By Liz Nkukuu

It is Chris Rock who said that wealth is not about having a lot of money; it’s about having a lot of options. People have different needs and wants and we should ensure that we work towards creating the level of wealth that can satisfy us in future.

One of the main reasons why we are constantly getting further and further from our goals depends on decisions we make or those that we do not make. As we walk through the journey of financial wellness Dave Ramsey warns that:

“You must gain control over your money or the lack of it will forever control you.” Here are some of the key pitfalls that derail us from attaining our goals:

• i. Failing to plan: As the old saying goes, failing to plan is planning to fail. It is therefore important to ensure that we understand where we are going because if we don’t, this means we shall have no clear destination. Financial planning helps create a clear picture of our goals and helps identify potential pitfalls well before they materialize
• ii. Failing to execute plans: No matter how good a plan is unless it is implemented it shall never bear any fruits. “To me, ideas are worth nothing unless executed. They are just a multiplier. Execution is worth millions,” said Steve Jobs. Better to be wrong and learn other than never to start.
• iii. Trusting too much: We live in a time where there are so many people with great ideas and some of them are extremely convincing and we occasionally find ourselves falling for them. No matter how convincing an idea appears, do your homework before investing. Richard Branson of Virgin says in investment there is always the next bus coming to the stage iv. Lack of financial literacy: We spend so much time in school studying and there is very little incorporation of financial knowledge into our education system. One therefore needs to create time to seek and understand how the capital market works to increase their investment options. v. Lending money to friends and relatives: The maxim that one should only lend that which they are willing to lose stands. Most of the time relationships are broken out of cash lent that was never repaid back. No matter how enticing the deal looks or how dire the situation might sound, ensure you keep your emotions away from the money business.
• iv. Borrowing and credit: Have you ever taken a loan just because it is readily available, for example, mobile loans? These loans are so easy to access but did you know that you could have actually survived without it? It is important to ensure when taking a loan it must be for investment and not consumption and that the investment shall give you a higher return compared to the cost of the credit.
• vii. Investing in that which we don’t understand: If you ask most people to talk about their key objective in life, you will be told it is to start a business one day if they haven’t done so yet. Note that unless you have the time and expertise one should not jump into it until you are absolutely ready. Same case to investing in something else, ensure that you understand the opportunities and also the risks. One must not get too excited about the expected returns before looking at the other side of the coin.
• viii. Lack of consistency in saving and not starting early: Investing should be done in a consistent manner, this helps create discipline. “It’s not how much you make each month that matters — it’s how much you save along with the flexibility and time outside work that you have.”• Francis Shenstone
• ix. Doing it alone: We are all good at one thing or the other but there are things that we shall need more specialised assistance. We should therefore be ready to speak to professionals. I have seen many of us get into legal contracts that cost us a lot but had we paid a lawyer we would not have found ourselves in that situation.

Most importantly, while walking the journey to financial freedom, always ensure that you gather as much information as you can, but remember you are the one calling the shots. Make sure you make the right choice for yourself.

-The writer is a Chartered Financial Analyst and investment professional