both families were just starting out in life.
One thing was very clear; these people who had made the lawyer’s business successful had been in his circles for decades; many were not strangers who just knocked on his door out of nowhere. Have you ever wondered why most successful lawyers, doctors, engineers, businessmen/women and other professionals are not very young?
I learned from a young age that you cannot climb a tree from the top; you always start at the bottom. Some of those people in your campus class or in your neighborhood are going to be the most wealthy people in our country 20, 30 years from now.
Guard your networks jealously and refrain from burning bridges. Never burn bridges except in these special circumstances. Devise a way to keep in touch with the people in your networks. That is exactly why most successful people have regular newsletters, YouTube channels and Facebook pages; that is how they keep in touch with their networks so they don’t lose them.
5. Leverage The Use of Social Media
Social media is much more than just a place to socialize and pass time. It is one of the most powerful platforms of our time. It takes time to grow a following on social media so start early. Brand yourself professionally and showcase your talents, skills and expertise. Connect with people and take care of those networks. Be visible on different social media platforms and nurture relationships.
Present a professional and polished image. Give people value such that they will never tire of soaking in the content you put out there. You will be amazed how much your networks can grown in 3, 4, 5 years.
Some of the people who will open doors for you in future are in your circles on social media so remain in touch always. The more socially active you are — both online and offline — the more opportunities you are likely to create for yourself and the more successful you are likely to become in the long run.
Do not wait to be gripped by panic when retirement knocks at your door. Prepare early. Invest in your umbrella while the sun is still shining, not when you are getting drenched by the rain. Would you need help to learn how your profession can secure your future and ensure that you retire in comfort? Enroll for our 90-day coaching program here.
This article is written by Susan Catherine Keter, personal development and business coach, mentor, motivational speaker, freelancer and blogger.