Home Money & Business How I lost KES 540,000 in a savings scam

How I lost KES 540,000 in a savings scam

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4 financial mistakes I made and how you can avoid them

I had managed to contribute a total of KES 540,000 which I did religiously for 36 months when Mr Okumu decided to award me only KES 194,000 which was subjected to further deductions, bringing it down to KES 153,000. I had expected to use my savings to start a small business and pay for my remaining units at the UoN where I was pursuing MSc in Entrepreneurship and Innovations Management. But here I was without an income, without savings, only bills to pay! It was a very costly mistake that nobody should ever commit.

Here are five costly money mistakes I made and how to avoid them:

#1: Refusing an offer to own a company before 25!

I remember when I was looking for a job, a lady wrote me from India asking if I could help her set up and run a digital agency in the country. I was young, stupid and without mentors. She considered me qualified, but I did not. This did not just end here. At work, whenever I thought about a promotion I would shudder. For a long time, I enjoyed the back seat.

Well, many people have this problem. Not just at work or regarding finances. They don’t like taking the wheel and running their lives. Or they wait for the right time to do something. They spend a lot of time planning. The problem is that you can never be successful at the back seat.

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You must take charge. You must begin instead of waiting for the right opportunity. Those guys who hang out with a lady till she invites him to her wedding can tell you how it feels to take the back seat. Truth is, you will never have enough experience, resources or be old enough to be CEO. Start where you are, fail if you must, make mistakes and grow through it.

#2: Being unavailable for part-time opportunities

I was working for a big company that looked small. I mean, we were an international team though never knew each other. I met some of my colleagues on Skype, we chatted, helped each other handle various tasks, connected on social media but apart from my bosses, I never met the rest of the team. My role was tasking. It occupied me throughout but I loved it. It was refreshing doing what I loved most – writing, editing and managing writers. I made my own decisions, and could work from anywhere. It was an enviable environment with covetable terms including salary.

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However, at the end of the day I was too tired to even update my blogs or attend to my freelance clients. Slowly by slowly, I started losing my very good readers and clients that I had acquired over time. Well paying clients who taught me on the job. Clients who tipped me handsomely and didn’t pick any mistakes with my work. All this because I had over-exerted myself at work. Then after a few years of trying to build the company, the employer decided to fold up! I felt conned – putting in all that effort in a dying company!

When you secure employment no matter how much you love it, leave yourself some time to do other things that could supplement your family income in the future. Your boss can decide to change tactic and do something unexpected that will take your energy and effort down the drain. You can get fired. Do not work overtime even if it is paid for. Life happens out there – take time off to build it.

#3: Making decisions too fast

I had just met this guy. A few months later, we passed by the mall where some guys were selling holiday homes. We were with my son and so looked like a young couple. I filled some forms. The following day I received a message saying that I had won, and should go for a presentation in Westlands when am free. It was the first time I was winning something. I could not afford to turn it down. They asked me to go with my husband. We went, listened and they made us an offer we could not resist. I was in a well-paying job and could afford this holiday home. Baobab fractional home ownership. I can say they were targeting the wrong group because young couples are busy making money. Those in retirement or with sponsors can afford many holidays at such an exorbitant fee. Anyway, I left some deposit – my boyfriend wasn’t interested and I was willing to take the risk and invest alone. Bad decision!

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Whenever making an investment decision, take some time to think about it. Nobody should put pressure on you to decide now. These things are not going anywhere. Even if you miss it, you will always find another one. Don’t let anybody sell you a piece of land or rent a dsq in Westlands now now at half the price. They are probably selling you air. Don’t let sales agents force you to get into fractional ownership deals or other great deals that you don’t understand. Seek counsel first before putting your money anywhere. Sounds like those mpesa cons who tell you to ‘tuma hio pesa kwa hii number, ile yangu iko na shida’ or ‘Tuma hio pesa kwa hii line saa hii, simu yangu imeibiwa natumia ya rafiki yangu.’

#4: Choosing the wrong investment plan

This one won the trophy of scams and selfish financial managers. I had bought an insurance policy with ICEA Lion because I could not keep my hands off my savings. After reading the terms and seeing that I could redeem my money after three years, I decided to go for this savings plan because it made it hard for me to go back to my savings. I just wanted to save for 2 years to raise enough capital to start a business. I could risk 3 years, even if it meant losing 30 per cent of the savings to the managers. After doing my calculation, this 30 per cent would be compensated by the bonuses I would have accrued then.

Before 3 years were over, I lost my job. I started spending my contingency money as I waited for 3 years to lapse so I could redeem my savings. Eager to complete my MSc studies, I paid my fees since I had a lot of time to focus. I even borrowed some money from my friend to start the business I wanted to venture into. I can tell you it has taken 2 years to learn the ropes and am yet to clear the soft loan my friend gave me.

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My insurance agent was a very friendly man, a born again Christian whom we fellowship together. He followed up my payments but to his shock and mine, his boss just decided to keep my money. Out of the KES 530,000 that I had contributed, he awarded me KES 153,000! This was after I even chipped in and involved the Insurance regulatory body.

In order to avoid this mistake, read my post on how to multiply your money here.

Have you fallen into any of these traps? Please share in the comments section or email your story to [email protected]