This archive report was first published on 20 November 2021.
With the pressure to become financially independent, many people are left wondering whether starting a business or focusing on their career is the surest way to achieve wealth.
According to Viffa Consult's 2019 State of Side Hustle in Kenya report, agriculture-based side hustles are the leading performers, followed by hospitality, business services, entertainment and media, and retail. Other areas where individuals have invested their money include transport, real estate, travel and recreation, education, and financial services.
Interestingly, the survey found that eight out of 10 employees with side hustles recorded an improved income due to engaging in the business. However, during the onset of the Covid-19 pandemic in 2020, a third of Kenyans with side hustles were willing to quit their day jobs.
Wahome Ngari, CEO of Personal Finance Academy, notes that while some people have acquired wealth through business, this percentage is small. He explains, 'It is a very small percentage. These are people who go to the top – you know the chief executive officers who are paid well.'
Ngari also points out that innovators and sports people can make fortunes without starting a business. However, he notes that for the bulk of people, starting a business may not be the only option for achieving wealth.
Ngari suggests that having other revenue streams, such as investments, can be a viable alternative. He adds, 'A business is a way of providing a solution to a problem in the society and people pay for it. So you do not necessarily have to do a business but go into other investments.'
Sarah Wanga, Head of Research at AIB Capital, notes that businesses offer a higher rate of return than a normal career. She explains, 'For a career, there is less risk and so the returns are lower. The lower the risk, the lower the returns and the higher the risks, the higher the returns.'
Wanga suggests that investing in the stock market can be a safer option for those who do not want to start a business. She notes, 'You can invest in a business or in stocks – and people have made a lot of money for instance Warren Buffet.'
Ngari emphasizes the importance of self-investment, whether in business or career. He notes, 'You seriously invest in yourself – and when I say invest in yourself I mean if it needs you to have any kind or knowledge you must acquire it. If it requires any kind of skill you have to go out and look for that skill.'
Ultimately, whether one chooses a career path or starting a business, Ngari suggests that it is essential to align everything towards the chosen path and be willing to put in the necessary effort to achieve success.
