Financial education is still needed and essential in the African community as many people tend to increase their expenses when they earn more instead of saving more.
One rule to help you become financially stable is not to touch the excess money in your earnings but rather find a suitable way to put it away for the long term until you know exactly what to use it for.
There are many ways to invest your money, which help save and grow your money simultaneously.
Fixed deposit
This allows bank, non-banking and financial companies customers to save a certain amount of money with an agreeable interest rate for a fixed period. It makes it harder for you to access the money and secure your future finances.
Let’s say you invest 2 million at an interest rate of 5% per month for 24 months; in the end, you will have 4.4 million in total.
Real estate
Another great way to invest your money is by investing in real estate. Buying houses and plots for business or not. Land does not depreciate, and the price goes up every now and then.
Depending on how developed the area will be, you might buy a plot for 2 million today and sell it for even 30 million in the future. A great example is the value of the place you currently live in versus its value 10 to 20 years ago.
Cryptocurrency
When blockchain hit hard in the tech world, one bitcoin was worth $1, but now one bitcoin equates to $38493. There are over 100 cryptocurrencies to invest in. However, you need to be a constant learner in this field and a risk-taker as well.
Shares and Stocks
These give you slight ownership of the company you are investing in.
A stock (also known as equity) is a security that entitles the stock owner to a proportion of the corporation’s assets and profits equal to how much stock they own. Units of stock are called “shares,” as put by Investopedia.
Side note: For Tanzanians who wish to invest in bonds or save at a low cost, I urge you to check out UTT-AMIS schemes. Opposed to most banks and financial companies UTT does not charge you withdrawing fees so you are bound to get the exact amount you put in plus interest.