10 Investment Opportunities in Kenya

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Investing is the best way to build wealth and secure your future. When you start to invest, you take a step out of the short-term goal and set your feet on a long-term goal for financial success. If done right, investing will work for you and your family. 

Currently, a significant percentage of the population is on the loan side rather than the investment side. We haven’t yet developed a culture for investing. In this article, we are going to show you 10 investment opportunities that you should pursue. 

Real Estate 

There are numerous benefits to investing in real estate. For starters, you get a steady flow of income through rent. Investing in property also allows you to earn through capital appreciation

There are several ways to go about investing in real estate. Most people are familiar with the traditional way of buying land, building a house/apartment.building, and renting it out. Unfortunately, this way comes with challenges because you’ll require huge sums of money to start. 

There are other ways to invest in real estate with low capital. You can:-

a). You can invest through Real estate investment trusts (REITs), e.g., Stanlib Fahari i-REIT (was acquired by ICEA Lion Asset Management). Unfortunately, in Kenya, REITs are a new option that’s yet to grow. 

b). Mutual funds. Mutual funds are another low-cost approach that you can pursue to invest in real estate. The term mutual means shared. Mutual funds are a professionally managed pool of investments. When you open a mutual fund, you get to deposit some cash. The company takes your money and invests it in several vehicles such as stocks, bonds, and some invest in real estate as well. It takes as little as KES 2500 to open a mutual fund. However, it’s always advisable to reach out to the company you wish to invest with and consult them about their asset types (i.e., do they invest in real estate? What assets do they invest in?). The main companies with mutual funds in Kenya are:-

You can learn more about how to invest in real estate with little money here

Government Bonds 

Government bond funds are a type of ETF (Exchange Traded Fund) or mutual fund that invests in debt securities issued by the government. There are two types of government bonds: Treasury bonds and municipal bonds. Bonds are viewed as a safe asset. However, it would be best to consult a financial advisor and do a bit of research before investing in them. Similar to most investments, bonds come with risks, and it would be best to learn as much as you can. 

Check out this link of the pros and cons of government bonds. Although it’s a U.S. based site, the knowledge offered here is relatively the same to our region. 

If you are interested in bonds, then the best route is to invest in them directly through the central bank. You can do this by consulting your local bank. 

Dividend Stock Funds 

Dividend stock funds are stocks that pay dividends (a portion of their profit) to stakeholders. Most companies usually pay out their dividends every quarter. However, with a dividend stock, you can only gain your investment through long-term market appreciation. Still, there are short-term benefits to dividend stocks. 

It would be best to buy dividend stocks through a stock fund. Individual purchase of stocks is advisable for seasoned investors. But if you are a beginner, you can start by investing through a stock fund. Most banks will assist you in purchasing stock funds. You can also consider consulting the investment banks (e.g., Britam, UAP, Cytonn, e.t.c.). As with most investments, be sure to do your research before starting. 

Invest in Yourself 

There are two main ways that you can invest in yourself. 

  1. Acquire a skill or certifications that will catapult your career to the next level. 
  2. Acquire skills that will help you launch a new career. 

You can also invest in yourself by reading books that will help you improve every area of your life. Since we are talking about finances, you should consider reading investment books or following a blog that looks into financial success. Also, there are great online platforms like Hubspot Learning centre, and Udemy offers relevant courses that can help you in your career. 

  1. Open A Side-hassle

The secret to a side-hassle lies in your mindset. When you open your mind to the reality that you can turn anything into a legit hassle. In this day and age, we cannot afford to have only one source of income. So it’s time to brainstorm and get a side hassle running ASAP. Just focus on any specific skill or talent you have and work towards making it your side business. 

Open A Retirement Account 

Apart from the NSSF, which requires a minimum of 200. It is highly advisable to take up a retirement account. Do the math. If you keep KES 200 a month and work for 15 years, how much will you have when you retire? KES 36,000

I look up to the heavens. When will our poverty end? 

One of the ways our poverty will end is when we see the value of saving up early for retirement and putting aside way more than KES200. 

Saving up for retirement comes with tax advantages (see: KRA Tax Incentives). 

Invest in your Family 

Rarely do people consider the human element when it comes to investing. Yet, even Forbes agrees that spending time with your family and focusing on your children’s well-being is a great investment in the future. This investment is one reason why the U.S. launched the Healthy Families America (HFA) to support families. 

One way that we can adopt the Healthy Family approach is by becoming our brother’s keepers. Let’s take time to check not only our families but also the families of those struggling in our communities. The best investment is human. Unlike money, your children are more likely to be there for you in your old age. 

Open a High-yield Savings Account 

High-yield savings accounts let your savings earn interest. This is a better option than just letting your money stay in a savings account earning nothing. Even if your money earns KES 30. It’s better than nothing. On that note, you can save your money on a high-yield savings account as you look for the best way to invest it. 

Check out this list on some of the best banks with high-yield savings accounts. Alternatively, you can opt for a money market account. Money markets operate more or less the same as a high-yield savings account. 

Invest in ETFs (Exchange Traded Funds)

ETFs provide an excellent entry point for a new investor. Unlike stocks, ETFs are cheap and carry a lower risk. Barclays bank is the first bank in Kenya to offer investors an opportunity to invest in ETFs. They opened the Barclays NewGold ETF, which allows you to invest in Gold ETFs. Some of the benefits of investing in ETFs include:-

a). ETFs have a variety. You can invest in commodity ETFs (gold, silver, oil e.t.c), index ETFs, debt, or equity. 

b). You can purchase ETFs in small amounts. 

c). You can trade ETFs anytime, unlike stocks. 

You can learn more about ETFs here

Unlisted Equities 

Unlisted equities refer to strategies such as chamas. Many people have been helped by chamas, and you should consider looking for one. Still, be careful and ensure that you join one that shares the same vision as you and operates with a clear financial report. 

Certificate of Deposit (CD) 

Certificate of Deposits is issued by banks and credit unions and provides you with interest. This deposit has a maturity date, and you are not allowed to withdraw your funds before the maturity date. If you withdraw before the maturity date, you end up paying a fee. CDs have a higher interest rate than savings and can be a great short-term investment. 

Conclusion 

There’s a famous quote that says, building wealth is not a sprint but a marathon. These ten investment opportunities offer you a great way to build your wealth. However, as with most good things, you need the discipline to build this wealth. 

Check: Equity Bank Certificate of Deposit Calculator to learn how much you can earn from a certificate of deposit from them. 

Consider consulting a financial advisor to recognize what works for you depending on your income, family, and daily needs. Also, we have plenty of good resources online to help you learn what can best suit you. Most of the companies mentioned here have great customer service and are willing to help guide you to the right decision. Good luck. 

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