‘Anybody can cast their lots with treasury bonds’

Financial advisor Livingstone Mukasa said last week that “the bond market is for big fish. If you’ve got Shs100 million or more, you can dive in and rake in steady returns. But if you’re just starting out, focus on growing your income first. Build your skills, get a decent job, and when you’ve saved enough, park it in a unit trust. From there, scale into bonds and build wealth.”

Sounds solid, right? But Alex Kakande, another financial advisor has a different take.
“You don’t need millions to get into bonds,” he said over lunch. “Start with what you have—even Shs100,000. Add consistently and let compounding do its thing. Wealth isn’t about quick wins; it’s about patience.”

Their contrasting views highlight the core of capitalism: turning small piles of cash into bigger ones. Mukasa argues that bigger pockets yield bigger returns—a harsh but valid truth. Yet Kakande’s call to “start small” offers hope for anyone ready to play the long game.

The verdict? Capitalism rewards capital, sure. But it also smiles on consistency and patience.
Investing—whether it’s stocks, real estate, or businesses—is a marathon, not a sprint. The same goes for Treasury bonds and unit trusts. They’re not get-rich-quick schemes, and anyone who tells you otherwise is selling you a dream. Both Kakande and Mukasa agree on that. But here’s where Kakande’s perspective differs: Contrary to popular belief, you don’t need “serious money” to make Treasury bonds work for you.

Kakande says that you can start small and let compounding do the heavy lifting. The beauty of Treasury bonds and unit trusts is that everyone gets the same percentage return, whether you’re investing Shs1 million or Shs100 million.
“Sure, the person with more money earns more in absolute terms. But smaller investors aren’t left behind. The return on your Shs1 million grows at the same rate, offering steady opportunities to build wealth,” Kakande explains.

Let’s get practical. What else can you invest in today that guarantees a return of 10 percent or more? Few options outcompete Treasury bonds, especially when you factor in scale.
“My 27-year-old brother invests Shs100,000 every month in a 20-year Treasury bond. By 47, he’ll have nearly Shs100 million, thanks to compounding,” Kakande shares. “If you can stretch to Shs 500,000 a month, you could end up with over Shs250 million in 15 years, earning Shs3 million per month.”

Your age is your advantage
Compounding: finance’s "eighth wonder of the world." Reinvest your returns, and your money grows exponentially over time. Treasury bonds and unit trusts are perfect vehicles to make that magic happen, Kakande says.
“Don’t buy into the myth that Treasury bonds are just for the rich. The earlier you start, the more time your money has to grow. Consistent investments, even small ones, can build substantial wealth,” he adds.

In our conservation I learn that his brother isn’t alone in starting small. Last week, he says, he met a woman with just Shs500,000 in savings, able to invest Shs100,000 a month and told her, "That’s enough. Buy your bonds."
If she sticks with it, by 60, she could have over Shs300 million and earn more than Shs3 million a month in interest.

The lesson? Don't wait. Starting now means compounding can work its magic, whether you invest Shs 100,000 or Shs 1 million. It’s about time — the earlier you start, the more your money grows.
Are you 23 and only able to save Shs100,000 a month? Don’t let that stop you. Invest in a 20-year Treasury bond at 13 percent, and by 43, you could have over Shs100 million. It’s the power of time at work, that’s the argument Kakande so badly has, not the huge lump sum.
He explains that even if you earn Shs600,000 to Shs1 million and can save just Shs200,000 a month, don’t worry. By 38, that Shs200,000 could grow into over Shs100 million—thanks to compounding.

If bonds aren’t your thing, try a unit trust. Just don’t leave your money in a savings account earning peanuts (2-3 percent).
Some quick math shows that the numbers don’t lie.
Shs 100,000/month for 20 years at 13 percent = over Shs100 million.

Shs 2 million/month for 20 years = over Shs1 billion, with Shs10 million monthly returns.
Yes, the rich make more, but you don’t need to be rich to start. You just need to begin.

Play the long game
Not everyone will invent the next big thing, but we can all be smart investors. Patience and a long-term mindset can turn modest investments into significant wealth. Whether you’re just starting out or well into your career, the rule is the same: start now, and let compounding do its thing.

Now, for the 40-45 crowd, perhaps married with a little more disposable income. You don’t need Shs100 million to start. If you invest Shs5 million a month in Treasury bonds from 35 years, in 20 years, you could have over Shs3 billion.
Even with Shs500,000 a month, over 20 years, you could still earn Shs4-5 million per month in passive income. The key isn’t how much you start with—it’s about starting and letting time and compounding do the work.

Real estate has long been the crown jewel of Ugandan investments, cherished across generations. But let’s face it — it’s becoming increasingly out of reach for many. If you're earning Shs1 million a month, saving for a plot of land might take you five years. Add another ten years to build a home, and you’ve spent 15 years waiting, all while inflation erodes your savings.

And if you’re borrowing at high-interest rates for construction, the rental returns may barely cover the cost of the loan.
This isn’t to say real estate is a bad investment; it’s not. But in today’s financial landscape, there are other opportunities with higher returns and lower entry barriers. Let’s talk alternatives. Investing Shs500,000 a month into a Treasury bond may not sound glamorous, but the results are impressive. In five years, your investment could double. In ten years, it could reach Shs200 million, giving you more options—from property to other ventures.
Unit trusts are another game-changer. They allow you to pool funds with others, reducing risk while enabling steady growth through compounding.

With less hassle than managing property or tenants, your money grows quietly in the background. Real estate investments often demand large upfront capital. To build rental units that generate a decent return, you might need at least Shs200 million. Even then, your monthly rental income might only be around Shs2 million—a return of 6-7 percent.
In contrast, Treasury bonds or unit trusts offer a chance for steady, less risky growth. They don’t require massive initial investments, and the compounding effect can easily outpace most real estate returns.

It’s about options
“Real estate will always be part of the wealth-building game, but for many, it’s not right now. The key is investing in what grows your money, suits your financial situation, and maximises your potential. Whether you're starting with Shs500,000, Shs5 million, or more, the principle remains: Start where you are, invest consistently, and let compounding work its magic,” Kakande says.

He illustrates this: Invest Shs200 million in rental units and earn Shs1.5 million monthly—before expenses. But the same Shs200 million in Treasury bonds could generate Shs3 million monthly at a 14 percent return. No tenants to chase, no maintenance headaches—just clean, consistent earnings.
“This isn’t about discouraging real estate investment; it’s about offering alternatives. The net present value of Shs200 million in real estate over ten years is lower than the same amount in Treasury bonds. Real estate is pricing out many Ugandans, and it’s time to acknowledge that,” he says.

Ugandans earning between Shs300,000 to Shs1 million monthly often face limited investment options. Treasury bonds provide a reliable way to build patient capital, offering steady returns of around 17 percent annually. On the other hand, starting a business in Uganda can be daunting, with 95 percent of them failing and a plethora of national statistics show this.
“So why encourage everyone to venture into business with those statistics in mind?” he asks.
Unit trusts and money market funds also offer accessible investment opportunities, with returns of 11 percent or more over the past decade. Whether you start investing Shs50,000 at 18 years or Shs500,000 at 25 years of age, your wealth will grow steadily.

The earlier you begin, the more you harness the power of compounding. Treasury bonds are globally recognised as one of the safest investments—and Uganda is no exception. Over the past 50 years, the government has never defaulted. While political risks like coups or military regimes might create turmoil, they rarely affect bondholders. In extreme cases, payments are deferred, not lost.
Contrast this with business risks: a dictatorship could shut down your business, but your Treasury bond investment remains intact. These bonds not only offer safety but also promise consistent growth. It’s not about quick wins, and this is something both Mukasa and Kakande agree on.

“Treasury bonds and unit trusts aren’t quick-fix solutions. They’re tools for building long-term wealth. You don’t need millions to get started—begin small, invest consistently, and grow your wealth at a steady pace,” the latter says.
The numbers speak for themselves: while businesses fail 95 percent of the time, Treasury bond and unit trust investors see returns year after year.

The last word
Treasury bonds may not work like a high-interest savings account where your money compounds on itself. Instead, you get regular coupon payments (interest) every quarter, and at the end of the term, you get back your original investment. It’s not a lump sum of compound interest, but that doesn’t mean bonds aren’t valuable.

Reinvesting your coupon payments isn’t technically compounding, but it’s like using your interest to buy a ticket to a bigger show. You’re taking the returns from your bond and turning them into more returns, kind of like multiplying your earnings by reinvesting them.
Sure, it’s not compound interest on the same bond, but it’s still a clever way to let your money do more heavy lifting. But here’s the catch: interest rates can drop after events like elections, so your returns might not always match what you expect.

While rates may decrease, bonds still provide steady income. Just be aware of the risks, and know that bonds can still be a reliable investment.
Investing isn’t a one-size-fits-all journey, but for most Ugandans, Treasury bonds and unit trusts offer a straightforward, reliable path to financial growth. Start early, start small, and let time do the rest.

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