Harnessing the Power of Leverage

Leverage is a buzz word for all savvy people out there seeking to hit it big. But a few among us use this powerful tool to achieve personal growth, whether in business or career. In order to understand why some people become rich while others toil the rest of their lives, it is important for you to understand this very potent tool. My favourite author and investor Mr Robert Kiyosaki, he of the Rich Dad, Poor Dad best seller, offers a lot on this subject. Perhaps to understand why I read Kiyosaki and listen to his audio books religiously I would like to share this link. Therein lies treasures of his experience that made him a savvy investor. In fact, as a savvy investor, I am already implementing his wisdom. Guess what-I am soon "firing" my boss as I become financially free. So, where will you be when Savvy becomes the next big thing? In case, you have any queries on the resources available to educate yourself on becoming a savvy investor drop me a line or just Meebo me when I am online.

Recently when the Safaricom IPO was on, many Kenyans turned to one form of leverage to invest-credit. However, as some will tell you, handle credit with care as it is a double edged sword. Its good and bad depending on how you handle it. Given the number of shares allotted to the millions of Kenyans who had to queue for hours on end to invest in what is touted as Kenya's biggest IPO it' s good to note that credit facilities helped many Kenyans get a piece of Kenya's leading mobile provider. But as it is usual with IPOs in Kenya the investors are back to their stock brokers queuing once more for refund cheques!

I had gone to my local bank to consult on credit matters-nothing to do with the IPO! I found a lady customer to the bank who had taken a loan for the IPO making frantic effort to have the refund returned to the bank to offset the loan balance. Definitely many of such investors had no plan B. Again the banks have a new product tailored for Kenyans with excess liquidity from the refunds to "invest" the money into a fixed-deposit account to earn an interest-of course paltry compared to the loan interest! Wondering where I am heading to? Sample this, according to a recent banner headline of a leading newspaper the banks are now recovering their money from those who had defaulted through the usual means-collateral. The reason why this is happening to Kenyans is that majority of us are financially illiterate. Or put it this way, Kenyans would rather borrow millions of Kenya shillings from a bank and "invest" in get-rich-quick pyramid scheme than pay for financial literacy such as investment seminar, read business articles in newspapers or Internet. Reason? They say such undertakings are expensive! For these unsavvy Kenyans I say-if you think education is expensive, try ignorance! Well educate yourself financially as it is the greatest leverage you will need as a savvy investor. Next-The Power of the Internet as a Leverage for Investors in the Information age. Watch this space.