Success in a devolved economy

Have you ever thought about the origin of your favourite blue jeans? In 1853, the California gold rush was in full swing and everyday items were in short supply. Levi Strauss, a 24-year-old German immigrant, left New York for San Francisco with a small supply of dry goods with the intention of opening a branch of his brother’s New York dry goods business. Shortly after his arrival, a prospector wanted to know what Levi Strauss was selling. When Strauss told him he had rough canvas to use for tents and wagon covers, the prospector said; “You should have brought pants” saying he couldn’t find a pair of pants strong enough to last.


Levi Strauss had the canvas made into waist overalls. Miners liked the pants but complained that they tended to chafe. Levi Strauss substituted a twilled cotton cloth from France called “serge de Nimes.” The fabric later became known as denim and the pants were nicknamed blue jeans.
Kenya is facing a similar situation with devolution. The challenges are far greater than Levi Strauss faced. We need to provide public services in areas where profit-making companies would never go, especially remote poor regions. Moreover, this is about much more than commercial bottom-line as it is about building a more prosperous, inclusive and equitable society.
But right there lies the opportunity for personal financial success. The intensity of hopes and expectations that have been pinned to devolution means there are high chances of success if you position yourself.
The secret can be summed up in two words-opportunity cost. Very simply, an ‘opportunity cost’ is what you miss out on when you choose to do one thing over another. For example, if you spend Kshs2,000 on a night out, you miss out on the benefit of putting the money into a savings account. So, whenever you buy a product or a service you are in fact faced with two costs; the price of the product/service and the ‘opportunity cost’ of not being able to use that money for anything else. Opportunity costs apply to every single financial decision we ever make. But how can you take advantage of devolution at a personal level?
It starts with you
Your skills, knowledge and experience are the biggest asset you have. The value of your future earnings will dwarf any savings or investments you might have for most of your career. Your job and future career is the most important factor in achieving financial independence and security. Because of economic pressures, Kenya will continue to urbanize. According to World Bank estimates, half of Kenyans will live in a city by 2033. Devolution must support this huge demographic transformation and help make its urban centres world class cities.
For those who understand this, future career opportunities are as bright as they’ve ever been. Those who are in a position to take advantage of these opportunities will benefit the most. Look at yourself as a financial asset. Investing in you will pay off in the future. Increase your value through hard work, continual upgrading of skills and knowledge and making smart career choices. Efforts to improve your career can have a far bigger impact on your financial security than tightening your belt and trying to save more.
Become a Planner
Financial planning is the process of meeting your life goals through the proper management of your finances. It is a process that consists of specific steps that help you find out your financial condition objectively. With devolution, you must find a way of gathering relevant financial information and goals set by the counties. You must then examine your current financial status and come up with a strategy that will tie in with the future plans of specific counties. Are the counties looking at educational infrastructure, health or tourism?  Of course, the success of personal initiatives will depend on how realistic the respective county goals are.
Research has shown that those who plan for the future end up with more wealth than those who do not. Successful people are goal oriented. They set goals and develop a plan to achieve them. For example, if you set a goal to own a plot of land in two years, you’ll have a better chance of achieving this goal than you would if you merely said you wanted to own a plot of land, but failed to set a timetable. Become a planner. Set goals and develop an action plan to reach them. Even the process of writing down some goals will help you to achieve them. Being goal oriented and following a plan means taking control of your life. It is an important step toward improving your financial independence and security.
Grab the opportunity
We have all heard it.  “Oh, if I had only acted on that idea back then, I’d be rich.”  Or, “I had the idea in my head but never acted on it.” Many people who say these things simply haven’t trained themselves to trust themselves just yet.  While normal people sit on the sidelines and wait for things to come to them, successful people are out finding solutions for everyday problems and making a great living doing it. It’s not all riches and glory. In fact, it’s a lot of hard work.
The truth is, there is no guarantee that services will improve with devolution. The jury is still out on a lot of the key result areas as many of the key parameters are yet to be worked out. Sharing the pie will remain a key area of contention. Taking calculated risks during this early phase of devolution will be a prudent decision in the long run. You might make mistakes along the way, but remember mistakes are the lessons of wisdom. You often learn more from your mistakes than from your successes. Also, when you start early, you can recover faster from financial mistakes and you have many years to recover. You can move to a new county with more job opportunities. Taking calculated risks when you can afford to do so is necessary to get ahead financially. Playing it safe might be the bigger mistake in the long run.
Search for information
Out of my own experience, I’ve come to learn that personal finance is 20 per cent head knowledge and 80 per cent behavior. Make the time and effort to develop a plan that matches your priorities. There are many resources if you need to improve on the basics; classes, magazines, books, websites, TV programs, there is a medium for however you like to learn. Making money is one thing, saving it and making it grow is another. Financial management and investing are lifelong endeavors. Making sound financial and investment decisions is important for achieving your financial goals. The more knowledgeable and experienced you are in financial matters, the fewer mistakes you will make.
Research has shown that people who are financially literate end up with more wealth than those who are not. There is a strong monetary incentive for becoming financially sophisticated. Taking the time and effort to become knowledgeable in the areas of personal finance and investing will pay off throughout your life. Life is filled with the unexpected. Even small efforts consistently acted upon can create enough of a stepping stone into your financial success. Knowing that time is money’s best friend provides you with a very long window of opportunity to turn a small sum of money into a fortune. Taking advantage of devolution may involve making hard choices, changing attitudes, behaviors and lifestyle, but it is unlikely that financial decisions made on auto-pilot will result in a smooth landing. You must understand the big picture and start acting on that knowledge.
Canute Waswa is a Management and HR specialist and Managing Director of Outdoors Africa.
E-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.

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