1. CHAMPIONS CONFERENCE 2007 University of Cape Coast 13th April, 2007
INVESTMENT: PROSPECTS & CHALLENGES Dr. Yaw Perbi Cert. (GSE), B.Sc. (Med. sci), M.B., Ch.B.
CHAMPIONS CONFERENCE 2007
University of Cape Coast
13th April, 2007

2. ? HOW LONG WILL IT TAKE $1 TO BECOME $1 MILLION AT 0% INTEREST?
BRAIN TEASER!!
Interest Rate
Time in Years
$1 One Time
$1 Everyday 5%
284
100
10%
145 56
15% 99 40
20% 75 32
Adapted from Robert Allen’s book Multiple Streams of Income
? HOW LONG WILL IT TAKE $1 TO BECOME $1 MILLION AT 0% INTEREST?

3. BRAIN TEASER!!
“It is a wise man who bites into a bone when you give him an egg” (Ghanaian Proverb)
What does this mean?

4. OVERVIEW… PARABLE ON PARLANCE: WHAT IS INVESTMENT?
PLACEMENT: WHERE DOES INVESTMENT FIT IN MY LIFE?
PROBLEMS: WHAT ARE THE CHALLENGES?
PROSPECTS: WHAT ARE THE CHANCES OF FUTURE SUCCESS?
PATHWAY: HOW DO I GO ABOUT INVESTING TODAY?
PARABLE ON PARADISE: WHAT IS THE ULTIMATE INVESTMENT?

5. PARLANCE & PARABLE: WHAT IS INVESTMENT…what’s not?
Parable of the Ten Minas (Luke 19)
Investment: “Put this money to work.”
Making your money work for you
And money works HARDER and LONGER than you ever can!
Savings and Investment are NOT the same?
Savings is putting your money to sleep…Investment is is giving your money shoes to go out there and work for you!
Savings is only a PRECURSOR to investment
The LEAST you could do is SAVE; the BEST you should do is INVEST!

6. PLACEMENT: WHERE DOES INVESTMENT FIT IN MY LIFE?
EMPLOYEE
BUSINESS OWNER
SELF-EMPLOYED
INVESTOR
Adapted from Robert Kiyosaki’s Cashflow Quadrant

7. BRAIN TEASER!!
WHAT COMMON WORD DO YOU FIND IN EACH OF THESE FOUR CATEGORIES?
“I have invested large sums of money in many different businesses and industries, but I earned this money in the business which represented my definite major purpose, the oil business.
“No part of my attention has been given to any of the other industries in which I have investments. My capital works for me in those industries, but my personal attention has remained always in my original business i.e. the oil business” (John D. Rockefeller)

8. PLACEMENT: WHERE DOES INVESTMENT FIT IN MY LIFE?
Adapted from Robert Allen’s Multiple Streams of Income

9. PROBLEMS: WHAT ARE THE CHALLENGES?
POVERTY
POCKET (MONEY)
PARADIGMS (MINDSET)
PURPOSE
PRINCIPLES
PERSONALITY
PLAYING FIELD

10. PROBLEM I: POVERTY CHALLENGE
POCKET (MONEY)
In 1990s 50% were poor i.e. lived on less than ¢900,000/year (GLSS)
Current per capita income: $500 vrs. South Korea $14,000
(US=$39,000; Norway=$54,000)
“I don’t have enough to ‘chop;’ how much more to invest!” // I’ll invest left-over (surplus)
PARADIGMS (MINDSET)
‘HIPC’ Mentality (Poverty alleviation vrs. Wealth Creation)
“Money matters are for the ‘experts’”
Going to school is a guarantee you’ll be rich
‘The poorer the purer’
“Valuables” are assets
“I’m from a poor family” ”// “It’s the government”

11. PROBLEM II: PURPOSE CHALLENGE
NO STRONG WHY
NO S-M-A-R-T FINANCIAL GOALS
5 NEEDS OF LIFE: Link (up with God), Live, Learn, Love, Leave a good legacy
NOT ENOUGH!: HIGHER, GOD-GIVEN PURPOSE!

12. PROBLEM III: PRINCIPLES CHALLENGE
FINANCIAL ILLITERACY: Many important things in life are not taught in school
“Practical money management, savings and investment is not taught at school, suggesting that you can be even be a professor and not have a grip over money management and investment” (Hon. Kwadwo Baah Wiredu, Min. of Education)
NAIC PRINCIPLES
Invest regularly, regardless of market outlook  Cedi Cost Averaging
Reinvest all earnings  Law of Compounding (Rule of 72)
Invest in growth companies
Diversify to reduce risk

13. PROBLEM IV: PERSONALITY CHALLENGE?
PATIENCE vrs. Quick Money Syndrome
Law of Process (Warren Buffet)
MATERIALISM vrs. Secret of the Rich
CHARACTER
“Fortune does not change men; it unmasks them.” (Suzanne Necker)
Character is the container…
HOLISTIC
Health or wealth?
“Best thing you can do for the poor…the worst you can do to yourself.”

14. PROBLEM V: PLAYING FIELD CHALLENGE
Retail/Consumer Banking > Investment
FEW LDMs in Regions
Inadequate variety of investment products
M-Fund OR E-pack/Horizon/Fortune/Gold Fund
Immature Bond Market
Tiny Capital Market
30 compared with Club 100 or S&P500
Always over subscribed

15. PROSPECTS: WHAT ARE THE CHANCES OF FUTURE SUCCESS?
PURCHASING POWER EATER
PEANUTS
POVERTY-BREAKER
PROSPERITY
PENSION
POSTERITY
PAN AFRICAN INDEPENDENCE

16. PROSPECT I: PURCHASING POWER
An ‘animal’ that is a Purchasing Power Eater: INFLATION
¢100,000 in 1990  ¢7,000 in 2000
History of average annual returns in Ghana ( ) and USA ( )
INVESTMENT
RETURNS (%)
Shares
42.51
Treasury Bills
35.00
US Dollar
34.57
1 Year Bonds
30.15
Inflation Rate
27.37
INVESTMENT
RETURNS (%)
Stock
10.5
Treasury Bills
3.7
Long term Bonds
5.2
Inflation Rate
3.1
Courtesy: 70-year Ibboston Study
Courtesy: Databank

17. PROSPECTS II, III, IV: PEANUTS…POVERTY-BREAKER..PROSPERITY
PEANUTS ~ Until such time that salaries will be worth more than peanuts…INVESTMENT
POVERTY-BREAKER ~ The ONLY way to WEALTH is on the right side of the Quadrant
PROSPERITY ~ Having MORE THAN enough

18. PROSPECTS II, III, IV: PEANUTS…POVERTY-BREAKER…PROSPERITY
THE DANIEL OFORI EXAMPLE (2006)
COMPANY
NO. OF SHARES
DIVIDEND PER SHARE
INCOME
GCB
(3rd largest with 6.26%)
10,333,972
¢550
¢ 5,683,684,600
UNIL
(3rd largest with 5.51%)
3,445,637
¢1,050
¢ 3,617,918,850
CAL
(16th largest with 0.37%)
591,200
¢75
¢ 44,340,000

19. PROSPECT V: PENSION
“Financial independence is the most over-looked achievement in everyone’s life.” (Venita Vancaspel)
In US: For every 100 persons at 65 years
Only 2 are financially independent
23 MUST continue working
75 DEPEND on friends, charity etc.
BLAY MACKIN:
State Sword & Maze Bearer
Retired in April 2003 after 44 years as civil servant
PENSION: 1.2 million; Monthly ¢106,000 for family of 7 (Joy Headline News, 15th May 2003)

20. PROSPECTS VI: POSTERITY
“A good man leaves an inheritance for his children’s children”
Ford Foundation since 1936  >$100 million yearly to needy causes
FOUNDATION
ASSETS
Bill & Melinda Gates
> $ 24 billion
The Ford Foundation
> $ 9 billion
David & Lucile Packard
> $ 6 billion
W.K. Kellogg
> $ 5.5 billion

21. PROSPECT VII: PAN AFRICAN ECONOMIC INDEPENDENCE
EGYPT
Hidden domestic savings ($241 billion) = 55x FDI in 20 years (Hernando de Soto)
WORLD AID & THE POOR
“The value of savings among the poor is, in fact, immense: forty times all the foreign aid received throughout the world since 1945”
“In Haiti, the poorest nation in Latin America, the total assets of the poor are more than 150 times greater than all the foreign investment received since the country’s independence from France in 1804”
“If the United States were to hike its foreign-aid budget to the level recommended by the United Nations—0.7 per cent of national income—it would take the richest country on earth [i.e. America] more than 150 years to transfer to the world’s poor resources equal to those that they already possess.” (Hernando de Soto)
ACRES OF DIAMONDS

22. PATHWAY: HOW DO I GO ABOUT INVESTING TODAY?
Resolve not to be poor! Value every cedi!
Start 10/10/80 TODAY!
Be consistent; think LONG term!
Invest in investment knowledge
Start an Investment Club
Build an investment culture~regular habit
Learn-by-doing investment
Learn-and-earn over time while having fun!
Go to Databank on Monday
SDC Campus Mutual Fund is here!

23. PARABLE ON PARADISE: WHAT IS THE ULTIMATE INVESTMENT?
The young, ambitious graduate & the old man
…AND THEN WHAT?
…I’ll say to myself, “You have plenty of good things laid up for many years. Take life easy: eat, drink and be merry.”
“But God said to him, “You fool! This very night your life will be demanded from you. Then who will get what you have prepared for yourself?”
“This is how it will be with anyone who stores up things for himself but is not rich toward God.” (Luke 12:19-21)

24. CONCLUSION: “SEE YOU ON THE GOLF COURSE ON MONDAY MORNING
CONCLUSION: “SEE YOU ON THE GOLF COURSE ON MONDAY MORNING!” “SEE YOU IN YOUR GRAND MANSION ON THE OTHER SIDE OF THE JORDAN!”
THANK YOU!!