Two weeks ago Bulaimu Muwanga Kibirige, more widely know as BMK launched his book “My story of building a fortune in Africa” and last week the New Vision had a four part serialisation on the same.
Its an entertaining read. Over five decades BMK has built an empire that stretched from Hong Kong to Lumbubashi in DRC and from Moroto to Lusaka, Zambia. It has been a labour of love, launched in the Idi Amin era – where he was labelled a smuggler, persevered through the Obote 2 era, where he literally dodged a bullet and has really taken off over the last three decades.
The business lessons are peppered all over its pages. It is all very well to have a long term vision of where you want to be in the future, and BMK had his share of that, but the bigger lesson, for me was
start where you are, with what you have, take the next step even if you can not see the whole staircase and believe that the path will become clearer as you go....
What right did BMK have to drop out of school after P7 and dream of one day being a hotelier? What right did have as he prowled the streets of Hong Kong, Guangzhou and Bangkok to think he could father the second hand spare parts and boda boda revolutions in Uganda? What right did he have to think he could turn marginal land on Wampewo avenue into the flagship of the African Hotel Chain? There is one in Moroto, another in Lusaka, Zambia and another two planned for Arua and Apac.
Given his journey through some of the worst economic times of this country the rest of us should shut up about the lack of opportunity in Uganda today. It is not in the nature on the man but such complaints maybe met with a snort as he set upon his newest venture.
"Just as important as a lesson, BMK is a compounding machine. Untempted by the seductions of youth he was able to plough back most of his profits into his business. Done across five or ten years the results may not be so impressive but done with discipline over five decades can make for eye popping results. This assumes of course, that like BMK, you enjoy more success than suffer failure during the period.
Which brings us nicely around to the latest drama with NSSF at the center. Earlier this year parliament passed a law that allows members to access 20 percent of their savings once they make 45 or save for ten years. The uproar was triggered by a report that finance minister Matia Kasaija had written to President Yoweri Museveni advising that he not assent to the bill. That it should be returned to parliament for further debate.
The minster argued that a massive outflow as is suggested by the law, would hobble NSSF’s activity and affect the Fund’s ability to pay members the attractive interesting they have become accustomed to.
Unlike BMK most of us have to compelled to sock away part of our income and allow the compounding effect to work for us.
Looking at my own NSSF account I notice that my contributions over the years account for about 45 percent of my savings with the rest being interest. That is down to the compounding effect. Because interest has been paid on interest I will receive much more than if I had just saved my money under the mattress dilligently during my career.
"BMK insists he is a lucky man. I guess looking back over what he has achieved he has surprised even himself. That is what the compounding effect does...Given time and a good rate of return the end result can look like a miracle.
To illustrate given the choice between receiving a billion shillings at the end of the year or starting with a shilling and compounding at the rate of one percent a day and being paid off what ever the total will be after six years, most people will take the billion shillings now. But then they would be forgoing another sh1.9b if only they had waited to year six.
The point for BMK as for the salivating savers of NSSF, we don’t need to be clever to take advantage of the compounding effect to do well. What we need is a good money making machine and uninterrupted time.
Delayed gratification is not for everyone – we can not all be like BMK, that is why government against our will made us save. The warm feeling of getting a few millions now may deny us a greater glow of many more millions a few years down the road.
What? You are scared NSSF may not be around by the time you are 55? That is the same thing they feared 20 years ago.
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