Why Fixed deposit account isn’t the best way to save money

Dorcas Wainaina is the Executive Director at the Institute of Human Resource Management, Kenya.

Saving and Investing: Previously, I used to save in a fixed deposit account. Today, I no longer save through a fixed deposit account. Instead, I have a savings account from which I invest. Interestingly, over time, I have come to learn that there is not always wealth in investing millions in a residential house. There is nothing wrong in renting to start with. It is better that when you get started, you invest in opportunities that will make you financially independent by the time you get your own residential house.

Breaking even: There are no two ways about it. You must strictly invest as regularly as you can whether you are an employee or an entrepreneur. Personally, I put aside a certain amount from my income for investment every month. I think, too, that as women, we must broaden our level of investing and minimize on our fondness for impulse buying. I fear that many of us invest too cautiously and at very low levels when there’s bigger fish we can go for and actually net.

Biggest Money Mistake: Sometime back, I was investing in shares. I over-trusted my investment advisor and left him to run my portfolio on his own and only give me occasional updates. Unfortunately, my investment went down. I made losses. Later, I learned that he had traded with my money for his own gain.

Biggest Financial Milestone: Twelve years ago, I invested in quite a large piece of land in a place that was so remote yet so close to Nairobi. Today, the land has appreciated hugely, giving me incredible returns. Never shy away from a viable investment because the majority isn’t pouncing on it. In the same vein, don’t rear quails because you hear that is where millions are. Instead, always think about your needs and what you can invest in to have maximum returns in the near future.

Biggest loss: Sometime back, I got into a contract that looked lucrative with a client. However, I failed to notice the small print that contained the tax details. Instead of the contract being tax exclusive, I came to realize that it was tax inclusive. This was a year after signing it. I was left with a huge tax debt on my hands. Always ensure that you have read and understood all contractual and business details.

If I could go back in time…: I’d start saving and investing as soon as I got my first paycheck.

Employment vs side business: Employment and side businesses can be successful in equal measure. However, juggling these two can turn into stress and fatigue. I believe that you should make a choice and stick to one if excellence is a value you want to commit to. If you choose a business, invest and re-invest in it. If you choose employment, you must be excellent in absolute terms in what you have been employed to do. Always keep timelines. Network as productively as you can and understand people management, which is the skill of how to deal with different kinds of people at different times and stages. These are the ingredients that will drive or stall your career.

This article was published by the Saturday Margazine