Investing: Different Ways to Grow Your Money

If you're holding excess cash in a mobile wallet like M-Pesa or a regular bank savings account, you're likely missing out on significant growth opportunities. While these platforms offer convenience and security, their returns are typically minimal and often eroded by inflation over time. In this guide, we break down strategic and diversified options for growing your capital — from traditional savings vehicles to more advanced capital markets and global investment products — using simple, clear explanations for both novice and seasoned investors.

📈 1. Investing Products - Capital Markets

These are different ways you can use to grow your money slowly but steadily over time. They won’t make you rich overnight — you need to be patient, learn how they work, and stay consistent. But if you give it time, your small savings can turn into something much bigger.

✅ a) Shares (Stocks)

This means you’re buying a small part of a company — for example, if you buy shares of Safaricom, you become one of its many owners (called shareholders).
If the company grows and makes more money, the value of your shares (called the share price) can go up — meaning you can sell them later for a profit.
Some companies also share their profits with you in the form of dividends — small payments made to shareholders every year or half-year.
In Kenya, you buy and sell shares on the Nairobi Securities Exchange (NSE). To get started, you need to open a CDS account (like a wallet for holding shares), which you do through a licensed stockbroker (AIB-AXYS Africa) using the investment platform AIB DigiTrader.

📌 Example: If you buy 1,000 shares of Safaricom at KES 20 each, that’s KES 20,000 invested. If the price rises to KES 25, your shares are now worth KES 25,000 and can sell to realize the profit (capital gains)— and you may also earn dividends on top of that.

✅ b) Bonds

Think of a bond like giving a loan — but instead of to a friend, you're lending your money to the government or a company.
In return, they promise to pay you interest (coupon) every year (e.g., 10%), and return your full money (principal) after a set period (like 2, 5, or 10 years).
📌 Example: If you invest KES 50,000 in a government bond with 10% interest for 5 years, you’ll receive KES 5,000 every year, and get your full KES 50,000 back at the end of year 5.
Bonds are considered lower risk than shares because the returns are more predictable, especially with government bonds like those from the Central Bank of Kenya (CBK).
You can buy & sell (before maturity) bonds through licensed stockbrokers on the NSE (like AIB-AXYS Africa).
📌 NSE also has corporate bonds — these are bonds issued by big companies. They offer slightly higher interest but may carry more risk than government bonds.

✅ c) Mutual Funds / Unit Trusts

A mutual fund (or unit trust) lets you pool your money with other people. Instead of investing alone, you contribute to a big pot of money.
That money is then handled by a professional called a fund manager, who invests it for you in things like company shares, government bonds, or even real estate.
This makes it a hands-free way to invest — the fund manager does all the research, monitoring, and decision-making.
It’s especially great for beginners because:
- You don’t need to know how the stock market works
- You can start with small amounts — as low as KES 1,000
- Your money is automatically diversified (spread across many investments)
- Returns are updated regularly, and you can track them like a savings account
⚠️ The returns are not fixed — they can go up or down depending on the market, but over time, they usually grow better than a bank savings account.
📌 In Kenya, some popular mutual fund providers include: CIC, NCBA, Britam, Sanlam, ICEA Lion, Old Mutual — and many offer Money Market Funds for safer, lower-risk returns.

✅ d) REITs (Real Estate Investment Trusts)

A REIT lets you invest in real estate (property) without needing to buy land or build houses yourself.
You simply buy shares in a company that owns and manages property — like office buildings, malls, apartments, or hotels.

How Do You Earn?
As a REIT shareholder, you receive two types of returns:

Dividends: You are paid a portion of the rental income collected from the REIT’s properties. This is real cash paid to you periodically (e.g., quarterly or annually).

Capital Gains: If the value of the REIT's properties increases, the share price may rise — meaning your investment can grow in value.

Example:
ILAM Fahari I-REIT owns properties like Greenspan Mall. If you own 1,000 shares of this REIT, and they collect rent from tenants, a portion of that rent is paid to you as a dividend. Meanwhile, if the value of those buildings increases, the price of your shares might also go up.

REITs are traded on the Nairobi Securities Exchange (NSE), just like company stocks. You can buy them through a stockbroker using your CDS account.
I-REIT (ILAM Fahari REIT) is one REIT listed in Kenya. It owns properties like malls and commercial buildings. When you buy its shares, you're part-owner of those properties.
⚠️ Just like shares, REIT prices can go up or down depending on rental performance, property values, or market demand. So it’s good for long-term investors who want regular income and capital growth.

🌍 2. International Investments – Grow Beyond Kenya

Don’t keep all your eggs in one basket! You can grow your money faster by putting some of it into well-known companies and funds from around the world.

✅ a) Buy Global Shares:

Imagine owning a small piece of big global companies like Apple, Google (Alphabet), Coca-Cola, Microsoft, or Tesla — even if you're in Kenya. When you buy a share, you become a part-owner of that company. If the company grows, the value of your shares can also grow. You might even get paid a small part of the profits (called dividends).
📌 Example: If you buy 1 share of Apple at $180 and Apple grows stronger, that share might rise to $220. If you decide to sell it, you earn a profit of $40 (around KES 5,200 depending on the dollar rate).

AIB-AXYS Africa allows you to invest in these companies from Kenya. You don’t need millions — you can start small and grow.

✅ b) Exchange-Traded Funds (ETFs):

Think of ETFs as a combo-pack of many global companies, all bundled into one investment. Instead of buying just one company’s stock (like Apple), you buy an ETF, which holds small amounts of many top companies — like Apple, Microsoft, Google, Amazon, Tesla, etc.

This means your money is automatically spread across different companies, which reduces your risk. If one company in the bundle performs badly, others in the same ETF might still do well and balance it out.

📌 Example: Imagine you buy an ETF that tracks the world’s 100 biggest companies (like the MSCI World ETF). It’s like buying a "supermarket basket" filled with top global stocks, instead of picking just one item.

ETFs are great for beginners who want to invest globally but don’t know which specific company to pick. You can buy and sell them easily through a broker, just like you would with normal shares.

✅ c) Dollar-Based Growth:

When you invest in international assets like global shares or ETFs, your investment is held in US Dollars (USD). That means you don’t just benefit when the stock value goes up — you also gain if the dollar becomes stronger than the Kenyan shilling.

📌 Example: Let’s say you invest $1,000 in US shares. If the dollar was exchanging at KES 130 when you bought, that’s KES 130,000.
Now imagine the dollar later rises to KES 140 — your $1,000 is now worth KES 140,000, even before considering any profit from the shares themselves.

So you get two benefits:
- ✔️ Capital growth from the shares you bought (e.g., Apple, Microsoft, Tesla).
- ✔️ Currency gain if the dollar strengthens.
This makes dollar-based investing a smart way to protect and grow your money — especially if the Kenyan shilling is losing value.

Example: You invest in Apple shares at $180, and after some time the price rises to $220. You’ve made a profit of $40 per share. If the USD also gets stronger against the KES, your returns are even better.

International investing is a great way to diversify your money, reduce local risks, and grow faster over the long term. You don’t need millions.

⚡ 3. Trading Products – Fast but Risky

Trading products are for people who want to try making money from short-term price changes in stocks, currencies, or commodities. They can give you quick profits — but they also carry higher risks.

These are not for everyone. You need to actively watch the market, understand how prices move, and be ready to act fast. Unlike long-term investments, these focus on short-term buying and selling — sometimes within minutes or days.

Think of it like this: Long-term investing is like farming — you plant and wait patiently. Trading is like flipping items at Gikomba — you buy low, sell high, and repeat quickly.

✅ a) Forex (Foreign Exchange)

Forex means trading one currency for another. For example, you might buy US Dollars (USD) and sell Kenyan Shillings (KES), hoping that the dollar will become stronger so you can sell it later at a profit.
This market runs 24 hours a day, and prices move very fast based on world news, politics, interest rates, and even tweets!
Example: If you buy 1 USD at KES 135, and later the rate moves to KES 138, you make a profit of 3 shillings per dollar.
💡 Analogy: Think of Forex like changing money at a bureau — but instead of changing for travel, you're doing it to make profit from rate changes.
⚠️ Very risky: Because currencies can swing quickly, you can lose your money fast if you’re not trained or if you use too much leverage (borrowed money).
Tip: Learn first using a demo account. Don't trade real money until you understand the risks and strategies.

✅ b) CFDs (Contracts for Difference)

CFDs are like betting on the price of a stock (or commodity or currency) going up or down — without actually owning the asset.
For example, if you think Apple shares will go up, you can enter a CFD “Buy” position. If Apple’s price increases, you earn the difference as profit. If it drops, you lose.
If you believe a stock will fall in price, you can also “Sell” (short) and profit if it goes down. This means you can make money whether the market goes up or down — but only if you’re right.
⚠️ Very risky: CFDs use leverage, which means you’re trading with borrowed money. Small price movements can cause big losses or gains. It’s not for beginners.
💡 Tip: Always use risk control tools like stop-loss orders, and never trade more than you can afford to lose.
In short: CFDs are fast, risky ways to speculate on price movements without buying the real asset. Learn well before trying.

🏦 4. Savings Products – Safe but Slow Growth

Think of these like money parks — safe places where your money is protected and grows slowly over time. They won’t make you rich overnight, but they help you build discipline and protect your savings from being spent.

These products are ideal if you want to avoid risk, save for short- or medium-term goals (like school fees, emergencies, or a future investment), or just want peace of mind knowing your cash is somewhere safe.

✅ a) Savings Account

This is the most basic and common way to keep your money safe. You open an account at a bank or mobile service (like M-Pesa) and deposit your money.
The bank pays you a small interest — usually between 2% and 5% per year — for keeping your money with them.
It’s a great option for emergency funds, short-term savings, or if you just want to avoid spending your cash.
🧠 Example: If you save KES 10,000 in a savings account earning 4% per year, you will get about KES 400 after one year — and your money stays safe the whole time.
💡 Tip: While interest is small, the real benefit is having quick access to your money in case of emergencies.

✅ b) Fixed Deposit

A Fixed Deposit is like a savings plan where you agree to “lock” your money in the bank for a set time — usually between 3 months to 1 year or more.
Because you are promising not to touch the money, the bank gives you a better interest rate — sometimes up to 8% or even 10% per year.
However, you cannot withdraw the money before the agreed time without paying a penalty or losing some interest. It’s best if you’re sure you won’t need that money soon.
🧠 Example: If you put KES 100,000 in a fixed deposit for 12 months at 9% interest, you’ll earn KES 9,000 by the end of the year — without doing anything!
💡 Tip: Use fixed deposits for saving school fees, future business capital, or large expenses where you don’t need immediate access.

✅ c) Insurance Savings Plans

This is a plan where you save money every month, and at the same time, you get life insurance cover.
You choose how much to save (e.g., KES 2,000 per month) and for how long (e.g., 10 years). If you stay on track and complete the plan, you will be paid back all your savings — plus a bonus or interest at the end.
If anything happens to you (like death or disability) during the period, your family will still receive the full payout — even if you had not finished saving. That’s the insurance part.
🧠 Example: You save KES 3,000/month for 15 years. After that, you may get back over KES 700,000 (including interest and bonuses), plus your family was protected the whole time.
💡 Tip: These plans are good for long-term goals like your child’s education, building a home, or retirement planning.

✅ d) Money Market Funds

This is a type of investment where you give your money to a licensed fund manager (like CIC, Old Mutual, Sanlam, etc.) who then invests it in safe places like treasury bills, fixed deposits, and other low-risk options.
In return, you earn daily interest which is added to your account. Most money market funds in Kenya offer between 7% and 11% per year, depending on the market.
You can start with as little as KES 500 or 1,000. Your money is relatively safe and you can withdraw it in 2–3 working days when you need it.
🧠 Example: If you invest KES 100,000 at 10% per year, you could earn around KES 833 per month in interest — with no need to monitor the stock market or do anything complicated.
💡 Tip: This is perfect for short-term savings, emergency funds, or if you’re just starting your investment journey and want something low-risk but still rewarding.

✅ e) Pension Plans

These are long-term savings plans designed to help you build a comfortable retirement. You contribute money every month — just like saving — and your pension provider invests it for you in safe places like government bonds, money markets, or blue-chip stocks.
Over time, your money grows steadily, and when you reach retirement age (usually 50 or 60+), you start receiving payouts — either as a lump sum or monthly income.
🧠 Example: If you save KES 5,000 every month for 20 years, you could build a retirement fund worth over KES 2–4 million, depending on your fund’s performance.
💰 Tax Benefits: Contributions up to KES 20,000/month are tax-deductible — meaning you pay less income tax. Your returns are also tax-sheltered.
✅ Great for employed people (via employer pension schemes) or self-employed individuals (via personal pension plans like Mbao Pension, CPF, or Britam).
🔐 Why it matters: It helps you prepare for retirement without depending on children or the government.

🎯 How to Choose What’s Right for You

Your Goal	Best Option
Emergency savings	Money Market Fund, Savings Account
Short-term growth	Fixed Deposit, Treasury Bills
Long-term wealth	Shares, Mutual Funds, Pension, International Stocks
Monthly income	Bonds, REITs, Dividend Stocks
Global exposure	International Stocks, ETFs
Protection + savings	Insurance Savings Plans
High risk, quick gains	Forex, CFDs (if trained)