Passive Income in money markets is a surefire way to make a living. In this article, we look at how to earn passive income from money markets. Money markets are one of the dynamic and growing segments of financial management both in the private and public sectors.
If you have tried many other ways to get passive income and failed, do not worry. It’s never the end of the road. You still have a chance to start earning passive income by investing in money markets. Essentially, money market funds are invested in government securities such as treasury bills and bonds. These securities tend to outpace inflation making them a better option to preserve a real value.
This concept of passive income in money markets resonates well with investors seeking to build wealth over time. It’s a journey with various steps of certainty compared to the traditional schemes. This means, that once you join successfully, which is more likely than not, then you are good to get your passive income consistently over the period determined.
With money markets, you won’t worry about the next decision of the business. Perhaps what you may need is where to get a source of funds to start investing in money markets. There are several money market firms that you can invest in. You simply need to acquaint yourself with each one of them so that you arrive at a solid decision.
Examples of money market companies.
- Sanlam
- Cytonn Money Market funds
- Genghis Capital
- Kuza Money Market Fund
- Absa Asset Management Ltd
- Madison Money Market Fund
- GenAfrica Asset Managers Ltd
- Zimele Asset Management Company
- Standard Chartered Shilling Funds
- Enwealth Money Market Funds
- Apollo Asset Management Company
The list is so long. When you take the initiative to invest in money markets to earn passive income, a company to invest in won’t be a problem. This is what you need to consider as you choose the right firm.
How you can earn passive income in money markets.
From the amount you invest in the money market fund of your choice, you earn interest. The amount of interest you earn compounds daily and paid at the end of each month. The term compounding is the idea of increasing the value of both the principal and the interest you earn. In other words, it’s the time value of money.
To understand this better, let’s assume you deposit sh.10,000 into a money market fund. The period for this investment is one year the rate of interest is 12% p.a. and it is compounded daily. So, what will you get? =10000*(1+(12%/365)) ^365=11,275. On top of what you will have invested, you earn about 1,275. This money, if you deposit it to stay idle in your bank account, won’t earn anything. The more money you invest in money markets, the more earnings you make.
Why choose money markets to earn passive income?
The beauty of money market funds is that its flexible to adjust yields in response to the changing interest rate environment. As a result of that, investors capture higher returns during periods of rising interest rates while maintaining liquidity and stability.
Additionally, money markets have low risks. That means there are low chances to lose money compared to other methods. Ideally, the lower the risk, the lower the returns and that’s why the amount in above example had a low amount as a return.
In conclusion, a journey to richness doesn’t happen overnight, it requires sacrifices, patience, and resilience. As you invest your little amount today, you are sure that you will earn passive income in money markets.
