If you really want to get the most out of your savings:
Here are a few things you can try:
We are assuming that you've got no savings right now or you just have cash sitting in your bank account:
Here are a few things you can try:
We are assuming that you've got no savings right now or you just have cash sitting in your bank account:
Open 2-3 Money Market Fund Accounts and split your savings as follows:
MMF A - Set up your emergency fund.
This is your backup account incase you lost your source of income or have a financial emergency.
MMF A - Set up your emergency fund.
This is your backup account incase you lost your source of income or have a financial emergency.
You have to find out what your normal monthly expenses are.
For example, if your normally spend 20K per month
To cover yourself for 6 months, you need 120K to cover yourself for 6 months.
Start small, extra cover gives you more security
For example, if your normally spend 20K per month
To cover yourself for 6 months, you need 120K to cover yourself for 6 months.
Start small, extra cover gives you more security
MMF B - This is your investing account. This is where you save to invest.
Accumulate money to buy cash producing assets.
Save up to invest in bonds, stocks, SACCOs, Real Estate, your business, etc
Have targets and once you hit them, move that money to the right investment.
Accumulate money to buy cash producing assets.
Save up to invest in bonds, stocks, SACCOs, Real Estate, your business, etc
Have targets and once you hit them, move that money to the right investment.
MMF C - Set up your sinking fund.
This is where you save money to meet expenses that you anticipate to meet your future needs.
These include school fees, holidays, lifestyle upgrades, etc.
This is the account you use to enjoy your money.
This is where you save money to meet expenses that you anticipate to meet your future needs.
These include school fees, holidays, lifestyle upgrades, etc.
This is the account you use to enjoy your money.
When you are getting started, you need to focus on building your emergency fund first.
After that, you need to start investing and saving up for near future *huge* expenses.
I like this model because it balances everything if used well.
After that, you need to start investing and saving up for near future *huge* expenses.
I like this model because it balances everything if used well.
Do note that MMFs aren't ideal for long term investments.
They are ideal for holding cash you intend to use in the near future.
That's all. Hope this helps someone out.
This is the ideal savings challenge.
They are ideal for holding cash you intend to use in the near future.
That's all. Hope this helps someone out.
This is the ideal savings challenge.
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