Blog – Page 3 – Rubiani Wealth Management Ltd.

3Mar, 2025

7 Tips for Attaining Financial Freedom in Kenya

Achieving financial freedom is the goal of many, but it can seem like a distant dream, especially in a complex financial landscape. Financial freedom means having enough wealth to live comfortably without relying on a paycheck. While this goal may seem daunting, it is certainly attainable with the right strategies. In this article, we will explore 7 actionable tips that can help you achieve financial freedom in Kenya. By implementing these practical steps and staying consistent, you can set yourself on the path toward a secure and prosperous financial future.

1. Create a Clear Budget

The first step to financial freedom is having a clear understanding of your income and expenses. By creating a budget, you can track where your money goes and identify areas where you can cut back. This will give you a better idea of how much you can save or invest. A budget also acts as a roadmap for your financial journey, helping you stay on track with your goals. Start by categorizing your expenses, such as rent, utilities, food, transportation, and entertainment, and ensure that you're living within your means.

2. Save Aggressively

To build wealth, you need to save a significant portion of your income. Make saving a priority by setting a realistic goal, such as saving at least 20% of your monthly income. Automating your savings can make this process easier and more consistent. Set up a standing order with your bank or use mobile platforms like MPESA to transfer a portion of your income into savings every month. The earlier you start, the more you can accumulate over time, allowing your savings to compound and work for you.

3. Invest Wisely

Investing is essential to growing your wealth over time. Instead of leaving your savings in a low-interest bank account, put your money to work by investing in assets that can provide higher returns. Do your research before diving into any investment, and focus on diversifying your portfolio to reduce risk. Some accessible investment options in Kenya include Money Market Funds (MMFs), stocks, real estate, and business ventures. Apps like Ziidi (Mpesa Investment App), Chumz, and Ndovu make it easy to start investing with as little as Ksh 100.

4. Get Out of Debt

Debt, especially high-interest debt, can hinder your ability to build wealth. Focus on paying off high-interest liabilities like credit card debt or personal loans first. Once you've cleared these debts, you’ll free up more cash to put towards your savings and investments. Additionally, maintaining a good credit score is essential for future financial flexibility. If you’re overwhelmed by debt, consider creating a debt repayment plan or working with a financial advisor to develop a strategy for becoming debt-free.

5. Build an Emergency Fund

Unexpected financial setbacks, such as medical emergencies or job loss, can derail your financial plans. Having an emergency fund ensures that you won’t need to rely on credit cards or loans when these situations arise. Aim to save at least three to six months of living expenses in an easily accessible account. This safety net will give you peace of mind, prevent you from incurring more debt, and allow you to navigate tough times with confidence.

6. Learn About Personal Finance

Financial literacy is a crucial component of achieving financial freedom. Take time to educate yourself about personal finance, including topics such as budgeting, saving, investing, taxes, and retirement planning. By understanding how different financial products work and how to manage your money effectively, you'll be able to make informed decisions that benefit your financial future. Subscribe to financial newsletters, read personal finance books, or attend financial literacy workshops to build your knowledge.

(Rubiani Wealth Management Ltd offers a fortnightly email newsletter where we provide investment advice and updates on market performance. Stay informed by reaching out to us at engage@rubianiwealth.com.)

7. Seek Professional Advice

Achieving financial freedom can be a complex process, and you don't have to do it alone. If you're feeling uncertain or overwhelmed, consider seeking professional advice. A financial advisor can help you assess your current financial situation, create a tailored plan to achieve your goals, and guide you through the process of managing your finances. Whether you're just starting or looking to refine your strategy, professional advice can help you make sound financial decisions.

(Looking for professional help? Get in touch with us at engage@rubianiwealth.com for personalized financial advice.)

Conclusion

Achieving financial freedom is a long-term goal that requires discipline, consistency, and smart planning. By following these 7 tips—creating a budget, saving aggressively, investing wisely, eliminating debt, building an emergency fund, educating yourself, and seeking professional advice—you can take control of your financial future. Start today, and with time and dedication, you’ll be well on your way to achieving financial freedom.

24Feb, 2025

10 Great Investment Books to Read in 2025

Investing is a complex subject that can take a lifetime to master, but reading the right books can be a great way to gain a deeper understanding of the market and how to invest wisely. Here is my list of the 10 great books on investing:

"The Intelligent Investor" by Benjamin Graham: Considered one of the most important investment books of all time, "The Intelligent Investor" is a must-read for anyone looking to gain a deeper understanding of the stock market. Written by legendary investor and economist Benjamin Graham, the book offers a wealth of practical advice and insights on how to invest wisely and avoid common mistakes.
"The Little Book of Common Sense Investing" by John C. Bogle: Written by the founder of Vanguard, one of the world's largest investment companies, "The Little Book of Common Sense Investing" is a straightforward guide to investing that emphasizes the importance of low-cost index funds and diversification. Bogle's book is a great resource for beginners who are just getting started with investing.
"The Intelligent Asset Allocator" by William Bernstein: This book is a deep-dive into the subject of asset allocation, which is the process of dividing your investment portfolio among different asset classes such as stocks, bonds, and real estate. Bernstein's book provides a comprehensive overview of the different types of investments available, and offers clear and practical guidance on how to create a well-diversified portfolio.
"The Warren Buffett Way" by Robert G. Hagstrom: Warren Buffett is widely regarded as one of the greatest investors of all time, and this book is a fascinating look at his investing philosophy and strategies. Hagstrom examines Buffett's methodologies and provides insight into how readers can apply these strategies to their own investments.
"A Random Walk Down Wall Street" by Burton Malkiel: This classic book is a comprehensive guide to investing that covers everything from the history of the stock market to modern portfolio theory. Malkiel's book is a great resource for anyone looking to gain a broad understanding of the investing landscape, and offers plenty of practical advice for both beginners and experienced investors.
"The Essays of Warren Buffett: Lessons for Corporate America" by Warren Buffett: This collection of letters written by Warren Buffett to the shareholders of Berkshire Hathaway provides a wealth of insight into his investing philosophy and strategies. The book offers a firsthand look at how one of the most successful investors of all time thinks about and approaches the market.
"Common Stocks and Uncommon Profits" by Philip Fisher: Written by a successful investor and business consultant, "Common Stocks and Uncommon Profits" is a timeless classic that focuses on the importance of thorough research and analysis in the stock-picking process. Fisher's book is a must-read for anyone interested in learning more about the art of stock selection.
"Security Analysis" by Benjamin Graham and David Dodd: Written by two of the most renowned investment experts of the 20th century, "Security Analysis" is a comprehensive guide to the principles of value investing. The book provides a detailed look at how to analyze and evaluate stocks, bonds, and other securities, and offers valuable insights into how to identify undervalued assets and avoid common investment pitfalls.
"The Black Swan" by Nassim Nicholas Taleb: While not directly focusing on investing, this book is a must-read for any investors. The book explains the concept of Black Swan events, or unexpected and highly impactful events that can have significant consequences in markets. The book teaches the reader to be prepared for the unpredictable and unknown events that can change the market, and how to mitigate the risk of them.
"The Big Short" by Michael Lewis: This book is a non-fiction account of the 2008 financial crisis, specifically the collapse of the housing market and the subsequent credit crunch. "The Big Short" is a fascinating look at how a small group of investors saw the crisis coming and made a fortune by betting against the market. The book is a great way to learn about the psychology of market bubbles and the dangers of herd mentality.

These are all great books to start with in order to learn more about investing and make informed decisions with your money. These books offer a wealth of knowledge, insight, and wisdom that can be applied to a wide range of investment situations.

17Feb, 2025

10 Steps to Prepare for Retirement in Kenya

Preparing for retirement is one of the most important steps in securing a financially stable future. In Kenya, as in other parts of the world, retirement planning requires foresight and consistent action. Here are 10 practical steps you can take to ensure that you are financially ready for the transition from full-time work to retirement:

1. Start Saving Early

The earlier you begin saving for retirement, the more time your money has to grow. Starting early allows you to save less each month while still reaching your goals. If you’re just starting out or are closer to retirement age, it’s never too late to start. In the latter case, you may need to be more aggressive in your savings efforts. Even if you have just a few years left before retirement, consistent and disciplined saving can still make a substantial difference. Set up an automated savings plan to ensure you're consistently contributing to your retirement fund.

2. Determine Your Retirement Savings Goals

To adequately prepare for retirement, you need to estimate how much money you’ll need to maintain your current lifestyle. A good rule of thumb is to aim for 70-90% of your pre-retirement income in order to maintain a similar standard of living. Take time to carefully calculate your expected monthly expenses and identify potential areas where you can cut costs or raise additional funds in preparation for retirement.

3. Take Advantage of Employer Retirement Plans

In Kenya, many employers offer Provident or Pension Funds, which are excellent tools for saving for retirement. These plans come with tax incentives that make them even more valuable. Ensure that you contribute at least enough to secure any employer match, if one is offered. Employer-sponsored plans are a great way to build a secure financial cushion for retirement while benefiting from tax breaks.

4. Consider Additional Savings Vehicles

In addition to employer-sponsored retirement plans, you can explore other savings options, such as an Independent Pension Plan (IPP). This is a private savings plan that offers additional flexibility and tax benefits, helping you accumulate more for retirement. Many insurance companies and fund managers in Kenya now offer IPPs, and it’s important to compare various providers to find one that suits your needs.

5. Create and Stick to a Budget

What are you spending your money on?

A well-crafted budget is critical for ensuring you save enough for retirement. Creating a budget will not only help you allocate funds for retirement savings but also prevent overspending. Living within your means will be just as important after retirement when you’re relying on your savings and investment income. Keep track of all your income and expenses to ensure you maintain financial discipline throughout your retirement journey.

6. Reduce Debt

High levels of debt can significantly hinder your retirement planning. Prioritize paying off any high-interest debt, such as credit card balances, personal loans, or car loans, before you retire. For those with mortgages, consider increasing your monthly payments to reduce your mortgage balance ahead of retirement. Being debt-free or minimizing debt before retirement will help you free up more income for savings and investment.

7. Assess Your Insurance Coverage

As retirement approaches, it’s essential to review your insurance coverage. Make sure you’re adequately protected in case of unforeseen events, particularly health emergencies. Assess your life, health, and motor insurance policies. Many people benefit from employer-sponsored insurance during their working years, but once retired, you may need to make changes or purchase additional policies. Be proactive in securing the right coverage before retirement to safeguard your financial well-being.

8. Establish a Plan for Health Care Expenses

Health care expenses can be a significant concern in retirement, as many health insurance policies may not fully cover costs after age 65. Research the health care options available to you in retirement and estimate the potential costs. Consider purchasing supplementary health insurance or exploring government healthcare programs. Planning for these expenses ensures that unexpected health costs won’t derail your retirement plans.

9. Understand Social Security Benefits

In Kenya, the National Social Security Fund (NSSF) is the primary source of government retirement benefits for employees. Make sure you understand your NSSF contributions and the benefits you are entitled to when you retire. Review your eligibility and expected monthly payout, and factor this into your retirement savings plan. Keep in mind that the NSSF benefits might not fully replace your pre-retirement income, so additional personal savings will be crucial.

10. Review Your Plan Regularly

Retirement planning is an ongoing process that requires regular reviews and adjustments. It’s important to periodically assess your savings, investment strategies, insurance coverage, and other retirement plans. This allows you to make timely adjustments based on changes in your financial situation or market conditions. Regularly reviewing your plan ensures that you stay on track and continue to work toward your retirement goals.

Final Thoughts

Each person’s path to retirement is unique, and your needs may differ from someone else’s. It’s always a good idea to consult a financial advisor to develop a personalized strategy that aligns with your goals. With careful planning, discipline, and a long-term perspective, you can ensure a financially secure and stress-free retirement in Kenya.

23Jan, 2025

10 Strategies for Becoming a Multi-Millionaire in Kenya

In Kenya, having a million shillings is not that big a deal. But getting to one million USD, equivalent to about 130 million Kenya shillings, is a milestone where you can confidently call yourself wealthy. This article seeks to give you practical ideas and strategies for building your wealth exponentially.

1. Consistent Saving and Investing

One of the key habits of millionaires is disciplined saving and investing. According to the book The Millionaire Next Door, millionaires invest an average of 30% of their income. You can also adopt aggressive saving strategies, such as those practiced by the FIRE (Financial Independence, Retire Early) movement, which emphasizes maintaining a low-cost lifestyle while saving and investing a large portion of your income. The earlier you start, the better, thanks to the power of compounding.

In terms of where to invest, you can start with investment opportunities that do not cost much like stock market investing and Money Market Fund and other mutual funds. As your funds grow, you can venture into Treasury Bills and Bonds, Commercial papers and corporate bonds, Real Estate and Private Equity investing.

2. Start a Business

Starting and growing a business is one of the fastest ways to become a multi-millionaire. However, business involves taking calculated risks and you need to be thorough in your research to mitigate losses. Entrepreneurship also requires courage and persistence. Most millionaires are entrepreneurs as not everyone is willing to venture alone, take risks and be courageous. However, if you master the art, it places you at an advantage in getting wealthy.

If you’re employed, consider starting a side hustle in your free time. Hopefully, you can grow the business and eventually step out into full time entrepreneur.

If you already own a small business, aim to scale it by creating systems and processes, hiring employees, and growing your operations organically. A well-structured business can provide exponential returns over time.

3. Network with the Wealthy

The people you surround yourself with play a significant role in shaping your financial future. Look for opportunities to network with the wealthy by joining sports clubs, charity organizations like Rotary Club, or business networking groups such as BNI. Many banks also offer exclusive business clubs for high-net-worth clients. These networks can expose you to valuable connections, ideas, and opportunities.

4. Keep Researching and Seeking New Opportunities

The key to building wealth is staying ahead of the curve. Some industries become saturated, but new technologies and trends can open up profitable opportunities. For instance, early adopters of artificial intelligence (AI) are already leveraging its potential to create wealth. Stay curious, research emerging markets, and be willing to pivot when necessary.

5. Get a Mentor Who Is a Millionaire

Learning from someone who has already achieved millionaire status can be invaluable. A mentor can guide you through potential pitfalls, provide insights into wealth-building strategies, and even open doors to opportunities. Seek out someone whose journey aligns with your goals and learn from their experiences.

6. Advance Your Career

While it may be harder to become a multi-millionaire as an employee, it is still possible. Focus on career growth to position yourself as a top executive or leading professional in your field. High-level roles in industries such as technology, finance, and healthcare often come with compensation packages that can help you accumulate significant wealth.

7. Inheritance or Lottery Wins

Though less predictable, inheritance or winning the lottery can instantly make you wealthy. However, these are matters of luck and not strategies you can rely on. If you happen to come into a large windfall, seek professional financial advice to preserve and grow your newfound wealth.

8. Invest in Real Estate

Real estate remains one of the most reliable ways to build long-term wealth. Investing in rental properties, land, or commercial spaces can generate passive income and appreciate in value over time. Look for strategic locations and consider real estate investment trusts (REITs) if you want a hands-off approach.

9. Diversify Your Income Streams

Relying on a single source of income limits your potential to build wealth. Explore ways to create multiple income streams, such as investing in stocks and bonds, starting a side business, or monetizing a hobby. Diversification not only increases your income but also mitigates risks.

10. Cultivate Financial Discipline

Finally, the foundation of wealth-building is financial discipline. Live below your means, avoid unnecessary debt, and prioritize investments over instant gratification. Track your expenses and consistently review your financial goals to stay on course. Discipline ensures that you’ll make the most of every opportunity that comes your way.

By adopting these strategies, you can steadily build your wealth and move closer to achieving multi-millionaire status. Remember, the journey requires patience, discipline, and a willingness to learn and adapt.

18Jun, 2024

Book Review: “Secrets of the Millionaire Mind” is a book written by T. Harv Eker

"Secrets of the Millionaire Mind" is a book written by T. Harv Eker that was first published in 2005. The book is based on the principle that one's financial success is determined by their mindset and beliefs about money.

The book is divided into two parts. The first part of the book focuses on the "financial blueprint" that individuals have, which is a set of unconscious beliefs and attitudes about money that they have developed throughout their lives. Eker argues that these financial blueprints can be positive or negative, and that individuals with negative financial blueprints will struggle to achieve financial success.

The second part of the book is focused on teaching readers how to change their financial blueprint and develop a millionaire mindset. Eker provides practical strategies and exercises to help individuals identify and change their limiting beliefs about money, and develop a more positive and prosperous mindset.

Some of these strategies include:

Identifying and challenging limiting beliefs: Eker encourages readers to identify the limiting beliefs they have about money, such as "I'll never be able to make a lot of money" or "Money is the root of all evil." Once these beliefs have been identified, Eker suggests challenging them with evidence to the contrary and replacing them with more empowering beliefs.
Setting specific and measurable financial goals: Eker emphasizes the importance of setting specific and measurable financial goals as a way to focus one's attention and efforts on achieving financial success. He provides a step-by-step guide for setting and achieving financial goals.
Creating a budget and sticking to it: Eker stresses the importance of budgeting as a way to take control of one's finances and ensure that one is living within their means. He provides practical advice on how to create a budget and stick to it.
Investing in oneself: Eker believes that one of the most important investments one can make is in oneself. He encourages readers to invest in personal development and education as a way to increase their earning potential and achieve financial success.
Developing self-discipline: Eker argues that self-discipline is a key ingredient for achieving financial success. He provides strategies for developing self-discipline, such as setting daily and weekly goals, and holding oneself accountable for achieving them.
Surrounding oneself with positive influences: Eker suggests that the people with whom one surrounds oneself can have a big impact on one's mindset and financial success. He encourages readers to surround themselves with positive and successful people who can serve as role models and provide support and encouragement.
Taking action: Eker emphasizes the importance of taking action to achieve financial success. He encourages readers to implement the strategies and exercises outlined in the book and take consistent action towards achieving their financial goals.

One of the main strengths of the book is that it is written in an easy-to-read and relatable style. Eker uses real-life examples and anecdotes throughout the book to illustrate his points and make the material more engaging.

Another strength of the book is that it provides a comprehensive and holistic approach to achieving financial success. Eker covers a wide range of topics, including goal setting, budgeting, investing, and self-discipline, and provides practical advice on how to implement these strategies in one's life.

One potential weakness of the book is that it may not appeal to individuals who are already financially successful. Some of the advice and exercises may seem simplistic or basic to individuals who have already achieved a high level of financial success.

Overall, "Secrets of the Millionaire Mind" is an insightful and practical guide to achieving financial success. It provides a unique perspective on the role of mindset and beliefs in achieving financial prosperity and offers valuable strategies and exercises to help readers develop a millionaire mindset.

5Jun, 2024

Book Review – The Compound Effect by Darren Hardy

The Compound Effect by Darren Hardy is a highly recommended read for anyone looking to improve their personal and professional lives. The book is based on the power of compounding. Hardy uses real-life examples to demonstrate how the compound effect can be applied to various aspects of life, such as health, finances, and relationships. He also provides practical strategies for building and maintaining momentum and overcoming obstacles that may arise along the way. Overall, The Compound Effect is a valuable resource for anyone looking to achieve their goals and live a more fulfilling life.

Here are the 10 take-home points from the book;

The Compound Effect is based on the principle that small, consistent actions yield significant results over-time.
The book emphasizes the importance of setting specific and measurable goals and developing a plan.
Hardy stresses the importance of consistency and discipline in achieving long-term success.
He also emphasizes the importance of taking responsibility for one's actions and being accountable for the results.
The book provides practical strategies for building and maintaining momentum, such as setting reminders and breaking down goals into smaller, manageable tasks.
Hardy also provides advice on overcoming obstacles and setbacks, such as staying focused and staying positive.
The book encourages readers to continuously learn and grow, both personally and professionally.
Hardy explains how small, positive changes in one area of life can have a ripple effect and improve other areas of life as well.
The book also stresses the importance of surrounding oneself with supportive and positive influences.
The Compound Effect provides readers with the tools and mindset necessary to achieve long-term success and create the life they want.

28May, 2024

Book Review – The Richest Man in Babylon

"The Richest Man in Babylon" is a classic personal finance book written by George S. Clason. First published in 1926, the book remains popular due to its simple and easy-to-understand advice on managing money and achieving financial success. Here are 10 key takeaways from the book:

Start thy purse to fattening: The book emphasizes the importance of saving money and investing wisely. It suggests setting aside at least 10% of your income for savings and investing in income-producing assets.
Control thy expenditures: The book advises against living beyond one's means and encourages living within one's income. It suggests creating a budget and sticking to it to avoid overspending and accumulating debt.
Make thy gold multiply: The book encourages investing in income-producing assets, such as rental property or businesses, to grow one's wealth. It suggests finding ways to make money work for you, rather than working for money.
Guard thy treasures from loss: The book stresses the importance of risk management and diversification. It advises against putting all of one's eggs in one basket and suggests spreading investments across multiple assets to minimize the risk of loss.
Make of thy dwelling a profitable investment: The book suggests using real estate as a means of building wealth. It encourages buying a home and paying off the mortgage as quickly as possible and also suggests using rental property as a source of passive income.
Ensure a future income: The book emphasizes the importance of planning for retirement and suggests saving for retirement as early as possible. It advises creating a retirement plan that includes income-producing assets, such as rental property or dividend-paying stocks.
Increase thy ability to earn: The book encourages continuous learning and self-improvement. It suggests investing in one's education and skills to increase earning potential.
The five laws of gold: The book outlines five laws of gold that it believes are essential for achieving financial success: Start thy purse to fattening, control thy expenditures, make thy gold multiply, guard thy treasures from loss, and make of thy dwelling a profitable investment.
Understand the power of compound interest: The book explains how compound interest can work to your advantage and encourages saving and investing early in life to take advantage of the power of compound interest.
Seek wise counsel: The book advises seeking the advice of experienced and successful individuals to learn from their experiences and avoid common mistakes.

Overall, "The Richest Man in Babylon" is a practical and easy-to-read guide to achieving financial success. It provides simple and timeless advice that is still relevant today, and it encourages readers to take control of their financial futures by saving, investing, and living within their means.

14May, 2024

Busting the Myths: Separating Fact from Fiction in the World of Investing

Green and White Geometric Business Quote with Right Arrow Instagram Post

Investing can be a complex and daunting task for many people, which is why there are many myths and misconceptions about it. Here are seven of the most common myths about investing and the truth behind them:

"You need a lot of money to start investing." This is not true. There are many ways to start investing with little money, such as investing in mutual funds or exchange-traded funds (ETFs) that have low minimum investment requirements.
"Investing is only for the wealthy." Investing is for anyone who wants to grow their money over time. With the advent of robo-advisors, investment apps and online brokerage, investing is easy and affordable for anyone.
"You have to pick the hot stock of the moment." Picking individual stocks can be risky and requires a lot of research and expertise. A better approach is to diversify your portfolio by investing in a mix of different assets, such as stocks, bonds, and real estate.
"You have to time the market." Timing the market is impossible, as no one can predict with certainty what the stock market will do in the short term. Instead, it's better to invest for the long term and let compound interest work for you.
"You can't beat the market." While it's true that most individual investors can't perform better than the market, it's not impossible. Some investors and fund managers can consistently perform better than the market through a combination of skill, research and experience.
"The higher the risk, the higher the return." While it's true that high-risk investments can potentially yield higher returns, it's important to remember that they can also result in large losses. A well-diversified portfolio that includes low-risk investments can help to balance out the overall risk of your portfolio.
"You don't need to diversify your portfolio." Diversification is an important aspect of investing, as it helps to spread out risk. Diversifying your portfolio across different asset classes, such as stocks, bonds, and real estate, can help to minimize losses if one investment performs poorly.

It's important to understand that investing is not a get-rich-quick scheme. It requires patience and discipline, and a long-term approach is generally the best strategy. Additionally, seeking advice from a qualified financial professional can help to ensure that your investment decisions are based on sound financial principles.

8May, 2024

Investing in Treasury Bills and Bonds in Kenya

In the recent past, the interest rate on Treasury Bills and Treasury Bonds has been substantively high. The Bills rate has been at around 10% and the Bonds rate at above 14%. This is indeed a good time to consider investing in these treasury products.

Below is a simplified guide on how Treasury products work and how to invest in the same.

Investing in Treasury Bills and Bonds

Treasury Bills and Treasury Bonds are one of the ways that the government funds its expenses through debt or borrowed funds. Treasury bills are used to borrow short-term funds (within a year) to finance the day-to-day running of the government, such as paying supplies, wages, salaries and the like.

On the other hand, Treasury Bonds are used to borrow long-term funds from the local public (periods of more than a year). These funds are utilized for capital expenditures such as building roads, hospitals, bridges and the like.

Characteristics of Treasury Bills and Bonds

The government offers Treasury Bills in 3 periods; 91 Days, 182 Days and 364 Days. Treasury Bills are on offer every week. Interest rates are determined through an auction process. Investors place bids and depending on the amount the government want to raise, the interest rate is determined.
Each month, the Central Bank announces the Treasury Bonds on offer. The Bonds differ in terms of; period, interest rate (coupon), and tax implication among other factors. You can get the current offers here - https://www.centralbank.go.ke/bills-bonds/treasury-bonds/
If a Treasury bond does not raise the amount that the government has targeted, the government can re-issue the bond in later months or years.
The Central Bank pays interest for the treasury bonds in intervals of 6 months. The interest rate of Treasury bills is deducted at source. This is called discounting. For example, if you successfully apply for a Treasury bill of Ksh 200K and the interest rate is 15K, you will pay CBK Ksh 185K and receive the Ksh 200K at the end of the investment period.
Treasury Bonds for building infrastructure (Referred to as Infrastructure Bonds) are 0% tax-rated.

Below is a summary of the characteristics of Treasury Bills and Bonds;

	Treasury Bills	Treasury Bonds
Period	Short Term (3, 6 or 12 months)	Long Term (Over 1 year)
Interest	Discounted	Every 6 months
Price Determined	Auction	Auction
Transfer	Non transferable	Yes - NSE
Minimum	100,000.00	100,000.00
W/Tax on Interest	15%	15%,10%, 5% and 0% for Infrastructure Bonds
Returns	Interest	Capital gain/interest
Interest rates (current season)	8-11%	13-15%
Costs	No further costs	NSE fee 2.6%
Offers	Weekly	Monthly

How to trade in Treasury Bills and Bonds

Opening a CDS Account with the Central Bank of Kenya – To trade in a Treasury Bill or Bond, you need to open a CDS account with the Central Bank. This CBK CDS account is different from the CDS account used for trading in stocks.

To open the CBK CDS account, you need to visit a CBK near you. There are 7 CBK locations. See locations here - https://www.centralbank.go.ke/contact-us/ . You can also open a CBK CDS from any CBK Treasury Bills and Bonds agents. Agents include stockbrokers, commercial banks and other financial institutions.

Once at CBK, ask for the Treasury Bills & Bonds desk and request to open an account.

Opening an account takes about 2 weeks after applying. You will receive a notification from CBK by text once this is done.

Deciding on the Treasury Bonds on Offer – Once your account is open, you can now trade in both Treasury Bills and Bonds.

To buy Treasury Bonds, you need to know what is on offer. You can find this information on the CBK website here;- https://www.centralbank.go.ke/bills-bonds/treasury-bonds/

Make an Application – Once you have determined the Treasury Bill/Bond to purchase, you will apply by filling out an application form with your details and the amount you are seeking to invest and submit it to the Central Bank before the indicated deadline. You can also apply using the CBK USSD code of *866#

Results Announced - The Central Bank will alert you through a text of the conclusion of a Treasury bill or bond auction. You can check the status of your application via the CBK USSD for Treasury Bills & Bonds (*866#).

Make Payment – Once your application is successful, you will make the payment for the bill or bond. To do so, give instructions to your bank to transfer funds to the CBK account with your details. Your local bank will help you with making this payment. You can also pay by depositing a Banker’s Check to any CBK office, or Treasury Bills & Bonds counter. Once you make the payment, your CBK Treasury bills & bond CDS account will be updated with the bill/bond.

Receiving interest for Treasury bonds – The Central Bank will pay you interest every 6 months after purchasing the Treasury Bond until the end of the period of the bond. Payments will be made through the bank account you indicated in your application.

End of Tenor – At the end of the tenor, Central Bank will pay you back the amount that you invested in the Treasury Bond.

Selling in the Nairobi Securities Exchange – Treasury bonds are negotiable. This means that you can sell your treasury bond to someone else through the Nairobi Securities Exchange before the end of the tenor. For example, if you buy a 25-year Treasury Bond, you can sell it to someone else through the NSE after 2 years or after any period. The price of the Bond is determined by demand/supply forces.

We hope this has shed more light on how to invest in Treasury Bills and Bonds. If you have any further queries, kindly feel free to ask by writing to us at invest@rubianiwealth.com

16Apr, 2024

The Keys to Successful Investing

pikaso_texttoimage_financially-successful-black-man

In our previous blog, we discussed some of the myths that limit us from getting started and succeeding in investing. We have all been victims of some of these myths at one point or another. Now, in today’s article, we will look at what it takes to be successful in investing. We have done some research and compared notes with others who have addressed this subject of investment success and have come up with a list of 5 keys necessary for your financial success.

1. Writing Down Your Goals, Having a Plan

Did you know that about one in every 100 people has written down their financial goals and has a plan to meet these goals?All of us have what we desire to achieve financially. But unless you put these desires on paper and come up with a plan on how to achieve them, then they remain fantasies and dreams.

In His book “7 Habits of Highly Effective People” Stephen Covey says that the 2^nd habit of highly effective people is that they begin with the end in mind. Articulating or writing down what you want to achieve through investing enables you to remain focused and motivated towards getting to your goal. So, take some time out of your routine and write down your financial goals, come up with a plan for fulfilling the goals and periodically review the plan.

2. Desire it, Believe it, See it

It is not enough to just write your goals. You must believe in them. In his book “Think and Grow Rich”, Napoleon Hill states that your financial success starts with the mind. Unless you visualize success and believe that you have what it takes, you will keep giving up or getting derailed along the way. Some of the things that can help you keep the faith include reading books or watching videos that motivate you towards your goals, constantly reviewing your financial goals and plan, looking for and interacting with individuals who are more successful than you financially and who encourage you to your financial goals and participating in talks, courses and forums that keep encouraging you towards your goal.

Our life is what our thoughts make it. – James Allen
Whether you think you can or you think you can’t, you’re right. – Henry Ford

3. Understanding the Money World

Robert Kiyosaki, a renowned investment teacher puts it this way – “The difference between those who succeed financially and those who fail is knowledge. He says that the reason many of us fail in investing is because financial literacy is not taught in school and many of us are ignorant about the financial world thus leaving us as victims. $C:\Program Files\Microsoft Office\MEDIA\CAGCAT10\j0298653.wmf$

In his book “The Art of War”, Sun Tzu, says that “if you know the enemy and know yourself, you need not fear the result of a hundred battles”. The money world is like war and if you do not understand what you are up against, you will end up being a victim and slaving for those who understand the money war and work it to their advantage. So, for you to be successful, you must understand how the money world works, who are the players and how you can position yourself for success.

4. Get Started and Be Consistent

Once we define our goals and gain an understanding of the financial world, we then need to go ahead and get started in our investment journey. A major key to succeeding financially is being consistent. Investing is more of a lifetime marathon rather than a sprint. Many people wait for a deal or some financial breakthrough as their key to success. However, one-offs have very little to do with your long-term financial success.

In his book “The Richest Man in Babylon”, George Clason states that money laws are like the law of gravity and they work all the time. His 2^nd money law states, “Start thy purse to fattening”. He explains that for you to succeed financially, you must pay yourself first by saving part of your income and thus fatten your purse. In his 3^rd law of money, “Make thy gold multiply”, he explains that you need to know how to multiply your wealth by wisely investing it.

5. Overcoming Failure

In his book “Think and Grow Rich” the writer says that success is always past failure. In other words, anyone who truly succeeds must have already failed before the success. It is said that on average, you will face a financial challenge that will significantly impact your wealth once every 12 years.

Therefore, it is wise to expect failure and protect yourself against the impact of a financial crisis. Insurance and having an emergency account are important to protect yourself. You also need to keep getting up once you fail and always know that success is on the other side of failure.