 Welcome back to Entrepreneurship Tuesday right here on why in the morning at Y254 channel is where you can find us across all our social media handles at Michelle Ashira is where you can reach out to me in this particular session we are talking about matters pertaining investments and savings when the and the youth being concerned on that particular issue it's more of an untapped investment opportunities for young people so you're looking at how young people can go about investing saving during this time of pandemic and it sounds a little bit impossible but in studio I have Hetal Natwani who is experienced financial advisor qualified ACCA affiliated and CFA level three candidate she studied out as an accountant but moved to investment after finding accounting to routine thank you very much Hetal Natwani for creating time to be with us thank you so much Michelle and the pleasure is mine absolutely studying us off I would like to find out is the youth bulging in Kenya a curse or a blessing it's a blessing okay yeah what do you find because people may argue in a different way because the the youth the number of the youth in our country they are the majority the backbone of the population at the same time we have high level of unemployment and it may cause a little bit of an imbalance if you look at it in a different perspective yes I would say it's a blessing because youth is synonymous with energy so having a high level of energy is always good for the economy high level of unemployment yes maybe I think people just need to look at it a bit differently I think the issue we have in Kenya is all of us want to go to college university get degrees and get a job so it's not possible for the whole of Kenya to be employed or maybe 90 percent of the youth right so I think people need to think of ways they can be entrepreneurs or businessmen or have their own hassles without really being employed so just because you went for example and studied engineering doesn't mean that you must do an engineering job or that's where you should end up as long as you find something that you're passionate about because again remember most of the time we use we are choosing careers for ourselves it's not because something it's not something you're really into it's just because it sounds cool to be an engineer or to be an accountant or a doctor or a pilot or something and then when you end up getting there you really most of us feel like okay maybe it's not my thing or you know you don't enjoy it as much and sometimes you do so I mean if you do by all means proceed but if you feel like you either need to sustain a living you know sustain yourself or you know you need to earn an income or you really don't need to enjoy your you know you don't enjoy what you're doing then it's time to break out and consider something else that you know you're employed by no one apart from yourself and you can still make a good living all right speaking about everyone wanting the the white collar job yes and just you just brought in the juakali aspect which is very important and also the the business owners entrepreneurship entrepreneurs that is yes do you feel like it goes back to the mindset and do then do we question how our mindset or the program how your program since when we are little and how do you go about changing that yes I would say to a good extent it is programming and it's I guess the generation that was there before us for them getting you know they came from that aspect of fast there was no one was educated and then all of a sudden education was a big thing and to be educated and to have a formal white collar job was a big thing so having parents or you know elders elderly siblings or relatives who are having white collar jobs then makes that then becomes the yardstick everyone feels that's the benchmark to be measured against but right now everything has changed so it may not necessarily work for the generation to come I would not say maybe for my generation because I'm not that young but for the generation to come I don't think white collar jobs is the thing that necessarily must be so I think it's for all of us as a nation maybe as parents is siblings as teachers or you know as mentors and coaches to understand that white collar job and not necessarily the only thing it's not possible for everyone to end up having these jobs as long as you love what you're doing it could be anything you could be a fundi you might you might have a passion for building furniture it's hard enough to I'll tell you what we have a service department Saisuts that's owned by Saiton and we do have you know we provide short and long term so we're trying to furnish a penthouse and it's just so difficult for us to get good furniture because if you get good furniture and it's important it's either very expensive or you have the very cheap versions of it so just getting the right design at the right price becomes very difficult so we're thinking right here if you had a lot of carpenters out there often these who could actually make a good product in market themselves well so that people know they exist then this is an opportunity in itself all right and looking up you mentioned about Saiton and the couple of projects they have yes and going back to it they have a project for young people which is the money market fund yes and I would like to find out what a couple of investment opportunities for the young people not just in the the money market fund last but just generally so so for young people I think there is a wide universe of investments in looking from an investment perspective you're better off starting off young than the than as you grow old because as you grow old your risk appetite becomes low that means you can only invest in a certain fixed opportunity set of investments which have to be you know less risky stuff like that more liquid have stable returns but when you are young you can actually invest in almost about everything but what I would recommend really for young investors because also take the practicality in mind a young investor may not have millions of shillings so yes real estate may be a good thing but may not be practical at this point in time unless you've either inherited or you come from a rich background and you have a lot of money that's a different thing but otherwise I would say something like money markets yes it's good because you can start as low as 100 bob I think 100 bob is just a lot of people can actually be able to set that aside the other thing that young investors can do is stocks because stocks you just need also like the minimum you can invest in Kenya is 5000 bob worth of stocks so that's also a good investment that young people can start with so these are some of the examples of course there's a lot you can invest in you know also businesses you can do private equity where you can start a partnership with your friend and you know invest in their business but stocks in something like money markets would be good so looking and I think investment is something it's not a one choose size fits all so you first have to look at where are you coming from and where are you headed so what's your financial goal if you're looking to invest short term like in the next three months you need your money back on the next one month or six months then money market is definitely good for you because you can put your money at any time when we draw at any time but if you're looking at a more long term maybe two years and above then you would go for something like stocks in money markets of course so you can actually divide your investments into a long term in short term okay speaking about just deciding which investment suits each person on a personal level and looking at their background um for young person who is watching this maybe I came out from the university and I'm probably just started a small business and there I am I have a student loan is waiting for me to pay yes and then there's another perspective or that people tend to think about when we talk about investment we look at certain class of people yes and we think these are just people who have way too much money that they have at their comfort just to instead of it staying at the bank let's put it into money market just for you to have interest so the question is how do you break that mentality and is it true that just this level of investment just applies for certain people who are you know chunk huge of money just to stay in the instead of staying in the bank you know let it just gain interest and is it actually workable for young person who is trying to probably make ends meet and I'm just trying to start out a business maybe I'm employed is it even viable is it is it possible yeah absolutely so I and I understand people when people think investment they think of millionaires who have money to just go invest but I think investment is more of a necessity rather than you know a luxury at this point in time even look at the corona you know pandemic how everything's big paning out people who have lost their jobs have realized if you actually had some passive income it's what's been keeping most people going as opposed to you know jobs because you either have a pay cut if you're lucky or no job at all so it's actually a necessity and not a luxury and yes young people who don't have a lot of disposable income can invest and we do have options like I said money market is as low as 100 bob so it's just not eating you know out for maybe you're not having a beer or just not buying that pair of shoes that you want but the key is just be consistent and be persistent so sit down aside and say before I start paying my rent or other expenses the first 10% and I'm not even saying 100% or 200% just the first 10% of your salary or income should actually go to investments so you're going to put this aside this money aside consistently every month and doesn't matter how small it is it could be 100 bob it could be a thousand it could be 10,000 but the fact that you are starting you see the key to investments for young people is that okay it doesn't matter where how just start because every day that you're not investing you're actually losing out because you're not earning yet inflation is going up so whatever you're going to earn will lose the value of money over time so the main thing is just start yeah start small start 100 bob start 1000 bob but start start today and I'll give you a very simple example the main thing in investment one of the key principles Albert Einstein says is the eighth wonder of the world is compounding interest so the earlier you start the more you have I'll give you a very simple example if you start investing 5000 every month from now for the next 40 years say you're 20 and you plan to retire at 60 for the next 40 years you'll actually end up with 25 million what you're really putting is and that is how much 25 million 25 million and i'm investing how much you're putting 5k every month so say um say 5k um for year that's like 60 k for like 40 years it's it's not much you know you've put in just maybe two three million but what you actually get after compounded interest is like 25 million that's if you started 20 years right now if you did the same thing and started at 30 years instead of 20 years what you'd actually get is close to 10 million so you see you've lost 15 million by just not starting 10 years earlier the power of compounding exactly so the earlier you start however the better the better for you all right then that brings me my next question what age is advisable for the youth even think about the the retirement accounts it's actually as soon as you start having some income and again it goes back to the principle of compounded interest look we all want to retire rich and we all want to go on cruises we want to have a couple of worlds yeah we need to we want to have a couple of mansions here they are villas bungalows you you know we want to have all these things and it is posible to have its oil i mean maybe not a hundred percent but a certain percentage but the secret is start early so the main thing you have to do as a youth is sit down and think and i think a lot of has have an issue when you say think we like doing things but we don't really think and think it through so you really have to sit down and say what exactly do i want out of my life when i'm 30 when i'm 40 when i'm 50 and when i'm 60 so set yourself goals and then when you set these goals now work backwards for me maybe say to on a house by the time i'm 35 years old how much money do i need and for me to have this much money how much am i investing every month so you kind of work backwards and it will work out better for you than just go and investing randomly you know your friend says put money in cryptocurrency or there another friend says you buy shares you buy there but you're not really putting any thought process so i think the main mistakes we sometimes make is not putting a thought process behind what when we invest okay one another thing that i would like to find out from me and when when you look at our school system and what you do like matters pertaining finances and our thought back in school and that ends up like affecting us yes like years down the line how important is it for Kenyans to just adapt into the Kenyan youth Kenyan youth Pase to just adapt to the investment and saving culture so i don't even think it's only a Kenyan school or education system issue okay even i think internationally even people who go to finance school you'd get someone who's a graduate i'll give you an example of myself when i started my job i was already a CFL level 2 but i had no practical experience in investing so it just it's about there in every country so i think aside from the education system parents mentors and coaches have to try to put investment mentality and i think the key here is parents and guardians because now you have this you can start this at a very young age teaching kids as young as three years or four four years old the importance of money the importance of saving even even if it's through a piggy bank the the importance of denying yourself today for a better tomorrow so if you can start implanting these thought concepts at a very young age by the time someone is coming out of college they actually ready to start investing and also i think it's also an investment farms to put up because remember investment farms are also looking to grow their business so they better provide some value for that yeah so there are lots of training satan is one of the farm does does a lot of wealth management trainings completely free of charge and i know there are a lot of institutions out there who do them as well some may charge some may not charge but what ham is there to just log in spend half an hour and get to know something a little bit more about money all right when you look at a couple of african countries let's look at the eastern african rwanda we have the government uh but there uh it's really empowering the youth when comes to manufacturing sector they're part of just them people also part of uh the group that brings in the smartphones into the country back in rwanda how do you feel that our government they big for agenda how does that translate to the young person just may be thinking that there are no opportunities back here home i'm looking at the for the for big the for big agenda in our country the before and i'm thinking where am i live what am i really considered in this space and what would you tell that person okay so for my perspective as far as opportunity is concerned kenya has tremendous opportunities in fact the opportunities we have in developing worlds does not exist in the developed worlds the reason is for them everything works perfectly for us most of the things don't work and when things don't work you have the opportunity to make them work and make money out of it in the process so as far as the for uh the big for agenda is concerned um for me i think when i maybe it's the background i come from or maybe it's how my attitude is in life but i think it all boils down on the individual you can't sit there saying sarikali say yeah maybe you know something of that sort you really have to do it yourself you have to take the step yourself and you know just figure it out how you're going to do on your own living and grow your own wealth so there is well maybe there's a godfather but the government cannot be your godfather godmother in how you start investing so yes they have the it's it's great that they have the big for agendas and it's great that they actually implement policies that's enable or promote entrepreneurship business the youth and everything but i think at the end of the day it's still boiled up boils down to you as an individual as a youth to stand up and do things for yourself all right now going back to what you said uh that it goes back to on an individual level do you feel like a self employment is viable during this time of kovid-19 pandemic i think it's one of the very few things that's actually viable yeah because with jobs i mean most firms are downsizing they're reducing force um you know so for example um a company is going to reduce its staff in uh because a lot of people are working from home or they're doing some you know part time in the office part time at home then you'll need less office space when you need less office space so by extension less cleaners less rent less everything so all these things are actually reducing but when you're actually self employed then well for a start you won't fire yourself and then secondly you can actually change your strategy uh maybe you used to have a shop and you used to sell from there and now you feel like you can't afford the rent anymore just go online online yeah it's very viable yeah exactly let's look at some of the financial mistake that the youth make while just being excited about investments yeah because i'm thinking if i'm i have 5k and i'm looking at the probability that probably in a three months time frame i will add a couple of extra 3k or just go you know all high on expectations well what a couple of mistakes that they i think the first mistake most of us make is we don't start in time you keep thinking you'll wait you keep procrastinating waiting for that big sum like you said you're waiting for that big chunk of money to go invest so that's the first mistake is you don't have to wait for the big money in fact it's not going to come there unless you're expecting some lottery or something you're going to win otherwise the big chunk of money is not going to come there so start as soon as possible with the little amount that you have then secondly we end up getting advice from the wrong people so you'll find friends discussing amongst themselves where should we invest and unless one of you is really a good investor in making a lot of money then you're actually asking the wrong set of friends right because if you all have the same experience the same knowledge then what are you really advising each other so unless one of you is actually good at investments maybe you should look out to an investment advisor and actually you can get lots of them free because they're also trying to sell products so you'll get free you know investment advice then we end up investing by following the crowd so we don't really invest in a product that we understand but we invest somewhere because that's where everyone is going you know so that's a very big mistake we do in like Warren Buffett says when everyone is um what does he say when when everyone is being fearless um be greedy you know when when everyone is fearful be greedy and when everyone is greedy be fearful so that's actually tells you don't do everything that everyone's doing because if they're all losing you you're going to be one of them so for you to actually make some money that's different from you know come out which are more investment savvy than the rest you can't be following the crowds you need to sit down and say okay do I really understand like a lot of people are into bitcoins but do you even understand how bitcoins work if you don't understand please don't do it so only invest in investments that you understand okay when you look at young young people so I included and we have this uh struggle of just living within our means yes the struggle of just budgeting and having specific goals how can we how can we be rescued in that situation okay so first it comes with awareness so there is self awareness that yes as you said we have this issue and then secondly is awareness by figure by learning or understanding how can you actually do it better so it's it's a couple of you could actually google or you could attend trainings or but the basics of it is first sit down and have a budget so right this is my income and this is my expenses and the first entry in your expense line should be pay yourself that 10 percent for investment after that 10 percent that you're actually going to invest then say this break down your expenses into needs and wants so when you've broken them into needs and wants it's easier now we know the needs is what comes first after the needs if there's anything left then go for once if not just try and live within your means all right I believe you've answered my next question which is all about young people who actually get minimum wage yes they're kind of like still they want to have yes so let's look at a couple of ways that young people have looked at ways we can untapped opportunities yeah investment opportunities and let's look at savings accounts okay so I'll start with the savings accounts for me savings accounts are money for a rainy day but they're not money to make you grow rich all right because for you to grow rich the return that you earn on your investment should be inflation now inflation in Kenya for this year is it's been fluctuating quite a bit but it's around five percent right so investment accounts actually pay much lower than or savings accounts pay much lower than five percent so you're putting that money aside like in case of a time like this when you don't have a job then you have money to keep you going in case there's a medical emergency or something of that sort you can actually use your savings but that money is growing at a much lower rate than inflation so that means in years to come your money would have lost value so that money for sure it's very important to have but just know that money is not going to make you rich if you want to grow rich and grow rich not not necessary in a bad way but the end goal is when you retire you want to have a financial freedom you don't want to be dependent on anyone else for your upkeep so if you want to get to the point that you're financially free then you have to grow your passive income um i'll give you a simple example so um we have two types of capital there's human capital and then there's financial capital so human capital is what you are worth in terms of your salary okay or income right so taking a simple example if you're earning 10000 today um so in a year say you've earned 120 000 right so in 50 years or 30 years or 20 years whatever years you have to return and multiply that and say for example say now your net worth in terms of your human capital how much you're worth earning over the next um say 30 years is around 30 million that's how much you could actually earn okay so now here this is a graph right so you're starting here so the younger you are the higher your human capital is not that you actually have 30 million but meaning that over your years that's what you can actually earn but your financial capital that means the money that comes from your investments is probably at zero or closer to that so as your years go by your capacity to earn is going less and less because you have less years now at this point your financial capital needs to be going up so at the point you retire your income human capital is zero because you're not going to earn anything at this point your financial capital needs to have picked so that's at its highest so at the point that you have no income from your salary the the income you earn from your investments needs to be at the highest that's the point when you say you're financially free now you can retire and still have all the money so your savings will never get you there it's a good to have it's an important thing to have because it will keep you going in bad times rough weather like this right but um income is actually but think about it you know they say three to six months is how much you should have as your savings right corona is five months down the line and we still have no end to it so if this god forbid goes on for two years then your savings will be depleted so what would you really be relying on you needed to have a passive income or some sort of investment income that would keep you going in such a time one thing i can tell you and tell you in this conversation one thing that is cutting across is how logical we should be when it comes to yes spending our money and even thinking about the future yes and and still on that but mantis pertaining investment for young person who is watching this and they are wondering about stocks and shares when is the right time to actually bachaiso invest in cheap stocks now because now yes right now because this is when the market is at a low and if you buy now you will actually this is the worst time to sell but it's the best time to buy in terms of crisis stocks usually plunge so that's the time you buy so that in the next and kenya has a resilient economy trust me we've gone through post-election violence through droughts through political issues we've gone through a lot we've gone through terrorism attacks and everything and somehow we always bounce back so kenya has a wonderful resilient economy so we will always rebound it will always come back and right now everyone's a lot of people are pessimistic they don't want to think about tomorrow they they think like and and i mean fairly so reasonably so right now the most important thing is now born to have food on your plate and secondly to stay healthy so yes but in a few years to come in maybe the next two or three or four years kovid will be behind us so if you actually bought your stock at the low now um like kcb would be trading at say around 40 right now but by the time everything rebounds the value of say the share would be at around 70 80 bob so you could actually end up doubling your money by putting it in stocks and remember stocks is supposed to be a long term goal not short term goal the mistakes we make is we buy a stock today and then the next day we see the price is falling so you start selling so it's also important for you to be patient enough to hold on to your stock give it time let the markets go up and down just sit there wait patiently for your money to grow all right yeah and then another another burning question will be how do we identify credible spaces to invest in because we have sacos that are coming into into this space and we also have investment from couple of banks and microfinances that are coming in also into the market how how do we identify credible spaces to invest in okay so there is a lot of different ways and they actually more investment specific so i'd say if it's something like land then obviously there is due diligence like do your search see who owns the land if you can get a copy of the history of the land what's going on or no if it's a stock then you have to look at the fundamentals of the farm so there's a lot that you can look at but it's actually also not a one shoe size fits all it depends on the investment asset class that you're going for but in general just maybe use common sense look at look at the governance of the company corporate governance is very very important especially in kenya so look at the corporate governance do you trust the management of the company that sells whatever product it is that selling whether it's land whether it's a stock if you do trust the corporate governance that's a good sign then look at how they have been performing the growth is it an investment that's growing and then look at how they react to incidences crisis like maybe corona are they open with their communication do they tell you exactly what's happening because also remember it's a very uncertain time no one really knows what's going on what we should do so you can really blame a management team for not doing the right thing because again nobody knows nobody has encountered this before but what's important is that there's clear communication what are you doing and why are you doing it so it's okay if it ends up being wrong but you can always then sit back and say well three months back this is what we thought it's not turned out as it we thought it is so we are changing our strategy but companies that actually constantly keep communicating to their clients there is transparency there is visibility so these are some of the things that you can look at someone for young person who's watching this conversation and they would like to get into investments and savings and they recently lost their jobs and they're wondering why are you guys talking about i am here going through a lot yes i'm at the lowest point in my life yes i'm barely making ends meet will be a kind of adverse towards up towards that kind of person okay so first the most important thing right now is have food on your plate and stay healthy so as long as you have these two whatever little you have i mean forget about eating out forget about drinking i think this if there is if there is ever any time to be frugal this is the time to be frugal just cut down your expenses as much as you can if that hundred bobo you know a thousand bob you would have actually spent on buying something else this is the time to actually invest it because in the long run this is what's going to keep you going all right so getting your final remarks on on a particular issue that i like us to get to get into so the knbs second second quarter labor first report shows that that the number of unemployed increased from four thousand four million yes six hundred and thirty seven thousand hundred and sixty four between april and june compared to two million three hundred and twenty nine thousand hundred and seventy six in the same period last year twenty nineteen so this means one point seven million kenyans have lost their jobs due to kovid yes nineteen i like to get your remarks on that and also just connecting it to matters pertaining you getting into investments and savings and alia on you had a conversation about the cool aspect of just white collar jobs yes so definitely it's very sad when anybody loses their job it's not a good thing even even when we've seen colleagues we've seen friends family losing their jobs or sometimes even not losing but being in that uncertain field of you will be called at anytime and you'll get your exit letter at any point in time so even that uncertainty is very very depressing it takes a toll on your mental health um as long as and also it's it really impacts how you can plan ahead because you know if you know you have a stable job you can actually plan ahead but when you don't know whether you have a job tomorrow no i can't even be telling you this is what you should commit yourself to be doing so um it's very sad yes but then again we need to live we need to survive so get over it um just think this is what life has thrown my way i may like it i may not like it but there's nothing i can do to change what life has thrown my way but i can change how i deal with it and how i react to it so again this is the right time and i have seen a lot of people have side hustles all of a sudden i mean kenyan we are known as hustlers but in the last few months the side hustles has really gone up quite a bit so it is actually time for people to think of other things they can do to just give them that additional income whether it's selling clothes online or you know whether it's you know being a real estate agent trying to sell properties for someone there's a lot you can do you can open a v-logal tell you interestingly uh when we started advertising a little bit more on instagram for size fits our service departments a lot of people just inbox me asking me can you give me a free apartment stay in return i'd actually go and promote your i'd go and promote your apartment because i have an x number of followers which now just makes sense that people have started becoming entrepreneurial they're thinking how can i get something free or how can i get some income using what i have exactly so i have followers and there's something i can do out of this yeah so i think this is the right time people need to start thinking out of the box forget the white collar jobs if you have them you're lucky good for you if you don't have them figure out how else you can make money if you and i'm sure and i know everyone in this world is talented we all have different talents there are people who are good in finance there are people who are good in cup and tree there are people who are good in cooking and there are people who are just good with motivational talks whatever your talent is make use of it come up with filo's come up with blogs do something that will earn your passive income all right last question until how can you how can young people have the best relationship with money three tips only the best relationship yes so number one be disciplined it's very very important right number two be consistent and persistent in number three research research research research invest in yourself funding i mean i think a few years back maybe my parents or grandparents generation they didn't have google we have google it has the answer to everything in this world so if if if you can keep searching researching what other people are doing how they are doing it what's the best way what are the mistakes what are the every time you read you'll always obviously learn something new and it keeps making you a better version of yourself all right so there's window of opportunities for the young people even during this time of COVID definitely okay thank you very much until for creating time to be with us and just bringing light on matters pertaining investments and savings concerning young guys especially during this time of COVID-19 and when uh then and guys were actually unemployed and the employment and an employment trade actually skyrocketing not just in kenya but also globally so thank you very much for uh being with us and giving us more uh advice pertaining investments and savings so probably could give us the social media handles if you have any questions we can engage with you yeah sure i'm just on Facebook Hetal Natwani yeah i my instagram are actually the business pages but yeah you can go to the siton investments handles in here throw in your questions there okay so there you have you guys make sure you follow us across all our social media handles that is at Y2F4 channel at michela shireza you can find me right now we're going for uh musical break and we'll be right back