By Livingstone Mukasa
I started getting serious in creating sources of passive income around 2010 and also begun sharing about the need to prepare for retirement every time and everywhere I could get an opportunity.
In 2015, one of my students challenged me to write a book on investing and preparing for Retirement and I took it up. That became one of Uganda’s best selling book “Investing for the Future”.
In the book, I listed areas to invest in & generate income to support retirement & these are (not in any particular order): Agriculture, starting and growing a business, investing in stocks, treasury bonds, insurance led saving plans, unit trusts, pension funds & real estate.
However today I want to concertrate on the 85% that goes into government securities aka Treasury Bonds. I submit that this is causing a lot of harm to the growth prospects of Uganda as a country.
Come to think of it, a nation of entrepreneurs is so risk averse that it sends 85% of its re-investable capital to the most inefficient part of our society (Government of Uganda) which by the way creates less than compelling value.
And if it can’t create value to share, it simply prints more money to pay the “great interest” it promises. Imagine that!
Trouble is: when it prints money it simply takes money from one side of our pocket to pay the other through inflation.
This then starves off sectors like manufacturing, real estate, funding innovations and the irony is that we turn around ask: why is our nation not growing?
Well we know the answer now. As investors we too scared and circumspect of loosing our money that we rather “lose it indirectly” than take on calculated risks to grow wealth.
I view investments in Treasury Bonds, Unit trusts, voluntary retirement savings etc as “Investment parking spaces” and not final investments. You invest in the them as an aggregation tool and as you look on investing elsewhere.
Final and optimal personal investments should be in business, education and skills, content creation, stock market (where it works) and Real Estate (Land and Buildings). Rather than be afraid of risk, we should seek to manage it.
The writer is the Chief Executive Officer, Four One Financial Services & Living Business Education.
