One of the greatest ways to have your money grow exponentially is by having one or more investment accounts that compound. Most wealthy people have a number of long-term accounts that facilitate compound interest. No wonder Einstein called compound interest the eighth wonder of the world!
With compound interest, your money works diligently for you. Because it continually feeds your profit upon itself it grows at a substantially faster rate than with simple interest. Compound interest simply pays you interest on your principal; then, when it is time to pay interest again, you’re paid interest on your principal and the previous interest that you earned.
There are three persons; Coolieman, Whiteman, and Blackman. Each one has money to invest. Coolieman has $45,000. Whiteman and Blackman each have $25,000 to invest. Coolieman places his money into a 20-year investment which pays 12% simple interest annually. Whiteman and Blackman also put their money into a 20-year investment which pays 12% annual interest. However, theirs’ is compounded interest, with Whiteman’s compounding yearly and Blackman’s investment compounding quarterly.
After 20 years, here’s what their accounts would look like:
• The total value of Coolieman’s investment has grown to $153,000.00 (principal and interest).
• The total value of Whiteman’s investment is $241,157.33.
• The total value of Blackman’s account has become $266,022.25
• Additionally, if Blackman made $12,000 (that’s putting aside just $1,000 per month) additional deposits every year during the 20-year period, his balance would increase to $1,259,033.99!
$1.2m in 20yrs in Jamaica is as some would say – foul feed’n. However, a starting principal of $60,000 with yearly additions of 48,000 ($4000 a month) will give you $4,452,316.89 after 20yrs. Note this is just one form of investment you will have in your portfolio.
Most of the accounts I mentioned in the previous post facilitate compound interest, however not all have attractive rates. I highly recommend starting one as soon as possible and leave it until retirement! DON’T DISMISS IT, YOU CAN DO IT!
Blessings!
Andre P. Llewellyn
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Ethnic oriented references made in this document are not racially motivated but reflect Jamaican colloquial expression.
First of all thank you for deciding to read, or download this information. There are a number of investments that one can make however, this document will be looking at the best investment options from the financial landscape in Jamaica. If you are interested in learning about other forms of investment feel free to ask.
What I am offering is specific time, sensitive information. Therefore, some of the rates are subject to change (though not drastically). It is plain, practical yet profound. N.B. I AM NOT A PART OF ALL THESE ORGANIZATIONS. Remember to check out the Robert G. Allen video below the article.
Things to consider:
1. Join an Investment Club (90% chance you will never read this in the papers)
a. Olint Corp – You get on average 10 % per month, like stocks, is a high risk investment. But only two other organizations provide similar returns/profit than this. Plus it compounds if you don’t withdraw profits. You start it with no less then US$1000. You have to wait until March before you can start investing with them because of a court order. (N.B Tax issues may be a factor later this year, though it’s unlikely that this would dramatically affect your investment)
b. Lewfam Investment Club. You get on average 8% per month, like stocks, is a high risk investment. But only two other organizations provide more returns/profit than this. Plus it compounds if you don’t withdraw profits. I would suggest that you start with no less than US$200-300. If your equity management allows you to put more then do so. You have to wait until March before you can start investing with them because of a court order.
Cash Plus Jamaica – I really don’t know all the things that cash plus invest in, I do know that real estate and telecommunications are some though. You start with at least J$100,000.They guarantee 10% return, you receive your money every quarter though (I think there may be monthly encashment). I mention Cash Plus as a suggestion not a recommendation because I am not a part of them. However, some of my friends are members and it works for them.
2. Open a Money Market fund
a. JMMB TAX SHELTER ACCOUNT- It’s a tax free medium term (5yrs) account. It’s a Medium risk account with an interest/return of 12.30% per annum. You have to leave it in for 5 yrs. However, you have access to 75% of your interest every four (4) months (that will be taxed). You can start with no less than J$25,000. Visit www.jmmb.com
b. DB&G http://www.mydbg.com/ also offers a TFI (Tax Free Investment) account and the rates are competitive. The thing is, like JMMB, you are bonded for 5yrs. And especially in the Jamaican economy you cannot predict the rates (especially over a 5yr period), this can drastically affect you interest (not principal). My major issue is you have to start with at least J$100,000 at a rate of 11.95% the most. JMMB’s Tax Shelter is your best bet!
c. JMMB’S SAVESMART JA ACCOUNT – It is a low risk account that you can start with J$1000. The interest is very low (a bit higher than the banks) but it’s a good place to save money. Right now the return is 10.02% on J$25,000. Visit www.jmmb.com
d. JMMB’S SAVESMART US ACCOUNT – It is a low risk account, with the interest rate being 4.81%. You can start with US$500. The interest is low but higher than the banks in JA and some international banks. It is definitely a good place to save your US dollars especially because the Jamaican dollar is weak and seem to be getting weaker. Although you have to start it with US$500, I recommend this account instead of opening a US account in a Jamaican commercial bank. Visit www.jmmb.com
3. Government Securities
As it relates to government securities you may consider Capital and Credit visit http://www.capital-credit-securities.com/default.aspx. However, you have to start with J$100,000.
a. A little info on Bonds
What are they? A bond is a loan, an IOU. You, the investor, are the lender. The organization, for which the bond is created, the one desiring the loan, is known as the issuer. Investing in Government bonds is where you lend the Government money and they give you a certificate. Government bonds are the safest form of corporate investments; this of course is because the government can print more money if they owe people.
b. International/Global Bonds
DB&G’s Global Bonds account is something you may want to consider at some point. http://www.mydbg.com/ the reason why I suggest this is because of the level of diversity it comes with. Additionally, it is great for long term investment.
4. Stocks/shares
You can buy stocks through most financial houses/organizations. The thing with stocks though is that in Jamaica the market is very volatile especially since 3 years ago. I personally don’t invest in stocks again because I have had bad experiences. However, if you find a great and aggressive broker, over J$500,000 (a little exaggeration), and stocks that have GREAT potential, then you may gain. IF YOU GO STOCKS THINK LONG TERM! Of course there are exceptions, but very few. Review the Jamaican stock market daily here; http://www.jamstockex.com/
Things to consider before you make any investments:
1. What is my financial target, and are my investment goals/objectives realistic?
2. Do I want to invest in the short, medium, or long term?
3. The service fees of the organization (management, withdrawal, etc) and taxes the account assumes. Believe it or not these can sometimes deplete your profit. Investigate before you Invest!
4. The rate of return on your investment. You need to know your profit in $$$ and cents. It is one thing to work for your money, but your ultimate goal must be to make your money work for you.
5. The level of risk you are taking. Risk is a must – how much can you handle?
6. The accessibility of your money. “Am I tying up money that I could use to make more interest?” “Can it be wired?” “How many encashment options are available?”
7. The security of your money. Is my money insured, if so how much of it? Note; risk management is not limited to insurance though. I have made investments that are not insured, but I am ok with the risk.
8. Does your equity management allow you to invest in the particular opportunity?
May God Bless you richly,
Andre P. Llewellyn
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All financial advice presented in this document is not upon the mandate of any organization, club, or company mentioned in this document. All information provided is solely based upon the research, experiences and knowledge of the author. It is provided freely and should not be used for monetary gain or financial service.
