Hi Talkers, My first born is now 6 months old and i plan to start saving for my kids education (you can read future) early. . I need your input on the best savings/ investment vehicle ( not limited to insurance education policy) that can earn my hard earned money some handsome returns, a flexible plan would be ideal. Right now i can only afford to start with savings of about Kshs. 1,500 to 3,000 per month. Maybe in future i can add up to that as my family also grows bigger . My Age: Late 20’s .
Thank you all in advance. Cc @Okiya@Luther12@Afro@All Talkers
insurance remains your best bet. aim at contributing most of that 3000. if you get more money, take another one but with a different company- spread your eggs.
My advice:
1.Before you sign the dotted line, you need to understand all the terms and conditions.
2.Ask as many questions to the insurance guy selling the policy to you and also from colleagues who have obtained education policies.
3. Get a second opinion from an insurance person working in the same company with the first and ask him the same questions. (I have noted you can have 2 guys working in the same company but with conflicting information)
4. If their answers corroborate and you are happy then sign in.
You never dissapoint, I like your contributions.
Back to the topic @hand, I went to BRITAM and they have good plans for the future. Try them but be careful about those sales ladies, they will never show you the TERMS and Conditions.
Britam are good,i have two with them,but do not expect"handsome" returns,you can also buy a plot or land in utopia and sell when the kid is ready for college or high school.
BRITAM have an education policy that you can save and the payments start from when the kid is in primary for instance class 4 up to university. I have other education policy but the BRITAM one is a good sell since payments start early.
@kermit Thanks, will definitely look to diversify my portfolio, ni muhimu kucut risk. @Okiya T&C are very important in such “contracts” na hapo ndio watu hu blunder zaidi. Sales agents love to push you to sign ignorantly. I will adhere to your advice bro. @spax@bluetooth@qtip I havent visited Britam, will do and see what they have. From your say, they must have a good policy. I will check it out.
@bluetooth Pia hiyo ya ploti si mbaya, land ina appreciate highly by day. Good consideration too.
Have a target sum that you would like accumulate after X number of years. Shop around for the insurance company with the best terms. Make sure your read and understand every phrase in that memorandum. Personally, I would vouch for Jubilee Insurance.
Warning: Do not accept the ‘riders’ that come with such plans.
Plan 2: Investment
a) You can buy cheap land with a clean tittle deed and wait for around X years. Go back and liquidate that land. Peleke mtoto
b) Buy a piece of land huko gishagi, plant ecucalyptus or any other tree that can be used for timber, let them mature within 10 years or so, harvest them, peleka mtoto high school na university and your land would still be intact.
c) Accumulate a large sum like 1 M, shop around for the financial institution with the best interest rates, keep on re-investing that money for as long as you need. *****The savings may be little when adjusted for inflation.
Assumption: You are looking for something secure and low-risk. Your target maturity period is not less than 5-8 years.
My advice, stay away from joint insurance-investment products. A significant chunk of your contribution purchases life insurance, minimal is pushed to investments. Pick any random insurance company, check the maturity amount after x yrs and compare that with your contributions over the x years.
Now factor in inflation and time value of money and you’ll realize you’ve been seriously screwed. ONLY GO FOR THESE PRODUCTS FOR PEACE OF MIND (insurance) incase something happens to you but not as INVESTMENT VEHICLES incase you live. Pick a different vehicle for investment and supplement with insurance but go for low premiums.
Since your goals are long term, you want minimal risk, steady returns and ease of realization/liquidation.
A good start would be to find a nice bank with decent interest rates on savings a/c and start pushing your 1,500/- to 3k as you say, in there. Push more if you can. Once you hit 50k, move the funds to an FD and start enjoying even higher rates.
Meanwhile, start researching the NSE for companies with strong fundamentals and techs. As soon as you hit 100k push that to shares. A bearish run will get you in on amazing companies with great prospects at ridiculous bargains.
Repeat the cycle.
Since your goals are long term, usipanic when your portfolio appears to be loosing value. Market shocks ni kawaida na eventually it rebounds.
Time for paying for your kids fees, you’ll find that you may only need to liquidate a small chunk of your portfolio and you’re set while the rest continues to grow in value.
Land, while it appreciates highly in value, it may pose challenges during disposal and not avail you the funds WHEN you need them & unless you own massive chunks you cannot sell shamba nusu ubakishe nusu as is the case with plots.
My two cents.
yes insurance are not for investment, a honest insurance guy will tell you they are not in the business for making you money but taking the risk for you, i see it as a means to save cash i do not want to access soon,it is more like just putting 3k in a savings account for a period,the only difference you cannot withdraw easily and insurance offers one a peace of mind due to the cover availed.
Education Policies are not investments. That’s a saving plan. They pool your money to invest then pay you back your principal plus a fraction of the interest.
If you want to invest, look for a chama & pool your money together to invest. Buy shares in REITS . Buy T Bills. Buy land & invest in a FARM. That one bit, the farm, is what separates successful investors from the rest. It may not make much, but it has a purpose.
[ATTACH=full]21670[/ATTACH] @spgizzi in respect to saving,hit my inbox and assist me with the following info so that i can do the necessarry calculations and present you with what 3k per month will get you
Your age
The number of years (min 5 max 20) you wish to work with. The longer the better.