David Tanki, a veteran financial management trainer, speaks to JACQUELINE MAHUGU on the easiest investment options anyone with a little capital can make increase their revenue streams.
1. Put up rentals
In Kenya, this is one of the most popular sources of passive income, and it is with good reason – it tends to be a very stable source if you are able to mobilise capital and build residential houses. One of the hurdles is usually that the capital outlay needed is huge, but that can be overcome. If you cannot afford land of your own, you can rent space and build semi-permanent, pre-fabricated structures. You can have a lease agreement of say, 12 to 15 years, during which you can make a substantial amount of money. This set up is popular in areas like Nairobi’s Dagoretti and Riruta Satellite. You can also pool resources with three or four other people, team up, buy land, then build.
2. Use idle land
Many people have idle land lying upcountry or being used in non-productive ways. There are a few people in this country making massive gains from land that would otherwise lie idle. If you plant eucalyptus trees or bamboo trees, after a couple of years you will make so much more money than you put in. You can also do commercial farming. It may cost you a tidy sum upfront but the returns are huge. Hire people to do this and if all you have is a small piece of land, put up a greenhouse, plant vegetables and export produce.
3. Uber & Airbnb
The biggest taxi company in the world owns no vehicle, and an impressive accommodations firm like Airbnb owns no house. Apps like Uber have been some of the most disruptive technology to arise, but one of the best ways to make money for the money-smart. You can buy a vehicle specifically for Uber, or you can use your personal car that lies dormant from 7am to 7pm. With Uber, your car can be a cash cow and you can decide to get a driver who picks up your car between those hours while you are at work, make money during the day and bring it back in the evening. You can also rent out spare rooms in your house on Airbnb for travellers looking for places to stay for short periods.
4. Buy shares in unlisted companies
You can also put your money in other companies that are not listed in the Nairobi Securities Exchange. Vet them, run background checks and then sit back while they work full time to bring you more money from what you gave them. You can also outrightly buy a portion of a business. Identify someone who is in business who needs money and does not mind selling a portion of it. Become a co-owner and agree on the terms of the returns you get as a co-owner that is not actively involved in the running of the business.
5. Treasury Bills and Treasury Bonds
The government borrows from its citizens, and pay it back with some interest. They are good because returns are guaranteed. The guarantee means they are low-risk and therefore the returns are not as high as from other sources, but they are 100 per cent secure, and you get extra money without having to do anything extra.
6. Shares in listed companies
Shares can be a powerful source of passive income if you know how to navigate the stock market. There are companies that are known to be very consistent in giving fair returns and would be a good bet for anyone. Some have as high as a 25 per cent return. I always recommend training and mentorship from someone who knows the ropes, in order to get maximum returns from it. You can identify a stockbroker and consult with them, so that they can walk with you and guide you on how to make money in the stock market.
7. Monetise your skills and talents
Everyone has some talent or gift that can be monetised. If it is writing, nowadays you do not necessarily need a publisher. Getting one is good and you can make money from selling the physical copies, but you can also self-publish ebooks online, like on Amazon at zero cost and then earn royalties without having to do a thing for the rest of your life, as long as people continue buying it. You may also be good at planning and event organising. Do it on weekends. Emcee at functions if you are blessed with gift of gab. You can make as much as Sh80,000 per function if you are decent at it. Take advantage of your talents and make some money
8. Fixed deposit accounts
For the very risk-averse, putting money in a fixed deposit account can give you about 7 to 10 per cent interest per year. Saving in a sacco is also just as good or even better, because all saccos pay dividends at the end of the financial year and in addition to that, saccos act as an investment vehicles and allow you to borrow at friendly interest rates.
9. Mutual funds, unit trusts and other endowment products
Investment groups (chamas) and other investment vehicles that use pooled resources to invest in one thing are seeing powerful returns. What you choose depends on how much cash-flow you need, as some are more of a long-term investment which bring in good cash in the long run, while others bring in cash.
10. Block-chain technology
The emergence of cryptocurrencies like bitcoin and ethereum have provided new forms of investment. One makes money by, say, buying bitcoins and then disposing off some units later when their prices rise. As with most investments, they have a risk aspect to it, but the returns are good.