HOW TO INVEST WISELY
I talked about the importance of saving money and how to come up with an effect monthly budget in my other post. You can check it out if you missed it.
This time I am going to talk about the best investments that require less money.
Before I get any further, let me first remind you what an investment is.
What is an Investment?
This is an act of putting money into financial schemes, shares, property, or a commercial venture with the expectation of achieving a profit.
There are a lot of lucrative business to invest in with less money in Zambia, these may be poultry farming, bottle store, restaurant, money lending, butchery, thrift store (Salaula), selling fritas, mobile money, and many more.
Read: How to run a salaula business.
Now that you know what an investment is and examples of businesses to invest in, allow me to introduce to you cooperative investment. Later I will guide you on how to make it big with less.
What is a Cooperative?
This is an organized group formed for mutual assistance in working towards a common financial goal.
The best way to invest with less money is to form or join a cooperative. Don’t mistake them with village banking groups around Zambia.
HOW TO INVEST AS A GROUP
I will talk about how to form a Cooperative group later once you have formed a group
There are many types of these cooperatives and they come with varying constitutions and agreements. Below I will give an example of a cooperative group and its activities.
Let’s say you formed a cooperative named InvestCorp and you have a total membership number of twenty. In this group, the parent business is money lending.
For Investcorp to be up and running, all members must invest a certain amount each month for a year. For instance, each Investcorp member invests K1000 ZMW each month.
For the first month, Investcorp will have K20,000 ZMW, from which, all business levy and all necessary permits shall be paid from. I will talk about the requirements for starting a cooperative group in my other post. The remaining balance could be used to rent a building, hire staff, and advertise your new money lending agency. Investcorp will still have enough remaining to lend to customers.
The second-month investments shall all go directly to what the purpose is, which loaning clients.
After six months, Investcorp will have more than K100,000 ZMW and that is enough to run smoothly. So it would be wise to divert the seventh-month investments to purchase a piece of land. Investing in property is a great strategy.
Now that you have land, you could draw up a business plan for poultry farming or any livestock and apply for government grants to develop your land.
From your eighth to the last month, all investments should go to the money lending institution.
After twelve months, you’ll have invested only K12,000 ZMW as an individual, K240,000 ZMW as a group and the lending institute should have an account worth more than K350,000 ZMW.
Now that you have come to an end of contributing money, it is now up to you as a group to agree on the way forward, whether to continue contributing for a few more months for some other business or use the profits of the lending institute.
In this case, Investcorp members agree to let the lending institution to run for another year without disturbing its profits.
Since some times the government takes time to inspect and assess cooperatives, Investcorp members agree to continue contributing for another year, and this time, the money is used to build poultry houses and purchase equipment. By the end of the year, livestock business would have already started making money and expanding itself. And the lending institution would have an account of close to or over K1,000,000 ZMW.
Now, it is time to sit and let the money work for you. With only a total investment of K24,000 ZMW, you would be getting a dividend of about K25,000 ZMW each year, that is like K2000 ZMW monthly. That is your investments returning. And with the business growing, so is your yearly bonus. And believe me; it will exceed your expectations.
If you desire, you could be diverting your dividend to some individual investments. Could be property investment, or even business. If you do not mind, you could form another cooperative.
Money lending is not the only business you can run as a cooperative. You could run a feeling station, a bar or club, hotels, a school, or even get into real estate. I wrote more about how to run a bar and how to open a school.
There is no limit on what you can do and achieve, all it takes is determination and discipline.
This article is not limited to Zambians or Africans only; I am sure you could get ideas and implement it from wherever you are.
I hope this piece of writing has helped you in a way. I love writing for you and would also love to hear what you think. Let me know in the comment area how you feel about this article. You can as well ask questions or request for ideas to run a specific business you have on mind. You might even get a free business plan by so doing.