FINANCIAL LITERACY FOR ALL- PORTFOLIO INCOME

FINANCIAL LITERACY FOR ALL- PORTFOLIO INCOME


We have learnt that there are different types of income for individuals as well as for corporate entities. One of these different types of income is portfolio income.

Portfolio income is received from shares, mutual funds, unit trusts, balanced funds, treasury bills, etc. Portfolio income is simply gotten form commercial papers.

We have been advised to look for other means of getting income for ourselves and for our corporate entities, thus we should invest for short-term, medium-term and the long-term purposes and one important way of getting rich without necessarily working physically is to invest in commercial papers. Getting rich is not using physical strength or working hard physically but being intellectually or mentally hardworking to get what you want. Mere physical strength without being financially intelligent will not get you the money but will only exhaust and wear you out no sooner than you could imagine. Financial literacy teaches us that we should not work for money and worship it but rather we should let money work for us.

Money can only work for you when you are financially literate and financially intelligent; in that case you see money with your mind not with your physical eyes. Opportunities foreseen bring the money, and those who prepare for the opportunities embrace them when they arrive.

To get very high portfolio income, one needs to be financially literate to understand the dynamic movements of the prices of these commercial papers, to know when to buy more and when to sell more. If you go the brokers, who are the middlemen, they would advise you and charge you high fees, but sometimes they the brokers don’t even know the future trends of the commodities that they have you advised you on even under the strong efficient market situations where past, present and future information about the market is made known to all stakeholders. If they knew everything that well about the market, then why not they brokers become the richest in terms of portfolio income. They don’t know the future; they only do some predictions which could be true or false. Robert Kiyosaki says ‘’the broker is more broke than you’’

This is why we are creating the awareness that you learn financial literacy yourself, understand and when you are given some professional advice you could discern whether it is right or wrong.

In the current educational system, we are not taught financial literacy. We are taught literacy, but in real life it is full of financial literacy education, because we cannot this live without money or money equivalents. Financial literacy education teaches us all we need to know about money.

In almost every country, there is at least one form of commercial paper that one can find to invest in to get some income. In Ghana, we have more than necessary that one can invest one’s money in and get some good returns because they are all doing pretty well.



Some of them are:

• Shares – traded on the Ghana Stock Exchange Market, located at the Cedi House, near National Theatre and opposite the British Council, Accra.

When one invests in shares one can get two forms of returns; dividends and or capital appreciation of the share price, depending on the welfare of the share among other factors on the market.

Some Mutual funds and unit trusts to invest in:

• EPACK-this is a long term mutual fund operated by Databank, located near Tigo headoffice, or near TUC, or Accra Polytechnic, Accra.

• M-Fund- this is a short-term mutual fund operated by the same Databank

• The Balanced fund- operated by the same Databank

• Ark Fund- invested in environmentally friendly companies- operated by the same Databank.

• SAS FORTUNE FUND-operated by Strategic African Securities, located around Accra High School and Atlantics Radio

• GOLD FUND- operated by Gold Coast Securities- located around SAS area

• NTHC HORIZON FUND-operated NTHC located at Adabraka

• SDC CAMPUS FUND-operated by SDC Finance & Leasing Company Ltd

• HFC UNIT TRUST-operated by HFC Bank

• HFC REIT ( Real Estate Investment trust) operated by HFC Bank

• HFC EQUITY FUND-operated by HFC Bank

• 1st FUND- operated by 1st BANC ( The mutual fund that preserves your capital)

Fixed Deposits can be made with:

• National Investment Bank( NIB)

• The Trust Bank- Savings Plus Savings Account

• UT Bank

• Cal Bank

• First Capital Plus Savings and Loans Ltd

• Fidelity Bank

• Guaranty Trust Bank

• Zenith Bank

These banks have just been listed by me not in order of priority or importance and I would advise anybody, who wants to make a fixed deposit to shop around all the banks in Ghana to get a better deal because at some places and some times one has to negotiate for a better rate.

To invest in any of these, one can just call them or look for them on the internet and get better information on a commodity before buying it. I have listed the above by own volition and not in any way connected to any of the above funds or their companies. All omissions and commissions are mine.

• Treasury Bills can be bought from any commercial bank operating in Ghana. The commercial banks and other commercial houses sell the Treasury Bills to you on behalf of Bank of Ghana, which also does it on behalf the government of Ghana. Treasury bills are called Risk free investments, risk free because, you get back your capital invested plus interest and the government will continue to be functioning as far as well the world continues to exist so there is no problem of permanent defaultment

Turn your monthly earned income into portfolio income where your money would work for you, whilst you sleep. You would then have two types of income to fall on. Earned and portfolio income.

© 2010, Godwin-Xavier Ayeebo

Email: gayeebo@gmail.com