Banking director urges prudent financial investments to fight poverty in Africa
Ms. Ramat Ebella Ellis, Banking Executive called on African financial systems to integrate large players in the informal sector in the development of financial investment portfolios as a means of lifting people out of poverty.
Ms. Ellis, an investment adviser at the Center for Greater Impact in Africa (CGIA), told Ghanaian news agency Tema Industrial News Hub’s boardroom dialogue platform.
Speaking on the theme “Investment and sustainable development”, Ms. Ellis also called on financial sector players to explain certain financial and economic terminologies to the understanding of non-financials.
“We should not assume that everyone understands stocks, bonds, treasury bills, fixed deposits, cocoa bonds, trust accounts, stocks and mutual funds, among others. As financial actors, we must help people with a marginal understanding of financial language to appreciate these terminologies, to translate them into the informal economy.
Ms. Ellis, who is also a financial planner, noted that understanding some basic information about financial investments could be a first step in learning how to invest, knowing the paths to retirement or maximizing the rate of return on money.
“A financial investment is an asset that you put money into with the expectation that it will grow or appreciate into a larger sum of money, the idea is that you can sell it later at a price higher or earn money on it while you own it.
“You might be looking to grow something over the next year, like saving for a car, or over the next 30 years, like saving for retirement,” she said.
Ms. Ellis, who is also a financial analyst, pointed out that it is important to note that there is an economic definition of financial investments which deals with how companies invest in products, equipment, factories, employees and stocks.
Ms Ellis, who is also the founder of Girls with Purpose Foundation (GWP), explained that before making an investment decision, “sit down and take an honest look at your overall financial picture, especially if you don’t never made a financial plan before.
“The first step to successful investing is determining your goals and risk tolerance – either on your own or with the help of a financial professional.”
She explained, “If you get the facts on saving and investing and follow a smart plan, you should be able to gain financial security over the years and enjoy the benefits of managing your money. “.
Ms. Ellis pointed out that all investments involve some degree of risk; “If you intend to buy any securities – such as stocks, bonds or mutual funds – it is important that you understand before investing that you could lose some or all of your money. money “.
However, she noted that the reward for taking risk is the potential for a better return on investment, “if you have a long-term financial goal, you are likely to make more money by investing carefully in categories riskier assets, such as stocks or bonds, rather than restricting your investments to less risky assets, such as cash equivalents.
On the other hand, Ms. Ellis noted that investing only in cash investments may be appropriate for short-term financial goals, the main concern of people who invest in cash equivalents is the risk of inflation, which is the risk that inflation will overtake and erode returns over time. time”.