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After paying the 10% tax on interest is someone still subjected to pay income tax?
This is a better deal than real estate or mbuloti maguta maguta,the best thing is I can sell this bonds much easier than say a mbuloti maguta maguta huko kyanguli
No, I think
niliweka 13million hapo
nitaongeza 3 million july
weka effidense sio story za jaba
Absolutely
E.g for 10M, you get an interest of 1,392,400.
Less tax interest( net) 1,253 ,160 KES [SIZE=1]in 10 years(120 months)?. Asking on their behalf. [/SIZE]
Nipe formula nifanye yangu ya principle 700k
Was just inquiring on behalf of my few ,clueless billionaire fellows.
Hio 13.924 is yearly not for the entire 10 years,T bills and T bonds ndio zinafanya most banks make insane profit and choke small scale business
check inbox
Asante.
That’s a perfect investment then if 10M can give a net of 104k monthly for 10 years.
You can literally stop working with 50m invested in government papers.
Kenya Shilling is not a currency I would trust long term. After 10 years when you get your 50m back it could be worthless. Eurobond with attractive interest rates. Now we could be talking.
As a short investment it’s okay… For long term investment, may be not. What do you think is the purpose of these bonds? Primarily to manage inflation…
Why should it be worthless yet cumulatively you you would have over 25M or more. The money has been earning interest, right?
Inflation msee, saa hii Kenya inflation iko very high 6.7% so that’s means that percentage of your money unakua worthless per year. So the shorter the investment the better.
Yes you’ve earned interest, but to what extent has inflation diluted your principal (& earned interest) over the 10 years? Remember when you buy a bond, you are simultaneously placing a bet not only on the issuing entity but also on the currency in which it is denominated. People often forget there’s a time value for money and it is affected by inflation. FV = PV × (1 + i)^n
If that (i) interest rate (inflation) fucks you up. When the government finally gives you your 50m back, it could be worthless.
I see my explanation above is still not satisfactory. Let me attempt a real life example.
Naona mtu hapo juu ame compare na Real Estate. So let’s have 2 people. One bets on Rentals, the other bets on bonds. They both invest 50m.
The bonds guy is getting interest at 13% annually, the Rentals guy is getting a return at 5% annually. On the face of it, the bonds guy seems to be doing better. (And they could do better if they are spending the 13% return more wisely than the 5% guy is spending his).
BUT you need to remember that for the bond fellow, his 50m is losing value year on year. And even the interest earned monthly, is getting less and less valuable. What you can buy with 50m today is not what you will be able to buy with 50m in 2032. The 50m will likely be worth a lot less in 2032.
The rentals guy on the other hand has two advantages. He can adjust his rent charged to keep up or at least not be severely outpaced by inflation.
AND more importantly, his rentals, if acquired well, are appreciating in value. That house he bought in Nyali for 50m, will almost certainly be worth a lot more than 50m in 2032.