Way to Wealth: Investment Opportunities for Nigerians

Way to Wealth: Investment Opportunities for Nigerians

By David Alade

Though I have written a couple of times about investing in the equity market, I understand quite well that the dynamics and volatility that drive the ecosystem of stockbroking won’t allow everyone to benefit from the promises it offers. To make up for this inherent limitations, and still help you to grow your wealth, in the following paragraphs, I will be examining “safe” and “less risky” investment opportunities an average Nigerian can leverage to grow wealth no matter how much you have to start with.

Mutual Funds

Many people do not know there is a stress-free way of growing wealth, a mutual fund offers such itch-free, secure and reliable opportunity. Mutual funds are investment vehicles managed by professionals trained to do so. Currently, an average fund in Nigeria returns over 10% per year, the implication of that is when you invest say N200,000, you will expect to cash out more than N220, 000 at the end of a 1-year cycle. When you factor in the principle of compounding, you will realize that 10% yearly is a lot in return.

How much can you start Mutual Fund with?

You can start with as little as N5,000. A lot of fund managers now receive that low as minimum capital. Currently, we have ARM, Cowrywise, StanbicIBTC, and more investment houses playing in this space. Reach out to anyone or more of them to make adequate enquiry about modalities and return.

Treasury bills

Treasury bills (TB) are a way of investing in government activities. Because the government is not rich enough, it tends to always borrow money both domestically and internationally. One of the ways it pursues its domestic borrowing is via TB.

How do TB works?

Unlike any other investment vehicles, TB is one investment vehicle that pays you your interest (return) upfront from day one of your investment. That is, if you invested N1m and the interest is 10%, on day zero of your investment, you will receive N100k as your interest, implicitly, you are only dropping N900k on day zero. On the expiration of the investment, you get your N1m investment back. Don’t worry it’s not that complicated. Good to mention as well is that this investment is regarded as risk free, in other words, it is one thing you can invest in and you can be sure you will get both your interest and capital.

How can you invest in TB?

So far, I-invest App by Sterling Bank is one Fintech solution that has been able to efficiently democratize access to TB investment. You can download it and start using it. You should note that TB on I-invest requires a minimum of N100k as a starting capital. Yes, N100k as minimum.

AgricTech Crowdsourcing Platforms

The rise of technology entrepreneurs has further increased investment opportunities available for an average Nigerian.

Crowdsourcing is a way of aggregating funds from different sources on a micro-scale, targeted towards investment on a much bigger scale than what individual micro fund would have been able to do.

What AgricTech entrepreneurs are currently doing is investing massively in Nigeria agriculture value chain, but these investment opportunities are opened to you and me via their different platforms. Currently, on top of my head, I can mention FarmCrowdy, Farmfunded and ThiveAgric as few of those avenues.

Risk and Return

While so far no one has reported any issue of nonpayment of capital and interest of the invested sum in any of these platforms, the risk of such exists. Please read all terms and conditions before investing and understand what you are putting your money into.

On the flip of the return, it’s probably the juiciest you can find in the market, currently returning sometimes up-to 30% per year on your investment. When you couple this with the fact that there’s not been any default news so far since the creation of the ecosystem, it’s a good thing.

Real Estate

There’s has been some crowdfunding opportunities in this space as well and return can be great if well managed. However, unlike all the above that I’ve talked about whose return can be realized within a 1-year cycle, real estate does not follow the antecedent. Yes, it takes more than a year to realize the value of an investment, but can worth it in the end.

I’m not so familiar with this space, but I’ve had discussions with players in the ecosystem. I caution that for anything you are putting your money into, you must conduct your due diligence yourself, don’t rely on what someone told you.

I have written so far on things you can invest in to grow your wealth, now go and do likewise. Save, invest and grow your net worth.

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