The cost of living has been on the rise, driven by two major issues. First, the rising oil prices globally have been made worse by the ongoing Russia-Ukraine fights and the depreciating shilling.

The second one is the increasing food prices due to the ongoing drought in some parts of the economy. The challenge has been made worse by the fact that some people are still recovering from job losses and income reduction brought about by the Covid-19 pandemic.

Another obstacle on the journey to recovery is the fact that we are in an election year. Though businesses have been showing some signs of recovery, there is still a lot that needs to be done to put economic recovery back on firmer footing.

With all the above aff­ecting the investment landscape the question that comes to mind is what is it that needs to be done to make it easier for people to continue on their wealth creation journey.

Below are some of the key tips:

i. Be discipline and consistent: Despite the hard times, consistency in one’s savings and investments remain key in the journey to wealth creation. Starting as early as possible helps in ensuring that one has a long time horizon to benefit from the power of compounding. It is good to always create a system in that one does not have to debate on whether to put money aside for investments or not. Putting standing orders to your investment account makes the wealth creation process easier to manage. One can also take advantage of any check o­ investment avenues o­ered by their employers.

ii. Select the right products: There are many investment products in the market among them being formal products e.g bonds, shares, o­shore, currency, unit trusts etc and other informal ways like starting a business. When one is considering what they are to invest in, it is important that they understand the key characteristics of each. If one is saving in a saving account, it is highly likely that they are losing money since on an inflation-adjusted basis, they are getting worse. It is therefore good to note the products that do well during this inflationary time.

These products include among others investments in stocks and real estate. If one is seeking to preserve their wealth then, it is better to look at fixed-income investments like bonds and money markets funds whose risks are lower but the returns are above inflation.

As you look at the products that one can invest in, the other key consideration is to know who the key providers are, as it helps one make the right partnership decision. The best way to help select the right product is through gaining working knowledge which can easily be accessible on the internet and in books.

iii. Manage your debt: One of the biggest challenges we have is debt, especially the easily available debt like digital lending. There is a lot that has been said about debt but one of the key things is to always ensure that we do not get into bad debts. The bad debts are largely the borrowing we do for consumption.

The first step to keep this away is to always plan our finances through the creation of a budget. As one creates a budget being honest with oneself helps and cutting on the discretionary expenses that they can’t a­ord plays a big role.

If one is faced with previous debt and reduced income, negotiation with the debt providers helps one plan for their income better.

iv. Diversify your sources of income: Now more than ever it is clear that we should try as much as possible to get other sources of income. Getting a new source of income is largely dependent on the individual’s available time, working knowledge and passion.

There are always questions on what business one can start and for me, the answers are always that I do not know. The reason I give that answer is that we are all different and there can never be a solution of one fits all. The key guiding principle is whether there is a real need that the product is to address, whether the entrepreneur is passionate about the solution they intend to o­er and what time involvement is required and compare that with the time that they can set aside.

v. Involve people around you: The people who are a­ected in the decisions we make should be part of the decision-making process. Wealth creation, especially in these challenging times, would mean a lot of lifestyle changes. If not well handled this can be a significant source of stress. Money is one of the leading causes of family challenges and at times it is more of a communication issue.

Explaining the changes will help move the process forward and one gets the support in the form of ideas and buy-in.

In summary, it is good to note that the hard economic times cannot be wished away. What we can do is to change our perceptions and create ways and means to grow our income as we cut our expenses. Selecting investments that are able to help with this journey within our means shall make all the di­erence.

Remember. Nick Murray, a leading Client Advisor remarked: “Wealth isn’t primarily determined by investment performance, but by investor behaviour.” It is therefore good to work on our attitude and behaviour on wealth creation and eventually, things will be in place.

 –The writer is a personal investment expert.