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To be our Customers’ most trusted savings and wealth management partner in East Africa
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“To be our Customers’ most trusted savings and wealth management
partner in East Africa”
OLD MUTUAL OLD MUTUAL KENYAKENYA
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Retail Mass Market
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COURSE OBJECTIVES 1. Personal financial management •What is Financial education •Why is Financial education important •Financial self awareness goals•Pillars of personal finance•Building a personal financial plan•Budgeting, saving and investments guidelines•Retirement and estate planning•Personal balance sheet •Personal record keeping
2. Principles of Financial management •Illustration with the BIG 5 animals
3. Financial planning solutions•Long term savings – retirement & investments•Dependent education •Life cover
About Old Mutual
• Old Mutual was founded in 1845 and we have since expanded from our origins in South Africa through organic growth and strategic acquisitions.
• Old mutual is among the largest and most established and trusted financial service providers in the world with over 40 years experience in managing low risk high return products.
• We operate through market leading international brands including Old Mutual, Skandia, Nedbank and Mutual & Federal.
• OMK offers products in four areas: Long-term savings, asset management, banking, short-term savings and stockbrokerage.
• We are in over 34 countries { Africa, Europe, America and Asia } and have over 54,000 employees. We are based in London.
• Old Mutual operations started in Kenya in the late 1920’s and were directed from Salisbury (Harare) until 1930, when a branch was established in Nairobi where it is now amongst the top ten insurance companies.
• Old Mutual restarted operations again in 1995.
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Group Structure
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Presence in over 34 different countriesOver 165 Years of Investment Wisdom!
OLD MUTUAL GLOBAL PRESENCEOLD MUTUAL GLOBAL PRESENCE
WHAT IS FINANCIAL EDUCATION
This the ability to understand personal finances and allow an individual to make
informed and effective decisions in securing their future.
•People think choosing the right investment savings plan is more stressful than a visit to the dentist!!!!!!!!!
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WHY IS FINANCIAL EDUCATION IMPORTANT
• Achieve personal Goals– Buy a home– Fund the children’s education– Ensure there’s an income when we retire– Peace of mind to enable us be productive at work places – Plan for holidays
• Have cash flow– To balance our budget– Financial freedom- get out of the rat race
• Cater for contingencies– To ensure you have a nest egg when out of a job/emergency– Take care of our financial obligations after death/disability – Plan for Health care needs
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MONEY CYCLE
Three key pillars that are critical to planning
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Accumulation
Growth & Conservation
Distribution
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COMMUNITY FINANCIAL EDUCATION HEALTH CHECK
From research, it shows that: 91% of East Africans spend more than they earn
70% don’t have income on retirement
71% of adults know nothing about investments in equities, bonds, stock market.
Newly employed people don’t have the ability to choose and manage credit card or save for retirement.
67% of Kenyans claims to know the concept of compound interest while a partly 18% have an idea.
Highly educated consumers with high income levels can be just as ignorant about financial issues just as less educated, lower income consumers.
INDIVIDUAL FINANCIAL HEALTH CHECK
• Do you have financial goals?
• Do your expenses exceed your income?
• Do your expenses always increase when you get a pay rise?
• How much of your loans are financing a) consumer goods/services b) development projects?
• Are you carrying assets (future) or liabilities
• Do you mind the banks or your business ?
• Are you a messenger to your cashier or the manager?
PERSONAL NET WORTH STATEMENT CASH/EQUIVALENT KSHS LIABILITIES – LONG TERM KSHSCurrent account balanceSavings account balanceOther cash
Cooperative loanCompany loanBank loanShylock loan Car loan Mortgage loanDevelopment (self/dependent education)Monthly family maintenance
INVESTED ASSETSCooperative sharesKioskPlotShares Savings/retirement plansInvestment plans
LIABILITIES – SHORT TERMKiosk billBar billI owe youCar repairsHospital bills Credit card
USE ASSETSUpcountry houseTown houseHousehold property
TOTAL LIABILITIES
PERSONAL PROPERTYFamily businessChama/Group
TOTAL ASSESTS
TOTAL ASSESTS TOTAL NET WORTH
HUMAN LIFE CYCLE- LIVE WELL, RETIRE SECURE
CHILDHOOD 8-21 primarySecondary/college
SENIOR CITIZEN & GOLDEN YEARS 71+……
death
LEVELS OF FINANCIAL STATUS
PROGRESSION IN FINANCIAL LEVELS
1.Courage2.Self honesty
3.Delay gratification4. planning
5.Taking action
1.Courage2.Self honesty
3.Delay gratification4. planning
5.Taking action
JOURNEY TOWARDS FINANCIAL INDEPENDENCE
PERSONAL BALANCE SHEET- MONTHLY
INCOME KSHS EXPENSES KSHS
Salary 1. Basic- Tithe/Offering-Tax-Food-Rent-Dependent education -Transport -Clothing -Utilities:((electricity/water/paraffin)
Extra work 2. Secondary Entertainment Personal improvement RelationshipsCommunity
Assets 3. LiabilitiesLoan/Sacco repayment
TOTAL TOTAL
SAVINGS > + 20%
ACTIONS FROM YOUR PESONAL BALANCE SHEET
• It balances
• It does not balance now and I don’t intend to make it balance
• It does not balance now, but will make it balance after 3-6 monthsAnd I will take the following actions to achieve the balance1.2.3.4.5.
THREE TYPES OF ASSESTS
• Profitable business
• Paper assets: - Savings plan- Retirement plan - unit trusts- Shares
• Real estate
THE SEVEN LIFE CASHIERS
• God
• Tax man
• Community
• Life style maintenance
• Personal improvement
• Relationships
• Yourself ( 20% monthly savings)
Principles of Financial Management
• Financial EducationOld Mutual School Of Money… “The Big 5 Secrets of Money Management”
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The Secret of the Lion
The lion eats first, ahead of the pack. You too should “eat first” by having an automatic deduction from your salary or wages.
The Secret of the Leopard
The leopard never lets its prey out of its sight, patiently planning and moving towards its goal, never backing off or giving up
The Secret of the Elephant
The African elephant never forgets. Its knowledge, aided by its memory, is its power. It remembers the places it has been, and uses this knowledge to plan its future.
The Secret of the Rhino
The rhino’s weapon is to charge. When threatened, it looks for the biggest threat and charges, taking swift control of the situation. Confront your debt and charge it down
The Secret of the Buffalo
The mighty buffalo is deliberate and steady, waiting all day for the hot African sun to pass. It steadily grows and protects its herd, knowing its strength and future are in its numbers.
OMLAC Product Offering
EDUCATION SAVINGS PLANS Rafiki Halisi Education Plan: A unit linked investment plan that offers compulsory life cover 10 times the monthly premium and pays out the accumulated fund value at maturity.
Features and benefits:•There is choice between Money Market or Balanced Funds respectively.•Life cover benefits which is ten times the monthly contribution•Waiver of premium on disability or death for up to Ksh 20,000 per month for a maximum of 10 years• It has partial maturity benefits that is available four years prior to maturity.
INVESTMENT SAVINGS PLANS Rafiki Halisi Investment Plan: Similar to the Education Plan above, the Rafiki Halisi Investment Plan is a unit linked investment plan that offers compulsory life cover ten times the monthly premium and pays out the accumulated fund value at maturity.
Features and benefits:•There is choice between Money Market or Balanced Funds respectively.•It offers 100% accidental cover immediately.•Compulsory life cover which is 10 times the monthly contributions.
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OMLAC Product Offering…contd.
LIFE INSURANCE
An individual whole life product sold with an age – banded premium rate structured and minimal underwriting.
Features and benefitsa) Cover to the main member plus gives an option to have the spouse and children { up to a maximum
of four children} covered at an additional discounted rate. b) A 50% money back benefit will be available if the lives assured survive a five year period provided the
policy has been in force for the five years.c) 100% accidental cover available immediatelyd) A range of benefits starting from Ksh 50,000 up to Ksh 1 Million available for every a[pplica
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PERSONAL RECORD KEEPING ORGANIZER
ITEMS FOR STORAGE IN BANK SAFE FOR STORAGE IN HOME ACTIVE FILE
PERSONAL-Family birth certificates/adoption papers/death certificates-Marriage/divorce papers-Passports-Education certificates
CURRENT INCOME/EXPENSES DOCUMENTS-Unpaid bills-Bank /credit card statements-Brokerage account statements-Unit trust /mutual funds/investments/insurance statements
OWNERSHIP -Title deeds/home plans/surveys/Home inventory-Vehicle log books-Business partnership agreements/Trust/stock/bond certificates
CONTRACTUAL DOCUMENTS-Loan statements and payments receipts-Equipment manuals and guarantees-Receipts of assets bought and copies of agreements entered into
OBLIGATIONS AND CONTRACTS-Mortgage charge documents-Insurance /investment policies- Retirement/pension plan documents
PERSONAL -Employment /education records and certificates -Inventory and spare key to bank safe deposits-Copies of wills/estate planning and receipts of assets-Family health records/important phone numbers/emergency info-Tax return /mortgage /rental property/business expenses receipts
ESTATE PLANNING DOCUMENTS -Wills-Trusts deeds -Powers of attorney-Letters of instruction-Guardianship arrangements
LIFE LONG REFERENC DOCUMENTS-Prior years tax returns-Prior business records-Prior family heath records-Proof of payments of debts and contractual obligations met-Prior bank statements
