Starring in it was Maurice Odumbe, the disgraced cricket star who was banned from the game for five years after allegations of match fixing and book making were finally substantiated by unearthing overwhelming evidence against him.
Forget the matchmaking prediction, the next couple of paragraphs aroused my emotions, causing me to cuss out in angst……I believe my exact words were “you dumb fu**”, which I yelled atop my voice to amazement of my co-workers who were now curiously looking on, probably thinking I was going to pull out a machete and massacre them? Read on and you’ll understand why…..
“Once upon a time in 2003 during the Cricket World Cup, Maurice Odumbe was a sporting superstar with a white wife, Katherine Maloney — a teacher at the ISK, two kids and two white side dishes —Caitlan Patterson and Katja Nielsen.
He traveled the world, played cricket, played white chicks, rented a mansion in Runda and owned a BMW 520i, two other BMWs and a Mercedes Benz.
Then the International Cricket Council came calling, accusing him of bookmaking and match fixing. Hell hath no fury like a white Chiquitta played, and all the three of his women got together, not for a ‘menage-a-quartet’ but to testify against Maurice.
Five-year cricket ban, and Odumbe was sank.
He’s moved from Runda to a flat in Kileleshwa, and sold his three ‘Beamers’ and the Benz (Assuming the show-room cars cost him a total of Sh10 million, why Maurice didn’t simply floss with a Sh2.5 million ‘Beamer’ and invest Sh6 or 7.5 million of his cheddar in his own home, we will never know).
Anyway, our concern is his women and fiancÈes, not his finances. And white chicks aren’t good for our Odumbe lad.”
I don’t care about the white mamaz, my concern is his finances!
I am consternated by how he managed to scupper resources in a relatively short amount of time-a classic case of rags to riches to rags again. Stories like these are ubiquitous and transcend ethnicity, background, sexual orientation and religion. It can happen to anyone, a sure recipe for financial ruin is of course outta control spending without regard for thrift, saving and investing in assets. Odumbe frittered a small fortune away by choosing to keep up with the wabenzi instead. Robert Kiyosaki observed that his rich dad invested in assets while poor dad invested in liabilities. The outcome of both choices is known.
Assuming that Maurice had sought wise counsel from a financial planner, how would he have fared? Lets go back to in time, to the peak of his career and assume he had that 10 million in cash.
There are numerous avenues through which an investor may choose to diversify their portfolio of assets to include but not limited to equity stocks, real estate-land, commercial and residential properties, government securities, unit trusts etc. According to a research report carried out by city villas, real estate is the most preferred form of investment followed by shares.
This would have been my asset allocation recommendation.
4.5 million—Home
500 K—emergency funds stash
500 K—Operating cash
3 million—equities
1.5 million—Vehicle
House: 4.5 million back then would get you a 3 bed house in Kilimani/Hurlingham area or a posh flat in Westlands, Lavington surbubs.
Emergencies: Its always advisable to have 3-6 months worth of living expenses set aside in a savings or money market accounts for emergency purposes.
Moti: Since jangos love to floss, 1.5 M would have got him a used 200 Merc or 5 series Beemer so that he can go toe to toe with the best of them.
Investments: Equities were completely undervalued at the time. The NSE index was roughly at 1500 and although GDP growth was at 2% and interest rates hovering in the 20% range, certain sectors of the economy were still thriving eg Banking.
How would he have fared using this approach:
Property values have since sky rocketed. According to the national property index report, some areas in Nairobi have seen 100% price appreciation due to rising demand and short supply. Three bedroomed flats in Kilimani, Lavington, Westlands are now going for 6.5-11 million Ksh!
The NSE has been one of the world’s best performing stock exchange. According to Standard and poor’s, the Index rose 787% in dollar terms from 2002 to 2007. $1 dollar invested in 2002 would equal $787 at the beginning of 2007!
Odumbe Then>>>>>>>>>>> Odumbe Now
4.5 million House>>>>>>>>> 7.5 Million
3 million invested in the NSE >>>>>23.61 Million
Change in Net worth:
20.61 + 3 = 23.61 Million!! The idiot would have had a net worth of 23.61 million!! Today, he close to nada.
In the words of Ben Franklin, wealth is created by industry and frugality. Save, Plan ahead, buy assets which grow in value or produce income not liabilities which loose value and reduce income. Unfortunately for Maurice, the lesson is a bitter pill to swallow but what better way to learn than from experience huh mate?
