The first rule of money is “never spend all you have on what you don’t probably need right now”. For some individuals, the secret of staying above the poverty margin is to invest their earnings into a suitable pastime that will bring more money to them. While for some, it is to save and save not minding the current inflation, and dwindling value of the Naira.
A few years ago, precisely between 2007-2008, the buying of shares suddenly became a big deal as far as investment in Nigeria was concerned. Many people quickly bought into it. Not because they really wanted to invest, but as a sort of status symbol or just to belong and have something to brag about among friends.
Lots of people had no business investing in shares because they had little or no information about the stock market. Yet, they all went to dig into their life savings and invested it on shares. A few months later, before the end of 2008, the stock market capsized.
Eight years down the line, the stock market seems to have resurrected. Lots of people still invest in shares. Unfortunately many of such people cannot account for these shares. Every year, there is a huge mass of unclaimed dividends lying fallow. Many people are not aware that they are entitled to dividend payment or profit sharing. That is a very bad way to invest. The fact that everybody is investing in a particular line of business doesn’t mean it’s the right one for you.
Only few learned people have the temerity to follow up on their share investment. Such people are still reaping from it till today.
Now, most people shy away from investing because of situations such as the one exemplified above. It is not only about shares but in everyday business.
For instance, I invested some money in a friend’s business a few years ago. I trusted this guy because he was also my ‘fellowship brother’. Stupidly, I didn’t look at the signs. A few months later, the young man disappeared, and I have not seen him up till now.
So many people have equally had similar experiences, and worse. Some people give money to their family members or friend to help them invest in a line of business. In little time, problem starts. These investments usually wind up before they have even kicked up.
Is it then safe to focus on saving money?
Over the years, the value of the Nigerian currency has witnessed a massive decline in value. While fifty thousand naira meant a lot of money ten years ago, the same cannot be said of now. Saving one hundred thousand in your bank account till next year isn’t wise either. I mean, judging by the way things are going, it would have diminished in value to the worth of around twenty thousand by then.
Trailing behind this is the fact that, you can easily dive your hand into those savings anytime an unforeseen situation comes up. How many people are disciplined enough not to touch their savings when they have cravings? Few, very few.
Investment is still the way to go. In fact it is the best thing that can happen to you as an individual.
Rules Of Investment
1) Never invest in a business you have zero interest
This is a recipe for disaster and this is why most investments fail. Do not invest in real estate if you do not have interest in properties, taxes and estate development. It will be an exercise in futility. What drives you when the times are hard?
2) Never join others to pool resources together for an investment if you aren’t experienced
Joining a group of friends to invest in a certain idea or project when they clearly have an upper hand in terms of financial knowledge, information and network put you at risk.
3) Never forsake any simple investment idea so far you are passionate about it
If it is about waste collection and you are so passionate about it, you are good to go. Do not forsake that idea. Do not dump it to go into the equity market when your original interest lies in collecting waste.
Truth is, the investment market will forever be booming.
For example, as bad as the world economy is, the real estate market still continues to wax strong. What about the agricultural sector?
In conclusion, your savings may not take you too far. Still, deciding to invest isn’t enough. Knowing the right way to invest is the way to go.
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