Yesterday, I received a small dividend payment from MTN Uganda directly on my mobile money account. This is because I am a shareholder in MTN, having participated in their Initial Public Offering (IPO) a few years ago. Since then, like clockwork, I’ve been receiving dividend payments regularly.
Dividends are essentially a portion of the company’s profits shared with its shareholders. To become a shareholder in a listed company, you simply buy shares through a stock exchange like the Uganda Securities Exchange. As a shareholder, you don’t have to be involved in the daily operations of the company. Instead, you’re entitled to attend the annual general meeting, where you can vote on important company decisions based on the number of shares you own.
What makes dividends so special is that they’re a form of passive income. Passive income means you earn money without actively working for it. I don’t wake up every day to sell MTN airtime or run their operations to earn these dividends. My only job was to buy the shares and let MTN’s hardworking team do the rest. While I sleep, their staff are busy ensuring the company runs smoothly, and at the end of the year, I get my share of the profits.
Another fantastic example of passive income is the interest you earn from treasury bonds. I often say this is the easiest money you’ll ever make. You simply invest in a bond, and every six months, the government sends you an interest payment. That’s it—no stress, no hassle.
The ultimate goal with passive investing is to have multiple streams of income flowing into your account every month. Then, instead of spending all of it, you reinvest some to create a snowball effect. Over time, these reinvestments grow to the point where your passive income can cover all your living expenses. That’s when you hit financial independence—the sweet spot where you no longer have to work hard just to make ends meet. At this stage, you’re free to focus on things you truly care about rather than stressing over bills and survival.
The beauty of passive income is that it doesn’t require you to quit your full-time job or business. In fact, it’s the perfect side hustle. It works in the background, paying you consistently with little to no effort on your part. It’s like planting a tree that eventually shades and feeds you for years to come—one of the smartest financial moves you can make.
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