Mukwano Mall Martin road. You need to reinvest the profits back into a business to build a generational business. PHOTO/courtesy
The definition of wealth differs from person to person. Accumulated wealth is attained across generations. Meaning one generation built it, the next generation inherited and expanded much more than the former and so did another generation and another according to Charles Ocici, a business coach. The Mukwano group is a classic case of accumulated wealth that has stood the test of time.
For Apollo Mbowa, a customer financial adviser at National Social Security Fund, wealth is an accumulation of assets, which bring money into one’s pocket even in their absentia. There are assets, liabilities, possessions or obligations. Building a house is an obligation or possession, rentals are assets. The first key in understanding wealth accumulation is understanding liabilities, assets and possessions.
No one gets wealthy in a year because it is a learning process and different for every individual. Mbowa insists wealth is not a figure. “What I consider as wealth might be Shs1 billion, to a security guard, wealth might be Shs10 million. If the Shs10 million is able to sustain him to meet his needs without him fleecing to make him live his normal life, he feels wealthy! Not everyone should drive a hammer, wealth to an askari could be driving a boda boda.”
Wealth consists of 95 per cent habits and five per cent money. Wealth is not the amount of money you have on the account, Mbowa says.
“It is the habits that have brought in that money,”he explains. For instance, there are people earning Shs150,000 and taking their children to school without any dues demanded. They built the habit of paying on time while another corporate is reminded to pay school fees after the children have been sent back.
Acacia Mall which is part of Mukwano Groupof Companies. These are some of the businesses built by the late Mukwano Group of Companies’ chief executive 0fficer Amirali Karmali. PHOTO/FILE
Your relationship with money
Among the character traits that have an impact on one’s financial decisions on how to handle money is leadership that recognises that wealth does not remain the same.
A leadership that envisions how to continue setting goals, meeting them after another continuously, Ocici says. You cannot achieve a big Acacia mall like for Mukwano and begin celebrating and feeling good. After collecting all that rent in billions per month, is the next step buying luxuries? That is associated with trouble because wealth won’t grow.
Whatever achievement you have made, you must be goal-oriented. That is the first requirement for wealth to stand the taste of time. Wealth does not want to remain the same size, it can only grow over time.
As a matter of fact, Ocici recommends to be ready and willing to continuously satisfy customers’ needs and compete better than any other person in your space.
“Being goal-oriented is not enough, your growth is measured in the market done through consumer numbers. The consumer is available to any other competitor so the ability to constantly take care of customer’s demands and be ready to compete is another trait you must have,” says Ocici.
The ability to be disciplined enough to reinvest the profits back into the business. A mind-set that can sieve essential needs over unnecessary wants met them under the current income so as to witness organic growth to build a generational business.
The ability to engage family into the business as early as possible has a positive impact on the financial decisions. They should be inducted into the whole process so that they know riches come by serving people. The earlier the children get into that business arena and have a feel of that experience, the better they start to know how to build an enterprise.
Prepare your children
One key habit to sustain wealth beyond you is preparing your children. Mbowa cautions, “Don’t prepare for your children but prepare them. Preparing for your children means you establish property for them while preparing your children is giving them the skills, habits and ability to afford the property so that even if you don’t leave behind anything for them, within one or two years, they can have it. You have given them the ability to amass wealth or assets.”
On the other hand, “If you have only bought for them the property and not prepared them, the minute one dies, they will see it off. So one has to get into the habit of continuously preparing the children. Preparing them includes introducing them to suppliers, business partners, business operations so that they understand the whole process,” Mbowa explains.
In addition, sharing the vision of the future prospects for an independent enterprise brings in recruitment of structures and systems away from being intertwined with family individuals. Ocici adds, this should be merged with the need for culture for information and records. At any one time, you must have the right information that talks to strategy aspects of the business; human resources, production and technology, marketing and customer, accurate records on finance and debtors. It poses high chances that a business will last the taste of time.
The habits that bring the money is what maintains the money. “If you don’t develop habits, you won’t be able to maintain wealth. Mbowa outlines financial intelligence habits which include budgeting for the money, growing your money through investments and learning new things.
Another habit is to save money before it is spent and the habit of increasing your knowledge in understanding and investing money.
Also including physical habits of staying healthy; eat right and exercise. A sickly body will not maintain wealth. Emotional intelligence like having empathy to understand your customer, being self-aware and managing self over time efficiently to sustain and maintain wealth.
Wealth
What constitutes wealth?
Wealth consists of 95 per cent habits and five per cent money. Wealth is not the amount of money you have on the account, Mbowa says.
Among the character traits that have an impact on one’s financial decisions on how to handle money is leadership that recognises that wealth does not remain the same.
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