I am working from home surrounded by domestic noises and needs. The
roads are relatively empty. Many pedestrians are in masks which pretty often,
don’t cover their noses and mouths. Supermarkets have social distancing rules.
Luxuries tend to be missing from those shopping baskets.
I am a Financial consultant. I discuss Financial matters on webinars
titled “Money Matters with Melvin” on Zoom, Facebook Live or Google Hang-outs. My
current and potential clients from the US, Canada and Kenya are cautious
spenders in this season. One such potential client, Wanja works 16 – 18 Hours a
day in an old people’s home, in North America. She makes three times double the
pre Covid 19 hourly wage, for this job. The work is hard. She hardly sleeps.
She asks “Is this the best time to invest in Kenya?Friends and family have
often conned me of my hard earned cash”. I respond “The demands from friends
and extended family, in this country, for financial support, at this time, have
been hitting you with increasing regularity. Why not open a money market fund,
which you can regularly draw down, say once a month, as part of your family
social responsibility?”
I go on to add “If you have been living in the US without the right papers you could be on your
way back home, on a one way ticket, as soon as this COVID 19 blows over. You
will need opportunity, sink and emergency funds to re-integrate into the Kenyan
economy. What better place to keep these funds than Money market funds (with no
lower limit) and/or Wealth Management funds (if you have USD 10,000 or more
sitting abroad).”
I throw in my final submission “This might just be the right time to
consolidate your savings and investments and rationalize your investment
portfolio. You could also take a Life Insurance policy to cushion you against
Income Tax.”
The times have changed. All of the above might sound academic if you
have been laid off, if you have taken a pay cut or are simply not turning over
enough cash like my friend Peter who used to sell second hand duvets in a
low-income Nairobi neighborhood. We are no longer importing second hand clothes
to Kenya. Another such friend is Julius, who is a bus driver in Nairobi (now
off work because social distancing rules in public transport and few commuters
have made it uneconomical to have a bus on the roads).Paul and Julius ask “How
do we save at this time?” I give them my intelligent Financial Consultant look
and quip “You need now, more than ever before, to stick to a strict domestic
budget because that seems to be the sink hole where most employment, business and passive incomes in Kenyan households seem
to find their way.” I quickly share a word document screen on my Zoom
presentation and break down what an after tax monthly domestic budget should
have looked like in pre-curfew days.
·
Tithe/Charity 10%
·
Education 20%
·
Rent/Mortgage 15%
·
Clothes 5%
·
Food 10%
·
Medical 10%
·
Entertainment 10%
·
Savings 10%
·
Investment 10%
Now that we have a curfew we must re-arrange these numbers and note
that support to family and friends has to come out of that 10% entertainment
budget that you can see above.
If you have read thus far you may want to ask some of the questions
that Wanja, Paul and Julius did not ask. Why not? Just drop me a call, a what’s
app message or email me because none of us can know everything about making and
managing money. I am slightly ahead of most.
Dr Melvin D’lima
April 28 2020
Nairobi Kenya
Email:melvindlima1@gmail.com
