Are investors in Kenya crazy?

I went back to school. Shocking I know, but that’s what happened. It is not as bad as you think – I am actually enjoying it. Anyway, last week we had an interesting discussion in class.

Shillings

Let us consider the following scenario. You’re an investor. You have some 5 million shillings that you want to invest somewhere. You are a Kenyan living in Kenya. Now, the last assumption is important because we all know what all your friends and family will tell you to do: buy a house, get paid rent monthly.

So let us say that you buy a 5 million house in Mlolongo. How much rent can you get for such a property? I would argue that you will get nothing more than KES 25,000/- per month for a house in Mlolongo that costs KES 5,000,000 to buy. Am I wrong? Contest that in the comments below.

So you’ll be getting 25000 x 12 = 300,000 a year. 300k per year is a 6% return on your investment. Nice eh? Nope. It is actually a shockingly bad return on investment.

Right now (the link leads to a PDF document) you can invest in a Kenya government bond which will give you about 12% returns per year. DOUBLE what you get from a rental real estate investment. This is crazy.

Government bonds are generally thought of as “risk free” investments because the government will always, always pay up. This may not be true everywhere in the world but you get what I mean, right? if an investor is a rational investor (i.e. not stupid) then they will never invest in anything if it returns less than the risk free government bond. Why would you take any risk anywhere if you have a guaranteed 0 risk investment as an option?

If you follow this train of thought then it means that any other good investment simply HAS TO yield a higher level of returns than the government rate. Why? Because it is higher risk. A house can burn down but the government can never “burn down”… see what I mean? Why would you invest in something higher risk, for less returns? It simply doesn’t make sense. Any right-thinking person would never ever do it.

And yet Kenyan “investors” do it all the time. Why is this? Are we crazy??

Small note
I know, I know, there exists governments out there (maybe even in here) that can and do default. But: 1) we’re assuming this is not the case and 2) if a government defaults then all the houses and other investments in that country also go up in smoke.

5 Tips to Get a Job Online

Every one of us would like to find a perfect job to develop a professional career and realize our personal value. Nowadays, we rarely obtain news from traditional sources like the newspaper or magazines otherwise we have all turned to the website. In the age of information, we can get what we need/want from the Internet including that elusive job.

Job, anyone?

I would like to share some experience about searching jobs online and some tips to help you find your ideal job.

1. The email you send to the company should be concise and to the point. You have to ably express your strengths and personality in brief without being verbose. You had better clarify the position you want to apply on the subject and give a brief introduction of yourself in the body text.

2. Get better your CV and make it unique for each job application. As you search for your job online, the first impression for the interviewer is your CV. The quality of the CV reflects your personal conduct and your attitude to the job. A perfect CV will leave a good impression on the employer. If you apply to many similar jobs in different companies, you need to adjust the content of your CV according to the match the company you are applying to.

3. Search for information on authority websites. It is always better to find the recruitment announcement in the official web page of the company. But if you do not have an ideal company to search, you can turn to some authority website that offer jobs or post free ads on such kind of platform so that the employers will look for your information and contact you.

4. You can establish your CV online. While sending out your cover letters, you can simply share a link for recruiters to visit your personal website to further attract their attention. The personal website should be well established with your personal information, CV, your study results, your work experience, etc.

5. Be careful of your personal information. The Internet is huge and there are some risks of revealing your personal information. Take precautions to protect your personal information.

I hope some of the advice will help you find a nice job and I wish you all the good luck in your career.

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