With the rising cost of living and the value of the cedi constantly shifting, simply saving is not enough for many young Ghanaians.
A lot of youth are asking the question “Where can I invest my money safely?”.
A wave of financial scandals and economic turbulence has made some Ghanaians wary of investing.
From the collapse of savings and loans companies to the infamous Menzgold saga that left many in financial ruin, trust in financial institutions has taken a hit. It is no surprise that many young people would rather keep their money than risk losing it.
Yet, as financial awareness grows, a new generation is exploring where and how to grow their money, with safety and stability in mind.
When asked why he decided to start investing his money, one young man simply responded, “Life.”
Another said “I started because I hated saving money only for the economy and inflation to make it lose its value. I decided to start exploring investing options like Bitcoin, stocks and gold.” This has worked for him as investing compounds and savings do not.
The young investors we spoke to said they had to rely on their own extensive research to figure out what to invest in.
When asked whether it was easy to find investment information in Ghana, they admitted it was a challenge, “It was quite difficult, and I had to experiment with foreign strategies to find out what worked best for me and in this economy” one commented.
Navigating investment options can be confusing, especially for first time investors. There is often uncertainty around which investment paths are safe and suitable, which leads to many people sitting out due to fear.
We spoke to Evangelyn Quarm, an Investment Banker, on what investment options the youth in Ghana can explore.
“Before you decide to invest, it’s best to know your goals. Why are you investing?” she said.
She went on to add, “For low-risk investments for a young person’s future, they can start with mutual funds. Some banks and fund managers offer these with as little as 50 to 100 cedis.”
A mutual fund is an investment that pools together money from different people and invests it in various options such as treasury bills, bonds, and shares, both local and foreign.
“You can also invest in treasury bills for short- and medium-term goals,” she said.
Treasury bills are issued by the Government of Ghana. They offer fixed returns and can be purchased through banks, licensed investment firms, or digital platforms.
In simple terms, they are short-term loans you give to the government, usually for a period of 91, 182, or 364 days. You buy them at a discount and receive the full amount when they mature. They are considered safe.
For young people investing with a long-term mindset, Ms. Quarm recommended buying shares, while noting that the potential returns come with higher risk.
“With shares, the company only pays interest when they make a profit, and even then, they can decide to reinvest the profit into the business, so there’s no guarantee of regular payments, you also make money if the price of the company goes up. So if you buy a share and it is not performing well, you could make losses,” she stressed.
However, she added that starting young gives you more time to recover from such risks.
Some shares young investors in Ghana can consider include MTN Ghana, Total, GCB, and Ecobank.
Ms. Quarm also touched on bonds, noting that those which were restructured now receive regular payments. Bonds are similar to treasury bills but are meant for longer periods, typically two years and above. With bonds, you lend money to the Government of Ghana or companies like Kasapreko, Cocobod, or Letshego, and they agree to pay you back with interest over time.
Bonds come with their own risks because your money is locked away for longer. Additionally, rising inflation can reduce the real value of your returns.
One platform mentioned during our conversation was CediManager, an investment app that allows users to buy shares, treasury bills, and bonds with as little as GHS 200.
The app, developed by Fincap Securities, a licensed broker-dealer regulated by the Securities and Exchange Commission Ghana, offers a simple way for first-time investors to start investing. It is available on major app stores, and users only need to create an account to begin investing.
Evangelyn Quarm also uses her TikTok platform (@msmoneymaven) to break down financial topics in simple terms, aiming to make investment knowledge more accessible.
She advices young people to start investing with what they have rather than waiting to have a lot of money to begin.
“Yes, more money means more return but building the investment habit when you have small money goes a long way.” she said.
“This comes from the concept of little drops of water make a mighty ocean. Starting early helps you accumulate more, and in the worst-case scenario something happens, you can recover.” Ms. Quarm added.
A young investor also wants to tell young Ghanaians wary of investing that “taking the risk and learning from failure is better than not taking the risk at all.”
While investing can seem intimidating, starting early and being informed helps reduce the risks. As explained by a professional, young Ghanaians have several options to consider depending on their goals and the risks they are willing to take.
