Hello guys, i have been wondering for quite a while about how an individual can invest Ksh20,000 wisely in Kenya. Most of the time you find yourself having a excess of 20Gs and you need to consider all the options of investing, not just saving. So, what options do you have? and do not direct me to kuza biashara website…
Is this per month or lump sum?
its per month excess, but i would like to hear about lump sum ideas… if any
weka kwa mutual fund or buy dividend yielding stocks kwa NSE
For that amount, he will be getting a very low return investing in stocks. I don’t think it is worth it.
As for the mutual funds, why not cut the middle man and invest it directly? Most mutual funds invest a large portion of the pooled funds in govt. securities.
More info here - https://www.centralbank.go.ke/securities/treasury-bills/
Govt. securities have a very low risk profile. If the govt. is unable to pay you back, the country must be in ashes.
I can send you a calculator that you can use to estimate your earnings for the T-bills.
Higher risks, higher returns. If you want to have 50x of your initial capital in a few years from today, the ‘easiest’ way to do it is to start a business (online or offline)
All the best.
I invest my excess amount in stocks every month. Little by little it grows to a bigger amount cumulatively. My favorite stocks are Safaricom, KCB, Equity, Centum, Kenol Kobil…Safaricom has always grown its dividend every year and price has appreciated from 20 bob a year ago to 27 currently. KCB from 30 to 44, Equity from 30 to 41 and Centum from 36 to 43. There may be years where the economy is challenging or policies affect the sector but they are pretty much solid companies which always find a way to recover. The beauty of stocks, you can invest a small amount if you have it and you can easily sell if you find a bigger opportunity for your money.
Are you sure about that?
I guess the ‘low return’ part is subjective.
How long are they willing to hold? Expected ROI? Risk profile?
CBK just closed a 7yr infrastructure bond. 12.5% interest and it is tax-free.
Don’t get me wrong, stocks can be profitable if you invest in the right companies. (You bet I will jump on the next Safaricom)
Personally, I will always pick an investment with a decent payout - preferably annually. Liquidity is much more important to me.
What does it matter that we take different roads so long as we reach the same goal?
– Mahatma Gandhi
I’m staring at a 60.0% return(if it hits 28.00) on Safaricom in less than one year. Bought in February of this year. Investing in stocks does require some work though. Its not for everyone.
I’ve invested in NSE, T-bills and T-bonds. With stocks, you have to keep up with news about the companies you invest in. The buy and hold rarely works unless you in for the dividend yields. Your age also matters, if you young, do stocks, otherwise bonds and T-bills.
LOL… how young? Kumbuka young people have little disposable income to be worth a damn thing investing in stocks for dividends. Can you give an approximate age when to stop investing in stocks?
Example, At 35. There’s a rule of thumb 35% should be in safe havens like bonds while 65% in high risk like stocks. At age 60, about 60% in bonds/low risk while 40% in high risk/ volatile investments.This is just a guideline, not cast in stone or backed with science.
In summary, when young, create wealth, as you age, preserve wealth.
This is my problem with the stock market. If you are young if feel you should be able to take more risks.
The return from stocks from an investment of around 200k is low compared to what you could potentially earn if you decide to start some sort of business.
200k is decent capital. I have two friends running successful businesses and both started with about 200k. One is running a gaming lounge and the other a clothing stall.
They would not have made anything close to what they are making right now if they opted to invest in the stock market.
I have personally started with around 50k (price of my laptop) and a few months of free online tutorials.
Here are some things to try:
Spend 12K getting a subscription to Abacus - abacus.co.ke - you’ll get great financial advice for your long term investments. Save the other 8 for events they may have during the year - meet and greet etc.
Consider taking a live course. Michelle Ntalami - michellentalami.com - has a masterclass on how to start a business for 15K. Those who’ve attended have told me they werent disappointed. The primary benefit is learning how the business culture is in Kenya for millenials. You can use what you learnt to advise people over coffee meetups on how to start their business or do strategy reviews for small companies to improve operations. Charge small entrepreneurs like 2500 per meet every month and give them tasks to impliment and report back every 30 days. Do this for one person every day and by the time you’ve grown this consultancy you’re making 50K from your initial 15K investment.
3rd - 6th Month
You now have 2 months of knowledge on how to roughly run a business and from your coffee dates know what people are working on meaning you know where to invest. Pick someone and invest some start-up capital - upto 3 months - to match their own seed capital and guide them to building their business. In the event you haven’t picked one yet, here is ine possible example:
A quick scroll on facebook and youll realize quite a number of people are starting to bake. Checking groups like Bakers Club should verify this. Someone with 2 years baking experience has a potential minimum earning of 2K a day if they get one 2-3KG cake order daily. They do this from their small oven at home. Many of these bakers lack a dedicated space with a big enough kitchen - minimum 6 burner cooker - to bake and are looking to rent a flat. Kinoo/Ruaka/Lower Kabete have flats at 15,000 a month, decent kitchen space. Partner up with a rising star baker and lease them this apartment. They can move from 2K a day to 5 or even 10K a day by fulfilling more orders making 300K a month. Their direct expenses would be maybe 50K for ingredients leaving them with 150K and you get 100K, subtract about 30K (Rent, power, water, home internet) and it’s still 300% return on your investment (Might take 3-6 months to get these consistent returns) If successful, duplicate this model but with rented warehouse space and more bakers.
6th to 12th Month
Social outreach. There are people in low income areas who need 5K or 10K to start a business. Identify these people and invest in them. Understand their models and work to build them up. Pick 2 a Month for 6 months and learn how to agile start these micro businesses. Blog or make a videos series around it. The knowledge gained will make you an authority in this niche and make you eligible to give talks (some even paid) at workshops or schools. A year from attending the master class and you’re giving talks of your own. Even if you don’t get paid directly, you’re raising your portfolio so those coming for small business consults pay even more than the 2500 you initially started with. Potential earnings are 500K per month by the 2nd year (still spending 20K a month)
1 Year Review
You’ve been documenting everything you’re doing the last 1 year, corroborating it with third party data - independent bodies, government studies etc. Turn it into a brief report (upto 100 pages) on a millenials perspective of businesses and micro Investments in Kenya. Submit it to publications for peer review. A few major ones pick it up even just to discuss and now your nsme is out there. Exposure for all your other ventures. It’s now easier to raise awareness and capital for further ventures. You are now a prime consultant for small businesses and the 20K excess you had per month is now 20K income per day, all ventures added up.
This is a very rough guide. Landscape may change and the numbers guiding ROI would get clearer the more you progress with the Abacus learning course. That’s how I’d spend my excess 240K the first year.