Kenya’s business leaders: How you handle your money in your thirties could make or break your attempt at creating wealth. It is within this bracket that you’ll mostly have a stable career or business, and a sense of the financial direction you want to embark on. Today, we look at a few key tricks you can use to wisely handle cash.
Monthly income: In your thirties, it is highly essential for you to pay yourself regardless of the kind of income you earn. “You must always put something aside that will go towards savings or even better investments,” says Kenneth Kaniu the chief executive officer of Britam Asset Managers (BAAM). He observes that the investments your carve out of your income will come in handy especially in meeting major financial and career milestones such as retirement. In order to be able to achieve this, you must cultivate a strict discipline that can be nurtured by working with a qualified financial advisor.
Lifestyle investment: Every financial decision you make after hitting your thirties should primary be informed by the kind of lifestyle you want to live now and in your later years. Florence Nyokabi, the head of HR at Standard Chartered Bank, says this determination should then form the basis of your investment plan and journey henceforth. She adds that some of your investments should be high risk – high return, others long term, others yet, with capital gains and cash flows.
Wealth investments: Use the money you raise as capital for generating wealth creating assets. “I have seen many people try to start to invest when they retire only to realize that investment doesn’t bear fruits overnight. It takes time, consistency and resilience,” says Samuel Gichohi, the Business Development Manager at NIC Securities Limited. If you are employed, you should invest your money in ventures that bring you passive income. These include investments such as treasury bonds or medium to long term strong stocks. Similarly, diversify and rebalance your investments. “In you thirties, you can now take on more financial risks. These risks should be well calculated and not taken just for the sake of it,” says Erin Baehr, the author of Growing Up and Saving Up.
Insurance: At this point, you must have an insurance program covering you. “The insurance package you have at work may not comprehensively cover everything you need,” says personal finance expert Waceke Nduati-Omanga. “Look into life insurance and be clear on what you need to have protected, then evaluate your options.” In the same breathe, Mr. Kaniu points out that this will require you to plan ahead and be aware of the merits and demerits of the existing policies in the market.
Debts: Pay off your bad debts. These include debts that don’t bring in money but rather supply you with luxuries. “Your objective is to enter your forties without a host of debts such as a HELB loan dating way back to your twenties,” says James Njenga, a Nairobi-based money coach. In case you find a bank loan necessary, ensure that you pay the least possible interest. “You can enter into an agreement with your bank and add more money to your monthly installments. This will reduce the overall repayment period as well as the total amount paid in interest.” To find favour with your bank, you must maintain a reputable credit score by keeping away from default.
Curb wastage: Financial wastage is usually a major characteristic in the 20s age bracket. In your thirties, you must be able to identify where every coin goes. “Put a stop to impulse buying and start following a budget,” says Mr. Njenga. Kenya’s business leaders.