With almost 11%, This Can Be An Alternative Source of Income

Photo by Tech Daily on Unsplash

By Arthur Moses Opio

I read something profound this week on social media. Livingstone Mukasa said, "I explained to him that 10% interest is better than 100% consumption any day, anytime."

Livingstone was talking about how, "What percentage of your money do you put to work for you?" He talked about a lady who has worked for the bank for 15 years and all she has is NSSF which will give an interest when it’s declared this year. He also talked about another person who earns 6m UGX but takes home 1.8m saying, "His Mercedes Benz C Class is about to be confiscated by the Moneylender." and that "He is now looking for a pastor to pray for him. He thinks he is cursed!"  - He isn’t cursed, he just has a money management problem not an income problem.

The statement 10% interest is better than 100% consumption was towards the man who earns 6m and "thinks one should save when they get a lump sum." - We can never have all the money, wealth is gathered little by little (Proverbs 13:11)

A friend once said, "I am paying the price of regret. It is a huge price. I remember having lots of money in my bank account. Had I at least put it in the Unit Trust, I would have enough to carry me through this rough patch."

You see when you are in a desert, the camel that’s used as your transport must be fed. If it’s not fed. It dies and so do you.  I learnt from Reno Omokri "that the camel is your future." He then stated "As you make money today, don't eat all. Feed the future. Invest money for tomorrow, or you may die before your time."

Remember, Proverbs 21:20 "The wise have wealth and luxury but fools spend whatever they get." Verse 17 of the same chapter says, "Whoever loves pleasure will be a poor man; he who loves wine and oil will not be rich."

So Why Unit Trusts?

• Unit trusts give you a passive income
• Unit trusts offer you risk-sensitive options
• Unit trusts give you liquidity 
• Unit Trusts are structured for security
• Perks of Scale  
• Professionally Managed
• Tax-exempt Income
• Flexibility 

Source (My Xeno)

I will share with you performances of two CISs/Unit Trust Funds (XENO and UAP)

XENO offers goal based investing. You can dial *165*5*7# and start investing with as low as 10,000 UGX. Through the USSD, you will just sign up because they have an MOU with MTN and this makes it easy, you don’t need an ID or Passport Photo but via web myxeno.com or APP, you need to provide those other details and within 2 days, your account will be active.

XENO invests your money in four asset classes (Bonds, Money Market Funds, Regional and Domestic Equities) as show in the picture above. The last two are volatile and because many are risk averse, a little percentage of your money is put in that asset class.  Annnual management fee is 1.5% p.a for Money Market Fund and 2.0% p.a for the Bonds.

UAP saves money in Bonds, Commercial papers, Fixed Deposits, Offshore investments, Local Stock Market. They have three funds, Money Market Fund(MMF), Umbrella Trust Fund and Balanced Fund. For the Umbrella Fund, their main objective is capital preservation and generation of consistent income with low to medium investment risk. You need a minimum of 100,000 UGX. Annual management fee is 2% p.a.

XENO Performance in the last 6 months:

1. Feb, 29, 2024 ( MMF - 11.16% Bond - 14.79%)
2. Jan, 31, 2024 (MMF - 11.70% Bond - 15.20%)
3. Dec, 31, 2023 (MMF - 11.51% Bond - 15.62%)
4. Nov, 31, 2023 (MMF - 11.76% Bond - 15.70%)
5. Oct, 31, 2023 (MMF - 11.93% Bond - 15.62%)
6. Sept, 31, 2023 (MMF - 11.92% Bond - 15.33%)

MMF

BONDS

• On average, some one gets around 13% from XENO with some exposure to the volatility in regional & domestic equities.

UAP Performance in the last 6 months:

1. Feb, 29, 2024 - 11.02%
2. Jan, 31, 2024 - 11.21% 
3. Dec, 31, 2023 - 11.49%
4. Nov, 31, 2023 - 11.02%
5. Oct, 31, 2023 - 11.24%
6. Sept, 31, 2023 - 11.07%

• On average someone gets 11%

There are other Funds like ICEA, Sanlam, etc. that are doing the same. These are alternative investment vehicles. 

This is low risk, so guys who are heavily involved in business will say, "ah! That money is too little for me." They are indeed right. Where the risk is high the profits are also quite high and business is one of those areas. You might be the type who says, "I can’t do business for now", but you want to participate in owning shares or lending to government - this can be a good alternative. The key is to invest for long term to benefit from compound interest.

In conclusion, in your investment portfolio, consider having Unit Trust Funds, rather than having money in your bank account where you earn 2% interest against inflation of 3.4%, you are basically earning 1.4% that means your money has lost value and you have no purchasing power. What worsens the situation is our depreciating shilling against the dollar. Keith Kalyegira once said, "When money is seated in the bank, it shows that you are not thinking." So put your money to work, that shows you are thinking. You are the commander in chief and your monies are the soldiers, you can have different battalions - battalion 1 (emergency fund - defence), battalion 2 (investments - freedom fighters).

Why is a school child taught about bank accounts but not about investment accounts? asked Alex Kakande

By Arthur Moses Opio

An apple doesn't fall far from the tree. We are the by product of our upbringing and environment. We can't go beyond what we have been exposed to. If I grew with parent's talking about money in negative ways or just always complaining about how scarce or hard it is to make or even grow - that's what I will carry with all my life.

Alex Kakande recently wrote an article about a dream he has, he started by saying, 

"I have a dream that someday Uganda will transition to an investment-centric society. For an extended period, this nation has thrived on the spirit of entrepreneurship, which is commendable."

"My dream is to witness the growth of our capital markets, not through the participation of a mere 100,000 -200,000 individuals currently in the Capital Market Space, but to grow it to 1 Million people, 5 Million plus Ugandans." 

Alex further said, 

"We need to initiate a paradigm shift towards investment. If an individual aspires to open a salon, they could alternatively purchase a stake in a thriving salon instead of starting from scratch. We need to embrace an investment mindset that appreciates the merits of shared risk, injecting capital into existing businesses, and discussing annual returns."

I responded to his article in the comment section and said, "Alex you have spoken well." You have said and I quote, 

"It is sad to see people well-versed in betting, yet ignorant about buying shares of companies like MTN, Airtel, Stanbic, Bank of Baroda, Dfcu, and others. If people can risk their money in betting, why not in purchasing shares?"

The question then is what is the root cause of all this misalignment? 

Why can't people have a change of mindset?

We all have a financial blueprint and our environments have a strong bearing on how we think and interact with money. From childhood, we have been told money is evil, rich people are evil, you can't have a lot of money and be good, etc. In school we were never taught about money except about cost or buying staff but nothing to do with investment. So we don't have that in our blueprint. Someone earns money and they first thing they think of is spending, they are hooked by the "Shiny Object Syndrome." Some have the Diderot effect, it's something that disturbs them. Some want to play the status game and not the wealth game. Some keep complaining, that life just happens while a wealthy person thinks totally different and says, "I create my life."

In schools, A is still for Apple and not for Asset, B is still for Ball and not for Bonds, C is still for Car and not Capital or Compound Interest, D is still for Dog and not Dividends. With such a curriculum, what do we expect?

All this stuff is by design, our poverty is by design, our mindsets are for consumption and that's by design. The poorer the person, the easier they can be controlled, someone still says, "I want my money where I can see it." That's by design. Our parents were limited to such education, the media can't give the knowledge on Unit Trusts and Bonds the airplay they deserve. Banks that have the money for adverts continue to dominate the airspace, they are always in our faces and what comes to mind first is to have a bank account and not an investment account. 

What you and many others are doing is going to awaken everyone. 

The conversation on money is best taught by the parent at the dinner table or on the way to school because the parent will have the vested interest but parents need financial education - this financial education is key to our problems.

If the boda boda man or builder can even grasp a little bit of this, we can continue to see great take up of these products. It has to be deliberate and intentional but the miseducation is by design, unit trusts continue to take the banks customers and it's now a massive issue.

I trust as we all contribute to the space, we will continue to grow the numbers and ensure this dream is achieved. Every parent reading this article should not only have a bank account but also an investment account for themselves and their children. Monkey see monkey do, we can't preach what we don't practice.

Jaspreet Singh once said, "We can all be investors by owning a share of a company not necessarily starting one." So this speaks to what you are alluding to.

How To Start Investing with XENO

 #𝗙𝗶𝗻𝗮𝗻𝗰𝗶𝗮𝗹𝗙𝗿𝗶𝗱𝗮𝘆 Series

https://myxeno.com

Why you should follow the 𝗽𝗮𝘁𝗵 𝗼𝗳 𝗶𝗻𝘃𝗲𝘀𝘁𝗺𝗲𝗻𝘁 & why you should do it with XENO Uganda

@XenoUganda

 

It's only through investment that money can be multiplied/grown. Having your money idle isn't good and cannot be protected against inflation. 

"Consistency and compounding are two powerful ingredients necessary for wealth creation. Few people stick with an investment long enough to experience the compounding effect. Pick an investment that suits your risk profile & fund it relentlessly. What keeps you from doing this?" ~ Cheruiyotkb

https://twitter.com/cheruiyotkb/status/1686778675998474255

Cheruiyo says, What keeps you from doing this? Xeno gives you this opportunity to invest. As you start investing you must be consistent and leverage the power of compounding. 

You can do this with Xeno, a Unit Trust that is licensed by Capital Markets Authority.

𝗗𝗼𝗻'𝘁 𝗟𝗼𝘀𝗲 𝗠𝗼𝗻𝗲𝘆

Warren Buffet said, "The first rule of an investment is don't lose (money). And the second rule of an investment is don't forget the first rule. And that's all the rules there are." There are many con investments not licensed by

@CmaUganda

.

Warren Buffet

Xeno Offers You Goal Based Investing 

@XenoUganda

is a goal based CSI that is licensed by Capital Markets Authority(CMA). They do collective investments by pooling resources from people who are willing to start their investment journey with as low as 10k. Dial *165*5*7#

Goals

𝗢𝗻𝗰𝗲 𝘆𝗼𝘂 𝘀𝗶𝗴𝗻𝘂𝗽 𝘃𝗶𝗮 𝗨𝗦𝗦𝗗 𝗼𝗿 𝘁𝗵𝗲 𝘄𝗲𝗯𝘀𝗶𝘁𝗲 𝗼𝗿 𝗔𝗽𝗽.

Your risk levels will be assessed as you answer the questions. A Chart comes up showing how your money will be distributed in the different investment parameters.

Investment Strategy

𝗪𝗵𝗲𝗿𝗲 𝗶𝘀 𝘁𝗵𝗲 𝗺𝗼𝗻𝗲𝘆 𝗶𝗻𝘃𝗲𝘀𝘁𝗲𝗱?

As seen from the above chat. Money is invested in;

• Regional Equities
• Money Markets
• Bonds
• Domestic Equities

We have been promised more asset classes will come on board.

𝗛𝗼𝘄 𝗰𝗮𝗻 𝗼𝗻𝗲 𝘁𝗿𝗮𝗻𝘀𝗳𝗲𝗿 𝗺𝗼𝗻𝗲𝘆.

• Bank Transfer
• Mobile Money
• @mtnug USSD, dial *165*5*7# & follow the prompts (it's quite easy & convenient)
• Agent Banking

More FAQs on the site https://learn.myxeno.com/support/

Money Transfer Options

Once Money Is Transferred

You need to remember you are investing towards a goal which has a time period.

@XenoUganda

has some cool features. - You can autosave - You can lock your withdraws The key is to consistently save/invest and to kill the temptation to pull out.

Automate Savings

Lock withdraws

Another cool feature is for 𝗮𝘂𝘁𝗼𝗺𝗮𝘁𝗶𝗰 𝗱𝗲𝗽𝗼𝘀𝗶𝘁 𝗱𝗶𝘀𝘁𝗿𝗶𝗯𝘂𝘁𝗶𝗼𝗻.

Imagine you had those 3 goals or more. Just determine how much goes to whatever goal. This cuts out manually doing it. This is the convenience that comes with investing with

@XenoUganda

Deposit Distribution

Can someone withdraw their money?

Yes. You click the withdraw option and this screen comes. You can withdraw some/all. Since you are investing & you could have emergencies any time. Consider an emergency goal to avoid affecting the compounding effect of the other goals.

Withdraw Money

𝗢𝘁𝗵𝗲𝗿 @𝗫𝗲𝗻𝗼𝗨𝗴𝗮𝗻𝗱𝗮 𝗙𝗲𝗮𝘁𝘂𝗿𝗲𝘀  

Features like having a deposit reminder come in handy. This is really cool as we have those days where we slack. You can update your targets & rename your goals. This could be one of the best CSI's serving us through Tech.

Xeno Features

You can 𝗘𝗮𝗿𝗻 𝗦𝗵𝘀𝟱𝟬𝟬𝟬 By Inviting Others

Besides investing,

@XenoUganda

gives you the opportunity to earn as you invite others. To join, quote my code XENO84105

Invite and Earn

You Earn Everyday

Tweet about Interest and Compounding

Link to tweet below.

"With XENO compounding is daily (interest earned daily is reinvested). That's how your money grows. We encourage regular saving so that your money is working for you. Deposit at anytime, with @mtnmomoug by dialing *165*5*7#, this is free to your XENO account."

This video guide explains a few things to get you up to speed.