Very often people underestimate the power of money that is within their grasp. We find ourselves perpetually waiting for bigger amounts of money as that is what we feel is adequate to start saving or investing with. We feel that it is only with these huge amounts that we can actually do something significant. And while we are waiting for these big amounts we are usually recklessly spending small amounts of money everyday without realising their value or the alternative use of the money. Secondly we are letting opportunities pass us by.
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I think sometimes the disease of instant gratification filters down to our saving or investment mentality. We want to immediately be able to say we have Kes 50,000 to put aside without realising it is also small amounts over time that build up to Kes 50,000. Today, we explore the power of Kes 5,000. You might be wondering where to get Kes 5,000 given that your bank account is usually empty by the end of the month. Well, do you easily spend Kes 170 a day without thinking about it? If you left your house with Kes 170 in your wallet, would it be there at the end of the day? Right there is your Kes 5,000 at the end of the month. Maybe you are spending it on lunch, snacks, drinks but you can make a choice to ensure you have Kes 5,000 every month. So what can this Kes 5,000 actually do?
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You can have a savings account with Kes 5,000. You can opt to put this money in a savings account. Many banks will be able to provide this to you and these days even some mobile service providers are offering a solution for these savings. At the end of one year you will have at least accumulated Kes 60,000 plus some interest in this account. This is money you can use to pay school fees or even go on a holiday. Even if you are not sure where to invest, start here. Open this savings account even as you research on various areas to invest. Don’t wait to have the perfect investment to start putting aside your Kes 5,000. Starting this way will actually start creating the discipline of saving that many of us need to foster.
You may even opt to put this money aside in a SACCO every month and at the end of the year earn dividends on the shares you have accumulated. Just using an example from one of my SACCO clients, you would have earned Kes 6,000 shillings at the end of that year. This 6,000 can be used to reinvest in something further or enable you to pay your utility bills that month. Your Kes 5,000 has started making money work for you. Accumulating this amount of money in a SACCO will enable you to borrow up to three times what you have saved. This means after one year of saving you can borrow Kes 180,000 to do further investment such as a business and in some areas you can buy a plot of land with this. Remember to ONLY borrow for investment and not consumption purposes. Ensure that the return you will get will exceed the interest you are paying. Your Kes 5,000 has therefore enabled you to leverage and access good debt for investment purposes.