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February 20, 2020 - 23:02
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Why Keeping Money in the Bank Won’t Make You Wealthy

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Did
you know that keeping money in the bank won’t make you wealthy?

Well,
if you didn’t, this is the time to reorganise your finances and see how best to
see your money make money for you. Better yet, there is nothing as good as
making money while you sleep, right?

Money in the Bank Scenario

Have
you ever wondered why banks tell you that your interest rates are per annum
(per year)?

First,
the bank is not there to make money for you but instead to make money from you.
Thus, the institutions will give you a deal that favours them and seemingly
favours you. In most cases, the favour for you is against your growth.

It’s
not a crime, though, since the banks have to make money and remain afloat.

Take
this scenario for instance. If the bank is keeping Ksh1,000 for you for a year,
the returns will not be more than Ksh200. Here’s why.

If
the bank gives you a rate of 14% p.a., then you will make Ksh140 from your
Ksh1,000 that year.

What
many people do not understand is that the percentage offered by the bank is not
monthly but yearly. If one goes in with the misconception that their money will
earn 14% interest every month, then they will be in for a rude shock when they
check their accounts at the end of the financial year.

Bearing
in mind that there are costs that come with banking, even the Ksh140 may be
hard to come by.

Making Your Money
Make More For You

Using
the same Kshs 1,000, let us look at a scenario where you invest your money so
it brings you more.

Assuming
that you are in a place and time where you can afford to rear kienyeji chickens
which are hardy and low on maintenance, how much can Sh1,ooo bring you in a
year?

Well,
if you manage to buy two chickens to start a flock, then this is how it turns
out.

Assuming
that you can buy good, healthy chickens at a cost of Ksh500 each, a male and a
female and you have to rear them in your backyard, then you will have started
on a venture that could bring good returns.

Hoping
that your chickens suffer no sicknesses and they start laying as soon as you
acquire them, then luck is on your side. If they are good partners giving you
fertilised eggs, then you can look at growing your flock from the two.

If
you eat a few eggs and then hatch let’s say 10 when the chicken becomes broody,
you’re looking at growing your flock by at least five more birds in less than 6
months.

I
know about the cost of their feed and all but if you decide to let them
scavenge and feed them on kitchen scraps, then it is possible you will turn out
fine.

If
your chicken manages to bring up about 5 chicks which survive the year, then
your Ksh1,000 will have given you more than 100% return on investment.

If
you have managed to cut feed costs, then this could be the reality that you
face. Growing your flock from 2 to not less than 10 in a year.

Do
you know wealthy people don’t keep money in the bank but they have where it
keeps working for them?

Read >> Questionably Wealthy Kenyans Hiding Ksh6 Trillion Abroad

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