How Naira Failed Me And The Challenge of Building Generational Wealth in Nigeria [video]

When I began work as an entry level banker in Lagos, I developed a personal wealth building plan: 45-20-20-15. When I received my salary, 15% was used to buy stocks in the Nigerian stock exchange. I did simple statistical modelling and was convinced that with small equity appreciation and dividends on those investments, for every five years worked, a two-year free bonus on income would be added. I was not an engineer for nothing; I wanted to engineer an independent financial future!

But you know what? Because of the continuous devaluation of Naira, what would have turned out as a great idea failed. When I made those investments, Naira was exchanging around the range of N100/$; today, it is N1500/$ making tons of dividends I still receive yearly largely useless. I am invested in most companies in Nigeria because I bought anything on sight then.  Of  course, nothing like any more as Naira has messed up the party!

That takes me to a message: Nigeria needs to stabilize its currency. Otherwise, generational wealth will be impossible for middle class families to build in the capital market. If what I did, which I have taught in Tekedia Mini-MBA, was done in America, I would have a bestseller right now. But you know what? I destroyed REAL value by buying those stocks because the Naira shifted the equilibrium in the middle of the game.

And that takes me to the conclusion: Nigeria’s greatest leader will be the person who can stabilize the Naira for years!

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