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Eighth Wonder of The World
Rank: Elder Joined: 7/22/2009 Posts: 7,455
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I know I am preaching to the choir here but I will do it anyway because there might be a few who are not converted yet. Invest and Re-invest your earningsMany invest, few re-invest. My message to the "non-believers" today is start reinvesting your earnings/dividends/bonuses/wind fall income etc. and experience the power of compounding. Look at these money not as fruits but seeds. Motivation for this thread: Every time it's dividend payment time, very many wazuans start talking/implying how they will spend their dividends and I can't help but wonder, are these fruits or seeds? But it all depends on the stage of investment you are in. At one point you have to sit kivulini and "eat" mali yako. If you started investing the same period as @guka, by all means enjoy the fruits of your hardwork. The rest, re-invest! Never count on making a good sale. Have the purchase price be so attractive that even a mediocre sale gives good returns.
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Rank: Elder Joined: 7/22/2009 Posts: 7,455
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A certain fellow you might have heard of called Albert Einstein said and I quote: "Compound interest is the eighth wonder of the world. He who understands it, earns it ... he who doesn't ... pays it." Einstein also believed that compound interest is "the greatest mathematical discovery of all time". Never count on making a good sale. Have the purchase price be so attractive that even a mediocre sale gives good returns.
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Rank: Veteran Joined: 1/20/2011 Posts: 1,820 Location: Nakuru
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sound advice @Maichblack... Dumb money becomes dumb only when it listens to smart money
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Rank: Elder Joined: 9/23/2010 Posts: 2,220 Location: Sundowner,Amboseli
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Great advice @Maichblack. I can see you have take over from where @mzeeyoung left! @SufficientlyP
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Rank: New-farer Joined: 12/27/2013 Posts: 87
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Good advice. GOOD TO GREAT. KINGOTORE
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Rank: Elder Joined: 2/26/2012 Posts: 15,980
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Compounding interest is a double edged sword, good if you are into saving money but cruel if you are the borrower. The longer money compounds the faster it grows. You can approximately tell when you will double your money by using the rule 72. For example if you have Kes 100 which is earning 10% annually interest you're bound to double your money after 7yrs 2 months or there about. Test that using your scientific calculator log(2)/log(1.1)= 7.3 Years If your earning a compound interest of 6% annually then you are bound to double your money after 72/6 = 12 Years. Test that log(2)/log(1.06)=11.9 Years For low interest rates the rule of 72 slightly over estimates the time you will double your money and for high interest rates the rule slightly under estimates the time you will double your money "There are only two emotions in the market, hope & fear. The problem is you hope when you should fear & fear when you should hope: - Jesse Livermore
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Rank: Elder Joined: 7/11/2012 Posts: 5,222
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 @MaichBlack Sound advice there. I've always wondered with people who put money in the bank, money that should be making you more money! I've been fighting my chama on this. Second is salaried employees who look forward to their salaries so that they can spend it! If you are paying rent from your salary, you are a slave 
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Rank: Member Joined: 1/27/2012 Posts: 851 Location: Nairobi
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Mukiri wrote: @MaichBlack Sound advice there. I've always wondered with people who put money in the bank, money that should be making you more money! I've been fighting my chama on this.
Second is salaried employees who look forward to their salaries so that they can spend it! If you are paying rent from your salary, you are a slave It's war time on that front.
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Rank: Member Joined: 1/13/2014 Posts: 386 Location: Denmark
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Am getting great inspiration from this thread.. but just wondering from a layman's perspective, what makes sense if an investment gives you good earnings in the short-term? After all, bird in the hand is worth two in the bush.I guess it's only prudent to cash out and probably wait for another season to get back.. Seeing is believing
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Rank: Member Joined: 12/15/2009 Posts: 142 Location: Nairobi
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Mukiri wrote: @MaichBlack Sound advice there. I've always wondered with people who put money in the bank, money that should be making you more money! I've been fighting my chama on this. Second is salaried employees who look forward to their salaries so that they can spend it! If you are paying rent from your salary, you are a slave hapo you have really caught some of us! UKITAFUTA UKABILA UTAKUFA BILA!
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Rank: Elder Joined: 12/9/2009 Posts: 6,592 Location: Nairobi
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Mukiri wrote:Sound advice there. I've always wondered with people who put money in the bank, money that should be making you more money! I've been fighting my chama on this. Second is salaried employees who look forward to their salaries so that they can spend it! If you are paying rent from your salary, you are a slave Are you saying that people should pay rent from their passive income? How practical is that?
BBI will solve it :)
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Rank: Member Joined: 6/14/2010 Posts: 521 Location: Nairobi
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MaichBlack wrote:I know I am preaching to the choir here but I will do it anyway because there might be a few who are not converted yet.
Invest and Re-invest your earnings
Many invest, few re-invest. My message to the "non-believers" today is start reinvesting your earnings/dividends/bonuses/wind fall income etc. and experience the power of compounding. Look at these money not as fruits but seeds.
Motivation for this thread: Every time it's dividend payment time, very many wazuans start talking/implying how they will spend their dividends and I can't help but wonder, are these fruits or seeds?
But it all depends on the stage of investment you are in. At one point you have to sit kivulini and "eat" mali yako. If you started investing the same period as @guka, by all means enjoy the fruits of your hardwork. The rest, re-invest! Keep preaching this until we all learn. Very inspiring indeed.
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Rank: Member Joined: 8/14/2009 Posts: 244
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"Look at the(i)se money(dividend)not as fruits but seeds."
I like the advise
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Rank: Member Joined: 6/26/2008 Posts: 384
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Rank: Member Joined: 6/26/2008 Posts: 384
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Mukiri wrote: @MaichBlack Sound advice there. I've always wondered with people who put money in the bank, money that should be making you more money! I've been fighting my chama on this. Second is salaried employees who look forward to their salaries so that they can spend it! If you are paying rent from your salary, you are a slave Rent, school fees, fuel, entertainment on a salary. How do people do it?
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Rank: Veteran Joined: 6/23/2011 Posts: 1,740 Location: Nairobi
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The equation about rent is like this:
The wise man finds a house and goes to the bank to obtain a mortgage to buy the house. He intents that one day the house will be not only his but will be loan free.
Once he has obtained the mortgage he says to himself, why should i pay the monthly payments till the mortgage is fully paid. This to him not a nice idea and headage.
He says to himself why not find someone to pay the mortgage for me..and sure enough he finds someone who is so excited to not only pay the mortgage monthly rates but also stays in the house keeping it safe till the mortgage in fully paid at which time the guy who initially obtained the mortgage can say to the good Samaritan.. I need to occupy my house.
Question: who bought the house and who is the final owner ?
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Rank: Veteran Joined: 1/4/2010 Posts: 1,668 Location: nairobi
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@streetwise, the renter also bought the house in terms of time value. Assuming a house has time value of 30 years, and the renter lives in the house for 10 years, he bought the house for the 10 years presumably. As Iron Sharpens Iron, So one Man Sharpens Another.
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Rank: Member Joined: 3/3/2014 Posts: 131
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streetwise wrote:The equation about rent is like this:
The wise man finds a house and goes to the bank to obtain a mortgage to buy the house. He intents that one day the house will be not only his but will be loan free.
Once he has obtained the mortgage he says to himself, why should i pay the monthly payments till the mortgage is fully paid. This to him not a nice idea and headage.
He says to himself why not find someone to pay the mortgage for me..and sure enough he finds someone who is so excited to not only pay the mortgage monthly rates but also stays in the house keeping it safe till the mortgage in fully paid at which time the guy who initially obtained the mortgage can say to the good Samaritan.. I need to occupy my house.
Question: who bought the house and who is the final owner ? And what if the good Samaritan decides to tell the owner...I need to take a mortgage for my own house...before the mortgage period elapses. Is the arrangement among the three i.e including the mortgage company or just a local arrangement between the two guys? IMITATION IS LIMITATION
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Rank: Chief Joined: 5/31/2011 Posts: 5,121
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Very good advise @MaichBlack
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Rank: Elder Joined: 9/23/2010 Posts: 2,220 Location: Sundowner,Amboseli
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xtina wrote:Mukiri wrote: @MaichBlack Sound advice there. I've always wondered with people who put money in the bank, money that should be making you more money! I've been fighting my chama on this. Second is salaried employees who look forward to their salaries so that they can spend it! If you are paying rent from your salary, you are a slave Rent, school fees, fuel, entertainment on a salary. How do people do it? Add to these,mortgage repayments plus that car loan @SufficientlyP
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