This Investment Secret Makes the Rich 10x Richer (Don’t Invest Until You Watch This!)​Why it works

All right. Hello there. Thank you so much for joining us right here. This is Power Talk Show. You can always engage with us on our social media and absolutely let us know your thoughts and your feedback especially in today's conversation in just a bit to your sharing our engagement question of the day. So we also want your feedback and your thoughts on it. The hashtag is power talk show at Brian Sak 101 and at Y254 channel. Now today this topic concerns you. We delving into matters investments for you before you take that first route and first step. What do you need to understand? I definitely absolutely believe you need to understand the market first. the risks and also uh the the regulations too as well but especially when it comes to right here especially the Gen Z and the youth the get-richqu mentality and especially also what are some of those common scams that Kenyans fall for are you a victim are you in that route as well of investment what's currently happening where you are please let us know once again through our hashtag which is power talk show and at44 channel and feel free to tag me too as well but we'll sample the feedback as the show continues and I'm being joined live in studio by a powerful guest I'll be speaking with Freda Kani. She's a financial wellness coach alongside Ian Tomu. She's a capital markets and security analyst. Great to have you here again. Uh for Freda, lady and gentlemen, great to have you here again. >> Thank you very much. >> Thank you Kibonisana. uh to kickstart this conversation. If an ordinary young Kenyan and I'll start off with you Freda, if they want to ask you about the route of the journey of investment, what should they know first before they spend that first shilling or that first thousand bob into the markets? Uh first of all I would actually advise anyone starting investment get to know your status first so that you don't invest money meant for your other personal needs and now you start getting uh stressed that you're not even able to pay your house rent. So the first is analyze your income and look at how much you have currently so that you're able to aortion it the basic needs and also look at how how much you will invest. >> Right? So investment is not something you need to rush into. >> It's something that you need to sit down, analyze and invest. Right. >> Right. >> So at least a critical study or a research or find out of how the market works before you take that route. Right. >> Yes. >> Yes. And and let me ask you cuz uh Ian, you're an expert into that world also. Maybe what was the first I don't know if as an expert are you allowed to invest uh if you've ever gone that route uh what did it teach you about the markets and how does it go if you to explain to any ordinary Kenyan watching this conversation >> first of all I'll start by um answering the question you just asked yes as an investment professional I'm allowed to invest >> and it beats the case if I cannot invest because how do I practice it >> so um >> something I learned while I was starting investing investments personally is that all investments are not the same. And as you're getting into investments, you should have an understanding of what you're investing into because you have short-term investments. We have medium-term investments. We have different asset classes from money markets to stocks to bonds. All these investment classes serve a different purpose. And the more you get to understand it well, the better you have you the better the chances of you using it as a good tool. >> Yeah. And on our engagement question of the day, we are asking you if you had a 100K that is 100,000 K shillings, what I believe it should be where should you invest in and please feel free to share your thoughts and your feedback on this question. If you had a 100K, what or where would you invest in? We'll be sampling your feedback as we continue. But let me ask you uh still where are the common avenues that the current ordinary Kenyan is investing in that are giving a lot of returns especially right now in today's economy and in the current market. Um Ian >> well I'd start off by saying money markets is still alive and kicking. It's a really good avenue where Kenyans are investing in especially because the the the minimum investment is quite low and anyone can participate in it. Something very interesting that's equally coming up is the sort of access that CMA has given to everyday investors. We all know of the application that was launched through Safariccom just the other day which enables us to it's called ZDI which enables us to buy shares from as little as one share of a company and you've seen the results coming in sh um Kenyans are already really uptaking that as well. So we have ownership in shares, we have money markets, special funds not so much because it has a higher minimum requirement in terms of capital. But yeah, we have those two which they're really uptaking plus bonds. >> The government bonds have been performing pretty well and steady for a long time. >> Yes, if you to advise a Kenyan Jenzi watching this conversation on how they can capitalize in any of the maybe the MMFs and the T bills as well and the treasury, what would you break it down to them that they need to understand before they pump in their money. >> Okay. Um, based on what you're going for, you need to understand your investment objectives, right? So, the money you put in an MMF should be treated differently from the money you're putting in, say, a stock. Why? An MMF can be your emergency fund. You can put money in today, get it out tomorrow if you have an emergency. You can put in money today, get it out in a month, maybe because you've done some sort of planning for your finances in the near term. >> If you're investing in something like stocks, it's not the same >> because these are things that this is growth or value investment. So, you're looking to allocate your money somewhere where you need to see growth in a longer time frame. So if you say have 20,000 which is your emergency money, don't put it in stocks because by the time you maybe even need it, the stock might have been uh might have plummeted a bit, you know, so it kind of gives you um investment anxiety, >> right? >> Yeah. >> Freedom, I'm coming to you. Don't worry, hold your horses. I know you have some good insights, too, but I'm coming to you for for the purpose of of of understanding what is the which one is more riskier, a money market fund or a stock? And what makes it that way? >> Well, a stock is more riskier >> because share prices change with regards to information that the market um disseminates each and every day. So, you'll never find a share price staying the same for an entire 24-hour period. Um there's a lot of information that share prices usually reflect. So, it's more riskier. And in the investment landscape, we usually say higher risk, higher return, >> right? >> But it's more or less like a riskreward trade-offs, right? So, if you're going for a less risky approach and you want consistent income or returns, you better take the money market fund route or the bonds route, right? >> Because there you have a fixed income that you can even plan with beforehand. >> In stocks, it's different, >> right? and and Freda for a Jenzi so to say I believe everyone is a genzi at this point for a ji who's earning maybe on a salary bracket of let's imag margin creatively 25 to 50k >> and they're interested to go on this journey of investment um are they equitable to it is it worth it and also from a finance uh wellness coach perspective how do you advise them to take on this journey 25 to 50k roughly yeah >> so uh The journey of investments doesn't matter how much you're earning >> because you can start small and grow it. >> Right? >> The beauty about investing is you are multiplying something. Something is growing. If you put in money markets, you're earning interest. No matter how small it is, you're earning on a daily basis. >> So the thing is anyone earning small, you start small, >> right? >> Analyze your income and be able to put aside amount that you're investing on a monthly basis. M >> so that you're able to multiply that money. Actually the essence of investing is multiplying your money >> because the moment you put in money market 20,000 you get interest it keeps on multiplying that money. There's a lot of um compounding cuz you see you get the interest it's loaded into your amount. So you get you your money is compounding. So the fact that you have small amount should not deter you. There are many avenues. He talked about Zindi. That's something that you can actually be pushing your money on Empessa, >> right? >> Yeah. You don't need to go to any stroke uh brokerage and they've really simplified matters right now for everyone. So, uh no matter how much you're earning, >> look at what do you want to achieve. And I tell people whatever small you're earning, start by building up your emergency. Start small with money markets and then now you move to other avenues that you're able to do bigger. For example, you can do uh stocks >> and I the minimum is 50,000, but you can go stock uh not stocks, sorry, uh bonds. Yeah, the minimum 50,000. You're able to save when you reach there. You can now put your money into bonds, >> right? >> There's 90 days, there's 365 days depending with your purpose. >> What do you want to do with the money? Tie any investment with a goal. >> Yeah. >> Set the goal first and then now you put money into it, >> right? >> Yes. If you are to help um person who is juggling debt and also maybe the income is not regular or maybe they're running a business a small theme or maybe a startup the income is not consistent it can come this month like 100k next month 50 another time it's 30k how would you advise them to uh let's first of all kill the debt help them kill the debt and also how do they juggle between having to sustain this debt and then investing into the markets and having returns >> I would advise advice anyone don't take a debt to invest. >> Mhm. >> Because you have to look at the rate of return. >> Right? >> You might be taking a debt that is higher in terms of the interest rate is very high but what the investment you're putting into will not give you more than the interest that you're paying. So of course that is a loss. >> All right. and and um if you have debt there um there's like a a way that you can pay small. I tell people what you do start with the high interest rates loans. pay off that one so that you remain with the favorable loans that you're able to pay and then as you pay I call it snowball um is it called snowball uh method >> where you start with the big ones and then it's it's piles then you remain with the small ones right >> so that you're able to actually um you know then the interest is very high of course it's very expensive so if you're able to finish that one and come to the low interest rates then that is better number two even as you pay that and set aside money. >> If you are getting 30,000 or 50,000, set set aside money for investing. Even if it means it's 3,000, 1,000 >> and I like women because you go chamas and the rest, you know that those if you're very intentional about those money, it can really help you because you go I know chamas you go around Mary go rounds but by the time you get that 50,000 what are you using it for? >> You can decide to put it into the the the bones. buy bonds and leave it there. >> So it depends with how you put aside money that you will invest, >> right? >> Even if you continue paying the other loans from your income, set aside small amount. Start small. Even if it's 1,000 every month, >> as you finish the other loan, the money is becoming freer, >> right? >> Once you have more money, you can now invest more, >> right? >> And for Jenz's, I would advise people to practice delayed gratification. >> Mhm. Are they willing? Cuz you know genesis are all about feedback. You know many many genesis will talk about you only live once. >> Yeah. Which is true. >> Yes. You only live once but you only live to the extent that you build. >> Mhm. Right. >> There's no way that I'll finish everything. What happens tomorrow? >> Right. >> So you you Yes. We live once and to the extent that I built >> if I'm able to practice delayed gratification in the next >> um 10 years >> 10 years you're receiving interest so much interest that it can be able to sustain you >> right >> so it means that you have more money you can actually leave that ones that you want >> so you can live to the extent of what you're building >> right >> yes >> right so having long-term goals about where where do you want to find yourself in the next 10 years just in case the economy collapses So things change but it's interesting because for an IPO and you'll explain it into details that's offering it's dangling so many striking goods for people to you know come through and invest in uh should I drop a name of course the Dangote refinery is currently trending on the market here. >> Is it a is it a good move to take that route and invest in in its early initial stages? What are the risks you should look out for as a common ordinary Kenyan who wants to go that route? >> Well, even before we talk about the Dangote IPO and just to clarify, an IPO is an initial public offering. So, this is what happens when a company is coming from a privately held shareholding to a publicly held shareholding. So, it gives people the opportunity to be part and parcel of the company >> to buy shares. >> Yes. To buy shares. So, an IPO is a really good thing, but how you look at it equally determines if it's going to work for you, >> right? >> I' I'd advise people to go for an IPO, especially for companies that have a really strong history in terms of we know what their business model is. We know how they make money. They've had consistent revenue. There's still room for growth for such companies. Why not? But as you're going for an IPO, the aspect of time is very important >> cuz you wouldn't really expect to get into an IPO, say like the Dangote IPO we're getting into today. If you have a if you have a time horizon of 3, four, 5 years for your investments, I mean, the share price will have settled into the fundamentals. So, it's a good thing to do and it can have um long-term benefits. However, I'm a strong believer of the fact that the I the initial stage of an IPO is usually shaky because this is when the company is going public. There's a lot of new information that will hit the market which will affect the price of that IPO and how it trades within the few months, right? So, you'll see a lot of volatility >> just like the Kenya pipeline IPO. Would you believe that today the share price of the IPO was N right >> and as of today the share price of Kenya pipeline is still N >> it went >> it has maintained trust as well >> yeah yeah yeah it has maintained it hasn't really dropped a lot but even if I didn't buy it at the IPO I still have a chance to buy it at the same price today >> so um an IPO is very exciting and that excitement equally creates a lot of speculative demand Mhm. >> And when that excitement fizzles out, sometimes that demand drops and the share price follows. >> So invest in an IPO if you may, but make sure you do your research on the company you're investing in, have at least some hard facts that if someone asks you why you in Dangote, you can actually say something about Dangote. When someone asks you why are you in KPC, you can say something to um defend your narrative. just don't invest into it because people are investing into it. There are a lot of IPOs that have failed in the in the past as well. Um but this doesn't mean that IPOs are inherently good or bad. It depends on the IPO, the facts you have, but don't have fear of missing out. You can always buy the stocks at a later price at the IPO price. As long as your fundamentals are right, you'll definitely hit the mark. And Fred, I also want you to chime in on the same as he responds briefly. What makes Kenyans to be afraid of investing in specific avenues? What is the fear specifically about that market of investment? You know, green specifically. Yeah. What are they afraid of? You can you can answer from an analyst perspective of CMA. Um first of all I do believe what they're afraid of is the history of that thing you've said people failed while trying to invest in that specific thing right so there's that information loop that has already been created okay I tried investing in X say someone who invested in Wumi back in 2012 >> and has suffered losses ever since before it picked up recently. So he or she would have some negative prejudice towards Wumi. It's difficult to have a prejudice against the entire market, >> you know, because these asset classes are different and each one of them has their specific story, >> you know. So it's that feedback loop that might have you afraid of taking that step forward. And secondly, it's lack of information because you're only afraid of what you don't understand. >> If you start having a good understanding of something, the fear aspect drops because even mentally you have mental models that would actually um protect you from overthinking your investments. >> So people need to seek more information on the things they want to invest in. >> Absolutely. uh Freda inject. >> Yes, please inject something >> from from uh the history. Um I would talk about uh the nonregulated investments. >> There are so many out there and we've seen people crying and people losing a lot of money. So the point is even as you get yourself into that there are some very um clear red flags on what not to invest into. >> Number one, the ones that gives you quick >> returns. returns. >> Those that don't even have a product. >> I want those quick returns. >> Exactly. But you see, if they're not regulated, your money will get lost and no one can follow it. >> And there are some that will give you a deadline like >> tonight is the last day for you to do it. I mean, >> right, >> raise your eyebrows around that. And then you also there are some companies that will tell you it's an investment yet they don't even have a product or a service they're selling. >> Mhm. >> That should raise your eyebrows. Number three, the last one that I'll say is don't invest because of hype. >> Yeah. >> Don't invest because a group of people are investing. >> So the go is not good. >> No, no, that one is regulated. It is actually going into the stock market. So that one is good. But there are some that people hype, >> right? >> And you get into it. Even if you're getting into Dangote, make sure that you know your motive of investing, >> right? get to know I am investing because I want returns in the next 2 years, 3 years. >> Not something that you want to get it then you panic leave, you lose money. >> And don't make panic um don't panic every time when the market goes down or up because >> there's volatility, yes, but there's a time that you'll stabilize. So don't panic. sell your your stocks for example >> because get information get an expert like him to help you go through that fe decisions out of panic >> out of pressure >> and out of researching and even looking at what what exactly you're getting into but you really painted a good picture fed up I have 100k and I want it to triple equally by December uh how do you advise this person who's thinking in this direction. Is it a good Is it a good move? >> Um, it depends. I'll say it depends because um like for special funds will give you 20 20%. 20%, right? Depending. >> But but that still can get you to a million. >> Yeah, that's what I wanted to say. Yeah. But you see someone promising you that 500,000, >> I would tell someone to raise their eyebrows and be like, are you sure? Because I don't think it's possible for now. unless what I know it's possible is uh stocks because their pricing is volatile can go up or less >> and um and also for a long term I don't know but it is possible when you get the right vehicle that will take you to that place >> but not a vehicle that is neither here or there >> but such information you need the experts >> right >> yes they can analyze the market for you and advise you can get into this talk we've seen it goes up and down. When it's up, you can sell. So, I think it's possible, but it depend with the analyst. >> Ian, what do you make of that? >> Well, if you have rational, >> well, not really. If you have 100k and you want to get to a million in a year, there's one thing you actually have to put in mind. You're chasing very high returns, right? >> And with high returns comes high risk. So you should equally be comfortable with the worst case scenario which is losing your 100k. >> If you're not comfortable with losing your 100k then don't even try go for such sort of returns >> because um what we say is risk is a double-edged sword. It can either work in your favor or work against you because of the volatility aspect that Fred has just mentioned. Right? >> So you need to have a really keen understanding of that. Um, another thing as Freda said, there are specific asset classes that may allow you to achieve returns higher than what the market is giving. And such asset classes are equally inherently >> risky. So say for example, let me give you a good example. Just last year January, January 2025, >> right? >> KPLC was trading at around five shillings per share. >> Wow. last year January >> by five shillings per share. Yeah. By this year January, KPLC was trading at 13.5 shillings. That was already more than 130% return. >> By September, KPLC reached its highest high of 25 shillings Kenya shillings. 25 25 Kenya shillings per share. So someone who invested in KPLC in January last year is already up 354%. >> As of today, >> if you put it in the perspective of what a money market fund can do, for example, if you're doing 11% per year, >> how long will it take you to achieve 354%. >> It'll take you a substantial amount of time, right? You're talking 20 years even plus to get a return that KPLC was able to achieve in two years. >> I get rich with mindset. Are you able to have that conversation? >> Well, now that's up to the person investing. I wouldn't really know what their mindset looks like. But >> is a gen willing to wait until they're 40 to have returns? Really? Well, >> living in a world of convenience gratification, but I'mma delayed gratification will help you a lot here. >> Yeah, delayed gratification really helps. And now that you're talking about Jenz's, I think it's time I equally put in another factor when it comes to investment. >> Age is a very important aspect in your investment journey, >> right? >> And it's always better to start early. Why? Because in your life cycle hypothesis in terms of how you'll be earning if you're 25, 24, 26, you still have like over 30 years to work actively. >> So you should start investing right now. Don't det the the capital markets are very accessible. And um there's usually something we use in the investment landscape to grade clients based off of their age. Younger clients say 35, 36 and below >> should be more inclined towards medium moderate to medium risk investment. >> 352 >> from say 24 to 35. >> 24 to 35. >> Yeah. 24 to 35 40 there about >> Gen Z a millennial. >> Yeah. Gen Z millennial. You're still young. You still have more than 20 25 years to work actively. Assuming retirement is 60 years, right? So you have enough time to invest in moderate to medium risk investments which have an uncorrelated upside, right? So this is your time to um hedge your portfolio. Say if you have um 1 million as your portfolio and you're young, >> you should not do more of bonds >> because bonds are too safe for you. >> Yeah. You should do more of equities, special funds and things that give you a higher return because you have enough time to compound even if the stock market falls. You have another 10 years to just wait for it to go back up as it is its normal trajectory. So the young people should be heavily invested number one in things they understand and secondly in things that give higher returns. >> Yes. Then as you grow older, you're approaching retirement. Now you switch that up where you invest now more in risk-free assets >> and less in riskier assets, >> right? >> It's it's a playbook that has worked for the longest time. >> Yes. Uh should I come to you Freda? Yeah. I wanted to understand as well a bigger picture of what are some of the scams that Kenyans fall for especially you get 500k right now and you're like you know what quick returns in a 1.5 are there like common scams that are notable especially in the financial world that you caution people if you see this and that please type record >> yeah the I would I would say pyramid schemes the ones that you have to earn because you're bringing another person. So they'll call it investment. >> Mhm. >> But the fact is you don't earn if you don't bring people. >> So that's not an investment because you'll put in your money and it's not guaranteed that you'll get even people to bring in. >> Number two, another way of losing your money very easy. >> Mhm. >> Is the unregulated ones. >> So how do you verify that this entity is under CMA? It is actually published in their website. >> Okay. So you should go to CMS website and Google it or sanitary >> Google it. You can get and and and all the information is actually out there. >> It should be public information. >> Public information. >> You agree as well Ian? >> Yeah. Um all financial institutions >> usually have a CMA license number. >> Okay. >> So you'll find there's number 190 number 189. All >> institutions that deal with public funds or finances should have a CMA number. So if you can't find that, if you can't find the company you're dealing with there, >> then you're probably a scam for something really scam. Uh Freda, go ahead. >> Yeah. So if it's not regulated, leave it. >> Mhm. >> Because should anything happen when it's regulated, you have a fall back, >> right? >> Yeah. So you'll get help. >> It's not regulated, leave it. >> Number two, remember this is your money. >> It's not money that you've collected. I normally tell people money doesn't grow in trees >> because but I was asked why do banks have branches >> anyway that's a question for another day but >> if you are able this is your money put it safely in somewhere that you you're able to account for it >> right >> because yeah as I said money doesn't grow on trees you have to work for it and then again another the last one that I would really want to talk about is do not invest It's I call it a red flag. I said don't pressure uh invest. >> Cuz everybody's going down. >> Exactly. >> Yes. >> When whenever you lose your money, you will lose a loan. It's not everyone will lose. >> Right. >> And I tell people sometimes those schemes that come in with a lot of hype, they will there are people who have the early adopters will win. >> You have joined you will lose your money tomorrow >> and they'll promise you very high. So the best thing is just stick to the regulated ones, right? >> But start small. Don't don't wish for more. And if you feel like you can't start very small, do business. >> Have multiple sources of income as well. >> Do a business small small and you'll get something. Money will come in. >> Yeah. Let me also ask you, Freda, >> how can somebody invest without feeling like >> I'm I'm I'm super denying myself a lot and I'm in survival mode. Yes, I need to just spend a,000 bob, but also investing that a,000 bob is worth it. So, how do you help this person from living like they're not missing out or they're not fulfilling their best life or they're not living their best life, but yet >> it's correct. It's actually you're required to invest and have future long-term goals. >> I I tell people to use the formula the 50 20 50 30 20 rule. >> Mhm. 50% of your income should actually cover for your basic needs so that you don't deny yourself. >> The 30% take it to your wants, the things that you can live without. 50% basic needs. 30% take it to the things that you can live without. And then the last 20% is what I normally say the 20% save it invest those are the for the investment because I will save it after maybe 5 months I have 100,000 I can be able to put it in an investment. >> Yeah. So that is the rule that I tell people don't deny yourself the basic needs because you want to invest. M >> I tell people remember when a stress hits you or a mental psychology hits you >> remember you we need you first to survive >> so survive first >> before you think about investment >> right >> don't invest and then you sleep outside >> right all right >> clock it write down the notes but let me ask you uh Ian if a person wants to invest yes but again the ship ends up sinking how do you protect your money or your investment from a sinking ship? >> Well, that's a good question and more or less it's it um it depends on which sinking ship you're in cuz the other investments say like if you're buying stocks or in a company that are harder to protect than because you've more or less agreed to take on the risk of being an owner. So if it sinks, it sinks with you. However, you can have um specific price points say in shares, say if you're buying a KPLC share today at the 25 shillings that it is, um you can have a mental stop-loss where you're not really expecting it to go all the way to zero. If the fundamentals of um company X is too bad and the share price has been plummeting for a number of quarters back to back, I wouldn't love it to go beyond a specific point. >> And that's that's that's how we handle risk management when it comes to investment because there are some investments that's that once you uptake the risk falls solely on you. However, for you to not find yourself in such situations where your investments or most of your investments are under the drain, you know, investments is just like any other career. Sometimes there are people who understand and know what to do in such situations more than you. Right. >> So, and that's why there's a disruptive shift in the in the investment landscape in Kenya of professionally managed special funds and funds because you as an ordinary Kenyan wouldn't really know all the metrics needed to know if a company is still okay to invest or not. We have the price to earning ratio, price to book ratio and all the other fundamentals that come with it. So, sometimes it's not bad to leave it to the professionals, you know. So don't want to make all the investment decisions yourself. Um the market share for collective investment schemes where a lot of people come together put their funds there so that um an entity can professionally manage for them was around 58 billion back in 2018. >> Yeah. >> As of now we are almost hitting a trillion. 940 something billion has been entrusted to collective investment scheme units. 4.1 million Kenyans hold accounts in these um in this organizations >> like widely stated and known such as Mansa X by Standard Investment Bank. We have um Sandlam, CIC, NCBA unit. So these are think of it like doctors but for finance. >> Yeah. Cuz sometimes when you're sick, you don't treat yourself. You go to the hospital, right? >> So if you're financially unwell, you can equally entrust that responsibility to a professionally managed firm. >> So that they they do the risk management for you. They ensure that at least you're getting some good sustainable returns over a long period of time. >> Yeah. >> Like Mansa has delivered pretty well, I'd say, in the past seven, eight years. Every quarter has been a positive quarter. that shows the sort of professionalism and adeptness to financial markets that they have. So yeah, sometimes don't do it alone. I mean you can >> come to Ian seek insights on how to go that route. >> Yeah, sure. Absolutely. >> Instead of being in the pits. >> Mhm. On that note, let's take a break. But before we do that, we are asking you if you had a 100K today, where would you invest that money? If you had 100K, it's just about to be wired into your bank account or your pesa. Where are you investing that money? Please keep it on the hashtag which is power talk show4 channel at brand1. They'll say the handles later when we come back take a break. See you on the other side in just a bit. Thank you for staying with us and welcome back. You're still here with Freda and Ian uh talking about Mart's investment. We went on a break actually of the air having a conversation about some of the Ponzi schemes that Kenyans fall for. But I'm interested to know from um a professional market analyst perspective, are there regulations or guardrails or rules that the CMA has put in place to protect either investors who come into the market or also people that are willing to invest into this already existing market? Yeah. >> Yeah. Sure. So what CMA is is an oversight authority, right? And >> a regulator. >> Yeah. An regulator. Their first mandate is to oversee all capital, market and financial activities that are going on. So as an oversight authority, they'll definitely have they'll have they'll have specific guardrails in place to ensure that all these financial institutions that are regulated are complying by. So you'd find these financial institutions usually have to send very critical documents on their client's account, what they're invested in, how exactly they're performing their risk management just to satisfy CMA's um CMA's curiosity as to whether investors are well protected and that's that really stops them from doing out of pocket investments or doing >> unethical practices in the investment field because once you're caught >> there's jail time, there's um delicing delicensing your company and all these negative effects that come with and that's why it's very advisable for you to only deal with CMA regulated >> financial institutions because there's nothing that can there there's probably nothing that can be hidden from the oversight authority if they're doing wrongful investment. If it's anti uh anti-moneya uh anti-money laundering or anti-terrorism CMA catches all this so you're sure of the ethical practices of such financial institutions >> right and I want to just read a sample of this u article that was highlighted by business daily and freed I want you as well to share what you think of it >> so it startled how Kenyans lost millions in an online investment and it says it's detailing the story of this person says things started falling apart when Edwin Mutuma wked up on September 7th, this is just this month to a notification on his QVSE mobile app telling him that his his account and fellow investors accounts had been frozen. Mhm. And then they have a photo right there. User tries to log into the Convest stock. The capital markets authority has blacklisted and warned the public against investing classifying it among illegal unlicensed funds. Uh what do you think possibly happened here, Freda? Uh what possibly happened is people got um um when that there's this investment vehicle that is here and of course there was uh people advertised it and people got into it >> without checking if this um is it legal is it regulated because you're putting your money in something that you don't have a fall back >> should anything happen >> that one CMA of course has one people but it will not help those because it is illegal. It's not regulated. It's not part of the mandate that CMA is doing. >> So if you want to invest your money as I said invest in the rightful places >> where you can have a fall back in case of anything. Why CMA comes into place. I'll tell you if if CMA if it is regulated you will still get your money no matter how long it will take. >> Yeah. >> Yes. >> Right. And I know you have a book you'll talk about it too when we're just about to round it up. There's this story of this guy by name Samuel Abisay. I don't know if you remember him. Uh he won a he won the jackpot I think in 20 2017. Yeah. Close to 220 million Kenya shillings. Actually 221 million Kenya shillings. He invested and bought a building in Tarangai. He recently sold it at 35 million after getting only 200k rent. But the feedback about this whole story is what caught me. And I want you to sound off on me too as well. Uh somebody commented and said Jen would have spent like 20 million Kenya shillings. Uh somebody said if he would have invested that 40m in a fixed and lowrisk passive income he'd be making more than 500k per month. This one actually caught my attention and I want you to build upon it too as well. rentals 18K 22 out of 15 to just reduce the rent and enjoy full capacity ever. When you look at such stories of people going for like area scammer property and real estate and the way it's giving returns does that show you that that avenue is dying anymore? It's not booming as it used to be. Uh what would be your expertise, thoughts and advice on that? Well, when you have money, you cannot be single-minded. And here here in comes diversification. I wouldn't really call real estate a bad investment. Because as much as the returns are mid to average, say 8 to 10% in current times, depending on the location that you're building in, >> it's equally consistent income >> as long as your vacancy rate is low, right? >> So, it's money you it's it's it's income investing. You can you can plan with it. You know, at the end of every month, maybe you'll be getting A, B, and C from these guys. On top of that, there's the aspect of appreciation. land appreciates faster than um other asset classes we have, right? >> Money market funds. >> Yeah. Or even faster than money market funds, especially if you get it in the right places. So, I will not discourage people to go the real estate route. >> What I'd tell them is as you're having your real estate, don't die in it. >> Diversify. have have some real estate here but when someone approaches you about bonds and stocks don't be too closed-minded not to try that as well it's okay you have a 100 million Kenya shilling real estate portfolio >> when you get your next 20 million try something else >> so that you can even understand how the benefits work so that you can equally understand how that asset class work >> but and equally once you have if you have 100 million in special funds diversify the next 20 million, maybe try some real estate, you know, cuz it never really hurts to diversify. And we're living in times where >> things change so fast >> and having physical assets is never a bad bet. Yes. They are they're not what's the word? We usually call them liquid. Yeah. They're not liquid assets, right? Where you would say that I have a 20 million apartment. let me go and get some 1000 liquid equalance sheet. You can leverage on it. You can take more loans for development on it. So there's still some positive side of having physical assets like real estate. But no one investor should be so caught up in one side and neglect the other. >> Right? have a diversified mindset that would save you in the long run. >> There's a question coming through to you, but uh I'll get to it in just a bit. Fred for Gen Z, who is let's imagine they're an influencer. They're making money out of uh influence. They're called the gig, it's called the gig economy, influencing, selling products online and then maybe they're earning something on a 9 to5 and then maybe they're also an entrepreneur. They're selling maybe they have an individual product line. How would you help them rack up all these monies and try to walk them on a journey of investment so that they have a balanced life between juggling uh gig economy, a 9 to5 and entrepreneurship? >> I I tell everyone number one know what you're earning. Don't just wait for money to come in without doing your proper accountability of everything that is coming in. >> Yeah. >> Because if you do not know, you cannot control what you don't know. And if your money is not directed to the right place, it will direct itself. >> It will go to the wrong places. It means that it will be you'll be losing money. You might end up earning a lot of money but end up with nothing at the end of the day. And that is what apparently >> that is what is happening >> because they get a lot of money now and then if something happens tomorrow they are not able to survive. >> So my advice is consolidate your income >> even if it means recording. And this is what a very practical advice I tell people. If you do, if you want to know how much you're earning, >> just pay everything with Empessa and at the end of the month, just print your statement because you will not have any leakage >> and you will notice how much you're earning. For example, if you're getting everything on Empessa, if you're paying everything on so that you know how much you're spending every other month, >> then now put aside money to invest. Once you know you're earning all these things at the end of the month you're earning 100,000 >> spending it save something emergency fund have it somewhere once you have your full emergency man money for one year six to one year that can safely just leave you live your life under normal circumstances for one year should anything happens now close that chapter and now move to something else that you can invest in >> right For example, like I I had a comment on the land. Land is not a a short-term thing. >> If you're investing in land, know that you cannot liquidate that land and you might even find a seller for a whole 6 months or even more depending with the location. So, it's not something to think of getting the money easily. So, invest in the right places. >> Once you fill in your emergency fund, you have it in the money markets because money markets you can get within 24 hours. Now move to other avenues, other vehicles, diversify your income, put in the stocks. Others um put in the bonds so that you have your money. >> If you're someone that gets a boom, a lot of money at some point, think long term, infrastructure bonds, for example, >> if you get like 3 million and you know this child will be in university in the next 15 years, for example, >> put that money in an infrastructure bond. Every six months you get an you get dividends. I don't know what it's called the returns. >> Yeah. >> Semi. So that 6 months you know what you will do with it. So tie it to a goal. Any investment that you're doing but the fact is do not just remain. >> Look at the money that you have. Ensure that you know what you're earning and now aortion your money differently. >> Right. >> You know this is 50% the rate that I said 50% is for you to survive. >> Yes. >> Then put other money into other vehicles that would give you more money. >> Yes. >> Right. before we get to the feedback or the comments by the way forex yan is really booming right now. Yeah, as a play as an investment avenue. Yeah, but you'll sound off on it too as well. Uh together with this question uh says between circles, unit trust, treasury papers and buying a plot on installments, what is the actual realistic forz in terms of earning under maybe somebody's earning under 50,000 in a month in this economy? Because somebody would say says the economy an buyable one. Yeah. Between those options, which one is the realistic one for them if they are to go that route? If you remove earning um buying plot on installments, what remain? >> What remain after you remove buying plots on installment? What are the other options? >> Um my unit trusts and circles too as well. >> Unit trust and circles. >> Um well, unit trusts are good if you're looking for specific if you're doing income investing only. >> Why? Because in unit trust you have your dividend on return on investment right so whatever it is you can actually base your future spending on the income or cash flow that you're expecting circles are equally good and it comes with a lower return on investment but you can leverage on your on your circle shares >> so if you're someone who say has you if you're someone who would want to be taking loans here and at reduced rates. You have a lot of responsibilities that you feel um being a member of a circle could actually help you fulfill them. There are a lot of perks or benefits that come with being a circle member because you know how the circles usually operate. It's like you buy into ownership with what you contribute. You can you can um take a loan maybe two to three times of your contribution as long as you have the good a good guaranter and a good contribution amount. So I'd say you can balance the two but know that unit trust are specifically for income investing but circles come with yes dividends they come with loans they come with this other benefits that unit trusts don't come with. So just do more research on the circle that you're investing in. This information is bluntantly out there. They'll tell you what their loan rate is, what their dividend is, um the requirements for you to get in, and do your research on the different unit trusts that are out there. Then once you have this research at hand, you'll be able to make a good decision like, okay, if if I'm in a sack and I need a loan, I can get A, B, and C. Do I need this option? Cuz there's no onesizefits all scenario when it comes to investment. And that's why we usually we usually do customer um client profiling just to see who are you what are your goals with all this do you really need a circle at your level or not do you need a unit trust so all this sort of profiling helps you know but buying a plot in installments I don't see how that helps you as a Gen Z with 50,000 >> good over there >> I wanted to say something about circles just this reaction is also get to the question. Uhhuh. >> Ensure that the circle is also regulated. >> I think that's what a lot of people actually don't know that you know some of these circles are regulated by SASRA and uh >> Right. >> Yeah. Sassra. So make sure that it's under SASRA. >> Right. >> Yeah. >> All right. On our digital engagement question of the day. All right. On our social media question, we're asking you if you had a 100K that's 100,000 Kenya shillings today. Where would you invest the money if you had 100K? That's the question right over there on your screens. If you had 100K, that's 100,000 Ken shillings, where would you invest it? And we are ready to sample part of your feedback on our social media as well. Let's see on the hashtag witches power show. Please feel free to jump in and plug in with us at Y254 channel on all our social media platforms. Let's sample part of the comments if they're able to be loaded on screen. All right. Uh uh let me see if I can get to uh to through the Facebook too as well. Mhm. Paul Nelson in agriculture cuz it's the background of the Kenyan economy. Do you think agriculture by the way is underrated especially when it comes to as well how it's presented in terms of agree opportunities? I heard somebody say agree tech how as well I I think I interviewed a guest who was using artificial intelligence to map out fatile souls. I feel like it's an untapped place of investment too as well. What do you make of that? Yeah, in agriculture there's a lot of potential >> and as a country we need to move from now even selling the raw things to value add our products. >> Mhm. >> That's why we have a lot of I'll say a lot of information right now on agriculture. >> There's money in the value addition. So for me agriculture is actually the I'll say is it the future or it's the now? >> Yeah. We need to map ourselves as a country and take advantage of the massive opportunities that are there in the agriculture space. >> Okay. >> Yes. >> Right. Uh this one goes to you. I believe you can react on need to as well. Um Ian Gu Peter says Nairobi Securities Exchange is the best place to invest in big time. You agree big time that should be the best spot. If you got 100k shillings right now to invest. >> It depends with the market cycle. I wouldn't say yes or no to that question. >> Right now, what would you say is the market? But there are there like peak periods and low time periods >> in terms of seasons. >> Yes, they are. And right now, we are really enjoying the n actually it's it's had its best year in quite a long time. >> But equally, it dropped 5% in one day just last week. So, I'd say in general, it's really performed well for the past 3 years. Mhm. >> Really really well. We've had returns in individual companies of over 400%. >> The Nairobi all share index is trading at above 27% for this year alone. >> The banking the banking index is trading at 33% for this year alone. We haven't even segmented segmented that into the individual banks which are pushing this narrative. So for the past 3 years, Nairobi Stock Exchange has been excellent and there are a lot of people who have caught this run and really enjoyed it. >> But as you're investing in Nairobi stock exchange, you need to know it's a stock market and it has its own market cycles. You don't want to buy stocks at the peak. >> Yeah. >> Cuz you might buy and it turns >> and you don't want to sell off your assets at the trough. >> Yeah. >> So it's the best. It's a really good place to invest in, but it comes with it its own fundamentals. So, it's good if you've done your research. >> Yeah. Is that what they call the bull market when it's on its peak? >> Yes. That's called the bull market when when um prices are gradually moving upwards. Then you have the bare market where there's a downtown and downturn and prices are moving lower. >> Yeah. >> So, yeah, the mic this the market never really goes in one direction. >> Yes. uh as we close up this conversation. But Freda just like shortly uh some of the valuable insights like just two as we close it up but also as you prepare to answer maybe as your final punch line before we give your social media platforms uh where or rather what are the common uh mistakes that Kenyans make especially when it comes to investing and also what do they don't know what do they not know about investing in Kenya from an analyst perspective you'll let us know in just a bit but talk about your book the three or two most invaluable insights in the book. >> Okay. All right. Thank you very much. This book that uh I've actually authored, it's called Budgeting and Managing Family Finances. >> It's more of a story of how I have um um grown as a person. Yeah. >> And also talks about what are the avenues that you can invest in. >> Just as a family, it advocates that as a family, why don't you have conversations around the money? >> We have all these conversations about the children and the rest, but we rarely do conversations about money. M >> and as a family if you're able to do um they say if you want to work faster walk alone >> if you want to walk further >> together yeah so for me I advocate for families to >> uh to work on their financial journey together so that they are able to build something solid that can be um it's like a legacy that you're building for your generations and generations right >> so this book uh it's available where >> available in store and also So uh in Amazon for those who wants to buy online you can get it get it at Amazon. >> Yeah you give your contact. >> Yes I'll give my contacts. You can find me on Facebook all the social media fa but also you can get me on my phone number. >> Please give it very quickly. >> 0726688568 >> right clock it. uh what what do Kenyans don't know about investments in the market or or how to invest especially when it comes to the knowledge all round of it of everything that we've talked about but from an analyst perspective >> well I'd say most Kenyans think investment is a ballpark and any investment all investments look the same >> um I do encourage Kenyans to take a deeper look onto which invest investment they're going for and what that investment offers cuz no two investments are ever the same. So, if you're doing um money markets, if you're doing infrastructure bonds, if you're doing treasury bills, if you're doing corporate bonds, if you're doing um special funds, whatever investment you get into, and even if you're doing offshore investments into international companies, you need to understand that all these investments are not treated the same. And each of them has a rightful place in your portfolio for a specific reason. If you look at it like that, it really um more or less simplifies the complexity behind investment and you know which asset class to go for or which investment to go for and why. That is something that we really need to look into as a nation to enable us increase our investment literacy and with that equally make good allocation decisions for our capital. Right. Where can they find you on social media to exit? >> Well, on Instagram um available under the handle sir uh sir_andu. Um I do run a investment consultancy firm known as Tomvault Limited and my number is 0715 468648. Let's chat anything investment related. >> Yes, absolutely. helping traders and investors alike convert financial markets knowledge into lasting wealth. That's your description. En sure that you also buy Freda's book, Budgeting and Managing Family Finances. I've read the book as well. She details her personal story and journey growing up. So very valuable book. En sure that you purchase it on the number she gave prior. Thank you so much lady and gentlemen for being right here. For anything you've missed, please plug in with them on social media platforms and their numbers. All right. want to thank you as well for watching us from 700 p.m. to right now. For anything you find it on our YouTube channel at Y254 channel and then I'm personally mine is a brand and feel free to talk with us as you engage on engagement question of the day. Thank you for watching. See you next time right here. 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