Ways to Invest your Money

Look at investing like planting a seed that would yield more seeds. This is putting your money where it will earn you more money. In order to build a substantial wealth, you’ll have to invest your money. Your Financial growth and Financial worth can only be sustained by Investing what you earning in the present. Today I’ll break down ways you can invest your money, if you still young then this would work for you maximumly.

But then why would your invest?

  • Reach financial goals
  • Reduce taxable income
  • Earn higher returns
  • Grow your money
  • Starting or expanding a business
  • Taking care of your retirement
  • Being part of a new venture
  • Help others financially
  • Diversify your Income
  • Grow your capital, etc

The word Investment does not necessarily mean putting your money in stocks and shares, but an investment can equally be property, bonds or even your business. The key factor is the intention to hold your investment over a period of time during which the invested finances cannot be used elsewhere apart from the intended purpose. Below are the ways to Invest.

Government bond funds

In Kenya we have Treasury Bonds; these are bonds are a secure, medium- to long-term investment that typically offer you interest payments every six months throughout the bond’s maturity. The Central Bank auctions Treasury bonds on a monthly basis, but offers a variety of bonds throughout the year, so prospective investors should regularly check for upcoming auctions.

Most Treasury bonds in Kenya are fixed rate, meaning that the interest rate determined at auction is locked in for the entire life of the bond. This makes Treasury bonds a predictable, long-term source of income. The National Treasury also occasionally issues tax-exempt infrastructure bonds, a very attractive investment.

Individuals and corporate bodies can invest in Treasury bonds as a nominee of a commercial bank or investment bank in Kenya, but if you hold a bank account with a local commercial bank you can also invest directly through the Central Bank and avoid additional fees.

High-yield savings accounts

This is by identifying banks which offers you high interest on your savings, most of this type of accounts are called fixed accounts. Look at it as savings account which pays you interest on your cash balance. That’s why is important to do a research on your local commercial banks, and find out which is more favorable to you, not all the banks will be the same.

In fixed deposit accounts arrangement, one is required to save for 3 months,6 months,12 months or even for a longer period. Remember the longer you save and the bigger amount you save the higher the interest rates.

Certificates of deposit or CDs

Famously known as CDs, This is for those who have big amount of money. CDs, are issued by banks and generally offer a higher interest rate than savings accounts. Because of their safety and higher payouts, CDs can be a good choice for retirees who don’t need immediate income and are able to lock up their money for a longer period.

CDs have specific maturity dates that can range from several months to several years. Because these are “time deposits,” you cannot withdraw the money for a specified period of time without penalty.

If you have enough money that you wont need it for a period of years this is a go to kind of investment better than even the government bonds.

Investing in Nairobi Stock Exchange

NSE is a market; Market of money not commodities, it encourages savings and investments, where by they enable your idle money and savings to grow by bringing the borrowers and lenders of money together at a low cost. The lenders (all savers) become the investors. They lend/invest and expect a profit/financial reward. The borrowers also known as issuers in the markets borrow and promise to pay the lenders a profit.

Shares are grouped into 4 sectors namely Agriculture, Commercial and Services, Financial and Industrial & Allied sectors. The shares are displayed in alphabetical order in each group for easy location by investors viewing trading from the public gallery. Bonds are in two groups namely; Treasury Bonds one issued by the government, and Corporate Bonds one issued by companies. They are displayed as and when the government or a company issues one.

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