Intelligent Investing: What does it take to be a Smart Investor?

opening a savings account in Nairobi

One can earn money either by working and second by having the chattels work for you. You will require money your whole life, right. But, in the older days, you can’t have a clone of yours to work that time. So, who will fulfill your monetary needs then? While a savings account can offer easy access and security of money but the returns can be modest. Therefore, the better option that can help you to save more money is intelligent investing.

Investing can greatly help you to realize your long-term fiscal goals, whether it is your retirement, early mortgage repay, or university fees of your children. Unlike savings, intelligent investing can significantly endow stronger returns over the long-term. A smart investor is one who earns maximum return on investment by choosing the right financial product, keeping the needs and goals in mind.

Here are some useful tips that can help you to become a smart investor.

Don’t Delay, Start Now

Investing at an early age can greatly affect the quality of your life in future. If you start investing at a young age, history is evident that you will end up with far more than those who invest later in life. Having time on your side means, you can make more investments that can increase in value quite satisfactorily.

Identify your Requirements

Examine all your goals and needs and choose accordingly. You can make a note of your long-term and short-term investments. For example, your retirement fund and your children education require long-term investment. On the other hand, saving for a car or vacation is a short-term investment. So, know all your intelligent investing goals and plan them accordingly.

Gauge Risk Involved

This is an essential step when you are making any kind of investment. Make sure you know how much risk you can take before investing. Remember an idea of saving that keeps you awake whole night, regardless of how “excellent” they might be, is not the right investments for you. So, before making any big investment, always seek guidance from an expert or you can even buy the intelligent investor in order to avoid risk.

Invest on a Regular Basis

There is no shortcut to success. You need to invest consistently in order to earn bigger profits. Regularly stashing a certain amount will allow you to decide when and how often you make contributions – ensuring you make investing a primacy. You can fund investment accounts through automatic withdrawals from your paycheck. It will greatly help you to make regular payments.

Don’t Chase the Horde

When investing, people often follow the crowd, which in turn, ends them in distress. To win the investment game, one need not chase hot performance investments. Remember today’s hot investments can be tomorrow’s cold turkeys. To be an intelligent saver, you should be familiar with your investment knowledge, risk appetite, gross annual income, and estimated net worth.

Think about the Downside

Possessing strong conviction on the funds you invest is good but a little cynicism is good too. So, before getting ahead with intelligent investing, know the possible downside before it occurs thereafter. By doing this, you’ll be prepared for the upcoming worst situations, if any. In order to avoid these pitfalls, keep yourself updated with the latest investment news. Also, you can take the help of an expert investor to guide you in such situations.

The Verdict

So, you need to be a little smarter about investing, if you want to count some extra dollars. Make sure to invest in a right way so that your extra cash doesn’t disappear. There is a variety of short-term and long-term investments options available in the market to invest your money the right way. Some of them are a public provident fund, stocks, equity shares, mutual funds, bank fixed deposits, and much more. You can choose the most suitable investment option as per your needs, budget, and future plans.

Stay invested for longer in the product with which you feel comfortable. But, don’t just get stuck with any one type of investment option. Instead, put some efforts to understand the financial world for intelligent investing. So think, study, comprehend, and choose the best saving investment option to stabilize your future.

How to Save Fast and Automatically With a High-interest Savings Account?

free-savings-account-hight-interest-mombo

Let us admit: not all of us are savings gurus. We visualize the goal, figure out the amount of money needed, and make a resolution to set aside some cash for it every month… But then, our determination gradually dies down, we lose consistency and soon find ourselves far behind our saving goal. You know the story.

Does it mean you are doomed to yield your goals to your inconsistency every time? No! All you need is to get your savings automated. Opening a savings account will keep you on track until you reach your goal. But the good news is that you can get there even faster if you choose a high-interest savings account. Follow us to find out how you benefit from automating your saving habit and a higher interest rate.

Why is automating savings so important?

Making savings for a long-awaited event, emergencies or, say, a retirement is a wise strategy. It helps us to always be ahead of the game. But when we are looking to cover the distance from point A (zero money) to point B, it’s crucial to decide what speed we are going to move at. A high and steady speed wins the race.

Your saving challenge is like a race. Are you moving at a steady speed or make deposits randomly, when you “feel like making a deposit”? A volatile mood is not the only hindrance on our way. Our everyday needs can eat up most of our earnings. So if you don’t secure a certain amount of money right after the payday, you have near-zero chances to cut through those needs and make a decent deposit later.

If you belong to those who easily fall into the trap of inconsistency, automating savings is your best saving plan.
mombo-free-saving-account

Benefits of automated savings

  • Official means mandatory. When you automate your monthly deposits, you “officially” refer them to your monthly expenses. This commitment greatly reduces your temptation to skip the payment.

Still unconvinced? How about

  • Peace of mind. Once you step into a monthly contribution program, you no longer ask yourself questions like “How much do I have to deposit this month?” or “When do I reach my final goal?” Because you know the answers.
  • Lots of time saved. Once automated, “making a deposit” can be struck off your to-do list. You can focus on other tasks.
  • More money saved. Making a deposit from your paycheck, not your leftovers, guarantees that more money hits your savings account every month.
  • Reaching goals faster. When you decide to automate your savings through a savings account in Kenya, you can always go for the one with a higher interest rate. This means your money is not just being accumulated but also growing.

While developing your best saving plan, it’s important to define the pace that will be comfortable for you and your family. It’s up to you to decide how aggressive you want to be on your way to your savings goal.

There are several ways how your savings can be automated

  • You can stay with your current bank and set up a deposit or a savings account there. Be aware of the bank fees (maintenance fees and minimum balance fees) and ensure the interest rate isn’t too low.
  • Leverage your employer’s deposit (if any): this way, a pre-defined fraction of your salary goes directly to your deposit.
  • Open a savings account at one of your local savings and credit cooperatives (SACCOs). The benefits here include higher-interest rates and a superior fee-free service.

How to open a savings account with a high-interest rate?

The rule of a thumb says that you find higher-interest rates online. So if you are looking for a real speed-up for your savings plan, consider opening an online-only account. MOMBO SACCO offers the most competitive interest rate of 6% on your monthly deposits of minimum KES 3,000. No maintenance fee is applied, so you can be sure no shilling is lost from your savings. Enrollment is simple using the MOMBO App or through the website.

Automating your finances, start with modest feasible monthly deposits. Later on, you can increase your monthly commitment once you are doing well. Usually, 10% of your paycheck is a comfortable and efficient pace of saving.

Savings and Credit Cooperatives vs Banks: Where Is Your Money Better Off?

savings and credit cooperatives vs banks

Want to save up money or get a loan in Kenya? Basically, your only options are banks and Savings and Credit Cooperatives (aka SACCOs). The latter is a sort of a credit union. They both offer features such as saving and loans, but the experience is very different.

Banks have been there for ages. Savings and credit cooperatives are relatively new on the market of finance. But old doesn’t always mean good. We’ll tell you the basic differences between banks and SACCOS in Kenya to help you find the best place for your money.

The main difference lies in ownership

Surprised? Banks and Saccos have different forms of ownership. Believe, it’s a big deal because it greatly defines how your money feels there. People who stand behind banks are the investor(s). They put their money in the venture and logically expect very high returns. They make a profit at your expense. This explains draconian interest rates on bank loans.

A SACCO exists “not for profit”, but for the support and satisfaction of people who hold its shares. Registered SACCOs in Kenya give their members access to better deals in form of a higher interest rate on savings and lower – on loans.

Banks

The greatest thing about banks is that their loans are always available. Although you might need collateral to borrow larger amounts. Other pleasant features are a dense net of ATMs and mobile banking with a transfer feature.

Things to keep in mind when dealing with a bank

  • Notorious high-interest rates that can go higher during the loan’s lifespan.
  • Interest rates on savings are very low.
  • Except for interest rates, banks make money on various fees they withdraw from your account. Be ready to pay insurance fees, minimal amount fees, accrued interest fees, processing fees, account maintenance fees and so on. With some banks, you even have to pay for paying your loan off early. They call this ridiculous fee “early repayment charge”.
  • Finding a no-fee savings account can be hard. You can look for one at online-only banks.

Due to the rate capping, banks rates in Kenya now are at a maximum of 15%. Banks give out loans very reluctantly as they find unsecured lending very risky. This option is saved for mobile banking loans, which aren’t interest capped. Such situation forces many individuals and SMEs to run for other expensive money lenders.

If you still decide to get backed up with a bank, ensure you choose a reliable institution. Beware of banks that heavily rely on customer’s deposits.

SACCOS

Savings and credit cooperative societies exist to serve their members, not to build up profit. In Kenya, SACCOs emerged a few decades ago to fill the gap of financial services in small towns. Now they are threatening major commercial banks with their higher member satisfaction rate.

Advantages of SACCOs over banks

  • Your savings attract a high-interest rate. At MOMBO SACCO, your annual percentage yield is 6%. It means that you get 6% of your savings as interest every year. You can either withdraw them twice a year or leave them on your savings account.
  • Members can get loans at a steady interest rate as low as 12%. You can have a peace of mind that the rate won’t grow with the lapse of time. For comparison, local banks almost never offer loans at a total cost of credit lower than 20%. Usually, their offer is double the SACCO’s rate.
  • At MOMBO SACCO, you can get a loan that is 5 times bigger than your savings.
  • Your high interest rate on savings compensates the interest rate you pay on a loan. To make this happen at a bank, you need to hold a very big amount of its shares.
  • While repaying a loan, you keep building up your savings account. With the draconian rates of banks, it is psychologically impossible.
  • You can borrow money even after you give up employment. A bank would require collateral (assets) in such case.
  • As a member, you can control your Sacco by attending meetings and electing officials accountable to you.
  • Unlike banks, SACCOs in Kenya trade their shares at affordable prices. For example, the MOMBO’s share costs only KES 100. Your risk is minimal because your liability as a member is equal to the amount of your shares.
  • Unlike other SACCOS, MOMBO SACCO uniquely offers 2 streams of revenue. Except for 6% interest on savings, a member gets dividends on shares as well.

To find the best place for your money, ensure you do your research and compare terms at both registered SACCOs in Kenya and banks. Open a savings account with the society that values your input. The money you earned with a dedicated work is worth a dedicated treatment.

Bank Fees Eat Up Your Savings? Open a No-Fee Savings Account!

no-fee savings account

Deep in our heads, we understand that savings account must be about saving… But what are those annoying discharges that drain our savings accounts on a monthly basis? They are maintenance fees… You must have felt their thievish manners while trying to set some cash aside for an important event or a long-desired vacation.

But you know what? You don’t actually have to pay for the privilege to save. An online no-fee savings account can cope with your savings goals no worse than a premium bank account. And even yield MORE money due to higher interest rates. We’ll tell how to make your money work harder for you with an absolutely free online savings account in Kenya.

Why is online savings account better?

Both brick-and-mortar and online banking institutions offer fee-free savings accounts. However, online-only savings accounts usually have much higher rates. So if you want a high APY (annual percentage yield) and don’t want maintenance fees, online accounts are your best bet.

You may consider looking for a fee-free high-interest savings account at your local SACCOs. They are not-for-profit financial institutions that offer prominent service and highest interest rates for their members.

Online savings accounts have another exciting advantage. You can manage and control them online using a mobile app. The MOMBO App enables you to enrol and start saving in a few finger taps.

But the list of benefits doesn’t stop here. With MOMBO SACCO savings account, you get access to a loan equal to a 5-fold amount of your savings. This makes this account an all-purpose wallet to support any of your life events. Expected and unexpected.

Benefits of a no-fee savings account by MOMBO SACCO

  • Firstly, no maintenance fees. You can have a peace of mind. You won’t ever experience any unpleasant discharges from your savings account.
  • Convenient access to your savings data from your smartphone, laptop or tablet via MOMBO App.
  • It pays you 6% interest. You can withdraw your accrued yield twice a year, in January and July.
  • The borrowing feature becomes available after 3 months of membership. You can borrow as much as 5 times your savings at the 12% rate.
  • For a loan, you don’t need a collateral (property or money used as a guarantee) for approval. Members guarantee each other with their savings.
  • For a member, qualifying for a loan is a simple and quick procedure. It takes as long as 10 minutes for short-term (6 months) emergency loans. Long-term (4 years) loans get approved in one week.

How to open a savings account at MOMBO Sacco?

  • This cooperative is only for Kenyan salaried employees, entrepreneurs, civil servants or farmers. You can enrol in MOMBO Sacco by making a request through the MOMBO App.
  • To become a member, you’ll need to pass several checks to prove you are credit worthy. Usually, it takes from a couple of hours to 3 working days to get your membership approved. Membership includes buying shares for the amount of KES 10,000.
  • After approval, you can start making deposits (minimum KES 3,000 a month) to your savings account.

Consistent monthly payments are a great way to automate your saving process and also ensure you save more than just leftovers.

Before you open an account, decide which features are crucial to you. A high-interest, loans, no fees, or a mobile app for an easy access to your account? Make sure you choose the best online savings account with the maximum set of benefits and without hidden fees. To open the fee-free savings account, please, download the MOMBO App or enrol right on this website.