From 50 Million to 1 Billion: How to Achieve Financial Freedom with Treasury Bonds.

December 15, 2023

Friends,

On December 27, 2023, The bank of Uganda is set to auction a 20-year Treasury bond - UG12L1806433, which presents another chance to invest in Capital Markets & grow your wealth. This Treasury bond boasts a generous 15% coupon rate that predicts a roughly 15% yield on the December 28, 2023 settlement date.

Investing in treasury bonds is one of the most smart and effective strategies to multiply your earnings by adopting a lower risk and minimal intervention method. With just UGX 1 Million as a starting point, you can invest in these bonds and start earning secure and stable returns of 15% per annum. This rate allows you to recover your initial investment within about seven years, and subsequently profit for the following 12 years. For tax purposes, be aware that these bonds only draw a 10% Withholding tax on all coupon interests.

Let's illustrate just how lucrative Treasury bonds can be.

Suppose you have UGX 25 million lying idle in your bank account. Investing this amount in the 20-year Treasury bond could earn you a neat 14% net return annually, equating to UGX 3.375 million post-tax. If this amount is ploughed back into the bond market at a clear rate of 15%, the magic of compounding interest would escalate your bond to around UGX 314 million by 2043.

Let’s take it a notch higher. Assume each year, you direct an additional UGX 5 million into your bond portfolio. This strategy would grow your bond value from UGX 25 Million to over UGX 750 million on maturity. Few, if any, investments in Uganda today can yield such incredible returns over the long run, with the minimal risk attributed to Treasury bonds.

What about those with more Money, Say you currently have UGX 50 million? Capitalizing on this bond will promise you a net income of UGX 6.75 million annually. Ploughing this back into the bond could see you filled with UGX 640 million by bond maturity. The beauty of this investment centers on the discipline of playing the long-term game. Re-invest the coupons and Enjoy the power of compounding.

The Home-run strategy.

The returns get even better. When you initiate your investment with UGX 50 million, then top up an extra UGX 10 million in the subsequent years, your bond portfolio could explode from the initial UGX 50 million to a staggering UGX 1.4 Billion after tax on maturity. Even accounting for inflation and money value changes, you'd have amassed over a billion in total financial assets.

Now, if you have a CSD Account and are ready to deepen your bond portfolio, notify your custodial commercial bank and start the process. Fill in the CSD Form 2 as soon as possible to join in the auction.

Remember, Treasury bonds are relatively low-risk, offer fixed income via biannual coupon payments, and guarantee principal return at maturity. They are the perfect choice for investors seeking consistency, stability, and long-term returns.

Here's to your investment journey and financial growth. Happy investing!

Alex Kakande