The main problem with land, they say, is that you can’t easily sell it. It’s illiquid. But over time, I’ve come to realize that this very “problem” might actually be its greatest strength.
Sometime in 2011, we bought a 50x100ft plot of land in Gayaza for about UGX 3.5 million. Today, that same plot is worth around UGX 25 million — nearly 15 years later. This represents a Compound Annual Growth Rate (CAGR) of about 14%. And here’s the thing: I highly doubt that if I had invested that same UGX 3.5 million in a unit trust or money market fund, I’d still have anything to show for it. Most likely, I would have withdrawn the money to pay school fees or contribute to a wedding.
We all know compounding works — it’s one of the most powerful forces in finance. The problem is, we keep interrupting it unnecessarily. Liquid investments like unit trusts, money market funds, or treasury bonds are easy to access. And that’s both a blessing and a curse. It takes tremendous discipline to leave money untouched in a liquid asset when opportunities — or temptations — arise. I’ve been there before. I once liquidated my bonds to invest in a “promising” startup. Several years later, the startup is yet to break even!
That’s the beauty of illiquid assets like land or real estate. They may not offer the highest returns in the world, and they won’t make you rich overnight. But what they do offer is forced patience. You can’t just click a button and withdraw your investment. That friction — the inability to quickly sell — becomes a protective moat around your capital. It gives compounding the time and space it needs to actually work.
While cash is king for liquidity and flexibility, I’ve come to believe that real estate, especially land, is the queen — steady, enduring, and quietly building value over time. It may not be glamorous, but it teaches one of the most underrated lessons in wealth building: sometimes, not being able to touch your money is the best financial decision you’ll ever make.
So perhaps it’s time we stop treating illiquidity as a flaw — and start appreciating it as a feature.
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