Welcome to another week of financial learning. Last week, we touched on the third component to look out for when you decide to invest your hard-earned money, which was Liquidity.

Today we will conclude on the components by looking at Time Horizon or period of investment. Every investment instrument has a life span of growth. Some investing vehicles building up higher interest from the onset whiles others gain good return with time.

Investments like Real Estates and stocks for example gain extra value with time than money market investments like Treasury Bills and Fixed deposits.

One may decide to invest his income in the building of houses in developing areas. This is very good and tactful!

However, such a person may be disappointed if he expects to get instant good return.

Most of these properties will gain extra returns as the community develops in terms of social amenities. One will therefore be engaging in wrong investment if he wants short-term good return on investment.

Short-term good investments would then be the treasury bills, fixed deposits as well as buying and selling businesses.

It therefore imperative that the right tenure be examined and chosen to avoid loss of income.

In concluding on the components, mention must be made of Liquidity of investment, Secured nature of investing company, returns on the investment as well as the tenure of the investment in terms of returns.

At this point, one may reluctantly ask, why do I even need to invest when life is short?

One needs to first invest and save a part of your income for a future need. No one can predict the future! No one can magically command the future!

They saying goes “no one knows tomorrow”. It is therefore necessary to put in place things today, which can affect the future positively. The future in this sense may be a need to be met, target to be achieved etc. We said from the beginning that we save to buy a house, further our education, get married etc.

We will not get the full amount to achieve these goals. It is therefore important we plan towards that wedding today by knowing the total cost of the ceremony and how much you need to start saving from today to make that ceremony memorable. In this way, one does not overly become a burden on friends and family financially.

You become “irresponsible” when as a working “horse” you still burden others financially.

You can also plan for the future needs of your unborn babies i.e. cloths, education and fun trips. Plan your future by saving and investing.

Next Week, we will look at the three other reasons why we need to start saving and investing today!

Related Article: SAVINGS 103: Your weekly Wealth Tips

I wish everyone a wonderful and memorable weekend!!

Gratias!!!

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Mr. Patrick Baah, Author

Patrick Baah is a chartered banker with over 5 years’ experience in main stream banking having worked in various capacities. He is currently at the Branch Manager Position of his institution.

He has been a qualified member of the Chartered Institute of Bankers, Ghana with a good membership standing since the year 2013. He also holds EMBA and BA from Kwame Nkrumah University of Science, Technology, and the University of Ghana respectively.

Patrick is the originator of the daily epistle dubbed “Savings Tip of the Day” which has been running for over a year on WhatsApp and Facebook. Patrick has also been teaching on the Topics Savings, Investment and Financial Independence for over 2 years and a research fellow for ILAPI Ghana. Patrick is into youth facilitation and counselling.