SHOULD YOU INVEST YOUR MONEY AND WHY?

Are looking for a place to invest your money or wondering how to invest? Many people wonder why they should invest and what is the purpose of in the first place. While another group is torn between the idea of investment and how they implement it. Both are very common dilemmas for many and one I also share for the most part. To remedy this, let’s see if you should invest, how to invest and if is there really a reason why you should invest.

First, to provide a disclaimer, I am not a financial advisor. I have only been into investment and growing financially for not so long. This is a personal journey drawing from the things that I have found to work and not to work and the pieces of advice that I would give myself a few years ago and to a friend who asked me for help.

So to determine some of the answers to these questions I will draw some advice from personal experiences, books I have read investment podcasts that I follow and advice from friends.

Why should you invest your money?

Money is one of those things that we never get enough, and ironically the more you get the more you use it. Thus, managing money and finances is a pickle that many don’t get a handle off and always seems to slip away. 

This makes the idea of investing your salary, your earnings and any money into any investment harder than it seems. In his book “The Richest Man in Babylon,” George S. Clason mentions that money will always fit one’s needs and the more one has to spend the more one needs. He continues to say that if you take out money from what you earn, that is one-tenth of all your earnings you will find that after some short while you manage your living without that portion and will have some money in your savings.

Again, he continues to explain that just having some money lying around is not enough. You should make the money work for you. In this he suggests that you put your money in investments, to have it work for you and earn you more money. And this brings us to the second part on what you can invest your money in:

Where and how can you invest?

There are a variety of places that you can invest in and the process of investing has become very easy and simple in recent days, with the possibility of getting started with as little as Ksh.100 or 1 USD. Before getting started with investing, you must decide whether you want to make a passive investment or an active investment depending on your availability.

Possible active Investments are:

1. Starting your own company with the skills you have. (If you are an accountant you can start an accounting consultancy firm.)
2. Getting into the SMART Agriculture business.
3. Opening a shop,e retail shop, movie shop, repair shop etc
4. Owning a rental premises.
5. Starting a YouTube channel.
6. And so forth.

Also, you can get into passive investments, such as:

1. Real Estate Investment Trusts (REITs )
2. Mutual Funds.
3. Sacco
4. Stock Exchange
5. Money Market Funds
6. Peer to Peer Investment (Chamaa)
7. Having a YouTube channel
8. And others.

Investing in any of these ways makes it possible for your money to earn more money, and grow your wealth. The only thing is to make sure you find out what works for you. Like, George Classon says, you cannot trust the brickmaker in the matter of jewellery and expensive stones. Thus, make informed investments.

If I were to do it all over again, I would get started investing in a Sacco and Money Market Funds. I find this would have worked better for me when I started investing.

Is there a reason you should invest?

Finally, we answer the question, is there a reason why you should invest? And the answer is a resounding yes.

To begin with, one invests for the safety of their future. To make sure that there is always a reserve of your income growing and unaffected by the changes of the current status and the events in your daily life.

Second, getting started with investing grows one the habit of healthy spending and saving. And the more you keep at it, the more you earn and grow.

Again, one can take advantage of the power of compounding interest. As such a penny earned in your investment yesterday grows you another penny today and so forth. Such is the magic of compounding interest.

Finally, Investing diversifies your income portfolio.

And this is what I have learnt in my investment journey through trial and error. There is no right or wrong way to do it, just start and in the end, you find your way.

If you have read this fat, you are halfway there and I hope that you have learnt something and enjoyed it. If you are new here, don’t forget to like, subscribe and share.

And that’s it for this one, see you in the next one.