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According to the International Energy Agency, in 2022, Russia invaded Ukraine, a country that is known to have the second biggest gas reserves in Europe apart from Russia. This war weakened the global economy through disruptions in trade, with fuel and food prices sky rocketing, raising the rate of inflation.

As the International Monetary Fund assures us the world is slowly recovering from a financial crisis, the cost of living in Kenya has greatly risen. At the moment, very few households especially in Nairobi are able to place three meals on the table. According to FinAccess household survey 2022, 32.6 per cent of Nairobi respondents identified the daily search for food as their main preoccupation in life. The survey also stated that only 35 per cent of Nairobi residents are financially healthy, with 65 per cent not being able to meet their day-to-day financial needs without breaking their backs.

The current high cost of living in the country serves as a good reminder on the importance of financial planning and ensuring one’s personal finances and investments are secure. According to a survey by EFG Hermes 2021, Kenya’s saving rate is at 12 per cent, unlike other African nations with an average of 17 per cent. This means that coming up with funds to cover major expenses has been difficult for most people in the country.

Personal finance is about realizing your financial goals, whether it is saving enough for short-term needs, planning your retirement, or saving for your child’s education. Factors that influence Personal finance include income, expenses, living requirements, individual goals, and the plan you make to fulfill those goals within your financial constraints. Financial planning helps with ensuring that you achieve your goals by assessing one’s current monetary conditions, goals and developing a roadmap that helps you get from the present to the future you want.

As a business owner, sometimes it is challenging to differentiate your personal financial goals from your business goals given the lack of a clear separation between the two. For this reason, you should consider creating a separate personal financial plan and determining what your goals are as the first step.

Making long term and short-term investments is one way of ensuring that you secure your financial well-being. The market has many investment opportunities from the financial institutions including insurance companies.

CIC Group offers a wide array of investment tools and opportunities through our asset management company. CIC Asset Management (CICAM) runs collective investment schemes and pension products offered in the Kenyan market. There are five products provided by the company:

  • Money Market fund is a low risk investment that preserves your capital while earning an interest.
  • Fixed Income fund is a high return, moderate risk investment that provides an investor with high distributions on a semiannual basis
  • Balanced Fundthat is ideal for investors looking for a mixture of safety, income, and capital appreciation.
  • Equity Fund that is designed for investors seeking long term capital growth and can manage high risk.
  • Income Drawdown that is ideal for someone who wants to access their retirement benefits as a regular income through an investment fund from which retirement benefits payments are drawn.
  • CIC Dollar Fund is a low risk investment that preserves capital while earning an interest for investors who have dollars.

As a business owner, your decisions will directly influence your financial status. Knowing how to secure and grow your wealth is one of the most important things you will ever need in life. No matter how much you have, the important thing is to educate yourself about how to manage your finances. Making the right choice will help you weather the storms and turn your goals to reality.

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