How I avoided mistakes my dad made, escape from poverty (Party 2)

By Ikenga Ezenwegbu

Real life story and lessons:

I grew up poor by the accident of Nigeria-Biafra war. It was not supposed to be, because my father (who was considerably wealthy) didn’t see it coming even though he invested in real estate in Kano and Zaria while growing his dealership with John Holts in the North.

The war took every Igbo person by surprise, especially those who were based in the Northern Nigeria. My father’s warehouses and residential buildings were all burned by our northern brothers, as my dad was marked for killing but a good Hausa man revealed the plot to him days before it happened. Upon hearing the plot, my dad first dispatched his family and relatives to the East and later disappeared on the night before the massacre. He was a notable Igbo leader. His escape irked the assailants, hence torching all his investments became inevitable.

While in the East during the War, my father had to release his other haulage trucks to the Biafran Government as war effort while managing one lorry for in-country haulage. He had to feed so many relatives as such the capacity to save or make any investment at that time was inconceivable.

My dear dad died a poor man few years after the war, leaving the survival of his six children at the mercy of Providence. Inevitably, I and my siblings practised the purest form of peasantism with my mum presiding. God was to drag us from poverty or being one of those families that depended on the charity of relatives to go to school, wear decent clothes and eat balanced diet.

As a growing child, I was not old enough in watching, observing and noting how my dad managed his money both at the early stage and at the end stages. Much of the information was what I gathered from my mum, as my dad died when I was seven years old, hence I couldn’t have hazarded such thoughts. But, most diligently, I studied the economic journeys of my uncles, neighbours and relatives. I would note certain acts that made the rich ones remain rich and what made some others descend to poverty or “just managing” status. I tried to figure out why many preferred being taken care of. I needed to know, so as not to repeat the mistakes of others, having brushed my teeth for many years with lack.

Below are some of my research findings: my practical applications of same to my life:

1. I never spend all my monthly earnings no matter what:-

Very early as a salary earner, nothing would make me spend more than 60% of my monthly income. To achieve this, I had to bridle my taste of accommodation, cars, women, and the company I keep and my social engagements. I had to also refrain from spending so much on clothes, shoes, etc. I learnt to watch the cost of what I ate and where I bought my food.

2. I had to open two savings accounts. One is for normal savings while the other is meant for accumulating funds for various types of investments. I would keep funds earmarked for monthly expenses in my salary account. They were times when some emergencies occurred, I would spend from my Savings Account. However, no drawings happen from Savings Account 2 except for investment.

3. Invest your savings on landed property:-

I had read one book called the Mystery of Capital and I learnt that purchase of landed property is the most secure type of investment, especially if bought in secure locations where scammers, land grabbers or omoniles don’t constitute a nuisance. I started buying lands priced at N50,000 and above, depending on my capacity at that time. I knew that land is scarce and that development would always move towards virgin locations. Hence, I would buy lands far away from developed areas. As my capacity increased, I started buying and building inside the town and city areas.

I took this as a religion because that was what my father didn’t do. He didn’t have a land bank from where he could have raised required capital after the war to bounce back. I took it a notch higher by diversifying my land investments and ensured that I have more in places where I will run to whenever there is need to run.

4. Building a house in places one regards as home:-

The book The Richest Man In Babylon, written many years before Jesus Christ, revealed that a wise man is that who saves and invests not less than 10% of his income and also the one who builds his own house as soon as he can, to avoid paying rent. Whatever rent you don’t pay is savings. People who didn’t witness the war won’t understand the problem of not having a house in one’s home town. Some of those folks thought that I was mad when I decided to build my first house at Nnewi before building one in Lagos. Experience, they say, is the best teacher.

In addition, as a rule, a salary earner should ensure that part of his house has a rented part that should be generating revenues to maintain the house.

5. Building other houses for rent:-

There is an adage in my town that when a wealthy man falls, he is wedged by his assets, especially his landed property. He would easily put some in the market to hedge against the storm. I internalized it. Even as a bank employee, I know the need to have a property to pledge as a collateral for loan. Collateral is a key requirement by a bank from loan applicants. What if I quit my job or I’m sacked? Shouldn’t I have a ready collateral to access bank loans? Also, rental income is a comforter that makes life easier for the aged. Proper background checks and avoiding frequent rental increase reduce incidents of rent default.

My former boss taught me to target an annual total rent income that would be equivalent or about 80% of my annual emoluments at retirement. That boss of mine does no work now. Having fully trained his kids, he is busy traveling around the globe with his wife. I believed him and I’m working hard to follow his footsteps. As my income increased with promotions, I started building on the lands I had earlier acquired. I will keep building until I’m tired; like former boss did. You noticed that I didn’t stress purchase of stocks. One needs the guidance of stock brokers to risk investment in stocks. I’m so afraid to advise anyone to buy a particular stock for personal reasons.

6. Immunization against being pulled down by relatives:-

There are many people who would have progressed and remained wealthy if they didn’t meet all the wants, fantasies and needs of their relatives, in-laws, extramarital sex partners and friends. My father kept doling it out. He would even borrow to “wipe out the tears of a relation” who would soon mismanage the money and return with another story. I heard that “anger against a blood relative doesn’t reach the bone marrow”. That’s how many originally successful people would have remained rich people but were pulled down by the never-ending needs of their relatives. I adopted a different approach. I would never do impulsive spending. Not then and not now. Every expense must be discussed, analyzed and budgeted for. It was difficult initially but I had to earn a bad name for that. The truth is that I would give impulsive advice and impulsive financial consultation but will never do an impulsive lending or spend money on impulse. Not me. Never! Even if I want to, I can’t, as the funds are invested as soon as they’re earned.

7. Refusal to impress anyone:-

Have you fallen victim of praise-singers or musicians at events where they would hail and hail you until you spend to match the honorific names they shower on you? The push “to belong” by paying high rent to live in an expensive neighbourhood, sending your children to very expensive schools you can’t afford if you’re shaken economically, buying what you deem a befitting car so as to present an appearance that you’re doing well or dressing to kill to elevate your status. If you can conveniently spend without going below poverty line or going a-borrowing, why not? Do you really need to impress anyone? Proper planning and serious enquiries or market research could help you achieve the same results without spending much more than you can contain.

Even as I approach the twilight of my working career and seeing many who are repeating the same mistakes my dad and many others around me made, I thank God for giving me the prompting to think about my father’s descent into poverty and to apply the lessons I learnt, which enabled me to achieve a reasonable level of financial security.

A clear proof that I’m not that stingy as some of my friends who read this piece would think is my decision to write down my experience and publish it here for the benefit of young adults who might find one or two tips herein useful.

As a matter of policy, my direct reports in all the places I have worked know that it is part of their appraisal to show evidence of investments for a year before. Lives have been changed via such mentorship while those who saw life the other way are not better of now.

Compliments of the Season!

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