Who wants to be a millionaire?
By Akin Monehin
I moved from British Airways (BA) Call Centre in 2001, into a Sales Executive position in Virgin Atlantic (VS) after a nice chat at the lobby of Sheraton Hotel Lagos. I had the drive & energy to make things happen for this newcomer airline planning break BA’s monopoly on the Lagos-London route.
It remains one of my toughest jobs, emotionally, as it hurt seeing the aircraft depart with empty seats month after month. We were unable to get ‘bums on the seats’ except we ran a Promo of 50% off! Even at that my colleagues in Marketing led by Nkiru Olumide-Ojo had to make a lot of noise to get passengers on board!! Travel preference is a habit. At that time, BA was synonymous with traveling overseas. A CIP (Commercially Important Person) I was prospecting told me, “Virgin? What kind of name is that? And that your Richard Branson; is he not a psycho? I can’t even enter his aircraft!” ☹
Virgin Atlantic was a tough sell
All odds were against this ‘start-up’. BA operated 14 weekly flights; daily from Lagos and Abuja. VS operated 4 days a week from Lagos — and everyone wanted options. VS operated in the morning but the market loved to work all day and travel at night, aligned with the BA schedule. BA operated from Heathrow Terminal 4, meaning most customers could conveniently join the London Tube to Central London. On the other hand, traveling with VS meant you had an additional 30 mins on the Gatwick Express (Surface Train) to Victoria Station, before joining other public transportation. Gatwick Express was GBP15 one way. BA had the “Bed in the Sky”, the first fully flat bed in Business Class, while VS had a reclining seat (we argued that aircrafts fly at an angle, therefore, your seat is actually flat while flying — seriously? Lol).
“Akin, take it or leave it! I didn’t offer you employment to make you rich. Employers only try to make staff comfortable”
I worked so hard, together with the pioneer team, to sell this difficult product to the Nigerian market so you can imagine my shock when I was told I would be transferred (& promoted) to Port Hartcourt as Regional Sales Manager Eastern Nigeria with a “paltry” 10% salary increase. I was to recruit staff, set up the City Office, prospect corporate clients, sign-off trade partners, and generally get the new route going.
I considered that salary increase unfair.
Staff earn salaries. Owners share profits
Afterall, I helped make this airline what it is! This airline should help make me what I want to be — rich. Oh whaow. Lol
“I worked so hard. We made so much money and all I get was an 18% increase? I spent all my time, energy & creativity on promoting this newcomer airline and all I receive is a salary”
10%? I was disappointed and furious. I have been to Port Harcourt only a few times. It wasn’t a city I was familiar with. I demanded at least a 100% salary increase amongst other demands (OMG! Lol). My boss then, Country Manager Peter Barry, after trying to persuade me for a few days got quite pissed. He was tired of hearing me whine. He looked me in the eye and said, “Akin, take it or leave it! I didn’t offer you employment to make you rich. Employers only try to make staff comfortable. You need to understand that Staff earn salaries. Shareholders share profits”.
Peter, being a very considerate person that he is, eventually made a case for me at the UK Office, speaking to Anna Robey, HR Manager Outstations. I got about 18% increase and relocated to Port Harcourt.
The product improved. We moved to Heathrow. We had daily flights. We slammed BA. But I struggled with the reality of Peter’s statement for a few years. “I worked so hard, we made so much money and all I get was an 18% increase? I spent all my time, energy & creativity on promoting this newcomer airline and all I receive is a salary”.
“You are unlikely to become rich, or live your dream life, if you remain an employee for life, rely only on your salary, and plan to live off your pension when you are no longer employable”
Salaries are indeed what we receive when we give our most valuable resource, time, to our employers.
Staff Salaries impact a firm’s profitability
As I gained more work experience, I understood that salaries are costs/expenses on the P&L. Smart business managers aim to keep that low to maximise shareholder profit. You are therefore unlikely to become rich, or live your dream life, if you remain an employee for life, rely only on your salary, and plan to live off your pension when you are no longer employable.
I shared a part of this very funny story over the weekend in an MBA Class, “Analysis of Business Problems” at the prestigious Lagos Business School. The conversation was energetic, as about fifty (50) switched-on middle level managers, led by Yetunde Ajayi Anibaba, a Professor of Management, tore a case study apart.
“Self-Employment is not the same as being a Business Owner. Huge difference”
I would like to share six (6) streams of income, in addition to salary, to help you become more financially stable (& probably rich). It’s never too late to start. You can start now. You should not learn the hard way, like I did 😊
This is from my experience, gleaned & adapted from several sources (referenced):
Seven (7) Streams of Income you should aim at
1. Earned Stream — As most of us do not have parents that hand corporations over to us after graduation, many work for Business Owners. Earned Stream of income is, therefore, your salary. It is something you earn as you wake up every morning to add value to someone else’s dream. It’s not a bad thing. It is popular and quite a good place to start your journey to being financially free.
2. Profit Stream — You usually make a profit when you become “a participating broker”. There is information asymmetry in every economy; you have access to products/services that someone is willing to pay for. The economic benefit received from such transactions would normally cover your cost and earn you some profit. An example is buying clothes from Vietnam and selling in your country at a higher price. You are likely to make a profit doing so.
“If you work 9–5 but get home to watch Netflix, socialise over the weekend, without pursuing your personal goals then it is not really about being tired or busy but being uninspired about your future”
3. Interest Stream — This is a major way banks make money (called retail banking). They pay you interest on deposits. Then lend the money you deposited to third parties at a higher rate. Simple but value-adding framework. You can legally do retail banking too. Check your local Usury Law for boundary conditions.
4. Dividend Stream — Many dedicate a percentage of their salaries, bonuses & pay increases to buying stocks/shares. This is good practice. Companies will usually pay dividends periodically. Dividends can be more shares, cash, or even property. Re-investing these compound your initial investment. You will be surprised how much value that adds. Think long term.
5. Rental Stream — This is money received from tenants who rent your property. Location matters most. If you are building from scratch, building materials & labour cost roughly the same in the cities, where you earn higher rental income than in the suburbs. However, strike a balance as urbanisation has turned several suburbs into cities. A mentor invests heavily in the choicest locations because he plans to live off rental income. Property is a huge investment. Reality is that many may not be able to own more than 1 in their lifetime. If that is the case I advise you design your home in a way you can still share with tenants while maintaining your family privacy.
“I’m not sure Dangote’s passion is selling bags of cement nor Adenuga’s passion is selling Sim Cards”
6. Capital Gains Stream — Whether you invest in the heart of the city or the suburbs, your property will usually appreciate because of population growth. Many do not recognise that gain as an income. However, it is value-adding because it has increased your net worth, and made you wealthier. You can tap into the value using Shared Appreciation Mortgage. Bonds & Funds gains are more popular with Margin Financing.
7. Passive Stream — This is not ‘Self-Employment’ but ‘Business Ownership’. Huge difference. This happens when you keep earning even after ‘the work’ is completed. You sleep, you earn money. You wake up you earn money. You turn up you earn money. You don’t turn up you earn money. You travel, spend time with family and loved ones while money keeps coming in. You will agree with me that this is the level to be in. This is the level you attain then you begin to ‘pay salaries’ and ‘keep profits’ 😊
Streams 2–6 qualify as ‘side hustle’. That is what you do outside your 9–5 commitment (ie Earned Stream). Someone told me some time ago that if you work 9–5 but get home to watch TV & Netflix, socialise over the weekend, without pursuing your personal goals then it is not really about being tired but being uninspired about arriving at the future you want.
Perhaps some of us haven’t even envisaged that future yet.
“A decent income with no pressure to impress others is a potent combination for saving a ridiculous amount of money”
Being a successful Business Owner, for me, is the most important piece for a stable financial future. And that doesn’t mean you quit your 9–5 but it usually means that you do have to. However, a family business may be run by a spouse or sibling, or you might be in a venture with trusted partners, some of whom are operating it full time. A note of caution, however, is to be ethical and professional while ‘hustling at the side’. If not done the right way, you will get in trouble and probably lose everything including your reputation.
Passion is overrated
You can build a business around your passion however I believe that passion is overrated. For financial security, follow your passion if & only if customers are willing to pay, now or in the near future, far more than your production cost, otherwise you will be broke in no time. If you are really ‘passionate about your passion’ 😊 but customers are unwilling to pay the premium, I would advise you to start a Profit Stream with what customers are willing to pay for then get it to fund that passion.
It’s just common sense, I guess.
Alhaji Aliko Dangote, the richest man in Africa manufactures Cement. Dangote Cement made USD350m profit in 2019, making it the most profitable company in Nigeria. A friend of mine that knows someone that knows someone that knows him 😊 says he is not sure Aliko’s passion is Cement (or other products he makes, like Salt or Sugar or Spaghetti). I saw a similar comment online. I agree. I am also not sure the Communication giant, Otunba Mike Adenuga, whose Globacom received USD1.2b as sales revenue as far back as 7 years ago has a passion for selling Sim Cards or Mrs. Folorunso Alakija, one of the richest black women in the world, who is worth USD1b is so much in love with that smelly, sticky, and hazardous crude oil, which she produces. I haven’t met any of them (yet) but I believe they are passionate about creating value customers are willing to pay for. They are probably fanning a passion right now so be careful how you insist on building a business around your passion!
“It’s good to have a job but you should not continuously work for money. Rather, you should put money earned to work for you, so when you turn up, or do not turn up, you are making money”
I read somewhere that a decent income (Earned Stream) with no pressure to impress others is a potent combination for saving a ridiculous amount of money. From my previous article however, there is no point saving money for saving sake as it often results in negative profits. You might as well just spend it and feel good about it.
You should not continuously work for money. Rather, you should put your money to work for you, so whether or not you “turn up”, you are making money.
About the Author
Akin Monehin (MBA, Strategic Management — Chicago Booth) is a thought leader, business strategist, writer & speaker.
He is a 2015 recipient of Choiseul Institut France’s Award of Top 100 African Business Leaders under 40 Years Old. He has worked in over 10 countries including French and Arabic speaking ones. He has the privilege of work experience from the following leading organisations:
- Qatar Shell GtL Ltd — The world’s largest Gas to Liquid Plant
- Virgin Atlantic Airways Ltd — one of the most innovative (& fun) businesses
- British Airways PLC — the world’s favourite airline
- The Shell Petroleum & Development Company of Nigeria Ltd — the pioneer in oil exploration & production in Sub Sahara Africa
- Nigeria LNG — one of the world leading producers of Natural Gas
He currently works for Shell Nigeria Exploration & Production Company(SNEPCo) as the Business Transformation Manager. He is based in Lagos and can be reached on firstname.lastname@example.org
Views expressed in this article are personal and do not represent the views of SNEPCo, Royal Dutch Shell or any institution he is affiliated to.