Concept Advisory Services

• For Many Kenyans,Lack of Enough Money Not A Reason

  Posted: March 2, 2008, 4:52 pm by CRB

  John’s day has been hectic. He has been up and running, the whole day trying to beat the Kenya Revenue Authority (KRA) deadline of submitting the Value Added Tax (VAT) returns by the twentieth.

   ‘Working as an Accountant is no easy task’, Johns says. ‘Its all about meeting deadlines’ he adds. ‘If it’s not the government, with the statutory returns, it’s the management who expect timely weekly reports’ says John.

   Meet John, a 28-year-old Accountant for a medium sized architecture firm. John has risen to the position of Senior Accountant having graduated 4 years ago with a Bachelor of Commerce degree from the University of Nairobi.

   To unwind, John frequents his favorite drinking joint to meet either old friends or network by making new contacts. Today is one of those days. John wanted us to meet to discuss the financial mess he is in, and explore the various channels he could invest in.

   John knows what I do and the conversation takes the familiar route of personal finance. You see, despite John earning a tidy sum, he has not been able to do much in terms of investments. To his pride, he has bought a couple of stocks for two blue chip companies at the Nairobi Stock Exchange. However, with his hefty net pay, he could be in a better position. For once, he should be having a better-diversified portfolio since this is the only form of investment that he makes. John prefers to keep the rest of his pay in a savings account.

   Nevertheless, keeping money in a savings account is not the only shortcoming afflicting John. His lifestyle has made him not realize his full potential in terms of investing. John is the type who has to visit a pub in downtown Nairobi every day after work. Actually, the waiters know him and his usual request for a beer is meet with ‘Kama kawaida?’ Swahili for usual beer. He ends up spending k’sh 500 for the night when he is alone and if there is company, the bill comes to an average of k’sh 1,500 since he has to use a cab, as chances are he will leave late.

   John’s house is classy, with the latest carpet from Saudi Arabia. The seats are black leather and had a price tag of k’sh 200,000. His entertainment system is valued at slightly over k’sh 150,000. John’s motto has been to live today, as no one knows about tomorrow. John is also not the type to draw a household budget when making his purchases. Being single, John prefers eating out with the occasional cooking over the weekend.

   John’s financial woes have to do with his spending habits. If he could cut on the consumption of non-value adding items, he would be able to save and invest part of his income.

   As we do the paper together for him to join, the British American equity fund John asks me to stay in touch. ‘You see, if I knew about these investments products, I could be far in terms of wealth’ John says as we conclude our meeting.

Blah blah blah

Fish cakes

Alas a fish cake.

Yet more fish cakes

Guess what ... yeah ... fish cakes.

The end of the fish cakes