Alfred Mathu

Have you ever wondered who protects your money when you invest in a money market fund? What happens to your money after you make that deposit? Who receives it? Who decides where it should be invested? And who makes sure it is being handled properly? These are important questions, especially when you are entrusting someone else with your hard-earned money. Let me explain something about Money Market Funds that every investor should understand. Money Market Funds are part of a larger investment structure known as 𝐔𝐧𝐢𝐭 𝐓𝐫𝐮𝐬𝐭𝐬. What makes this arrangement particularly interesting is that your money is not left in the hands of one institution to manage everything. Four different parties have clearly defined responsibilities. The first is the 𝐅𝐮𝐧𝐝 𝐌𝐚𝐧𝐚𝐠𝐞𝐫. Suppose thousands of people have contributed money to a particular Money Market Fund. That money is pooled together, and someone has to decide where it should be invested. That is the fund manager’s responsibility. They assess available investment opportunities and decide whether the fund should invest in Treasury bills, government bonds or fixed deposits, among other permitted instruments. So if the fund manager is responsible for making investment decisions, who makes sure investors’ interests are being protected?🤔 That brings us to the second party: 𝐭𝐡𝐞 𝐓𝐫𝐮𝐬𝐭𝐞𝐞. Imagine a fund with 100,000 investors. It would be impractical to bring all 100,000 people together whenever an oversight decision needs to be made. The trustee provides an independent layer of oversight. Its responsibility is to safeguard investors’ interests and ensure that the fund is managed in accordance with its governing documents and applicable requirements. The fund manager makes investment decisions, while the trustee provides oversight. Now, if the fund manager is deciding where the money should be invested, where is that money actually kept? Meet the third party: 𝐭𝐡𝐞 𝐂𝐮𝐬𝐭𝐨𝐝𝐢𝐚𝐧. A custodian is typically a bank responsible for holding the fund’s assets separately from the fund manager’s own assets. This distinction matters. The fund manager makes investment decisions, but does not simply keep investors’ money in its own operational accounts. The custodian handles the safekeeping of the assets and carries out transactions in accordance with the required instructions. This means that the responsibility for managing the investments and the responsibility for holding the assets are separated. Finally, there is the fourth party. You. 𝐓𝐡𝐞 𝐈𝐧𝐯𝐞𝐬𝐭𝐨𝐫. You are the reason this entire structure exists. You contribute your money with the expectation that it will be professionally managed, properly overseen and held under appropriate custody arrangements. Now, think about how these four parties work together. The fund manager could experience financial difficulties. The trustee could be replaced. The custodian could encounter challenges. In each case, the responsibilities are separated, and there are arrangements designed to ensure that one institution’s difficulties do not automatically expose investors’ assets to its own financial obligations. This structure, together with oversight from the Capital Markets Authority, provides important safeguards for investors. This brings me to something I often tell people. If you are just beginning your investment journey, a Money Market Fund can be a very good place to start. One of the biggest benefits of a Money Market Fund is easy access to your money. You can deposit money whenever you have some to invest and withdraw whenever you need it, without locking your money away for a fixed period.

The 3 Principles of Financial Planning

Approximately 15 years ago, I met a woman who was determined to give her twin boys a good start in life by preparing for their university education well in advance. She was interested in a contractual investment plan that would allow her to make regular contributions over time, gradually building a fund that would be ready when the boys reached university age. She was keen to involve her husband in the decision, so she made a request. “Alfred, would you like to come to my house in South C? I would like my husband to listen to this as well so that we can make one decision as a family.” I gladly accepted. The following Saturday, I visited their home and met her husband, who worked at the Central Bank. He had a strong professional and academic background, with exposure to financial matters. I took him through the same presentation I had shared with his wife. He listened carefully and seemed interested. However, when we came to the decision, he asked me to give him about a week. He wanted to think through the figures and decide how much they could comfortably commit. I understood. Financial decisions, especially those involving long-term commitments, deserve careful consideration. A week passed. He did not call. Two weeks passed. Still nothing. His wife eventually called and asked whether I had followed up with him. I called him, and he told me he was still undecided about the contribution amount. He would call me when he was ready. I left it at that. But this is where the story takes an interesting turn. About two or three months later, his wife contacted me again. This time, she wanted us to meet in town, just the two of us. When we met, she told me something I have never forgotten. “Alfred, I wanted my husband involved because I believed that with his input, we could do something more substantial for the children. But since we are taking too long to make a decision, I have decided to start with what I can afford.” She had made up her mind. She wanted to open an investment plan for each of her sons. She committed 12,500 per month for each child, bringing her total monthly contribution to 25,000. We completed the paperwork, and the two investment plans were put in place for a ten-year period and requested that the arrangement remain confidential between us for the time being Ten years later, the decision she made that afternoon would speak for itself. By the time the boys were preparing to join university, their investment plans had matured. She had contributed a total of approximately 3,000,000 over the ten years, and the two plans paid out a combined 5,000,000. The most interesting part of this story happened afterwards. She invited me to meet her and her husband at Java House. When her husband saw me, he immediately remembered our first meeting. His wife then reminded him of the conversation they had had 10 years earlier. She explained that when the decision had taken too long, she had approached me privately and started the plans for their two boys. You can imagine what was going through his mind! What happened next impressed me even more. The wife requested that the proceeds be paid into their joint account. She explained that she wanted their sons to experience their father taking the lead in making the arrangements for their university education. She did not want the boys to feel that their father had been left out of something so important. That was a remarkable gesture. The lesson I want you to take from this story is simple: Financial knowledge only becomes valuable when you put it into practice. Knowing the importance of investing means little if you never take the first step. You may have financial goals you have been thinking about for years. What matters now is turning those intentions into action. If you are unsure where to begin, let us have a conversation. I will gladly help you explore your options and put a practical plan in place.

One of the most expensive financial mistakes a parent can make is waiting until their child is ready for university to start thinking about how to pay for it. By then, the dream is clear. The child has worked hard, the university has been identified, and the family is ready to take the next step. But there is one problem: 𝐭𝐡𝐞 𝐦𝐨𝐧𝐞𝐲 𝐫𝐞𝐪𝐮𝐢𝐫𝐞𝐝 𝐭𝐨 𝐦𝐚𝐤𝐞 𝐭𝐡𝐚𝐭 𝐝𝐫𝐞𝐚𝐦 𝐚 𝐫𝐞𝐚𝐥𝐢𝐭𝐲 𝐡𝐚𝐬 𝐧𝐨𝐭 𝐛𝐞𝐞𝐧 𝐩𝐫𝐞𝐩𝐚𝐫𝐞𝐝. Parents know their children will eventually need an education. What many do not appreciate is the amount of money required to finance that education, particularly when a child wants to pursue a specialised course such as medicine or engineering. The mistake is not necessarily failing to afford the education. It is failing to prepare for the cost early enough. Think about it this way. When a child is born, a parent has approximately 18 years before university enrolment. Those years are not just a countdown to school admission. They are an opportunity to build a fund towards a clearly defined goal. This is where financial planning changes the conversation. Instead of asking, “Where will I get the money when my child is ready for university?” the better question is, “𝐖𝐡𝐚𝐭 𝐦𝐮𝐬𝐭 𝐈 𝐬𝐭𝐚𝐫𝐭 𝐝𝐨𝐢𝐧𝐠 𝐭𝐨𝐝𝐚𝐲 𝐭𝐨 𝐞𝐧𝐬𝐮𝐫𝐞 𝐭𝐡𝐞 𝐦𝐨𝐧𝐞𝐲 𝐢𝐬 𝐚𝐯𝐚𝐢𝐥𝐚𝐛𝐥𝐞 𝐰𝐡𝐞𝐧 𝐦𝐲 𝐜𝐡𝐢𝐥𝐝 𝐧𝐞𝐞𝐝𝐬 𝐢𝐭?” When I advise parents on education planning, I encourage them to establish a target, determine their investment horizon and identify a structured way to accumulate the required funds. If the goal is to have 10,000,000 million available in 18 years, the plan must account for the amount required, the time available and the effect of inflation. The cost of education today may not be the cost of education 18 years from now. The earlier you begin, the more time you have to build the fund gradually. You also have more room to adjust your contributions as your income grows and your circumstances change. But there is another consideration that parents must not overlook. A good education plan must account for what could go wrong, not just what you hope will go right. Imagine a parent who has been consistently setting money aside for a child’s education. Then, along the way, the parent experiences a disability, a critical illness or dies before the target is reached Without appropriate financial protection, years of disciplined saving could be disrupted, leaving the child’s education exposed to circumstances beyond the family’s control. Now, what if your child is already in primary or secondary school and you have not started? My advice is simple: 𝐬𝐭𝐚𝐫𝐭 𝐧𝐨𝐰. You may not have the same amount of time as a parent whose child has just been born, and achieving the same target may require substantially larger contributions. But delaying further only reduces the time available to prepare. Your child should not have to abandon a well-earned opportunity simply because the financial preparation began too late. Your child’s education deserves a plan, not a last-minute scramble.

The polished shoes, the expensive perfume and the impressive job title may tell you that someone is doing well. Their bank balance, outstanding loans and investment portfolio might tell a very different story. Look closely at some of your salaried friends. They dress well. Their suits are sharply pressed, their dresses are elegant, and they smell of the finest perfumes. They drive to work, attend meetings and carry themselves with the confidence of people who appear to have their finances in order. From the outside, they seem to be doing well. But look a little closer. Some are knee-deep in debt. Their salaries arrive with several claims already waiting: a bank loan, a car repayment, rent, school fees, mobile loans and money owed to friends. They have little in savings and barely any investments to their names. Yet, because a salary arrives every month, they feel financially secure. Until the salary runs out. The last week of the month becomes a struggle. Unexpected expenses trigger panic. Borrowing becomes a temporary solution, and the next payday offers relief before the cycle begins again. This is the uncomfortable reality of financial sickness: you can look financially successful while your finances are quietly falling apart. Imagine working for twenty years, earning progressively better salaries, only to reach a point where losing your job means you cannot maintain your household for even three months. What exactly have those twenty years of earnings built? This is why I encourage people to look beyond their salaries and examine what remains after the money has done its work. How much debt have you accumulated? What savings have you built? What investments are growing in your name? How prepared are you for retirement? If your income stopped today, how long could you maintain your lifestyle without borrowing? One statement I hear repeatedly is that budgeting is impossible unless you earn a certain amount. “You cannot budget on that salary!” Someone earning 30,000 says they cannot budget. Another earning 80,000 says the same thing. Sometimes, even someone earning 200,000 insists that their income is too small to accommodate a financial plan. There is a difference between earning too little to comfortably meet your essential needs and spending without a clear understanding of where your money goes. A budget will not magically make an inadequate income sufficient. It will however help you see your situation clearly. It can reveal whether your essential expenses exceed your income, whether your lifestyle has become too expensive, whether debt repayments are consuming too much of your salary and where adjustments may be possible. Without that information, you are making financial decisions in the dark. You cannot solve a problem you refuse to examine. Saying that you cannot budget because you do not earn enough is a convenient justification for avoiding the exercise altogether. The first step towards financial wellness is acceptance you must be willing to admit that you have not managed your money well, that your debt has become excessive, that you have neglected saving and investing, or that your spending habits are working against your long-term goals. There is no wisdom in continuing down a path that has consistently produced results you are unhappy with simply because it is familiar. If your current way of managing money is not giving you the life you want, why are you so determined to keep doing things the same way? You sought education to improve your career. You seek medical attention when your health requires it. There is equal value in seeking guidance when you need to strengthen your financial position.

You can spend three hours on social media and still learn nothing that improves your life or you can come across one idea that changes how you think about money forever. That is the interesting thing about social media. Every day, we have access to an incredible amount of information, yet it is possible to scroll for hours, watch video after video, and walk away with nothing meaningful to show for the time spent. Meanwhile, there are people trying to figure out how to acquire their first 1,000,000. There are parents wondering how they will finance their children’s education, and professionals earning good salaries but struggling to build wealth. What they need is not another source of entertainment. They need the right information, explained in a way they can understand and apply. That is why I make it a point to share financial insights across my social media platforms. If something I share helps someone rethink a spending habit, start investing, prepare for retirement or make a better financial decision, then the effort is worthwhile. We are taking that conversation a step further. I recently had the opportunity to sit down with Rick Okinda, CPA, host of The Executive Review Podcast for a conversation that I am looking forward to sharing with you. We discussed ideas that I believe will be valuable to anyone interested in understanding money and making more informed financial decisions. The episode will be out soon, so keep an eye on this space. Until then, the next time you find yourself scrolling, ask yourself one simple question: 𝐀𝐦 𝐈 𝐣𝐮𝐬𝐭 𝐩𝐚𝐬𝐬𝐢𝐧𝐠 𝐭𝐢𝐦𝐞, 𝐨𝐫 𝐚𝐦 𝐈 𝐩𝐢𝐜𝐤𝐢𝐧𝐠 𝐮𝐩 𝐬𝐨𝐦𝐞𝐭𝐡𝐢𝐧𝐠 𝐭𝐡𝐚𝐭 𝐜𝐨𝐮𝐥𝐝 𝐢𝐦𝐩𝐫𝐨𝐯𝐞 𝐦𝐲 𝐥𝐢𝐟𝐞? The difference between where you are financially and where you want to be begins with a lesson you have not yet learned.

Your salary needs a plan before your expenses take over. Rent, school fees, family responsibilities and lifestyle will always compete for your money. Without a clear budget, you may find yourself earning every month but making little progress financially. I believe every shilling should have an assignment: some for emergencies, some for investments, some for your future, and some to enjoy today. Give your money direction, or your expenses will give it one. The question is simple: Are you telling your money where to go, or wondering where it went?