The “Sponsor” culture, where younger people are opting to date older folks in order to meet their financial needs is a reality that is here to stay.
We are misled to believe that this generation is spoilt from this habit but even in the 70s, 80s and 90s, it still existed.
Sugar daddies and mummies have existed just as long as the urban lifestyle setting. The difference between then and now is that people are open to it nowadays unlike in the previous years.
Getting an older, richer lover comes with its perks, yes, a reason why so many youths have been lured to get one. Of course, it also has its dangers too but this hasn’t discouraged the majority from hunting down wazees.
A constant stream of cash is one of the major things youths enjoy in such relationships.
Shockingly, however, this quick cash they normally get, which can be even in millions in a year, ends up not helping them much.
This is because it’s normally wasted on fancy things like meals, phones, drinks, parties and other liabilities that only come to haunt the youth once the mzee walks away and the cash source dries up. If statistics are anything to go by, finding a new mzee with ease to foot bills is a whole new struggle on its own that requires time. The young man/woman sometimes finds themselves in a hand-to-mouth struggle once the sponyo walks away…a skeletal lifestyle of what they had been accustomed to.
Market Cap Trainers has seen this trend and decided to come up with a list of investments young people can make to cushion themselves financially in case they find themselves in such a situationship.
1. Money Markets
Because this cash supply is irregular and unexpected, open a money market fund.
A money market fund is a low-risk fund that deals only in investments that can be quickly and easily converted to cash.
These securities include cash, cash equivalent securities or debt-based securities with a short-term maturity eg. Treasury Bills.
A money market fund is quite ideal since it doesn’t require much financial literacy from an investor and also the chances of losing your cash are very slim. It also needs minimal to no active management skills from the investor and offers a steady return.
If you don’t understand the money markets, Market Cap Trainers can offer guidance alongside similar low-risk investment opportunities which can come in very handy.
2. Buy Cryptocurrency
That Ksh 2,000 your mzee is sending you weekly to go and buy Pizza or have fun with your friends, totals to roughly Ksh 10,000 in a month. If you discipline yourself into buying Ksh 10,000 worth of cryptocurrency every month, that can easily bludgeon into several multiples in just a year or two especially if you happen to invest in a bull market like it has been the case since 2020.
We have always encouraged Kenyans to consider investing in cryptocurrencies just as much they have done in other traditional ways…albeit with calculated risk exposure on one’s portfolio.
3. Join a sacco
SACCOs are good investment vehicles especially if you are disciplined, patient and also has an appetite for guaranteed credit. Instead of focusing on getting luxury items, be dedicated to saving money with your SACCOs and give it time for the compound interest to work its magic.
How will the compound interest work its magic in doubling your money? By you reinvesting the dividends you get every year rather than withdrawing it.
Saccos can also be a good bridge to access such things as loans and other investment opportunities in real estate that will sure help in expanding your financial base.
4. Become Financially Literate
Sometimes you never see the problem until you are enlightened. Investing in yourself financially might be the best way out. Talk to a financial advisor for tips on how to manage the money.
It costs only a few shillings but in the end, it will be the best investment you have ever made in yourself. Getting financial guidance and education on how you can double your money is always a win for anyone who wants to get rich.
5. Forex trading
Trade one currency against another currency, on the expectation that the currency you’ve bought will gain in value relative to the one you sold. This provides a convenient way to profit from the decline or rise of the U.S. dollar against most major currencies. It should be emphasized however that Forex Trading is a risky form of investments and one should only venture in it if they understand how it works to avoid incurring colossal losses as it is always the case to inexperienced traders.
6. Start a business
We have intentionally put this point last because it’s one of the easiest ways to lose your money. Despite the huge risk, a majority advocate and run to this whenever they get an extra load of cash.
Very few businesses work out. That’s the sad reality.
Before injecting the cash you are getting from your sugar mummy or daddy, understand the business and risks that come with it. Don’t jump blindly.
7. Stock market
The stock market broadly refers to a market where the buying, selling, and issuance of shares of publicly held companies takes place.
Such financial activities are conducted through institutionalized formal exchanges (whether physical or electronic).
With the random cash you are getting, stocks can be a very nice investment.
You don’t need a lot to jump into this space. The Ksh 2000, Ksh 5000 etc. that you are getting is enough to help you start investing in shares from different companies in Kenya.
To start investing in the Kenyan stock market, one needs to open a CDS Account. This is similar to a bank account, only that it holds shares as opposed to money. At Market Cap Trainers, we can help set up this account for you at no cost, and guide on shares to buy for your long term financial goals.
8. Real Estate
Finally, if you are getting a good sum, you can invest in real estate.
This will need a lot of discipline and expertise if you want to come out a winner.
It’s good to note that one doesn’t also need to buy land directly but can instead use REITS at the NSE.
A REIT is a regulated investment vehicle that enables persons to earn profits or income from real estate as beneficiaries of the investment trust.
REITS are for investors who want exposure to the property market without the large initial outlay of capital.
With as little as Ksh. 1000 one can invest in real estate projects at the NSE via the REITs.
The good thing about REITs is that they offer lower risks because they are shared investments, and shareholders who sell their units in REITs listed on the Nairobi Securities Exchange (NSE) do not pay CGT(Capital Gains Tax) or stamp duty.
These are just but a few examples. At Market Cap Trainers, we offer personal finance education, Investment opportunities and other financial services. Reach us through our contacts: Info@marketcap.co.ke or +254 765 093983 for any inquiries.