How children can grow up to be millionaires: expert

Dar es Salaam. The UTT Asset Management and Investment Services (UTT Amis) has debunked the theory that creating big investors is only through getting big bank loans for investment.

UTT has shown that through compounding interest children from ordinary households can be millionaires when they are aged over 20. UTT marketing and public relations director Daud Mbaga yesterday told The Citizen that Tanzanians should understand that investing in UTT has the benefit of compounding interest and create future millionaires.

“When one invests in any of our five products has a chance of being a millionaire through compounding interest calculations.”

When a father or mother starts investing or saving Sh220,000 for his or her child aged five in the coming 25 years the child will have an investment of at least Sh20.9 million taking into account the fact that the interest is 20 per cent.

“When the same amount remains in the UTT for more than five years, the earnings can rise up to more than Sh100 million,” he insists.

“This figure of accrued collective investment schemes under UTT can easily be proved through downloading a compounding interest calculator from your smartphone on the website.”

Business consultant Gilbert Komba defines compounding interest as medium- and long-term investment in which interest is added to the principal of a deposit or loan so that the added interest also earns interest from it. “It is interest over interest. Imagine, you invest a certain amount of money under an agreed period of time; and when you want to withdraw it you get interest with added interest,” he says.

Normally, interest rates provided by the funds that are owned by UTT are between 10 to 20 per cent. But its unit value is sometimes higher and sometimes low, depending on time spent in saving and the prevailing risks, Mr Mbaga clarifies.