Young and restless: Why Kenyan youth love get rich quick schemes

Their motto is impossible is nothing. They are sure that even with the dark cloud of destitution blowing across oceans to every hamlet and hanging ominously over humanity, becoming millionaires is just one get-rich-quick scheme away. They are the reason pyramid schemes and dubious multi-level marketing plots have spread fast across the country – why con men have managed to make away with millions of shillings before their scams collapse.

They are the youth of Kenya, and for them, investment is all about the thrill. The idea of ‘get rich, or die trying’ is not too far removed from their reality. According to a White Paper on consumer financial education with respect to capital markets – which is the part of the financial system that raises cash through the sale of shares, bonds and other long-term instruments – when young people think investment, they think get rich quick.

Instant millionaires

Crowd1 is the newest investment craze sweeping across social media, and its model of success is, like many before it, quite simple – the more people you recruit, the more money you make. The pioneers profit off the newcomers and boost the scheme’s spread. It is not based on any solid product or service, and predictably, it promises to make the masses instant millionaires. The findings of the White Paper are intended to inform a national consumer financial education strategy, according to the Capital Markets Authority (CMA). Among the habits, the report uncovered is the youth’s inclination to gamble in an attempt to multiply their wealth quickly.

“Youth in business are biased towards get-rich-quick schemes and purchases that provide immediate gratification, and as a result many are involved in betting and the lottery, and frequently use expensive digital savings and credit platforms,” the report notes. And this isn’t something exclusive to entrepreneurs – even those who are employed will use their incomes to support a lavish lifestyle. “For example, youth in formal employment prefer to purchase tangible assets, such as cars, home electronics, clothes with designer labels and home furnishings depicting their ideal image,” reads part of the paper published earlier this year.  True to form, a majority of young people, despite having little money to lose, will accuse savers of entrepreneurial cowardice.

They are driven by the blazing spirit of YOLO (you only live once) and will jump headlong into schemes and platforms that promise to double, triple or quadruple their money. And even if this dream is not realised, they still plan on making the most of the cash and time they have, taking loans to buy or kit out colourful vehicles that will speed past other cars on the highway. On the other hand, those who are over 50, retirees, Kenyans in the diaspora, high-net-worth individuals and foreigners tend to have more conservative financial habits, with most of them investing in the capital market because they understand it.

“They are keener at emphasising prudence in decision-making. This can be seen in both their income sources and in their expenditure patterns, savings and investment choices, and in their choice of influencers,” the CMA report says. In contrast, people with windfall gains (such as professional sportsmen, musicians and winners of sports betting jackpots) tend to be spontaneous in their financial decision-making. Among adults, the report found that women are better savers than men, while men take more risks than women.

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