The present economic crises in Nigeria, as a result of bad economic policies and Naira devaluation have direct impact on savings.
The economy is projected to grow at at 2.5 percent this year, while population will increase at the rate of 3.5. This is counter productive, but understanding the tips of smart investment will surely be useful to your financial goals.
The economic projections and recession affects the amount of money you are able to save within a particular period of time. But, you need to be resilient and determined to keep afloat.
Let’s assume you have saved some reasonable amount of money, you stick to your monthly budget and get your income projections right. Then, you’re good to go, to invest those cash.
“A lot of people when they first get started, they feel it’s overwhelming,” says Allan Small, senior investment adviser with DWM Securities. “But it’s not as overwhelming as it may seem.”
Sadly, in this part of the world, we keep our money in the bank without thinking of ways to invest. This sort of ancient mindset needs to changed.
As a newbie, here are some smart investment tips for you:
Be Knowledgeable
You don’t venture into something you know nothing about. There are tons of investment out there, but you need to identity few of them that interest you.
Alternatively, you could speak with someone who is knowledgeable about investments to advice you on what to do.
“Once you understand all the different types of accounts, the pros and cons, then you’re more educated to make those appropriate decisions” says Small.
Mutual Funds
Joining others to create mutual funds is a good investment tip for newbies.
For instance in Nigeria, mutual fund are operated by investment arm of most financial institutions. And are usually operated by investment firms made up of people who understand money and capital market.
“The best way to describe mutual funds is it’s a basket of investments.
Everybody puts any amount of money they want into this basket. The average mutual fund basket might have in it $500-million or $1-billion.
There’s this mutual fund manager whose job is to decide where to invest this basket of money,” he says.
The juicy part of investing in mutual fund is that, a large amount of money is churned out and shared annually or bi annually depending on the prospectus.
Start Today to Invest
It is not too late or early to start investing. Keeping your money in the bank isn’t a wise decision at all. Your money should be generating more more rather than leaving it for the bank use.
The compounding rate of investing your money is quite beneficial. Its quite simple, the more you invest, the more you make.
Apparently, there are going to be hurdles of setting out that particular amount of money for investment. You should always think of long term of investing your money.
Invest on Familiar Things you know About
It is not advisable to invest in a market where you are not familiar with its product or service. When you hear term such as “price of stocks has fallen”, you wouldn’t be taken unawares.
“If you want to get your feet wet and try it out, buying Apple shares because you own the iPhone, the iPad, the iThis and iThat is a great strategy,” Small says.
“But you have to separate that from more serious investing. If you are someone who is in their early 30s, you’re looking to perhaps buy a house. You want to invest more for the long-term where you’re investing with a certain goal in mind.”
I hope this was useful, let me know your thoughts on the comment session.
