Dear Millenial News Reader, it is a new week. I love Mondays for many reasons but what stands out is the fact that they can be new beginnings.
For the last four or so weeks, we have tackled the issue of financial management with the millennials and gen zs in mind. Today, I thought it wise to discuss a few financial investments we could make as young as we are. It is common to hear phrases like ‘You Only Live Once’ but as you are living, it is important to invest in the future. Gone are the days when investments were only discussed among seniors and more ‘accomplished’ people financially. Now, there are content creators demystifying investments and financial literacy. I am not a financier myself but how I wish financial management is integrated into schools as a subject or unit.
Away from my wishful thinking, I would want us to take a look into several ways in which we can make affordable investments:
- Real estate
The term may seem like a hefty investment but through platforms like Vuka, investing in real estate is possible. Vuka is an investment club regulated by the Capital Markets Authority that gives you the opportunity to invest in Acorn’s Student Accommodation Income Real Estate Investment Trust (ASA I-REIT) and own a piece of Acorn’s brands; Qwetu and Qejani. Qwetu has already become the first choice amongst students needing quality accommodation and wishing to be a part of one of the largest student communities in Africa.
- Insurance
As the Covid-19 pandemic struck, health and life insurance plans came into focus. When it comes to planning for the future, it could be prudent for millennials to prioritize health insurance as a way of shielding them against unforeseen circumstances in the face of responsibilities. Investing in insurance provides dual benefits: Safety for unforeseen circumstances and tax benefits. The premiums that individuals pay towards an insurance policy are eligible for deductions. The cost of a life insurance premium often depends on risk. A healthy and young millennial is generally considered lower risk for a life insurance company, and therefore, more likely to get an insurance policy at a comparatively lower premium.
- Stocks
For most people focused on long-term goals, stocks should be a good place to invest. You can get exposure to a basket of stocks through Exchange Traded Funds (ETFs) and mutual funds, or you can choose individual companies for your portfolio. Make sure to thoroughly research any company before investing and understand that concentrating your holdings in just a few stocks will likely be more volatile than having a diversified portfolio.
- Money Market Fund
Investing in Money Market Funds is a great way to invest your savings with low risk. Simply put, it is a pool of money from different investors that is managed by a fund’s manager. If you invest in a Money Market Fund, you are considered as a shareholder of the investment pool.
Here are examples of money market funds you can look into.
- Robo-advisors.
Robo-advisors are a relatively new offering but can make sense for many people who want a simple approach to their investments. After answering a few questions about your goals and risk tolerance, an algorithm will identify a portfolio of investments and manage the account for you. You’ll pay an annual fee, but it’s usually less than that of traditional financial advisors.
- Banks and savings accounts
Banks and microfinance organizations offer good interest in investments.
Here is a list of microfinance organizations and banks with details on interest rates on investments.
- SACCOs
A SACCO (Savings and Credit Cooperative Organization) is a group of people with similar interests who come together to form a credit union. They register the union with the Ministry of Cooperatives, which in turn authorizes the SACCO to receive deposits and provide loans to its members. A SACCO is run by members who are selected by the other members. SACCOs require you to save consistently and this, in turn, enables you to cultivate the discipline of saving frequently.
Learn the advantages of saving money in a SACCO compared to banks here.
There are many other ways you could invest financially such as cryptocurrency, forex trading, and making direct investments in businesses. My aim was to express that it is not too early to start investing and also you don’t have to wait to get to a certain level to make financial investments. My hope is to inspire you to make sound financial decisions and go about living.
Till the next read, bye and happy reading!
Ruthie Kimani ❤❤❤
The Millenial News 