Sharp Daily
No Result
View All Result
Thursday, August 14, 2025
  • Home
  • News
    • Politics
  • Business
    • Banking
  • Investments
  • Technology
  • Startups
  • Real Estate
  • Features
  • Appointments
  • About Us
    • Meet The Team
Sharp Daily
  • Home
  • News
    • Politics
  • Business
    • Banking
  • Investments
  • Technology
  • Startups
  • Real Estate
  • Features
  • Appointments
  • About Us
    • Meet The Team
No Result
View All Result
Sharp Daily
No Result
View All Result
Home Investments

Evaluating the best methods for acquiring assets

Faith Ndunda by Faith Ndunda
December 20, 2024
in Investments
Reading Time: 2 mins read

Most individuals in Kenya acquire primary assets through cash or loans. Deciding on the avenue to consider depends on the financial position, long-term goals or risk tolerance of an individual.

Acquiring assets using cash implies that there are no debt obligations. One is exempted from the regular monthly repayments, interest rates and financial stress associated with debt repayment. With cash, one retains full ownership of the asset without interference from lenders. Ownership control is vital in both business and personal assets. Obtaining assets eliminates the risk of default which often may result in financial or legal consequences.

The downside of using cash to acquire assets is reducing one’s liquidity. With less liquidity, there is less cash for usual expenses and emergencies. For businesses with limited or fluctuating cash flows difficult since it is essential in the day to day running of the business. Cash used to acquire an asset could be used to acquire an asset with higher returns. For instance, using cash to acquire a vehicle or property with no returns may not provide the same returns as stocks or business ventures. Paying for an asset in cash means waiving the ability to use debt to acquire more assets, reducing the extent of investment.

Acquisition of assets through loans lets buyers acquire larger and more expensive assets that could otherwise not have been afforded through cash only. It can be advantageous in investment ventures like real estate where loans allow for fast growth and high returns. Taking loans also preserves one’s cash flow for other investments and operational costs. It is especially advantageous for businesses with scarce cash flow. Taking loans is key in building a positive credit history and credit score provided one does not default on repayment.

RELATEDPOSTS

Turning liabilities into assets: A smarter approach to managing your finances

January 13, 2025

Securing your golden years: The importance of asset diversification

April 19, 2024

Loans however are subject to fees and interests that eventually increase the cost of acquiring assets. In Kenya, the interest rates and processing fees can be high especially for personal loans. If the borrower defaults on the loan they risk losing the asset and possibly facing legal action and this impacts their financial situation. For assets that do not generate returns, the loan repayments cause financial strain limiting long-term growth.

It all depends on the individual circumstance on whether to choose loans or cash to acquire assets. Cash reduces risk and provides stability but loans provide liquidity and leverage. Financial position, value of assets and risk-tolerance is a key guide in making this decision.

Previous Post

Ministry confirms Grammy partnership for Africa Academy HQ in Kenya

Next Post

East African Portland Cement denies shutdown reports, assures normal operations

Faith Ndunda

Faith Ndunda

Related Posts

Analysis

The hidden cost of outdated economic statistics

August 7, 2025
1049795356
Analysis

Maximizing Your Pension Contributions

August 1, 2025
Analysis

Kenya’s Interest Rate Cut: A Turning Point for Growth

July 31, 2025
Analysis

Transferring Your Retirement Benefits Between Pension Schemes in Kenya

July 23, 2025
Investments

Invest in stability: introducing the Cytonn USD money market fund

July 18, 2025
Analysis

Park your money where it grows: Why more Kenyans are turning to Cytonn Money Market Fund

July 16, 2025

LATEST STORIES

Segregated Pension Schemes in Kenya Q2’2025 Performance

August 8, 2025
Asset allocation dividing an investment portfolio among different asset categories.

Building a Retirement Portfolio in Kenya

August 8, 2025

Steps banks can take to align with fair lending practices

August 7, 2025

The hidden cost of outdated economic statistics

August 7, 2025

EABL posts 12.2% profit surge, strengthens regional footprint despite rising illicit trade

August 1, 2025
1049795356

Maximizing Your Pension Contributions

August 1, 2025

The functional role of narrative in financial markets

August 1, 2025

Tanzania’s protectionist shift and what it means for Kenyan entrepreneurs and regional trade

July 31, 2025
  • About Us
  • Meet The Team
  • Careers
  • Privacy Policy
  • Terms and Conditions
Email us: editor@thesharpdaily.com

Sharp Daily © 2024

No Result
View All Result
  • Home
  • News
    • Politics
  • Business
    • Banking
  • Investments
  • Technology
  • Startups
  • Real Estate
  • Features
  • Appointments
  • About Us
    • Meet The Team

Sharp Daily © 2024