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Home / Managing Your Money

Why I think every woman needs to have investments

 Financial services consultant Caroline Matu (Jenipher Wachie, Standard)

Caroline Matu is an investment banker and CEO of Net Worth Investment Consultancy:

Investment is the art of assigning money in activities or assets that increase in value over time and give you a positive return with the aim of growing your money.

There are several investment opportunities available to women. Some of the popular ones are shares and stocks, treasury bonds, treasury bills, and unit trusts. 

Shares or stocks represent the ownership of a fraction of a corporation or company, while treasury bonds involves lending money to the government or a company for a long term (2-30 years) for a return or interest.

Treasury bills on the other hand involve lending money to the government or a company for a short period of time (less than a year) for a return or interest, and unit trusts involves investing into a fund with pooled monies from different investors with the objective of having an investment professional manage the funds and give back a positive return.

For a beginner, and if you don’t have a lot of money to invest, unit trust investments are a good place to start because most firms allow you to invest whatever amount you have and as often as you would like.

It gives you the discipline to put your money aside and you can use this method to build a lump sum that you can later use to invest in other more capital-intensive opportunities like real estate or treasury bonds. The returns on unit trusts are better than what you get keeping your money in a bank account.

If you don’t want to put your money away for too long a time, treasury bills, unit trusts and bank fixed deposits are all good options. Before you pick one avenue, consider your individual goals as they inform on the ideal opportunity that will fit you.

Looking for a good long-term return? Treasury bonds, shares and real estate are good options. Real estate requires you to have a lot of money but treasury bonds and shares would accommodate you even if your funds are limited.

The minimum investment for bonds for example, is Sh50,000 and the coupon is anything between 10 to 14 per cent depending on the tenure. Then with as little as Sh5,000 you can start your journey to investing in shares.

Most women, especially in Africa, have been socialised to perceive matters relating to money and investments as the prerogative of men. It’s a self-sabotaging belief which limits progress and leaves women at the mercy of their male counterparts. In the past, men were the sole providers for their families and it was automatic that they got the upper hand on matters finances. But today with most women taking their place in the work force, it is absolutely critical that ladies make key decisions affecting them.

The main challenge women generally face when it comes to investment, is ignorance. Lack of knowledge on the opportunities available and how to go about them makes women lack confidence in making decisions and taking action.

 With as little as Sh5,000 you can start your journey to investing in shares (Jenipher Wachie, Standard)

When a deal is too good, think twice! Many Kenyans jump at the first person who comes to them with a promise of supernormal returns/profits no matter how absurd it sounds. This is as a result of ignorance and greed which causes them to become easy targets for fraudsters.

I would urge people to stop to think and do their due diligence before investing their hard-earned monies. Work with recognised companies who are licensed and regulated by the relevant authorities.

Kenyans owe it to themselves to do some self-education on financial matters. I am dismayed by the multitudes of people falling for scams, pyramid schemes and unrealistic expectations of non-existent returns.

Why work so hard for your money and forego spending just to go and lose it all in pyramid schemes? That said, regulators and authorities need to step up their game to protect investors. I feel that they have failed Kenyans and have turned a blind eye on rogue businesses fleecing Kenyans and especially in the real estate arena.

Statistics show that most women outlive their male counterparts by 5-15 years. That means that you will have many more years to suffer poverty in your old age if you don’t put your finances in order.

Plan ahead and invest wisely for your future. Stop delegating your financial wellbeing to your spouses and children.

Also, several studies have shown women to be better financial managers than men. Further let as hold on to Warren Buffet‘s advice on never depending on a single income, and instead invest to create a second source. Ladies, lets educate ourselves and make wise investments.

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