Expensive does not always mean quality and value for money

In the past few days, there have been articles circulating on social media about landlords who overbuild their houses. This means they build houses or apartments of very high quality in the wrong neighbourhoods. 

Thus, potential tenants are unwilling to pay the rent the owners are asking for, not because the houses are not worth it, but because they are priced outside the average price in that locality. The property owners are thus forced to drastically reduce their asking rent in order to get customers. This makes it very difficult for the owners to recover their investments and earn a good return.

Yet, this story is not isolated; it is all over the country in almost anything people are doing. The simple point here is, simply because you have spent a lot of money on something, it does not make it worth the amount.

I have had my personal experiences on this and I can testify it is true. Years back, I invested heavily in two small businesses. First, it was a greengrocery and later Butchery. For the grocery, I spent about KES.200,000 set up costs while the butchery cost over KES.350,000. In both instances, I imagined making them fancy would endear my business to customers.

The shock was on me as soon as I opened the doors for each business, it soon became clear my capital would be a waste for two reasons:

1. I could not sell my products at any different price above the ‘Kibandas’ next door – the customers were very sensitive to prices; and
2. The customers within this area actually didn’t care much about value-added –bora Sukuma au Nyama.

The summary of it all is that I suffered terrible losses and had to quit these businesses. The Kibandas I thought I would compete with most of them are still in operation to date – over 13 years later and still doing good business.

The thing is: it is not necessarily that my idea or concept was wrong –it is just that I invested too much in the wrong business location. But I learned too late.

Today, I want to share some tips on why you shouldn’t overspend on things if you desire money and wealth:

1. You gain nothing by paying more than you should but lose the money you could have saved instead– other than possibly trapping you in a costly lifestyle for most people; there is nothing more to spending more than you should. It won’t add any ounce to your life or make you happier. But it has the potential for stress due to the related expensive lifestyle;
2.  Expensive does not always mean quality – there is this twisted notion, especially for many people in the middle class that expensive things mean quality. For instance, an expensive school does not always mean better education for your kids, neither eating in a fancy place make the food different or better. For most businesses, this is simply psychological value created in the mind through good branding or superior marketing. This is not to say if you can afford it don’t buy expensive things, problem is when struggling to fit into a lifestyle you obviously cannot afford;
3. Well-monied people always live a lifestyle below what they can afford – no matter how expensive are the things they buy, those with real money will always be spending much less than they have or earn. They may buy the most expensive cars, clothes, big homes or even own private jets. But the proportion of their spending is much less than they are making –thus they can never finish their money across several generations;
4. The most essential things in life are free or cheap – the air we breathe is free, water is free, and most people can afford some form of food and clothes. Nature has a way of equalizing all of us in some way; and
5. Always know your place in life – we go through different stages in life. As you move along, your quality of life may improve, decline or stagnate. Most people who get to the top, have mastered the art of building in silence and growing without attracting attention to themselves. Look around at the number of celebs that are literally broke and still faking it until they crush it due to depression. This is not how life was meant to be.

Finally, the truth is there will always be someone better than you at any point in time. Accept this and be contended with where you are. You can then work on yourself to improve your lifestyle without any much pressure.

Always walk at your own pace at any point in time.