- Many young executives and corporate people tend to think that they know everything. That is great.
- How would you invest?
- What exactly is the reason for investing?
- Many young executives and corporate people tend to think that they know everything. That is great.
- How would you invest?
- What exactly is the reason for investing?
- Many young executives and corporate people tend to think that they know everything. That is great.
- How would you invest?
- What exactly is the reason for investing?
- Many young executives and corporate people tend to think that they know everything. That is great.
- How would you invest?
- What exactly is the reason for investing?
- Many young executives and corporate people tend to think that they know everything. That is great.
- How would you invest?
- What exactly is the reason for investing?
- Many young executives and corporate people tend to think that they know everything. That is great.
- How would you invest?
- What exactly is the reason for investing?
- Many young executives and corporate people tend to think that they know everything. That is great.
- How would you invest?
- What exactly is the reason for investing?
- Many young executives and corporate people tend to think that they know everything. That is great.
- How would you invest?
- What exactly is the reason for investing?
Contents
Many young executives and corporate people tend to think that they know everything. That is great.
However, information is not the problem.
Failure to take action is. Plus, many people take decisions based on hearsay and not data. And that is why they continue to think that their investment decisions are great, which is wrong.
One of the common questions I am often asked is:
If I have Ugx. 5m (US $2,300), which top 3 investments would you advise me to invest in Uganda and why?
How would you invest?
When faced with an investment decision, most people think real estate – buy a plot of land and build a house or rental. Buying land is good but is that the best financial decision? Does that offer the best return for your money considering the other investment options available?
To decide where to invest, first ask: what is the reason for your investment. Who are you and what financial risks do you want to manage?
- Are you a married person with a four and 10 year-old children and you intend to invest to guarantee their education five to 10 years from today, when you are out of employment and therefore no monthly salary?
- Or you want to have some money in 10 years’ time to help you fix your retirement luxuries and small incomes so that you are less stressed?
- Or you want to be proud that you have big building where you collect little income from them?
What exactly is the reason for investing?
Depending on your age and your savviness, if your investment decision is to fix item 1; then education insurance could be the best for you.
Many people think insurance is a bad thing, because they decide on hearsay. They have not collected data to understand how insurance works.
Consider education insurance example below:
- Product: education insurance
b. Policy period: 10 years
c. Monthly premium: 311,836
d. Annual premium: 3,742,032
e. Sum assured: 60,000,000
f. Minimum estimated maturity value: 63,220,000
___________
This implies: your total investment over 10 years is 3,742,032 x 10 = Ugx. 37,420,320. Total profit at maturity is Ugx. 25,867,967 i.e 63,220,000 – 37,420,320 or annual return on investment of 6.91%.
___________
If you are 50 years old, buying a 10 year education insurance policy presents a better opportunity than buying land. Why? Because land’s payback period is long after 5 to 10 years depending on location – plus it may not be able to provide the money needed for school fees.
Plus, many people die intestate. They die without having made a will. This means, the law decides on who takes what. Plus, some children have sold off properties a few months after their parents passed on in disregard of the education of their siblings. Even then, some wills get changed or lost and some land fraud in Uganda is a big thing.
If you see item e) sum assured above, it means that if you died just a few months after signing your contract, the insurance company guarantees you Ugx.60m regardless of the time of your death! In addition to paying a small monthly fee off your salary, you stand to get Ugx. 60m anytime during the policy term period!
I don’t know your reasons for buying land, but on this one I would be far better off investing in insurance than land.
Remember: the deciding factor is initial outlay, your age and reason for investing.
Investing in land may be good but not always.
To be continued.
Copyright Mustapha B Mugisa, 2015. All rights reserved.
