Many of us imagine that we need a lot of cash to start our investing journey and we end up procrastinating until we accumulate serious cash. This is a mistake because it is unlikely that we shall ever accumulate that serious cash. A better approach is to start investing the little we have on a regular basis. Better still we should create an automatic system that invests these little monies on a daily, weekly, or monthly schedule.
You only need ugx 100k to start investing in many investment vehicles in Uganda. So where can you invest 100k? The following platforms are easily available for anyone in Uganda:
- Unit trusts. A unit trust is a collective investment scheme that is regulated by the Capital Markets Authority. Basically, people pull resources together and a professional fund manager invests on their behalf. The common unit trusts I have dealt with are UAP, Britam, ICEA and XENO. With XENO you can set up an autosave from MTN mobile money starting with as little as 10k. Unit trusts pay some interest which varies from day to day but is on average about 10% per year. You can withdraw your cash anytime.
- Fixed deposits. You can fix 100k with most commercial banks. If you deposit 100k monthly you will have saved 1.2m by end of the first year. Over time this cash can compound seriously. If you increase the frequency to weekly then you can save 4.8m by end of year. You will earn a fixed interest on your fixed deposit.
- Local shares. You can easily buy shares in locally listed companies like MTN, Stanbic, Umeme, etc. Just contact a licensed broker like Crested Capital to assist you to open an account and then deposit your 100k with instructions to buy a certain share. Your broker can also help you to buy regional equities like Safaricom. When you buy shares you are entitled to dividends. You can also sell your shares for a profit when prices go up.
- International shares. You can easily buy shares in international companies like Facebook and Apple using Chipper Cash. Chipper Cash is an app that allows you to transfer cash across borders and also invest in shares and some cryptocurrencies. Chipper Cash is regulated by both Bank of Uganda and the Capital Markets Authority. You only need ugx 10k to start buying shares in these big companies.
- Treasury bills. You can lend your 100k to the government of Uganda by buying a treasury bill. The government in turn pays you some interest. You can do this by opening up an account with Bank of Uganda through your commercial bank. You can deposit cash for 3 months, 6 months or 1 year. You can easily sell your Treasury bill before maturity in case you urgently need the cash.
- Treasury bonds. When you lend the government cash for more than one year we call it a treasury bond. You can lend for 2 years, 3 years, 5 years, 10 years, 15 years, or 20 years. You get a higher interest rate because you are lending for a longer period of time. Treasury bonds pay interest every 6 months and you get back your principal at the end of the bond period. You can easily sell your Treasury bond before maturity in case you urgently need the cash. Treasury bills and bonds are quite safe because they have the backing of the entire government.
- SACCOs. You can save your 100k with your SACCO and earn some interest. Just make sure your SACCO is organized, registered, and has clear policies and leadership in place.
- Investment clubs. You can also save with an investment club you belong to. The investment club should have committed members and leadership.
- Mutual funds. Mutual funds are like unit trust funds but they mainly invest offshore. You can open up a mutual fund account in Standard Chartered Bank starting with $100.
- Provident funds. There are several provident funds like ICEA where you can open up a personal retirement account and start saving your 100k monthly. This cash will really add up by the time you reach retirement.
- NSSF. You can save as little as 5k with NSSF which is the largest fund in Uganda. Ignore the noise in the media and focus on the long term. NSSF is still one of the best-performing funds in the country.
- Mobile money deposits. You can also put your 100k on mobile money where it can earn some little interest.
So you can see that you can do a lot with 100k. This amount seems little but if you increase the frequency to daily, weekly, or monthly, it really adds up. The most important thing, however, is to START!
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