 best we always appreciate your company. Now we move on to the first part of the conversation of the day and we're going to talk about career development and career development. We have to talk about money issues, financial issues. And that's why today's topic is on financial literacy. How do you empower yourself financially? This is a topic that I know is affecting most of us. And that's why we're joined with Abraham Mastibo, who is a client relationship officer. And he works at Octagon, right? Correct. All right. Kareem Asana, we are glad to have you with us. Thank you so much. All right. So you want to tell us what you do, a little bit on what you do? At Octagon Africa, I work as a client relations officer. And basically just touching on the areas of financial planning, financial literacy, and majorly on retirement planning. We'll try at some point, whether in self-employment or working as an employed person, at some point your body will become reluctant to wake up in the morning. So what will happen then? So I basically train people in terms of financial planning and now majorly on the area of retirement planning. Yes. And we'll get to the retirement planning, because as youth, we do not think of the retirement plan yet. We are still young. That's the perception of most youths. But now you will tell us about it. Before we get to that, want to talk about financial literacy. What do we mean by that? What do we need to know about finances that we don't already know? I think financial literacy is basically your behavior on money, with or without it. So how well do you contact yourself with money? And talking about financial literacy, there are five key components that if you're not cognizant or not really in understanding of it, then we call you a financially illiterate person. OK, what are those five areas? So these five areas range from the aspect of budgeting. Then we go to investing. How well do you invest your funds and where? Then borrowing. But in borrowing, you talk about effective borrowing. Then personal financial management. And now in the area that you work, understanding how taxation works. If you don't understand these five areas, then we'd call you a financially illiterate person. Goodness. I don't know if I'm financially illiterate. I know most of the things there. So I want to tell myself that I'm not financially illiterate. But there are areas like taxation. Maybe that's an area that I need to be keen on. You know, in my career now, how differently am I taxed? How exactly am I taxed differently from others? From what you've said, you know? Yeah, so tell us from budgeting, how can a youth now budget and plan? That brings the aspect of planning yourself, right? So how do you plan yourself in terms of budgeting and the investing bits? How do you invest? Is it after savings? And how long do you need to save before you invest? Okay, so I know most of us do the budgeting only when you've seen the money. Yeah. It's the wrong way of doing it. So budgeting should be done before actually the money is in full or is attained. So that you are planning ahead for this money before it comes to avoid getting into the, what we call personal economic distress. So you're planning ahead knowing what financial roadblocks are ahead of you and that in advance, you know that these might happen and you're planning for it early in advance. So the aspect of budgeting now comes in about when the money comes, how do you allocate it? How do you plan for it? You know, the thumb rule is that it's 50, 30, 20, that you're using 50% of your income. Now we're talking about the net, not the gross. I think coming from college, we all know that when someone earns 100,000, it comes fully in your account as 100,000. You know, until you get your first paycheck and there's some money there that has gone away. Pay as you earn tax. So you budget with what's the net. And then from that, you now get that 30, 50% should be used to sort your personal area of finances. That's your rent, your food. You know, the major thing that's expressed is that you need. Then the 30% is what we're calling into the once. Once. Once that, you know, maybe in the next few years you'd like to own a car, you'd like to own a house or something like that. You are thinking of something that you wish to own. So you're chaining that money in a place whereby it'll, you know, keep your head that you're able to get that to that point. Then 20% you're putting now under the investment or saving. So that this one could be, you know, going into a savings plan to be more like a question, you know, the emergency fund or you're pulling this money in a place that, you know, is investing to earn interest, you know, to just more like grow your financial port in terms of the funds that you need. Okay. Yeah. When you talk about now, now the savings, the 20% you've, you know, you have divided so well. So how do you, how do you plan your savings again? The 20% for, you know, for the cushioning in case of emergency, like do you need, how much do you save for emergency fund? How much do you save for an investment that you want to get into? Or how much do you save for whatever else that you need to? Saving, I'll say it's a personal initiative. And you know, like in everything that you do, you have to be intentional. That you know that at some point you need some money to do something, something to grow your career, maybe go for an extra course, you know, begin a business or do something else to you. Just as a retro financial independence journey. So in terms of savings, you know, for the companies that have been set up in a way that they have a personal pension scheme or a scheme for the employees, there's a percentage you're saving aside of your money. So that, you know, increases the port that you're saving towards your either retirement or you know, should you lose your job? Now in terms of savings, you're saving as an emergency fund in a way that, you know, we are all employed. And if you're not employed, you actually be doing your own hustle somewhere. The economy gets bad sometimes. You know, you can lose your job someday. At that point in time, how will you sustain yourself? Do you have enough rent for the next six months if you're still renting? Do you have enough money to sustain in terms of your food and your personal needs for the period that you're looking around, looking for the next job, or even as you're planning to do something else to just, you know, feed yourself at that time? So that's what they use that as you work, you should put aside some money that, you know, emergency. Should you have a sudden illness that requires a lot of money? How do you go about it? Now you don't go back home and you know, depleting everything that's supposed to be, they are selling everything that is required just to, I'm saying about that at that point. Now most of us, you know, at age, if you're young enough and you have no family, we allocate our money very well in terms of budgeting. But much of the money goes into what we, is what you call, you know, the necessaries. You know, the sherehe and everything. And you've seen many people who've been, you know, in the limelight, very popular and very lively in terms of their working career. And then at the point when they lose their job was when something happens, you know, they come out seeking for assistance or help in terms of getting stable. But when they were working, this people had some good money. We saw them live going, you know, from Mombasa, traveling to Dubai and all. Different countries. Yeah, yeah. You wonder what happened? Then now we ask what happened, you know. You were working some, at some time you had some good money in your pocket, but you were not planning ahead in terms of, you know, the emergency fund or what should happen in case I lose my job. Okay. All right, so that's something. So we need to have that savings just in case, you know, just in case and to be able to secure our future. And now, when you talk about investment, what do we invest to? What are the good investment areas that we can get into, especially as youths? In terms of investment, it's a wide topic. So depending on you, you can go into the conservative side when you're talking about the, you know, the government bonds and pressure bills, very conservative and, you know, the government of Kenya has never defaulted in terms of paying out the coupons from the bonds. So you could go in that area and as the moment now you can, you know, you can open your own CDS account and invest as a person, not necessarily going through a block or anything. So what do you mean for those that don't understand treasury bonds and bills? Tell us a little bit about it and even the CDS account that you just mentioned. So in terms of treasury bonds and pressure bills, is that for the sake of treasury bonds, there is a cap amount. I think, I think some of the shellings that you can invest, you know, as a person, take your money, put in and invest. Then you can get coupons either quarterly, you know, by annually or once a year. So that helps you, you know, in terms of giving some money is in terms of growth. Then you can either plow this money back, you know, or use it for other purposes in terms of investment. Treasury bonds are for longer periods, you know, one year and beyond, five years, 10 years, 10 year periods. Then you can go into bills or treasury bills that are short term investments, whereby you invest for either three months, six months or let's say one year minimum, maximum. Then in the same case, the money earns you an interest over the year and that coupon or the amount that is paid back as interest. You know, your principal remains instant, but then there's an amount that is given back to you as a return, you know, for investing in the government. All right. So those are two areas or one, depending on how much money you are willing to invest or how long you want your money to stay away from you. So now, what other opportunities? How's the money market like? Yes, yes, correct. The market has opened up, you know, the money market aspect is currently, you know, one of the moving things, the business of investment in Kenya. Very varied types of money markets, you know, they set the site on that we've heard of, there's the Cusa asset that just came in recently, Brita, and even all these insurance companies and banks are having their own money market funds. You can, you know, visit online and see on the capital market authority how that performance has been. Their return is good, but you know, many markets are flexible in a way that you can invest your money and you know, you draw it at your convenience. Yeah. I'll say money markets are people who are disciplined, unless you're putting the money into a fixed, you know, deposit, a fixed account that, you know, I'll take it out in one year or six months. Okay. Money market, you can put in your 100,000 shillings and tomorrow you wake up, you need the money and you can just log in and withdraw it. So, unless you have the financial discipline. So that's a money market, it's for financially disciplined people. National discipline, people that when you know, you put the money aside and you forget about it. You won't touch it until you actually realize the return that you're supposed to earn from that investment. Okay. Yeah. So that's another option. What other option is there? The very old-fashioned ones, you know, putting the money in the fixed bank, fixed deposit in the bank. You can, you know, invest in circles. Depending now, if you're investing to get a return, then you can look for a circle that gives a very good dividends in terms of every year. Or if you're investing or you're putting your money in a circle for the sake of borrowing a loan, then you need to put your monies in a place whereby you have, you know, people who can guarantee you. You know, and as you talked about effective borrowing, that borrowing this money to take it to the, an area that will actually earn you better returns or better interest, that you're not taking the money, you know, to just use it for the sake of using. Like we did with the help. You know, we are told there's some free money here. We all logged in, we all looked for the money and borrowed. Not knowing that, you know, at some point we'll pay for it. So, if someone had talked to us about it earlier and told us that, you know, the money you are being given to you, even as Babu, you know, was fighting for us and all, when we were running around the streets here, saying that, you know, help must come. But, you know, it's borrowed money and borrowed money must be, must, must be returned. So, if someone had talked to us at that time, that, you know, this money is a loan and that you need to give it back. Some of us took the monies, you know, I know people who took the monies and began a business and, you know, financed them up to that moment. And up to now, their life could be better. And, you know, the larger portion of us were going for the money to buy Sabufas, you know. But, it's monies, they are profiteers. And the monies usually used to come more so at this time, you know, the valentines. And we are taking the monies, you know. We take you go for a ride on the streets. Yeah. You know, that's how money, money that you have loaned. And now, I know that there's a good debt and the bad debt. And that's what you're talking about, really. Taking money to make sure you invest it somewhere that will bring you returns, not... So, how does a bad debt look like? So, the bad debt that, you know, you're borrowing money and you're taking it in a place that will not really earn your return. And I think when you're borrowing money, the whole point should be is where exactly are we taking the money to? You know, if you're borrowing money from a bank, you know, the rates are high and they keep varying every now and then, depending on the, you know, the market fluctuations. But if you're borrowing money from a circle, they're giving you a flat rate, interest rate. And the interest rate applies on reducing balance. So, it depends with, you know, people work in the bank but they borrow from circles. They don't borrow from the same banks. I know of so many people who do that. So, if you're taking a loan to invest in business, you're taking a loan, you know, to do something that will give you a return in terms of investment, then you're doing the right thing. But if you're taking money or a loan to go and, you know, buy flashcards, buy things that will not actually, you know, bring you a return of value to yourself then, you're doing the wrong thing at that time. That was what we call bad debt. You'll struggle paying it when you actually don't feel the need or the, how it really helped you when you took it. Okay, so that's a bad debt. How do we get out of all these bad debts that people are in, I think, something that's really also just affecting the youth is being in debt, you know. We've had, you know, in the past, we had an issue with the digital lenders with the high interest rates that they were charging. And they're easily accessible. So, you borrow a loan, you get it instantly. They give you a loan. We're now paying it as a problem. So, you get some, are you sure that's what I did for this digital lender and tomorrow they borrow from this other one? So, you find someone has up to like five different loans from different lenders and now paying it is a problem and that brings stress and that, you know, I think it's also part of the issue of affecting youth in terms of mental health, courses rather, you know, because of the financial difficulty that they get in. When it's in debt, you don't know how to get out. So, how do they get out from this debt they get into? I think that still takes us back to the very first aspect of budgeting. If you wish to clear your loans out, then you have to have a plan of how you wish to clear them out. Depending on where your sources of income are, then you budget and know how much you'll go into in terms of loan repayment. So, the money that you are putting into the loan payment, you know, if you've taken a loan that you are paying monthly, then you can negotiate with the provider of the loan to either extend your period until that time when you have enough to repay it quickly so that you're able to finance it in a slow and steady way. I think, you know, when you get your first job and you have a pay slip, banks open the doors very wide for you. And everyone is very much willing to give you a loan because they know that you have the capacity to repay. If you lost someone who is retired and has a lot of retirement, they work into a bank and they don't want to be listened to because where do you get your finances to pay back your loan? And you know, most of us don't just, you know, the youth in that case, we don't take loans because we need them. You know, we want to test and see if this thing really works. You are told that, you know, there's an app that you just, you know, keep your key in your ID, key in your phone number and your money comes to your bank, to your own person. So, you are trying because you want to see if this thing really works. And actually the money comes and you are, okay. Now you don't have the plan for the money. You have no idea how you repay it. But since the money is here, you can find the next course of how to spend it. And until that point when, you know, you are listed with CRB, then you realize, okay, what did I do to myself? So I'll say, loans will always be there and loan facilities will always be there. You know, every micro-finance initials are opening every day to lend out people money. So the whole aspect comes back again to discipline, self-discipline that in whatever you're doing, you know, you avoid the peer pressure that we know about that, you know, you've seen your, if a colleague you worked with has, you know, has already bought a house, you want to buy a house, they have a car, you want to buy a car, you know, you just take your steps. And you know, what we say that, the only difference between you and that senior, executive you see in a corner office, or that very much CEO or owner of a business that you see is just time. You're planning, you're energetic, you know, push against yourself that you want to be in that place. And the aspect of, you know, saving and investing is what will get you there. Time is just there, the determining factor, yeah. All right, so it's just time. So what you're saying is those that are already in this kind of debt, they need to just plan plan themselves out, you know, how to repay. In terms of repayment, do they start with, you know, what type of debt, how do they, how do they, you have five different loans that you've taken from five different, you know, microfinance. So would you start with the most expensive, do you start with the highest loan you have? Do you start with the least? Do you start with the one that is stabbing you the most? Or, you know, there's also, you've also mentioned the aspect of just going to them and seeking to, for them to extend for you. And even when they accept, so which one do you start with in terms of repayment, how do you start? I think, you know, there are different analogies and ways of looking at it. So depending, are you, first of all, you look at your financial strength and capability. If you're able to repay the larger loans, you know, faster, that will be better, but that will be the harder part to start with. But if you're beginning the smaller ones, there's that feeling that you feel that you know, I've already cleared one. So one to go, two to go. So the best, you know, I'll say, depending on your financial capability, but if you have the capacity to pay all of them at once, you know, beginning the smaller ones. So that as you finish the small ones, is that feeling you feel that, you know, I've already completed one? So one to go, one to go and, you know, in a period of, let's say, two, three years, depending on how much the loan is, you'll have cleared the loans out and now it's channeled that money that you're paying the loans to investments. Okay. Yeah. Okay, that's, that's fair enough. So it totally depends with the individual and you know, how much they can pay at what time and what, you know, their preference. So now, talking about the retirement plan, we're saying that the youths are not, you know, the perspective on retirement is not really what you're saying, that we need to have a plan now. We wait until we get to 40s and then we think, now I need to have a retirement plan. So what do we need to start at, at our 20s? You know, this is very interesting. Just, just like a week ago, I was meeting with a lady who was retiring. She was around 61. She has just kept employment and she was telling me that, you know, if I had known, you know, what this thing will do, what I've done to me, I'll have began when I got my first job. You know, when you get your first job, most of us don't even have a plan of how we want to live. All you want to see is that we are living, moving out of that bed, that bed seat, moving into our, you know, a good house or in a better estate. Yeah. We don't really think of, you know, what next? And I, you know, our friends who finished school and got their first job and within six months, the job was gone again. It takes you way back in distress that you cannot manage. So when you get your first job, we say it's the first moment to think about your retirement. You know, you're employed. You're employed. So when you get your first face sleep, you know, if your employer is gracious enough and has a pension scheme, then you enjoy that benefit. You know, they take a percentage of your income, they say 5% and they match with the 5%. So you're saving at 10% per month as a retirement plan. But if that doesn't happen, then you have to find a way to, you know, look at it in a way that you have to open your own personal pension plan and start saving. I say we will have some, and looking at this, we will have some, you know, 2000 to 10,000 shillings that you don't account every month, depending on how much you earn, correct? Yeah. However much you do your budget or track expenditures, you can not trace how 2K shillings was spent or 3K shillings. But the difference that money can make in a period of 25, 35, 30 years is very huge. Okay. And I don't make the eighth or the ninth wonder now because you already have the eighth wonder. The one of the world is that, you know, compounding interest, that the longer you invest your money, the longer or the more it earns interest and the more it grows. So for those of us who are young have a longer period of investing. And we have the chance to enjoy that monopoly. If you do a simulation of just 2000 shillings investing in a period of 30 years, that money could grow, you know, depending on the place that you invested and now looking at this, we're looking at the interest rates that you earn, away investing the money. If you're putting in a pension scheme that has good returns, then that money could, you know, if you do the simple interest and compound it to be three or four times what you have actually saved. Yeah. So the compounding interest is what we, as the youth stands to gain. And if you have employer as a pension scheme, then you know, you can have your, you do over and above what they're giving because that actually puts you ahead of everyone else. And at the moment when you're retiring, or even if you start your own business, you know, retirement is about cash flow. You can have all the wealth, you can have all the land that you need, but if you don't have the cash flow, then that becomes a challenge. But if you have saved enough money for you to have cash flow, even if you have a business that's running and is just a point that's struggling, when you're retired, then you have a chance of getting some extra money to run aside for yourself. And you know, don't really depend on your children. Okay. Yeah. All right, that's fair enough. You know, when you're talking, I was doing the calculation. Yeah, if you have, if you're saving 2000, the 2000 that we usually lose track of, in 12 months, that's 24,000, right? So in a year, you know, that's the year, 24,000 in, let's say, 30 years. 30 years you're working. You almost have up to a million, almost. Almost a million. Yeah. Now, compounding interest in that period, if you, let's say you just assume the market's interest is at 10%, that money could be almost five, seven times that amount. Okay. Yeah. So you can make good money from the money that we waste when you start saving early. Early, yeah. And that's the thing, okay, so. And by the way, they say the best, you know, this is across the world. The best way of saving is at pace, at check off. You know, if your mind, and this comes to the COVID, COVID periods, you know, some of us got their, their salary slashed by a percentage. Yeah. So you are getting this 50%, but your life went on, like usual. Moved on. Moved on like usual. So if at pace, at paycheck, you slash off some money and save it. And now talking about taxation, money invested in a pension scheme doesn't, is not really taxed at payroll level. So if you, you only say 100,000 shillings and you are giving 10K to, 10,000 shillings to a pension scheme, then the pay as you want tax only applies on the 90,000 shillings that remains. Okay. So depending, even if you also have a life insurance cover, you know, of 10 years and beyond, then that also is not taxed at payroll level. So if all these things come in check off level, you are actually saving, saving to have a better financial future. At the same time, you are also saving on, on the taxes you are giving to the government. Okay. All right. Tell us about the NSSF Act. The NSSF Act, you know, of 20 to 13, is one of the game shares that has come in. And we stand to be the biggest beneficiaries as the youth of this NSSF Act. So when you are employed as an employee, your employer must remit 6% of your salary to NSSF. And you know, match the same amount that they are deducting you to the NSSF. So if this money is invested, you know, earning interest every now and then until you get to terminate it will be some huge amount of money compared to when our parents were just giving the 200 shillings with the employer matching 200. If you're earning 100K for instance, 6% is just 6,000. Going back to the math again if you'll do it. 6% is 6,000 that your employer is deducting. The employer must match it to 6,000 to become 12,000 per month. If you save that money for the next 30 years, you know, even with simple interest that's a very huge amount of money. And you know, now the aspect of, you know, that the employer can decide to take this money out to a private pension scheme and invest to earn a better return in terms of contracting out. Then you will earn a better interest and your money will grow at a very high rate. And when you get to terminate with a 10% or 8% average in the market, that money is quite huge. Just recently there was an article saying that, you know, Kenyan retirees are the poorest, among the poorest in the world, that in the retiree they have no money to sustain themselves. So looking at it, if the NSF actually was to be, continue being implemented for the next few years up to the, you know, when we get to retirement, then Kenyan retirees will actually be the richest in this world. We will be flying out here and, you know, just enjoying ourselves because we, we have hammers up to your retirement. Yes, yes. So the actors come in as a game changer and you know, the government was looking at the aspect of social protection. That as you retire, there's no serialized idea aspect of it. You know, or if, you know, you keep, you know, following up your parents, your children for handouts or those kind of things. Black tax. Yes, yes. So yeah, if you please, if you do not want to have, to impose black tax on your children, then I'll start saving for your future. All right. That should make sense. Yeah. Okay. All right. Now, how do you, how do you track your expenses? What, you know, by what means if someone wants to be financially disciplined, to know how much they waste, you know, this 2000 we were talking about, how much they actually waste in a month from their salary and how much they can invest, they can save, you know. So how do you, what best ways can you track your expenses? I think we've all seen that clip that was going viral sometimes back, you know. Some guy had gone in his salary and he was, you know, allocating their monies. 2000 she links for the girlfriend, some 2K for the, 1K for the, for the rent, for the rent, you know, some monies for, and they almost, 90% is going to share a, yeah. But you know, if that budget is done in the correct way, then you stick to your budget. That, you know, my rent will be 5000 she links. So you are, you're making the same, with the same rent, even if your salary increases, that you're making the same rent and whatever comes on board as extra, you are taking it towards a savings plan. Okay. Then in terms of tracking your business, that when you have collected your money, that you will need 10,000 she links for their, for food throughout the year, throughout the month, then try to stick to that budget. So that you don't actually go out, you know, getting it loans or spending money that was actually meant for, for savings. And that, you know, the rule of thumb is that, save before you start spending. Save? Save before you start spending. Okay. So when that money comes, whether it's at check, it's going to check off even better. If it comes in your account and you are that discipline enough, then take, if it's at 10%, take it out, put it under savings, before you start planning about the balance that has it meant. Then that will be the best way to be. If you, you know, you wait, you wait to spend until you have a balance to save. It will never happen. Okay. So save before you even start spending. Whatever you get, take off that percentage, but it's in your savings account or savings planner, whichever you have. Now, there's this question automating still related to that. How can you automate your bill payments and why is that also just important? Automating a bill payments helps you, you know, to not waste money in that way. And that's a, you are locating your monies to the channels that is supposed to go in. So that even as the money comes, or even if there's an increment on your salary, or in terms of your income, if you are, you're doing it on your own side hustles, then you have adequate amounts of money that's going to the right channels of money. I know that the safari, my safari come up. I think I use that a lot in terms of automating my bills. And, you know, there's a place for bill manager that you can put in, you know, if it's your cycle that you save, you can allocate the pay bill there in advance. Now that we use a PESA here in Kenya, so you can, even if you pay your rent by PESA, you can, you know, have it as a bill there. If you have your water electricity, you can have it as a bill there. If you have your, depending if you have a loan that you're paying, you can also put it as a bill there. So that, you know, by just looking at it and having it written out, then you know how much you're spending every month and how much is going in what aspect. So that, you know, your money doesn't get in your account and you're going out on a Friday. You know, your money comes in on a Friday and you're going out with your friends. You will come home without friends, no food. You know, money is gone. And that, you know, before you recover from that cycle, it'll be a six months or seven months. Yeah, you know. Period, yeah. So yeah, okay, all right. So we need to be intentional with how we spend our money, with how we manage our finances. That's what we're saying here. So we've talked about committing bill payments. That's very effective. So now, how would you say financial stability therefore looks like? For you to say I'm financially stable, how does it look like? I think I'll talk about now the difference between a rich person and a wealthy person. Please do. So a rich person has very much in terms of material wealth and the cash aspect of money being bished out. So if you have an uncle of yours who is 35 or 40 living in Kilimani renting a house of 200,000 and earning a salary of less than 400,000 in terms of net, then you'll see them as a rich person, yeah? Because they're living in an expensive place. They're having a very good car. They're taking their kids to a good school. But what will happen? Should they lose this job of theirs? They go back to zero. They go back to zero. And the children are going in a place they're learning French and German in terms of school fees. And they have no job. No, you have to take them back to a place nearby. They have to go and learn sheng, talk sheng to other children. So a wealthy person looks at the streams of income and looks at the long term. While the rich people are flashy and trying to show people that they have the money, the wealthy person is silent. And working on a long term aspect that this money is generational. That if anything will have to happen to me, then my generation will go on. And my children go to school safely. There will be nothing that will stop when I'm not here. That's how a wealthy person thinks. They put their monies in places whereby they are sure that a return will come out of it. They're putting money in a place whereby it will bring you a return. So investing that money is what defines you and spending that money is what we call you a rich person. You can be rich and wealthy at the same time. That you have the money, you are dishing it out, you are even having the cars, but you also have investments that bring you the return. But most rich people are not wealthy. Okay, but most wealthy people are rich? Not really most. Very few wealthy people are rich. Because rich is, in the outlook, what we see. Wealthy is what they own that we don't see. Okay, all right. So there's a difference between rich and wealthy. I hope you've taken that. And I love the aspect of generational wealth. You need to live well for your children's children. That's the point. Before we come to a close, talk to us about the taxes. Why is it important to know how you're being taxed in the area of work you're in? So, depending on what you talk about tax, in this regime, we get some shivers. Yes, oh. Yeah, so, depending if you're an employed person with a pay slip, the taxes that apply, if you're a person in business, you also have taxes that apply in terms of, you know, taxation and the expenditure that you, or the income that you make as a person who is running a business. So if you're employed, then you know the taxes that apply. I think the major one, the bigger portion of the tax, for those of us who employ these, they pay. They pay as you earn tax. So then there's a housing levy that has come in. There's, I don't know if it's a tax, but yes it is. You know, there are different taxes that apply. So if you know those taxes and how they apply, then they affect your gross pay. So for those who are actually, you know, just getting into employment or have gotten into employment, then you need to plan and know that. When you salary is 100,000 shillings, you know, you'll be keen enough not to announce it to everyone that you know, I earn 100,000 shillings because your account will not come with 100,000 shillings. Yes, please tell us. So, you know, if your colleague were to go home and say, you know, Abraham earns 100,000 shillings, everyone at home will be like, this person earns 100,000, they can't just give me a thousand shillings when I ask of it. Very mean. But you know, the money that comes in your account is actually not that amount. There's taxes that apply across it and if you know how what's the net now we say, work with your net, then that will be an easier way for you to plan ahead and know that, you know, this is the amount that comes into my account. When someone who is earning, let's say, 10,000 shillings has a tax of almost 100,000 shillings that goes away as tax. Exactly. The more you earn, the more taxes you pay. The more taxes that apply and even this government just changed everything else. So if you plan with what comes in your account as net, that's actually your income. In the same way someone who's earning a business, there's taxes that apply in terms of the income that you earn as a person, the corporate tax. I don't know if it's at 30% or 25% at now, but if you know what the tax is at that time, then you plan with what, you know how to plan yourself in terms of taxes you should pay to just be compliant with the government and how much that comes into your account in terms of planning for your own financial planning as an individual or even as a corporate. So knowing about taxes is something that, you know, helps you to plan ahead and also helps you to find a way of even, you know, I would say saintly or in a good way evading the tax. If you, you know that if you have an pension scheme, you'll earn a tax relief. If you have a long-term investment or insurance, let's say an education plan or an endowment plan, then you also have enjoy a tax relief. So if you know how these things work and you incorporate them, then it can be easy for you to reduce on the taxes that you're paying to the government and increase on the savings that you're going to earn in the long run. Okay. Yeah. All right, so I think that's clear enough. You just know how you're being taxed and then now work with the net now. Don't work with, come on, earn 200, don't go out shouting that you earn 200. No, I don't. Because the expectation is high about what you get is something else. But that's, you know, just being cognizant of everything. Now as we come to our close, what do you want people to take home from this conversation to be on being financially literate or being good planners? I think the take home is that you learn to budget before you spend. And actually, budget before the money comes. So that when it comes, it actually goes in the allocations as you have allocated it. Then plan out your financial journey. And as they say that the best way in terms of planning is have it as a region. We all hear this question in interviews that they ask, you know, where is yourself in the next five years? Yeah. If you are saying it out and it's not actually written somewhere, it's just a dream. Okay. So budget and have it written out clearly so that you know that when my money comes, this is how I locate it in terms of investment, in terms of my expenses, in terms of my wants, even the things that I want to earn in the long run. Then depending on how much you earn, you'll actually have a plan that works. Okay. What they call the smart plan. It's specific, it's measurable, it's articulate, realistic and time bound. Okay. Awesome. I think those are great points to relieve. Thank you very much for coming on board and sharing these amazing insights on financial literacy. We definitely hope we believe that it will help us in this journey. Now that it's still early on in the year, you know, we need such tips. So this has been Abraham Masibo who's a client relation officer at Octagon Africa and we appreciate that he came on board. Thank you for staying on for this conversation. I hope you've taken something from it. Now we're going to take a short break and then we'll be back to talk about what is happening in Kenya, state of the nation politics, discussions that are affecting the youth. So stick with us.