As a student, money is handed out to you without having to account for it. Many times easy money comes during our campus life and it is not until we are out there looking for money that we regret not spending wisely. Students spend so much on drinking, travel, even shoes and clothes, but invest very little. Capital Campus Correspondent Carolyne Mutisya had a discussion with Project Manager Christine Mbete, on what you can do to ensure you spend wisely.
From your first year in campus make it your goal to invest. Hang a declaration on your wall, diarize it or set a reminder every month, just make sure to place that goal up where you can see it every day.
2.Set Aside 10% Of Your Allowance
Whatever amount you get from parents, friends, relatives, or side hustles take 10% of it and invest. This is the minimal amount but you can continue to growth your wealth. Although it is not as easy as it sounds, you will find it easier to invest and it will eventually become a habit that you will carry on even after campus.
3.Invest 10% Of What You Set Aside
There is no point of setting aside money with no intention of investing it. Investing is a way of making your money work for you. It builds your wealth portfolio and is the only way to financial freedom. All rich people maintain their wealth by continuous investments. Even big companies invest in their business by scaling up and pumping in more money into their other businesses.
3.Reinvest Your Dividends From The Initial Investment
There is power in compounding. There is no point of investing and using the returns since this will place you at a stagnating level. Assume you invest 1,000 and your returns are 10% per annum. If you invest for 10 years you get 2,000 (total of initial investment and returns) if you do not reinvest the annual returns. Now if you reinvest the returns you will get 2593.74 (total of initial investment and returns). Now you see the difference. Imagine if this is a huge sum of money.
4.Where To Invest And How
In Kenya, we have unit trusts, fixed deposits, and the stock market. With as little as 1,000ksh you can start your investment journey. However, M-Akiba, a government bond requires a minimum of 3,000ksh. T-bills and other T-bonds require a minimum of 50,000.
M-shwari, which only requires a minimum of KSH500 is another good investment. It is a saving and interest earning account and allows you to lock savings for up to six months then once you accumulate a good amount, you can choose to transfer to a higher interest account or invest in the stock market or other fixed deposits. Eventually, you can do more like open a business.
This article was written by Capital Campus Correspondent Carolyne Mutisya.