Opinion by Paul Chikondi Nguluwe
Are you 45 years of age and above? Have you been itching to start a business, but capital has been a big challenge? Are you aware of the new development that has resulted from the Pension Act Amendment Advocacy that has been going on for the past two years?
I am here bearing some eye-opening news. Before I share that which I have for you, let me start by quoting what Robert T. Kiyosaki says in his book “Retiring Young; Retiring Rich” which happens to be a book I am enjoying this Easter. Kiyosaki says, “If you have money sitting in the bank in your savings account or a retirement account, then others are using your money as leverage.”
You see, in this book, he talks about the difference between the rich and the poor in the way they use leverage at their exposure. Recently, it has been mentioned that about 1.7 trillion in pension money is idle, as in not in active investment. This, ladies and gentlemen, is the money that you and I get deducted every month-end plus our respective employer’s contribution. It therefore should pinch your heart if you are struggling to raise a capital for your business, yet someone somewhere is using your pension money to invest. Sadly, the returns from such investments are heavily distributed along the way before that portion is doled out to you.
If your answers to the questions that I opened with are nothing but yes throughout, then I don’t see the reason why you should continue struggling with raising a capital. In the new Act, there is a wonderful clause that if properly leveraged, it can lead to a transformation of your financial life as you are heading towards retirement.
Section 91 of the Pension Act, 2023; under the Lumpsum Payment of Benefits, subsection 2 point (a) says, and I quote: “where the member has retired or has five or less years to retirement age, up to fifty percent of accumulated benefits;” Among the many things the fight for Pension Act Amendment was waged was to bring about a legal system that would foster financial freedom among retirees. I therefore deny that getting monthly annuities that are less that Government recommended minimum wage is a way to address old age poverty.
Fortunately, the battle was won, and we got the change we fought for. So, what next??? It is time to leverage the new Act now. The provisions like the one I have cited above were crafted specifically to benefit retirees. Let me point out though, that the benefit will only be realized if the qualified ones act prudently in leveraging the new legal framework.
If you are forty-Five or above therefore, I think it is about the right time to revisit those wonderful business ideas; analyze them to see if they are still viable and then pounce on the opportunity that has availed itself through a somewhat favorable legal framework. I am not much of a person with good business ideas. However, I think this year, food might be a big shot.
For instance, you may buy foot stuff like maize, Soybean, Beans, Rice and many more that we regularly consume. This year, such products are likely to fetch a fortune. If farm-gate price for maize is MK500.00 per KG, imagine how much it would fetch in lean season. You may as well imagine how much a KG of processed maize would fetch you. Of course, there is need to consider all necessary market analysis issues to avoid jumping into a business misinformed.
If you are forty-five and above, what are you still waiting? What are you afraid of? Some might be thinking like, “why don’t you do that yourself and the team that spearheaded the fight?” One funny fact is that the majority of the team that formed the leadership is less than forty-five and therefore does not qualify.
In my case, I am about Nine Years from qualifying to benefit from the provision I cited above. Nevertheless, the fight was worth it. Thus, we had to take. However, Two-year long efforts will be meaningless if people that qualify now do not leverage the new legal framework.
Like Kiyosaki said, “If you have money sitting in the bank in your savings account or a retirement account, then others are using your money as leverage.” It’s either you double your old age insurance by investing some of your pension money on you own or let someone use so that you languish in poverty later on when you retire and get those monthly insults.
Don’t be someone’s leverage, rather, grab the opportunity and leverage the new legal framework. The energy you have now will at some point vanish. The danger is to let your energy vanish along with your money, time and opportunities you can leverage now.