How to grow money

Part of managing your money is making it grow. This is where a lot of us get stuck. Many of us want a magic solution that will see us become millionaires overnight. We put our money in farming projects, shares and the latest multi-level marketing fad because someone told us you will grow your money tenfold in two months.

This is why so many people got caught up in pyramid schemes a while back. The schemes only needed you to put in a seed amount, then sit back and rely on someone else for an abnormal return. Chances are, someone had gotten in earlier than you and had their testimonial ready of how their money magically multiplied. Many burnt their fingers in the end.

Given all this, we still want maximum returns on our investments. What needs to happen for your money to grow? How does the one become two and then five and then 10? I don’t have the magic answer to make you a billionaire tomorrow… but I know what steps you should take to get you close over a period of time.

You grow money by saving.

You cannot invest what you do not have. I cannot count the number of times people have asked me where to invest their money without a shilling in savings. We end up having a long discussion… only to find that they were not prepared for it.

What is the point? If you want to grow your money you have to prepare for it. Put money aside regularly, whether or not you know where to invest. You are more likely to seek information on where to invest when you have money sitting somewhere like a savings account. Just the same way you would only consider driving a car that has fuel in the tank, consider these savings fuel in the tank. Gas up.

You grow money by keeping your eyes open.

Are your eyes open? If not, what are you doing to get them open? No one can take the place of your open eyes. People can give you insights and guidance but they cannot replace your ability to make decisions for yourself. You don’t know where to invest because you’ve not taken the time to learn. I have never met a wealthy person who completely delegates decision-making.

Don’t get me wrong; you don’t have to know about all the shares on the stock market. But you need to have initiative to get to understand how the stock market works and what to look out for in a company in order to invest in it. A stockbroker will then add on with the insight they have on certain industries or shares so that you can make the decision.

Do the research, even if it means taking time out of your entertainment schedule to do so. Finally, make sure that the person claiming to advise you (even if they have a fancy title) is also knowledgeable.

You grow money by being focused.

You can’t invest in all things. Your eyes cannot be open to everything. You also cannot jump into every investment that comes your way. Sometimes NO is the better answer even if it is YES for somebody else. Getting the best value for your money means different things to different people. What is your definition of growing money? Is it the one becoming two or becoming five? In how long?

Then it is your job to keep your eyes open and ear to the ground to determine what investment will get you there. Different investments behave differently, have different risks, and will give you different returns. Do your goals dictate the kind of investments that you can sell after a certain period and realise a gain? Do your goals dictate that you start getting an income from them?

Different shares, different business ventures, different types of properties can do either or both of those things. There are even different investment strategies for treasury bonds that will get either of those two results. Know your end game so that you have a better chance of recognising the information you need, the questions you need to ask and the research you need to do.

You grow money by taking risks.

Be prepared to lose some, and for things not to go your way. Risk-taking is not an option if we want to grow our wealth. However, take calculated risks, not blind ones. Weigh all the information and data you can access. Take risks with your eyes open, and avoid get-rich-quick schemes. 

Remember, what costs you Sh10,000 today may cost Sh30,000 in a couple of years because of inflation. If you didn’t look for avenues to grow your Sh10, 000 you will not afford that same item. You will also need money for retirement, school and university fees for your child, medical expenses, and so forth.

All the above points are underpinned by you taking some form of action. If you don’t act, you won’t grow. So take action.