In a previous article 7 cures for a lean purse was a map to wealth. Cure 3 says to multiply thy gold. But how? The answer is invest, invest, invest. So said the Chinese: if you have two loaves of bread sell one and with the monies buy hyacinths for your soul.
Most saving people go to work and have little or no room for side business. A nice way to save and accrue interests at the same time is the money market fund. A money market fund is generally a savings account that earns a much higher interest than a conventional bank account.
With Kenyan Banks offering savings accounts with 2% interest growing your money shall remain a pipe dream. Money market funds on the other side fetch interests as high as 21% believe or not. I even fantasized of getting a humongous loan at 16% from the idiotic banks and saving it in a money market fund at 21%. The logic for that fantasy is this. Assuming banks will nowadays beat a path to your door to offer you a loan on the slightest indication that you have a stable job, show up at a bank and order them to give you a loan.
Let’s pretend they have handed you Kshs. 2 milli at 16% interest p.a. At the end of the repayment period you should pretend to hand back Ksh. 2,320,000. If you immediately throw this cash into a money market fund that accrues interest at 21% p.a you will get an interest of 100k + each year assuming the interest is compund. The only backlash is if you must start repaying the loan back immediately.
Disclaimer: If you follow advice from this post and you end up in jail or loose property, it shall be at your own peril and I shall not accept liability for any damage caused. However if it works out share the knowledge and also feel to invite me to the after party.
The next question at this point might be where to get money market funds in Kenya and which is the best. When I first stumbled on money market funds I only knew one, and it was offering an interest of 6.5% p.a. then. At the moment of writing this post I had discovered over 20 and they all offer different products so it’s up to you to launch an inquiry into the most suitable. Below is a list from a respectable local newspaper dated Wednesday February 1, 2012.Given today is Friday February 3,2012 the information is up to date so it’s a good point to begin. You can also download the complete pdf file.
UNIT TRUSTS DAILY YIELD EFFECTIVE ANNUAL RATE
Africa Alliance Kenya Shilling Fund 11.85% 12.5%
Old Mutual Money Market Fund 12.17% 12.87%
British-American Money Market fund 12.45% 13.26%
Stanbic Money market Fund 12.75% 13.52%
CBA Market Fund 11.69% 12.40%
CIC Money Market Fund 15.83% 17.03%
Amana Money Market Fund 21.09% 22.5%
Suntra Money market Fund 11.48% 12.17%
Zimele Money Market Fund 9.0% 9.31%
ICEA Money Market Fund 10.96% 11.58%
A few advantages of this investment vehicle are that you can always withdraw your money, keep up with progress online and generate e-statements. It also has a guarantee unlike the stock markets where stocks fluctuate wildly.
Stocks are also affected by non-issues and may plummet to hell just because a board member of the company was allegedly spotted breezing into Motel Kabu Kabu with a string of kele keles in his wake.
Most saving people go to work and have little or no room for side business. A nice way to save and accrue interests at the same time is the money market fund. A money market fund is generally a savings account that earns a much higher interest than a conventional bank account.
With Kenyan Banks offering savings accounts with 2% interest growing your money shall remain a pipe dream. Money market funds on the other side fetch interests as high as 21% believe or not. I even fantasized of getting a humongous loan at 16% from the idiotic banks and saving it in a money market fund at 21%. The logic for that fantasy is this. Assuming banks will nowadays beat a path to your door to offer you a loan on the slightest indication that you have a stable job, show up at a bank and order them to give you a loan.
Let’s pretend they have handed you Kshs. 2 milli at 16% interest p.a. At the end of the repayment period you should pretend to hand back Ksh. 2,320,000. If you immediately throw this cash into a money market fund that accrues interest at 21% p.a you will get an interest of 100k + each year assuming the interest is compund. The only backlash is if you must start repaying the loan back immediately.
Disclaimer: If you follow advice from this post and you end up in jail or loose property, it shall be at your own peril and I shall not accept liability for any damage caused. However if it works out share the knowledge and also feel to invite me to the after party.
The next question at this point might be where to get money market funds in Kenya and which is the best. When I first stumbled on money market funds I only knew one, and it was offering an interest of 6.5% p.a. then. At the moment of writing this post I had discovered over 20 and they all offer different products so it’s up to you to launch an inquiry into the most suitable. Below is a list from a respectable local newspaper dated Wednesday February 1, 2012.Given today is Friday February 3,2012 the information is up to date so it’s a good point to begin. You can also download the complete pdf file.
UNIT TRUSTS DAILY YIELD EFFECTIVE ANNUAL RATE
Old Mutual Money Market Fund 12.17% 12.87%
British-American Money Market fund 12.45% 13.26%
Stanbic Money market Fund 12.75% 13.52%
CBA Market Fund 11.69% 12.40%
CIC Money Market Fund 15.83% 17.03%
Amana Money Market Fund 21.09% 22.5%
Suntra Money market Fund 11.48% 12.17%
Zimele Money Market Fund 9.0% 9.31%
A few advantages of this investment vehicle are that you can always withdraw your money, keep up with progress online and generate e-statements. It also has a guarantee unlike the stock markets where stocks fluctuate wildly.
Stocks are also affected by non-issues and may plummet to hell just because a board member of the company was allegedly spotted breezing into Motel Kabu Kabu with a string of kele keles in his wake.
