It’s that time again. Time to go back to university or college. Your parents have given you pocket money. You need to start learning how to save your cash because some times its over so fast it’s like it was stolen by the passing wind. Once you have done your budget and you have some extra cash for savings its time to invest it. The thing is to learn how to start saving cash so that you always have money now and in the future. How do you do that? Use your pocket money or the cash that you have to invest. So how do you make University investments?
Invest in a merry do round. Start a merry go round with your friends. You can contribute each week, or every month. For every round there is somebody who receives the money. At the end of it each member gets a contribution from all members then the circle goes round again. Once you receive it, when it’s your turn, you can invest it again or buy something that you had planned for like a radio, shoes, and clothes. Merry-go-round teaches you the discipline of saving money. Some of those chamaas if well managed can end up being an investment club.
Invest in the stock market. To do this you need to get a broker who can help advise you on shares to buy or if your business smart you can just invest the money for yourself. It is important to shop for a broker who will work well with you and your needs. The best way to get a good broker is to ask for references from people you trust who are actually investing. If your not sure about investing in the stock market and it’s your first time to invest you should probably invest a little cash first to see how it works then if it is good for you then you can invest more. Share brokers usually charge a commission on transactions but if you’re buying shares through your bank they won’t charge a commission (well I know Equity doesn’t).
Join an investment club. A group of interested individuals may band together to pool their resources. This means that they have more cash to invest together as a group then they would have as individuals. This gives them more purchasing power. The thing to do is be careful about what investment club you join and who the individuals in it are. There should be a contract signed by all parties to ensure that in case anything happens there is a binding agreement that states what happens in such a case.
Fixed accounts or mutual stocks. If investing in the stock market is not your thing you could put your money in a fixed deposit account where it will get interest. Forget saving accounts. If you actually think about it and do the math you will realize that you actually never save any money after they remove all the ledger fees, withdrawal fees etc it is a legal way for the bank to take your money and charge you fees for it. You can invest in mutual funds or buy bonds which usually give a good rate of return. These are usually expensive though.
You can either start your own business or invest in a business that is already running and get part ownership. If you’re an entrepreneur you can start your own business in campus. Identity a need and provide a solution to that problem. If you dont necessarily want to go through the hustle of being involved in the day-to-day running of the business you can be a silent partner. You put in capital and get a certain percentage of the profit. Make sure that you have an agreement in writing as things can get ugly later and you want proof that you invested in the business.
You can also join a Sacco. You can save money by joining a Sacco. Then when you need a loan you can borrow at 3 times the amount of shares that you have. Sacco’s also pay dividends at the end of the year so depending on your savings pattern you can make some good dividends. The thing about Sacco’s is that in order to get a loan you need other members who can sign your loan for you. So you need to make sure you have people in the Sacco who know you. So either join a Sacco with your friends or join one where you have relatives or friends.
In the end your money is in your hands. Your money is like your seeds. You can do go two ways. You can either eat all your seeds or be full for today then tomorrow you starve. Or you can eat some and plant some, so that you can have food and shelter in the future.
As an undergraduate student I had a part time job and I also had a small biashara selling jewelry. By saving money and also by sacrificing some things that were not important I was able to buy shares. Some I sold when I was broke and some I still have until today. They are the corner stone of my wealth plan. As a masters student and with a full time job I still look back at my undergraduate days and think I am made the right choices. Sure I got burnt in a couple of deals (that’s why I am telling you to be careful where you invest) but overall it was worth it. I would advise any university student to save money for a rainy day. Investing part of your pocket money or money that you get from jobs can be a good option although it is not for everybody.
Are you making money in campus? How? Share you story.
If you were in campus and saved some money through investing how it does affect your financial choices today?
PS. I wrote this post originally as a Daystar Undergraduate Student for the student newspaper Involvement. I have updated it and added a couple of things.