What You Need to Remember When the Deal is Too Good

So, let's repeat the lessons in case you were not paying attention last time. Feel free to share these with friends, or print them out.

1. There are NO guaranteed returns in ANY business or investment, anywhere. Even government bonds, which economics textbooks say are rock solid, can be defaulted on. Anyone who tells you of guaranteed returns is stupid or they're lying. If they're telling you this and asking you for your money, they are thieves. Run. Slap them first.

2. Past performance is no guarantee of future results. You may know someone who bought a plot in Ruaka whose value doubled in eighteen months. It doesn't mean that when YOU buy a plot in Ruaka its value will double in eighteen months. You may know someone who became a millionaire supplying chicken to DoD. It doesn't mean that YOU will get a DoD contract to supply poultry, and it doesn't mean that you will become a millionaire even if you do. This even applies to yourself - you may have made double your money on the plot in Ruaka. It doesn't mean that you now rush to buy twenty plots (with borrowed money), in the expectation that they will also double in value.

3. A lot of the money manias in Kenya are around agriculture. Here's this new crop/ fruit/ livestock that you can make millions off. Here's a simple rule: by the time YOU hear of it, all the easy money has been made, and you'll be one of the crowd struggling to make your investment back (that is if it's not being peddled by someone in 1. above). Here's another simple rule: if you don't eat it, don't produce it. Don't believe the guy who comes with a fantastic story about how in China there's demand for red bananas. Run. Slap them first.

4. Don't keep all your eggs in one basket, or all your money in one place. Distribute your money/ savings across banks, of different kinds. Don't sink all your life savings in one investment. People save for decades to invest all their money, for example, in the home of your dreams. Don't. Think of the people who did that at Syokimau, only to be woken up one morning by the oily sounds of bulldozers.

5. There's nothing wrong with borrowing, but only borrow for the right reasons, at the right price. Yes, borrow primarily to purchase appreciating assets, but don't let someone tell you that you shouldn't borrow for a holiday, or for your wedding. As long as you can afford the repayments, you'll be fine. However! Do not borrow when you need a miracle to pay back the debt. Do not borrow to buy assets which fluctuate in price. This means that you should never borrow to buy shares (there's an exception to this rule, but this exception is not for people at our wealth level).

6. Banks are not your friends, but neither are they your enemies. They're simply a service provider. So don't treat them with undue suspicion, or undue love.

7. There's nothing wrong with being employed. There's nothing wrong with being employed all your life. Not all of us are cut out to be entrepreneurs, and many of us will never be good at it. Think, even when you start your fancy startup, you will need employees, won't you? This nonsense that a salary is an addiction, or that you can never get wealthy from a salary is that - nonsensical. The key is to find something you're good at, be the best at it (in the world if possible), and find someone to pay you for it.

BONUS. Back up. Your phone. Your computer. Your life.