“Sticks and stones may break my bones but investment excites me.”
Those are the opening lines to a song I completely made up. But it’s also how I want my ideal relationship with money to look like. Each payday, I keep wondering “What are the investment opportunities for me?” “When will my enjoyment return from war?”
Maybe it’s the new year, maybe it’s my new age, but I decided to talk with someone more financially sound than I am about money and investment opportunities. Here’s what I learned:
Disclaimer: This is not to serve as a religious text but more to provide a way to look at approaching this issue one God-when at a time.
Charity begins at home.
The first takeaway from the conversation is that you should invest in yourself.
This doesn’t necessarily mean you should take a course or get an additional degree. The investment can be as little as reading a book on a regular basis, networking (Detty December) more to increase your social capital, or simply putting yourself in spaces that encourage growth.
Start where you are.
The second takeaway, although unpopular is that you should develop a savings habit. No matter how little.
Mad oohh Sorry, preposterously bonkers, but there’s inflation. How we go take do am?
After the discussion, there are three ways I have decided to think about this:
1) An investment that isn’t affected by inflation.
Think of foreign currency: “*One million dollars, elo lo ma je ti ba se si Naira?” whether you buy dollars from mallam and put under your bed or you use Piggyvest or Cowrywise, it is a good place to start.
To read more on this, click here.
To learn more about this, this is a good place to start.
2) Put money in something that gives returns above inflation and Nigerian anyhowness.
Things like government bonds, treasury bills used to be the preferred tool. Although the return rate is currently below inflation, a six percent return from treasury bills is better than a zero percent return from leaving money in the bank. T-Bills and government bonds are also relatively easy to learn about.
3) Try to learn about the stock market.
While this is also uncommon advice, it helps to think about this long term. This is more difficult to understand, riskier, and gives higher returns long term. So, learning and testing the waters with little sums can prepare you for higher stakes. You should only consider this as an extremely long term project and not short term in any way.
Ahan. Is that all?
Also, alternative investments should be considered. Depending on where you fall, this includes anything from bet9ja to agriculture and even transportation.
You should only invest your money in anything you can verify. If it sounds too good to be true, then it isn’t.
For an extra source of investment in Nigeria, make sure you verify the background of the people, where your money is going to, and how your money will work for you. If you can’t verify these things, take a step back and regroup.
Wow. This was long, abeg summarize
- Invest in yourself as this is the fastest way to increase your earning power.
- Develop a savings habit because learning to pile money increases how much you can invest with and thus increases your returns.
- Invest in things above inflation, not affected by inflation, and learn how stock works. The last part is important for long term planning.
Mahn, this was long and I don’t know if anyone got here. If you did, don’t forget to show off some of your newfound knowledge to your friends.
*One million dollars, how much is that in Naira?