The Six Investment Vehicles That Turns Me From a Poor Immigrant To A Millionaire

By Isaac Chanakira

Where to next? You have now developed your saving habit and managed to put a bit of money aside but, now you need to get involved in investing and you have no idea where to start. You are anxious to build your wealth and, after reading my previous article, How Your Saving Beliefs Are Stopping You from Building Wealth, you are aware that saving alone will not get you to financial freedom, especially now with the bank interest rates below 1%.

Maybe you should invest into the stock market, but again you do not know what is involved to get started. A lot of people talk about blue chips such as Apple, Microsoft, BHP etc. You are thinking that maybe that is what you should do. Just buy the blue-chip stocks and you will be ok. You check the cost of Microsoft stock online and its USD $291 per share. You do a quick calculation using the money that you have saved and discover that you can only manage to buy 4 shares or less after the trading cost. You checked a few more blue-chip stocks, and the results are the same, so, you give up thinking that stock investing is not for you.

Do not despair, you have already managed to save some money and that is the hard part. In this article I am going to give you some ideas that will get you into the investing game as soon as possible. Forget about buying blue-chip stocks or any individual shares. With the little that you have saved you can buy, not only Apple shares, but all the top 500 stocks in the American stock market or all the stocks in that market

I will share with you the investment strategies that I have used in my financial journey, and you can implement them too if they suit you. In my next articles I will explain in detail how I have personally invested in each of the wealth creation strategies that I am sharing with you right now. You will notice that you do not need to be an expert or to have large amounts of money to get started in some of these strategies. I will list them in their order of complexity starting with the easily to the hardest. I have deliberately omitted cash investments because you probably have used them during your saving period.

Here are the 5 wealth building strategies that I have used, and you can too:

1. Mutual Funds

So, with the little that you have saved you can join a mutual fund and your money will be pooled with other funds from different investors to purchase stocks, bonds, index funds. ETFs and other assets. You will be allocated with a number of units depending on the money that you have contributed to the pool. Instead of buying just one stock, a mutual fund will automatically give you diversification. There are several investment companies that offers this strategy. I personally used Vanguard Australia because I am based in that country.  

2. Retirement Saving Schemes

Most developed countries have retirement saving schemes which you can participate in such as 401K in America or Superannuation in Australia. In Australia it is compulsory for companies to contribute 10 % (used to be 9.5% until 2021) of your base salary towards your superannuation if your get paid $450 a week or over.

The majority of medium to big companies offer their employees an opportunity to salary sacrifices up to 5% of their pre-tax money towards their retirement saving scheme and the company will match it. Many people fail to take advantage of this free money that the company offers. Taking this offer will boost your wealth building endeavours tremendously and should never be ignored. Find out from your company and, if this scheme is available, start the process as soon as possible.

You can also contribute after tax money into your retirement saving scheme. The interest earned on this after tax money is tax free at age 60 if you are based in Australia. If you are in the USA  contribute to ROTH IRA, in the UK contribute to ISA and in Canada contribute to TFSA. If you are in other countries find out the equivalent of these schemes and contribute.

3. Property Investments

Most millionaires in the world have used property investments to build their wealth. I have also used this investment vehicle to build my wealth and its something that is very close to my heart. You can invest in commercial properties or residential properties, and each have its own advantages and disadvantages that I will elaborate on when I talk about property investments in detail in my future blogs. The biggest drawback on this investment is the amount of money needed for the initial start-up. You can still get involved in property investment using A-REIT (Real Estate Investment Trust) They are an alternative to direct property investment and can be bought using the pooled investment funds. So, you can still participate in property investment with little money saved up.

4. Bullion

I also have invested in gold and silver to add diversification to my portfolio. Bullion is not considered as an investment per say, but as hedging against inflation. Gold is known for holding its value and is not affected by inflation like other investment classes. Bullion does not offer you big returns on investments but preserves what you have, therefore you cannot use it as the main investment tool in your portfolio. I have a bullion account that I contribute to regularly with ABC Bullion. It is very easy to open the account and to set your direct debits to make it automatic. You have an option to get you gold or silver in bars and keep it at home if security is not an issue for you.

5. Individual Stocks

During all the years that I have spent learning about finance and investing I have managed to grasp the concepts of share trading using technical analysis. I have also learnt about the fundamental analysis of a company although I prefer the technical side because its quick and short term. I would like to warn you that this could be the easiest way for you to quickly lose your money if you are not sure of what you are doing. I discourage people to get involved in the individual stock picking because it requires a lot of trading knowledge to be able to pick the right stocks. This is something that you do when you are now accomplished and need to play with a bit of money that you can afford to lose.

6. Cryptocurrency

If you think that the stock market is volatile, then you don’t know much about the cryptocurrency investments. In its simplest form, cryptocurrency is a digital version of money that resides online, and all the transactions are online. Unlike the fiat money (traditional money such as pounds, dollars, euros, and many more, that we are all familiar with), cryptocurrency is all virtual; you do not have coins or notes that you can put in your pocket.

I have been participating in various investment classes for many years now, but none of them come even close to cryptocurrency when we consider the enormous returns on investment. Before I get any further, I would like to point out that this type of investment is not for the faint-hearted. The rewards are enormous, and so is the risk of losing your money within a brief period. If you are interested in trying, please get as much information as possible and only invest the money you can afford to lose. Start small and gradually increase your exposure as you get more experience

There is a whole range of things you can do to invest money in the Diaspora, but the six investment vehicles mentioned above are what I have used to build a seven-figure net wealth. With a bit of guidance, I am sure anyone can do the same. Contributing pre-tax money by means of salary sacrifice does not require much effort on your part, but, the rewards are massive. 

If you are interested in any of the mentioned investments and you want to learn it in detail, contact me and I will explain in detail how you can get involved.

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