Generations. Which one do you belong to?

The Depression Era

Born: 1912-1921
Coming of Age: 1930-1939
Age in 2004: 83 to 92
Current Population: 11-12 million (and declining rapidly)

Depression era individuals tend to be conservative, compulsive savers,
maintain low debt and use more secure financial products like CDs versus stocks.
These individuals tend to feel a responsibility to leave a legacy to their
children. Tend to be patriotic, oriented toward work before pleasure, respect
for authority, have a sense of moral obligation.

World War II

Born: 1922 to 1927
Coming of Age: 1940-1945
Age in 2004: 77-82
Current Population: 11 million (in quickening decline)

People in this cohort shared in a common goal of defeating the Axis
powers. There was an accepted sense of “deferment” among this group,
contrasted with the emphasis on “me” in more recent (i.e. Gen X)

Post-War Cohort

Born: 1928-1945
Coming of Age: 1946-1963
Age in 2004: 59 to 76
Current Population: 41 million (declining)

This generation had significant opportunities in jobs and education as the War ended and a post-war economic boom struck America. However, the growth in Cold War tensions,the potential for nuclear war and other never before seen threats led to levels
of discomfort and uncertainty throughout the generation. Members of this group
value security, comfort, and familiar, known activities and environments.

Boomers I or The Baby Boomers

Born: 1946-1954
Coming of Age: 1963-1972
Age in 2004: 50-58
Current Population: 33 million

For a long time the Baby Boomers were defined as those born between 1945 and
1964. That would make the generation huge (71 million) and encompass people who
were 20 years apart in age. It didn’t compute to have those born in 1964
compared with those born in 1946. Life experiences were completely different.
Attitudes, behaviors and society were vastly different. In effect, all the
elements that help to define a cohort were violated by the broad span of years
originally included in the concept of the Baby Boomers. The first Boomer segment
is bounded by the Kennedy and Martin Luther King assassinations, the Civil
Rights movements and the Vietnam War. Boomers I were in or protested the War.
Boomers 2 or the Jones Generation missed the whole thing.

Boomers I had good economic opportunities and were largely optimistic about the
potential for America and their own lives, the Vietnam War notwithstanding.

Boomers II or Generation Jones

Born: 1955-1965
Coming of Age: 1973-1983
Age in 2004: 39 to 49
Current Population: 49 million

This first post-Watergate generation lost much of its trust in government and
optimistic views the Boomers I maintained. Economic struggles including the oil
embargo of 1979 reinforced a sense of “I’m out for me” and narcissism and
a focus on self-help and skepticism over media and institutions is
representative of attitudes of this cohort. While Boomers I had Vietnam, Boomers
II had AIDS as part of their rites of passage. The youngest members of the
Boomer II generation in fact did not have the benefits of the Boomer I class as
many of the best jobs, opportunities, housing etc. were taken by the larger and
earlier group. Both Gen X and Boomer II s suffer from this long shadow cast by
Boomers I.

Generation X

Born: 1966-1976
Coming of Age: 1988-1994
Age in 2004: 28 to 38
Current Population: 41 million

Sometimes referred to as the “lost” generation, this was the first
generation of “latchkey” kids, exposed to lots of daycare and divorce. Known
as the generation with the lowest voting participation rate of any generation,
Gen Xers were quoted by Newsweek as “the generation that dropped out without
ever turning on the news or tuning in to the social issues around them.”

Gen X is often characterized by high levels of skepticism, “what’s in it for
me” attitudes and a reputation for some of the worst music to ever gain
popularity. Now, moving into adulthood William Morrow (Generations) cited the
childhood divorce of many Gen Xers as “one of the most decisive experiences
influencing how Gen Xers will shape their own families”.

Gen Xers are arguably the best educated generation with 29% obtaining a
bachelor’s degree or higher (6% higher than the previous cohort). And, with
that education and a growing maturity they are starting to form families with a
higher level of caution and pragmatism than their parents demonstrated. Concerns
run high over avoiding broken homes, kids growing up without a parent around and
financial planning.

Generation Y, Echo Boomers or Millenniums

Born: 1977-1994
Coming of Age: 1998-2006
Age in 2004: 10 to 22
Current Population: 71 million

The largest cohort since the Baby Boomers, their high numbers reflect their
births as that of their parent generation. The last of the Boomer Is and most of
the Boomer II s. Gen Y kids are known as incredibly sophisticated, technology
wise, immune to most traditional marketing and sales pitches…as they not only
grew up with it all, they’ve seen it all and been exposed to it all since
early childhood.

Gen Y members are much more racially and ethnically diverse and they are much
more segmented as an audience aided by the rapid expansion in Cable TV channels,
satellite radio, the Internet, e-zines, etc.

Gen Y are less brand loyal and the speed of the Internet has led the cohort to
be similarly flexible and changing in its fashion, style consciousness and where
and how it is communicated with.

Gen Y kids often raised in dual income or single parent families have been more
involved in family purchases…everything from groceries to new cars. One in
nine Gen Yers has a credit card co-signed by a parent.

Generation Z

Born: 1995-2012
Coming of Age: 2013-2020
Age in 2004: 0-9
Current Population: 23 million and growing rapidly

While we don’t know much about Gen Z yet…we know a lot about the environment
they are growing up in. This highly diverse environment will make the grade
schools of the next generation the most diverse ever. Higher levels of
technology will make significant inroads in academics allowing for customized
instruction, data mining of student histories to enable pinpoint diagnostics and
remediation or accelerated achievement opportunities.

Gen Z kids will grow up with a highly sophisticated media and computer
environment and will be more Internet savvy and expert than their Gen Y
forerunners. More to come on Gen Z…stay tuned.


5 tips for starting a business later in life.

Some people are born to be entrepreneurs. Colonel Sanders of KFC fame apparently wasn’t one of them. Although he had a lifelong skill for cooking, he didn’t sell his first Kentucky Fried Chicken franchise until he was 65 years old. The decades of his life before that consist mostly of a vicious cycle of dead-end jobs and hard knocks.

But for some people, business ownership just will not be denied. You might have stumbled onto an idea that you just can’t pass up, or perhaps ageism has made your workplace opportunities scarce. Whatever your reason, the time has come to embrace the challenge and become a business owner.

Before you make the leap, here are a few things to think about that may just mean the difference between happily ever after or losing everything you’ve worked so hard for.

What Does It Cost to Run Your Household?

One of the first things you should do before quitting your job is figure out what it takes to meet your current monthly household expenses. That may seem obvious, but it amazes me how often people do not know the answer to that question. A guess is not good enough, you need to track your expenses for at least three to four months to have a good idea. And don’t forget to include once-a-year payments like homeowners’ insurance and taxes.

The reason for this is knowing the monthly nut you have to cover is vital to de-risking the entrepreneurial venture. Elon Musk is famous for living on $1.00 day as a young man, so he knew how much it would take to keep him alive. Once you know the monthly amount you need to cover, you can create a reasonable runway for your new business.

Create a Reasonable Runway for Your New Business

A pilot has only so much road to work with before he absolutely must get the plane off the ground. In the same way, a new business can’t flounder forever, it has to eventually make money.

In the initial planning stage of your business, you will need to have a general idea of how long it will take to get the business off the ground. In the meantime, of course, you will want to have enough money set aside to fund your expenses. Then, if you can’t get it going before the runway runs out, you have time to think about other options. (For related reading, see: 5 Warning Signs of Risk for a Small Business.)

Many entrepreneurs ask how they should invest these “runway” funds. My answer? When investing for short-term needs, it’s hard to argue against the safety of FDIC-insured bank accounts (e.g. savings, money markets, or CDs). You won’t make much in yield with today’s low interest rates, but you have the guarantee of not losing your capital, even in the event of a bank failure. By contrast, if you tie your money up in the stock market, there’s no guarantee that your funds won’t be worth less than you invested if the market goes down at an inopportune moment. However, if your runway is multiple years in length, you might consider a very conservative balanced mutual fund, but only for the part of your funds that are set aside for three to five years into the future. An allocation with less than 40-50% in equities is probably a reasonable starting point to consider.

Consider a Franchise Instead

While the upside for a new business can be exciting, starting a new venture later in life involves a lot of risk as well. If you’ve saved up some money for retirement, you don’t want to squander all of that on a new business, because if it doesn’t become profitable, you could be on welfare in your later years. In addition, starting a business will need capital, which means you probably shouldn’t be as aggressive in your investment portfolio. Why? Well, because what if a down market comes along, and your investments are down 20-30% at the same time you need to sell them to fund your business? Then you’ve sold at exactly the wrong time, locking in losses that you could otherwise allow time to rebound.

For all of these reasons, it may be safer to consider a franchise business rather than starting from scratch. Franchises have proven business models with financial records to prove their success. Of course, care has to be taken to analyze the different opportunities, but in this case you have actual data to review rather than just an idea in your head. (For related reading, see: Share the Wealth With Franchises.)

Will Your Business Be Adequately Capitalized?

Capital is like oxygen to a business. Nobody notices it when times are good, but when it’s gone it leaves the business on the ground gasping. If possible, you want the business to be capitalized in advance for the anticipated runway period and beyond. In addition, you might want to capitalize it with other people’s money rather than your own if possible and if the terms are right.

One of the many ways to do this is with a small business loan if you qualify. Check out the Small Business Association’s website for more details on this program.

Can Your Business be Bootstrapped?

Nathan Barry of the email marketing company ConvertKit tells a story about how he bootstrapped his $5 million revenue company for three years without taking a dime of outside funding. He put in $65,000 of his own money, and the rest of the funding came from customers. In other words, he funded the business step-by-step by selling, and after three years of growth, he had a multi-million dollar profitable business, with no debt or partners/investors to answer to. Bootstrapping a business may take a little longer, but it’s a much safer strategy, especially for those who are later in life and don’t have as much time to recover should things not work out. (For related reading, see: Companies That Succeeded With Bootstrapping.)

The Bottom Line

Starting a business at any age takes careful planning, but it’s even more vital later in life. Take careful steps to figure out not only the business plan itself, but also your own finances to prepare yourself for the lean startup years. By carefully mitigating risk and preparing for the worst, you can build a successful business that will fund your golden years in comfort and style.


This article originally appeared on the Smart Money Nation blog.

Read more: 5 Tips for Starting a Business Later in Life | Investopedia
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Nature & purpose of Accounting

Accounting is the language of business. Accounting can be defined as the process of identifying, measuring, and reporting economic information to the users of the accounting information to permit informed decision making.
Accounting falls into two distinct categories; financial accounting and management accounting. Financial accounting is concerned with the recording of data, classifying, and summarizing the recorded data and communicating the results thereof to interested parties.
Management accounting on the other hand analyses and interprets financial statements in order to make managerial decisions that affect the financial position of the firm. Management accounting begins where financial accounting ends.
Some of the functions of accounting include;
Accumulation, selection, and recording of data.
Summarizing, analyzing, and interpreting financial information.
Planning and controlling the day-to-day operations & activities of the business enterprises.
Making proper decisions that affect the financial position of the enterprises.

Financial statements that is comprised of income statements (T, P&L), statement of financial position (B/S), cash flow statement, and notes to the accounts; accounts and proper book keeping records are designed to fulfill the following objectives;
Provide and communicate useful info to various interested parties such as investors, creditors, money lenders, employees, trade unions, management, etc. to aid in making rational business and investment decisions.
Provide and information bank about the past and future prospects of the enterprise as regards to its ability to generate net cash inflows through its earning and financial activities.
Provide speedy and objective information on the activities of the enterprise in order to permit informed judgement and decisions.
Provide information about the volume of economic resources available to the enterprises (Assets),obligations to other parties (liabilities), changes in financial position , firms financial plan budgets.
Provides interpretative information to allow prediction, comparison, and evaluation of the performance in terms of its earning power, solvency, gearing, efficient utilization of time and resources.
Account for resources placed at the disposal of management to those who entrusted them with the resources.
Financial statements must have certain basic minimum qualities in form of content, measurement, analysis, communication, etc. in order to meet the objectives. The following are key qualities of as set of good financial statements.
Accounting should provide information which is valid, verifiable, and which is based on objective evidence. Information contained in the financial statements should be free from preparers biasness. The intended users of accounting information should find it easier to understand to facilitate sound decision making.


Accounting information should meet the needs of user(s) in order to enable them make an informed judgement and decision. The information contained in the accounting statement should influence the decision making process of the user.
Matters that are materially significant to the financial position and performance of the enterprise should be reported. Information is material if its omission or mis-statement would influence the economic decisions of users on the basis of the financial statements.
The accounting information in the financial statements should be free of errors, bias, and mis-statements, as its to be relied upon for rational decision making. Information is neutral if it is free from bias.
All transactions and other events for the period of reporting must be faithfully represented.
The information contained in the financial statements should be capable of being understood by users with a reasonable, knowledge of business and economic activities and accounting.

Financial statements should not overstate assets and incomes nor understate liabilities, expenses, and losses.
Time is money and financial statements should be timely and promptly presented to users to enable decisions to be made rapidly on the basis of up to date information. Monthly, Quarterly, half yearly, and annual accounts and statements should be prepared and presented to users as and when they are required.
Accounting policies upon which financial statements are prepared should be consistent from year to year. These accounting policies adopted by an organization should be disclosed.
The information in financial statements should permit comparison with information about alternative opportunities and past experience. The users should be able to compare the position of the firm over time with similar businesses.
The users of financial accounting information are many and varied. Each user has his or her peculiar objective.
The users of financial accounting information include;
Investors/proprietors/shareholders:- They use financial information to decide on the amount of capital to invest and also check on profitability of the firm.
Suppliers and trade creditors:- They base the ability of the firm to pay their accounts and firms creditworthiness on financial statements.
Customers:- They use financial statements to study the reliability of the firm to supply, especially in bulk purchases/sales.
Trade unions:-The information contained in the financial statements helps the trade unions in making collective bargaining of their member employees salaries, pensions, fringe benefits, redundancy, scheme, etc. The employees must be members of the union.
Financial analyst and statisticians:- They use financial statements information to analyze the firm and evaluate their credit rating in order to provide reference to their clients.
Tax and other regulatory authorities:- They use financial information to determine amount of tax to impose on a firm, the tax authorities assess the financial position and income statement.
Employees:- They study the current remunerative policies and generally decide on other employment opportunities.
Loan creditors:-The firm will use the financial statements to apply for loans. The loaning institutions assess the firms ability to pay back the loan using these statements.

Term of the day: profit & loss(p&l).

What is the ‘Profit and Loss Statement (P&L)’

A profit and loss statement (P&L) is a financial statement that summarizes the revenues, costs and expenses incurred during a specific period of time, usually a fiscal quarter or year. These records provide information about a company’s ability – or lack thereof – to generate profit by increasing revenue, reducing costs, or both. The P&L statement is also referred to as “statement of profit and loss”, “income statement,” “statement of operations,” “statement of financial results,” and “income and expense statement.”

Read more: Profit and Loss Statement (P&L)
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Term of the day.

What is ‘Working Capital’

Working capital is a measure of both a company’s efficiency and its short-term financial health. Working capital is calculated as:

Working Capital = Current Assets – Current Liabilities

The working capital ratio (Current Assets/Current Liabilities) indicates whether a company has enough short term assets to cover its short term debt. Anything below 1 indicates negative W/C (working capital). While anything over 2 means that the company is not investing excess assets. Most believe that a ratio between 1.2 and 2.0 is sufficient.  Also known as “net working capital”.

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SAVE KES19,648 TODAY!!!!

SAVE KES19, 648 TODAY!!!!!

Kenya revenue authority (KRA) has raised the fine for late filing of annual income tax returns from kshs1, 000 to kshs20, 000.

Taxes paid during the year 2016 must be filed on or before 30th June 2017, if it is not filed by the due date, the taxpayer (you) will be required to pay KRA a fine of shs20, 000 or 5% of the tax due, whichever is higher. Those who have not filed 2014/2015 returns should do so; you will be charged a penalty of kshs1, 000 and some interest.

Those who need tax compliance certificates must ensure that they have filed all their taxes and paid the tax due, penalties, fines or interests due to them.


You can read more about increase on late tax filing penalty here:


The good news is, these taxes can be filed now. Avoid the last minute rush and file your tax using the guide in this link

Those of us, who were working last year, kindly ask your employer to provide you with your P9-A form as soon as possible. P9-A is the main ingredient in filing your returns.

All people with KRA PIN has to file returns. Save yourself from paying a fine and file your returns today or on time.

Also, inform your relatives on the need to file returns on time.

At Jamii Imara Investments Limited we offer these services at kes327 per return filed.

Reach us on 0715 2645 481 and save kes19, 648 today.