Personal Finance

Usitupe Pesa Bure! How Kenyans Abroad Can Safely Invest Back Home

The stories are always there and retold whenever the topic pops up of how so and so lost millions while trying to invest from abroad.

Almost every African has heard of how a certain person moved abroad, picked a family member or close friend to send money to for various investments back home only to come back years later to find all the hard-earned money he sent was wasted on useless things.

It’s heartbreaking, to say the least.

Living overseas is likely to be one of the most memorable, exciting undertakings of your life – but if you’re considering investing while living as a foreigner, don’t expect the experience to be quite as thrilling.

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The number of Kenyans living in the diaspora has steadily been on the rise and currently stands at over 4 million according to statistics from the Kenya National Bureau of Statistics (KNBS). Figures from the Central Bank of Kenya (CBK) showed that the total diaspora remittances to Kenya in 2019 stood at US$2.546 billion compared to $2.453 billion the previous year.

There are many things to consider before you start investing your money while living abroad.

Below are simple ways Kenyans can safely invest while abroad.

  • Build and Maintain a Globally Diverse Portfolio

The first rule of investing while abroad is to think globally. Unlike in the past when it was hard for foreigners to invest outside their country, nowadays the economy is global.  

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If you are a digital nomad who is unsure where in the world you want to cash out, it’s good to find a broker or a stock picking service that can help you build a portfolio based on multiple currencies.

A globally diversified portfolio based on multiple currencies can help to mitigate currency risk.

  • Think Virtual Currencency

Cryptocurrencies are proving to be a good investment in whichever part of the world you are in.

In the past, such options weren’t available a reason why so many Kenyans lost their money while sending it back home for development.

Inject your hard-earned cash into crypto where you can monitor everything and by the time you return home, you’ll have made enough to kickstart your local investments.

  • Invest in local Property

This is normally harder than it sounds. If you have the means and inclination, carefully consider local property investment in the country you are based.

If you’re planning to live overseas indefinitely, you can invest in foreign property without the same tax penalties associated with investing in foreign stocks. And depending on where you’re living, the returns can be significant when it comes time to sell.

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Just be very careful about the laws and customs surrounding property purchases in foreign countries. Work closely with a reputable real estate agent before pulling this off.

  • Use Saccos and Banks To Invest Back Home

Almost every Sacco and bank nowadays has a diaspora banking solution and investment schemes that Kenyans living abroad can tap to.

Saccos will give you a good investment opportunity and enable you to invest in land and property back home.

However, don’t just commit blindly to whatever project they are selling. Do your proper research and work with people back home to verify, measure and value the projects at hand to see their value.

  • Talk To A Certified Financial Planner

This is something a majority of Kenyans, and Africans living abroad mostly ignore before they start their investment journey back home.

Most people automatically assume things are still the same as they were when they left.

Speaking to a financial advisor will help you understand the economic state and other ways you can safely start your investment back home. He will show you the loopholes and guide you in making sober decisions that will definitely be rewarding financially.

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  • Portfolio bonds

In many cases, using a portfolio bond can be a great solution.

This is simply an administrative wrapper, and something which many investors use to hold a variety of assets in one account.

From these wrappers, an investor can normally access any authorized and listed asset: for example, any listed mutual fund/unit trust, ETF, tracker, company shares, or property funds.

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