My Facebook page was on fire over the weekend over the post I did entitled “THE FOOLISHNESS OF BUILDING A HOUSE” I am very proud to say for the first time I saw people in a heated argument giving very divergent views while respecting the views of others. This is the level of reasoning we need as a Country. Comments were too many as such I have decided to do a follow up post to clarify a few things.
To begin with, I am a firm believer in entrepreneurship and my approach is Radical hence the title ‘Radical Entrepreneur’. My wish is for many more people to engage in entrepreneurship as the major way to economic liberation as a country. I know what entrepreneurship has done for me and many others as such it is my dream to have many more people become like me or better. It is not that I am rich but because I am far better than I used to be.
Here are five facts before I bring down my thought;
#1. I am not against building houses, as a matter of fact I own properties and I last paid rentals early 2015.
There is a huge difference between building a house to live in or rent out and engaging in real estate as a business. I even indicated in the previous article that I will share a full article on how you can engage in real estate as a business.
#2. There is no single route to financial success, many people have used different routes and landed at the top but certainly there are routes that have higher chances of success than others.
#3. If we are to achieve extra ordinary things then our approach should be radically extra-ordinary. You cannot be expected to be much if you are doing what ordinary people are doing.
#4. Every business has risks. Some businesses have higher risks than others but certainly all businesses have risks. Despite the risk being low, real estate business has risks too.
#5. My approach is directed mainly to those who are entrepreneurs, would like to pursue entrepreneurship and looking forward to an extra-ordinary life. Those who are in their comfort zones may find my posts to be offensive because they are too radical.
HERE IS MY THOUGHT
Success is dependant so much on how one manages cash flow. Your number one target as you look at growing towards being a millionaire is to make sure that you increase your cash inflow as much as you can. The challenge is most people are scared to engage in things that will increase their cash inflow because of FEAR (Risk) and the traditions they hold on to which have been wired in our brains over time. I normally share on the experiences that have worked for me and which I believe may work for you as such on most issues I don’t believe in the traditional way of thinking. For instance, I bought a personal car to move in before building my first house against the wide spread tradition that building a house before buying a car is wisdom.
Consider this, if you stay in Chalala and work at Manda Hill it will be taking you close to two hours with public transport to get to work because of passing through town and another two hours when going home as opposed to the 30minutes when using a private car. So everyday one spends four hours of their life on the road to and from work. Using buses it costs K40 per day which is about the same amount you would spend on fuel using a car because a car uses a longacres shortcut. In addition the car has convenience and you can easily pass through part-time school after work to rewrite your Mathematics or do your MBA with ease as you run around on your little business. So if you can afford, get a car even before building a house if a car is a necessity for you.
Coming to the cash inflow issue, I believe a house is important and a very secure investment but my problem is that it ties funds when starting out. Here is my reasoning, if I was employed and earning a K7500 per month which is the average for a degree holder in Zambia, I believe after deducting rentals, transport, food and other costs I may fight to remain with K2000 as savings every month. Here is where my problem is, most people would get a loan and buy a plot then start building bit by bit with the K2000.
These are cases were one is dedicated to a building project for 8years, every month talking of cement and blocks. For such they are always broke because of the building project. For 10years one is surviving instead of living, they cannot take their children to good schools and they cannot advance their education because of cement.
In my case being entrepreneurial I would find a way out of the many ways on how I can increase my monthly earning. I can start keeping chickens or anything that I would have researched on to start saving a K10,000 or K20000 a month instead of the K2000, then build with ease.
The challenge is most people want to engage in very big businesses from start which are capital intensive when there are many things one can do. If I am not a risky taker and I love being employed I would invest in my Masters Degree or anything else to position myself for a job appointment which will be giving me a salary of K40,000 a month, then build my house with a bigger salary than spend a K2000 saving for 10years without developing myself because I am developing a house. After 10years my juniors have been promoted and are way ahead of me in life because they invested in themselves while you kept investing a house.
Finally there is no solution and success route that applies to everyone. My wish is for us all to be successful because a poor country is a collection of poor citizens.