The following are 3 Simple Ways To Invest Your Idle Cash To Receive High Returns:
- Ordinary Shares
- Market money Funds
- Government Bonds
If you are afraid to invest your idle cash in profitable companies, you should rethink.
You will not loose your investment if you invest your idle cash in the right way and at the right time.
You do not need to keep your idle cash at home or in a savings account in the bank.
Instead, you should invest your idle cash in good securities that will give you high yield.
The best part is that you can invest your idle cash within the country or outside the country.
There are many investment opportunities all over the place. For a start, you can invest your cash in the following securities:
You can invest your idle cash in ordinary shares of profitable companies.
The following are the benefits of investing your cash in ordinary shares quoted on stock exchange:
- You have the right to vote during the company’s annual general meetings
- Dividends will be paid to you two times in a year
- The company can issue you bonus shares
- You will benefit from rights issue of shares
- Your capital will grow if you are patient enough
- If the price of shares appreciates, you will benefit from Capital gains
- It is easy to buy or sell shares
- In case of liquidation, you will not loose more than the money you invested
- The company will not ask you to bring more money to pay its debts
- You can have a voice in the internal running of the company, especially if you are a majority shareholder
If you want to invest your idle cash in ordinary shares of any company, you need to:
- Look out for companies that pay dividends regularly
- Get an Accountant or Lawyer to help you look at the important metrics.
- Look for an experienced. reliable and registered stock broker
- Open investment account
- Give the stock broker instructions to buy shares.
Similarly, if you want to sell your ordinary shares, you can just give your stock broker instructions to sell your shares for you.
The prices of ordinary shares move up and down on daily basis.
Nevertheless, a stock broker knows the best time to sell your shares for you.
The good news about invest in ordinary shares is that you can the proceeds from the sale of your shares in just a matter of days.
For best results you should invest your idle cash and allow it to remain invested for say 5 years and above.
Bonus: If you want to invest in ordinary shares, I strongly recommend Guaranty Trust Bank Plc and Zenith Bank Plc
Invest your idle cash in Money Market Funds
This is another easy and less risky way you can invest your idle cash.
The following are the main advantages of investing in money market funds:
- It is easy to invest in
- It is also easy to redeem your investment and get paid in less than 5 working days
- You can start investing with as little as 5k
- You can top up your investment, daily, weekly, monthly as you like
- You can redeem all or part of your investment any time
If you want to invest your idle cash in money market funds, the procedure is as follows:
- Go to any authorized Money Market Funds Manager (mainly banks)
- Ask for money market funds investment form
- Fill out the required fields, stating your account details details.
- State how much money you want to invest.
- The bank will open and give you an e-account number.
- You will then pay the money to the bank cashier
- And collect your teller
- That is all.
Should you desire to redeem the investment, you should follow the following steps:
- Ask for money market funds redemption form
- Fill out the required fields
- State your regular account number (it can be any other bank where you have an account)
- State your e-accounts number
- Submit your form
Your regular account will be credited with the proceeds of the redemption within 3-4 working days. Personally, I use Standbic IBTC Bank, the award winning mutual funds managers.
Invest your idle cash in Government Bonds
The third place you can invest your idle cash is government bonds.
In Nigeria the Debt Management Office is the body that sells bonds to the public.
At the beginning of every month, the office announces new bond for subscription by the public.
The good news is that as the government pays bonds that have matured, it will issue new ones.
In case you don’t know, bonds are loans given to the federal government to execute specific projects.
The interest on the bonds is fixed at the beginning. It cannot be reviewed during the tenor of the bonds.
When the bond matures, the government will pay you both the principal and the interest.
The tenor of the bonds is usually from 3 years and above.
If you invest in government bonds, you will enjoy the following benefits:
- The loans is guaranteed by the Federal Government of Nigeria.
- That means that the government will not default in paying you
- Interest on bonds will be paid to you every three or six months
- Such periodic payments will enable you to meet some of your urgent needs
In any of the above investment options you will earn returns higher than what the bank will pay you as interest.
The banks are smart enough to loan your money to business owners at very high interest rates.
They later turn round to pay pea nuts as interest on your savings account.
You can see that it does not make any sense for you to leave your idle cash at home or in a bank savings account.
It is never too late to start to invest your idle cash now in investment opportunities which are available here and there.
Invest your idle cash and watch your money grow. You will be glad you did