If you are a low-income earner in Kenya, it can be tough to save money. But don’t despair, there are still plenty of investment opportunities available to you. In this blog post, we will share with you the top ten investment opportunities for low-income earners in Kenya.
First things first what is investing? In simple terms, investing is putting your money into something now with the hope that it will appreciate in value and you can sell it at a later date for more than what you paid or generate a residual income for you in future.
To be successful in investing you need to diversify by creating an investment portfolio that gives you exposure to different asset classes including stocks, bonds, real estate and cash.
Diversification is important because it helps to spread the risk of investing in any one particular asset class. For example, if you invest all your money in shares and the stock market crashes, you could lose everything.
The art of investing is unique to each and every individual and no size fits all. Some of the factors you need to take into account when investing are;
Risk appetite
How much can you afford to lose for a potential return? Are you the type of person who when they lose Ksh 100, your world falls apart, if so, you should consider investing in a secure investment such as a bond.
Your risk profile is influenced by factors such as age, your monthly income, expenses and liabilities such as loans. If you are young and have fewer commitments you can risk more for higher returns.
Investment goals
When it comes to investing, there are two main goals: generating income and growing capital. Each goal requires a different approach, and what you ultimately decide will depend on your personal circumstances.
For example, if you want to buy a house in the next five years, you may need to invest more aggressively in order to reach your target. On the other hand, if you’re looking to generate income in retirement, you’ll need to focus on investments that provide a consistent stream of payments.
No matter what your goals are, it’s important to have a clear understanding of what you’re trying to achieve before putting any money into an investment. By doing so, you’ll increase your chances of achieving lasting success.
Investment time frame
Are you looking for immediate returns or are you willing to wait for longer-term gains? Some investments take time to mature and may not be suited if you need the money in the short term. For example, investing in a start-up company may take years before it lists on the NSE and becomes profitable.
Liquidity
This is how easy it is to convert an asset to cash. Some assets such as shares can be sold quickly, while others such as real estate may take longer.
You also need to consider the fees associated with each investment. Different investments have different charges, for example, you may need to pay a broker to buy shares or pay annual management fees on a mutual fund. Weigh up all these factors before deciding where to invest your money.
Now that we have looked at what investing is, let’s look at the best investment opportunities for low-income earners in Kenya.
Best Investment Opportunities for Low-Income Earners in Kenya
Bonds
These are types of investments where Kenyans lend money to the government or companies for a specified period of time in return for regular interest payments.
Investing in treasury bonds is less risky than investing in stocks because they offer better protection against economic downturns as the government will be able to pay back their bondholders even if other investments fail.