Same Pay, Different Outcomes: What You Can Do Today to Build Wealth Faster

Most Kenyans believe the biggest obstacle to building wealth is earning too little.

But if that were true, everyone earning the same salary would end up in roughly the same financial position.

That rarely happens. In fact, it's common to find two colleagues earning almost identical incomes living completely different financial lives just a few years later.

Dorcas and Stacy were such two colleagues.

They both started working around the same time, earning nearly identical salaries. Over the next five years, they received promotions within months of each other and enjoyed similar pay increases.

Yet their financial lives couldn't have looked more different.

Dorcas had not only built an emergency fund to cover her on rainy days, but she had started earning passive income. 

Stacy was still living from paycheck to paycheck. A single unexpected expense meant borrowing money or pushing bills into the following month.

It wasn't that Dorcas earned more. The difference was that she made three decisions earlier than Stacy did. Three decisions that changed everything.

1. She Started Before She Felt Ready

Like many young professionals, Dorcas didn't have a huge salary when she began investing. What she did have was consistency.

Many Kenyans postpone investing because they believe they need a six figure salary to get started. By the time they feel financially "ready", they've lost years that their money could have been growing.

Today, that's no longer necessary. For instance, with I&M Capital's Wealth Fund, you start investing with as little as Ksh2,000. The amount matters far less than building the habit.

Income creates opportunities. The financial decisions you make with that income determine whether those opportunities turn into wealth.

Today, getting started is also far more accessible than many people realise. For example, I&M Capital's Wealth Fund allows investors to begin with as little as Ksh2,000, making it easier to take that first step without disrupting your monthly budget. 

You also have the option of I&M Capital’s USD Fixed Income Fund, especially if your primary income is in dollars, or you are interested in protecting your investment from currency fluctuations. 

Also Read: CBK Reveals Top 10 Banks with the Cheapest Loans.

2. Dorcas Let Her Money Work for Her

Stacy celebrated each salary increase by upgrading her lifestyle. A bigger apartment. The latest phone. More weekends away. None of those decisions were irresponsible on their own, but together they meant every pay rise disappeared almost as quickly as it arrived. 

Dorcas did it differently. Every time her salary increased, she would increase the amount going to investments by the same percentage. 

Once she'd set aside what she needed for bills and emergencies, she moved the rest into investments that could generate returns over time. Instead of letting her money sit idle, she put it to work.

That's the advantage of professionally managed wealth funds. Rather than trying to research stocks or predict the market yourself, experienced fund managers invest on your behalf while you focus on building your career.

Over time, your salary continues paying you every month, but your investments begin paying you too.

An example is I&M Capital's Wealth Fund, which gives investors access to professionally managed portfolios designed to grow wealth over the long term. Instead of your money sitting idle after payday, it continues working in the background, with any returns remaining invested to benefit from the power of compounding. 

Imagine investing Ksh5,000 every month instead of leaving it in your salary account. At an average annual return of 10%, after ten years you would have contributed Ksh600,000.

Thanks to compounding, your investment would be worth just over Ksh1 million, that’s Ksh400,000 of your wealth coming from your money working for you. 

3. She Gave Her Money a Head Start 

The biggest advantage Dorcas had wasn't that she invested more, she just started earlier.

When Dorcas began investing, she wasn't putting away huge amounts. 

Stacy told herself she'd start "once things settled down." Then came a rent increase. A wedding contribution. A holiday. A new phone. Before she knew it, years had passed.

Also Read: I&M Bank Issues Ksh20 Billion Bond Offering 12.2% Interest.

That delay turned out to be expensive. 

Imagine they had both decided to invest in a professionally managed fund targeting an average annual return of 10%.

Dorcas started investing Ksh5,000 every month at the age of 25 and stayed consistent.

Stacy, on the other hand, kept putting it off. By the time she turned 35, she realised she'd lost valuable time. Determined to catch up, she began investing Ksh10,000 every month, twice as much as Dorcas.

By the time they both turned 40:

• Dorcas would have invested Ksh900,000, but thanks to compounding, her portfolio would be worth around Ksh2.07 million.
• Stacy would have invested Ksh600,000, with her portfolio growing to around Ksh775,000.

That is why the best time to start investing was yesterday. And the next best time is today. The earlier you start, the longer your investments have to work on your behalf.

Getting started is also much easier today than it was a few years ago. For example, I&M Capital's Wealth Fund not only offers above-inflation returns but also allows you to automate your investments. 

You can set up a standing order so your monthly investment happens automatically  without having to remember every payday.

Get Started Today

You don't have to wait for the perfect salary, the perfect time or the perfect investment strategy to begin building wealth. The biggest step is to just start!

With low minimum investments, a professionally managed portfolio and the convenience of automated monthly investing, I&M Capital's Wealth Fund makes that first step easier than ever. If you would like to get started with the I&M Wealth Fund, get started here or email I&M Capital fund managers through: wealth@imbank.co.ke.