Safaricom CEO Bob Collymore on how to create lasting  wealth

On December 1, 2011, slightly over a year after I took over as the CEO at Safaricom, share price touched a record low of Sh2.80 -- almost half the Initial Public Offering price of Sh5 apiece. Today, Safaricom is trading at a high of Sh21.75 per share.

This journey, which has taken us over half a decade, has taught me a lot about the wealth creation process.  

PATIENCE IS A VIRTUE

Wealth creation is a long-term thing and should never be thought of in terms of a quick win. Warren Buffet said, “If you’re not prepared to own a stock for 10 years, don’t even think about owning it for 10 minutes.”  Some Safaricom investors bought the shares at the IPO at Sh5 expecting a quick win but ended up panicking and selling at Sh2.80 as the stock hit its lowest point. The patient investor, on the other hand, hung on, received Sh3.08 in dividends over the same period and has seen the value of the share quadruple to its current price.

DON’T PUT ALL YOUR EGGS IN ONE BASKET

Most smart investors will spread their risks, investing in different currencies, geographies, asset types (property, shares, government bonds) because life is unpredictable.

Currencies fluctuate. Companies deliver unexpected results. Political risks exist everywhere. You want to ensure that you have enough bases covered to cushion against shocks.

At Safaricom we also spread our risks, having invested in different revenue streams like M-PESA and the innovative Okoa Jahazi at a time when most mobile operators around the world are focused on defending limited revenue streams like voice.

Today, M-PESA and Okoa Jahazi account for more than a third of our revenues and are growing at a good rate whilst mobile phone companies around the world are increasingly concerned about where their growth will come from.    

TIMING IS EVERYTHING ...

... but don’t let it hold you back.  Countless would-be shareholders waited in vain for the Safaricom share price to go lower than Sh2.80.  Today they have little to look back on except regret.

INTEGRITY MATTERS

Accumulating wealth at the expense of integrity is often attractive to those wishing to make a quick buck, but that wealth will never really be yours and your past will always catch up with you or your offspring.

IT’S NOT ALL ABOUT MONEY

The triad of Health, Wealth and Happiness is important. Many people live with one or two of these, but the ultimate aim, surely, is to have the perfect balance of all three.