Have you ever had a sizeable sum of money—perhaps $100,000—and pondered where to put it to use?
Deciding how to divide your money can be challenging, but with a systematic approach, it becomes doable.
Evaluate Your Financial Condition
Examining your complete financial condition honestly before making any investments is essential. Begin by responding to the following inquiries:
Do you have a spending plan?
Do you have sinking money and an emergency fund in your savings?
– What are your timetables and financial objectives?
Thorough awareness of these factors will facilitate making well-informed decisions.
For example, you should consider your major financial goals, such as paying for your child’s tuition or going back to school.
Assess Your Danger Acceptance
It’s critical to know how much danger you can take.
Every investment carries some risk, so deciding about your assets will depend on how much you can tolerate.
Investing in the stock market may put you under unnecessary stress if you are low-risk.
On the other hand, it could be advantageous to diversify into medium- to high-risk possibilities if you have previously made low-risk investments.
The cornerstone of financial planning is budgeting.
Your financial blueprint is your budget.
It estimates your financial requirements for the upcoming 12 months and outlines your monthly expenses.
If you don’t have a budget, you can invest the money you need for urgent bills like auto insurance or school fees.
Making a budget is the first thing you should do if you don’t already have one.
For a nominal price, Coach Susan provides a budget template containing a debt and monthly budget tracker.
She also offers a three-hour, self-paced workshop to help you become an expert in financial planning and budgeting.
The Foundation of Sustainable Investing: Savings
Sustainable investing requires savings. Ensure you have enough money before considering investing your $100,000. This covers setting aside money for specific objectives and maintaining an emergency fund. Without them, you may have to take on debt to pay for unforeseen needs or prematurely liquidate investments.
If you don’t have any sinking or an emergency fund, consider putting your $100,000 toward these savings. You may divide the money, for instance, allocating $50,000 to sinking funds and $50,000 to an emergency reserve.
Table of Contents
Where to Put That Ksh. 100,000. 1
Bonds for Government Infrastructure. 2
Bond funds: A dependable means of obtaining passive income. 2
Investing directly in stocks. 2
Business Growth: Using Your Investment to Drive It 3
Money Market Funds: A Haven of Safety During Unpredictability. 3
Crucial Things to Think About in Any Investment 3
Comprehending the Time Value of Money. 3
Where to Put That Ksh. 100,000
You can consider various investment possibilities with a budget and enough cash. Coach Susan suggests the following actions:
Bonds for Government Infrastructure
Government infrastructure bonds are an appealing choice, particularly for investors with a low to medium risk tolerance.
A $100,000 minimum investment is required for these tax-free bonds.
They offer consistent profits without the stock market’s volatility, making them a reliable investment.
There have been multiple chances to invest in these bonds during the last year. They are highly sought after when they become available, even though they are not usually.
The description box below links to Coach Susan’s film, which has comprehensive information on how these bonds function.
Bond funds: A dependable means of obtaining passive income
Bond Funds: Why Do They Exist?
Bond funds are an excellent option for people who want to make passive income. These funds combine several investors’ capital to buy various bonds, such as corporate and treasury bonds.
This diversification offers a consistent stream of income while assisting with risk management.
Bond Fund Types in Kenya
Bond funds in Kenya normally offer yields of at least 9%, and depending on the market, some can offer returns as high as 11%.
Specifically, tax-free infrastructure bonds have been producing outstanding yields of 13 percent and higher, which makes them even more alluring.
Adjustability in Amounts Invested
One of bond funds’ main advantages is the flexibility they provide regarding investment levels.
Bond funds frequently accept investments as low as 5,000 KES, in contrast to infrastructure bonds that could have a minimum investment requirement of 100,000 KES.
Because of their accessibility, bond funds are appropriate for investors with a range of capital.
Preserving Capital
Verifying whether the bond fund offers capital preservation assurances before investing is imperative.
This entails making sure that your initial investment is preserved regardless of market changes. Always get advice from your fund manager to fully grasp the details.
Investing in Stock Market Diversification Using Equity Funds
Investing directly in stocks
Investing directly through brokers in the Nairobi Securities Exchange can be profitable for individuals with a strong interest in and understanding the stock market.
But to do this, you need to be well-versed in the company strategies, financial status, and market conditions of the firms you’re investing in.
Investing in Passive Equity Funds
If actively managing equities sounds too complicated, equity funds provide a more straightforward option.
These collective investment plans combine funds from multiple participants to purchase various shares.
Qualified fund managers make the decisions about investments, seeking to minimize risks and maximize profits.
Business Growth: Using Your Investment to Drive It
Investing in Already-Stated Companies
Investing 100,000 KES in a company with a track record of success can significantly increase its growth and profitability.
This strategy lowers risk compared to starting a new firm from scratch.
Launching a Novel Enterprise
Ensure a new company you want to invest in has a strong proof of concept.
To prevent expensive blunders, do in-depth market research, create financial estimates, and comprehend your target market.
Money Market Funds: A Haven of Safety During Unpredictability
Money Market Funds: Why Do They Exist?
Money market funds are an excellent option for people unsure where to put their money.
These funds provide a secure place to keep your cash while generating interest—usually every month.
They give you liquidity and protect your wealth, giving you time to plan your next investment.
Crucial Things to Think About in Any Investment
Comprehending the Time Value of Money
Make sure your investments keep up with inflation.
To maintain your purchasing power, your assets should ideally provide returns higher than the rate of inflation, say, 7%.
Steer Clear of Low-Yield Investments
Use caution when investing in products that don’t keep up with inflation, like some insurance plans or SACCO savings accounts with low interest rates.
Look for investments that are guaranteed to increase.
In summary
Making intelligent investments requires carefully weighing the advantages and disadvantages of different possibilities.
Whether you choose to use money market funds, stock funds, bond funds, or company expansion funds, it is essential to comprehend the guiding principles and conduct thorough research.
By making well-informed decisions, you may make sure that your investments match your risk tolerance and financial objectives.
Check out our extra resources, linked in the description box, for more in-depth information on each type of investment.
Remember to post any queries you may have or your investing techniques in the space below the comments!
Esquire Capitals: A blog about making and growing money 
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