EVERY OF TODAY’S SECRETS of most
famous and familiar ideas was once unknown and unsuspected. The mathematical relationship
between a triangle’s sides, for example, was secret for millennia. Pythagoras
had to think hard to discover it. Today, his geometry has become a convention—a
simple truth we teach to primary school kids. A conventional truth can be
important—it’s essential to learn elementary mathematics, for example—but it
won’t give you an edge. It’s not a secret. Until you discover the secrets hidden in
wealth management you will continue to remain under the puzzles while your
friends advance with their life. Mind you there are two kinds of secrets:
secrets of nature and secrets about people. Natural secrets exist all
around us; to find them, one must study some undiscovered aspect of the
physical world. Secrets about people are different: they are things that people
don’t know about themselves or things they hide because they don’t want others
to know. These secrets play a significant role in managing every aspect of our
life wealth management included. Over the next few articles, I’ll explore critical
lessons I’ve learnt from both Wall Street and from my personal wealth creation
strategies.
I said it at
the beginning of this year that I’ll covert my net wealth of less than $ 300 to
an excess of $ 2, 100 this year and ten-fold in the next couple of years. Click here to read how it will do it. Well,
that isn’t the hardest part, I’m almost there, but the point of sustaining the
growth of the wealth is still looking like a wondrous journey to explore and discover.
Let me give you an update of this promise. As of 1/12/2016, from about six
streams I had earned REVENUES and INCOMES of about $ 6, 000. This revenues were
primarily from a stipend I earn from my organization in Kenya, Two Online
sources, sale of books and revision papers, ICT consultancy and recently in
Wall Street. Of these six sources, 80% of my income was from stipend and online
sources. Some of this income is SEED and the rest is BREAD. My net worth now is
more than $ 2, 000 meaning I’m almost hitting my target with a month to spare.
Next year I will work hard and by the grace of God hope to grow the revenues to
$ 10, 000. Again I’ll present my overall plan I use in spending my income. Yet
each day I learn basic secrets and principles and look for ways of applying
them in my own context.
THE PARETO PRINCIPLE
Consider the
seed and the bread principle that I will explore in detail much later after a
brief introduction to the “Pareto principle”. This principle was discovered by Vilfredo
Pareto an Italian economist in 1906. This principle is also known as the 80-20
rule. The economist noticed that 20% of the people owned 80% of the land in
Italy—a phenomenon that he found just as natural as the fact that 20% of the
peapods in his garden produced 80% of the peas. This extraordinarily
stark pattern, in which a small few radically outstrip all rivals, surrounds us
everywhere in the natural and social world. The most destructive earthquakes
are many times more powerful than all smaller earthquakes combined. The biggest
cities dwarf all mere towns put together. And monopoly businesses capture more
value than millions of undifferentiated competitors.
And this
brilliance goes beyond the natural environment to the biblical statement that “For
whoever has will be given more, and they will have an abundance. Whoever does
not have, even what they have will be taken from them” (Matthew 25:29). Einstein made almost
a similar statement when he made an apocryphal quotation on the compound
interest as the eighth wonder of the world. In this theory, the exponential
growth for any investment made cannot be underrated. The truth is, people with
more continues to get wealthier while the greatest majority of the population still
remains unproductive and in poverty. This explains why only 20% accounts for
the whole production activities in the whole peas’ plantation while the rest do
less to break from unproductivity. As
long as you have no amount of money in investment, however minimal it is, you
will continue being poor since you will have no production taking place.
THE SOWER AND THE EATER
The point: The
simple truth of being diligent with the primary seed capital works the magic.
By simply investing the capital into profitable business enterprises, this capital
just moves from a simple value to a greater value. People who have learnt to
invest, earn and reinvest their capital often reps the biggest. They always
have the last laugh to the bank. I’m a Christian and I totally know the very
word of God that states that it’s God who gives bread to the eater and the seed
to the sower. He of course makes the distinction lest anyone should take one
for the other. Simple, he gives part of our resources as part of the initial
investment while the rest is for consumption. From the seed, we derive resources
for consumption. And the seed should never be depleted since ultimately it will
have the effectual bearing on the bread. When I started the year, I made the point of
ensuring that I would always keep my investment on various project to the
minimum of the $300 that I already owned before I started the challenge. Over
time I only add more funds into the projects while making sure that I have some
money left for me for paying the bills. In actual sense, you will realize that
these small additions have a rippling effect on the future. Eventually, it is
expected that this seed capital will grow to the amount that if I invested it
later on a bigger project, it will result to higher returns to all the previous
investments that I have made in the past: The Pareto principle.
All of us
are eaters and this is evidenced by the fact that we need provision for food,
clothing, and housing. The problem is
that sometimes we eat of our seeds thinking it will satisfy us. We eventually
end up being cash strapped. What we fail to reason is that a few grains of
seeds will not satisfy our hunger and so we lose the vision because during the
harvest we end up not having anything to sow for further multiplication of
resources. No sowing means that at the end of the day we end up losing
opportunities to have more bread in the future and hence poor. What we need is
the change in strategy and perspective of how we view our current resources so
as to ensure that we always have the seed and bread. In the last article on
perspectives in wealth creation, I suggested that saving is one such discipline
that will help you move out of the cycle again based on the biblical secrets.
That was too generic and this article will help you get over the dilemma of
having to save one fifth portion. This is especially if you are thinking you
are earning too little and broke every time to save and hence make long term
investment read here.
WHAT’S SEED AND BREAD?
The question
is; how do you determine in your life if you have seed or bread? I mean how
much should you keep and how much should you invest? My simple definition
distinction between the two is that the seed won’t meet your needs but the
bread will give you the satisfaction. Every worker is worthy the wages of their
labour but God wants us to use common sense and realize what the bread and seed
is. Good gives you seeds and bread, allocate some to eating, giving and sowing.
If you can answer the question as to how much you need to cover your bill and
if what is within your wallet is enough, then you’re a step closer to
determining the bread and the seed. If the answer is that you you’ve no enough
amount to pay for your nagging bills, then you definitely have the seed but if
your cash flow can sufficiently satisfy your needs then you have the bread.
Nevertheless, from every source of your income ensure to separate bread from seed.
In the former, you are simply eating the seeds which cannot satisfy you as
pointed out earlier. It should be noted that the seed is not always money but
other resources such as time and skills that we can always mix to create bread.
Just remember to sow the seed to eat the bread. The next article will explore
the statement: “The act of creation is
singular, as is the moment of creation, and the result is something fresh and
strange.”
You can now
enjoy my Book JOIN THE DOTS IN MY WORDS which is an inspirational book to help you join the
seemingly difficult puzzles of life. Grab your copy online on amazon Click here to order a copy or call +254 722 481 993 for hard copy delivery within Kenya at KES 400 or
$ 3.99 inclusive of shipping cost within Kenya. I’m Excited that this book is
an honest discussion on the subject of excellence, talents and fears.
