MASVINGO – Zimbabwe has one of the highest literacy rate in the World but its populace has generally failed in the area of wealth creation because of lack of financial literacy, prominent Harare lawyer and businessman, Simplisius Julius Chihambakwe has said.
Speaking at a Public Lecture organised by the Reformed Church University at Morgenster Mission last Thursday, Chihambakwe said Zimbabweans are highly educated in many areas but least in the area of financial intelligence.
Addressing the lecture on the theme; Wealth Creation: Opportunities and Challenges (A case of Zimbabwe), Chihambakwe who runs a law firm, sits on the boards of several quasi-Government organisations, is a shareholder in many companies and also chairs boards of several companies said he was not rich but not poor.
He said his 'modest' success in the area of wealth creation comes from basic financial literacy and intelligence. He described this financial knowledge as special knowledge which is slightly different from accounts or book-keeping but critical to wealth creation.
"We are all educated in our different areas; a lawyer solves legal problems, a doctor solves medical problems and an educationist solves education problems. There is however, special education we need in the area of wealth creation and this is financial education.
"Financial education leads to financial intelligence and financial intelligence will help you solve financial problems. We have many educated people who have died poor or have failed to create wealth for themselves; the reason is that they lacked financial literacy," said Chihambakwe.
He said the words saving and investment are key in financial education. Saving money and making investments are a prerequisite for wealth creation, said Chihambakwe.
He said one must save money so that one can invest.
He explained the difference between savings and investments and said when one invests it means one has put his money where it generates more for him.
He said many well educated people have failed on those two areas; saving and investing.
"If you buy a house that brings you money through rent, that's an investment, if you buy a car that drains money from you through maintenance and other costs that's a liability. Wealth creation can only happen on the back of investments. Investment is the purchase of a property in order to earn an income. Investment happens when you make your money make money for you.
"As long as you don't make your money work for you, you are working for money," said Chihambakwe.
Turning to teamwork, Chihambakwe said he preferred to invest as a team than as an individual.
He said a sole investor was prone to indiscipline as he can withdraw money from investments any time even for petty things like a funeral, a gift for a wedding or impulse buying.
"When you invest as a team you cannot use your investments anyhow and anytime, you have to follow group regulations and wait for group time in order to reap. This instils more discipline.
"The first investment I went into was as a family project and that was with my brothers. There were eight of us and we went into trading, running shops and then wholesales in Zaka and many other places in the country. We closed that business when Government introduced price controls and we went into black granite mining and we have since then spread our wings into many other ventures," Chihambakwe added.