How To Save And Invest Money In Nigeria
I used to think that keeping money in my box was the only method of saving money. As I grew, I began to think just keeping money in the bank is the ultimate. Following growth and financial literacy, I have come to understand that it might not be the best financial decision.
Saving is defined as keeping money aside for future use rather than spending it all at once.
Investing, according to Investopedia is the act of allocating resources usually money, with the expectation of generating an income or profit.
A simple analogy for investment is planting a grain of corn and reaping a plant containing 5 or 6 cobs.
It is absolutely possible to save and invest your way into wealth. All it requires is the right financial knowledge and consistency.
Related: 20 ways to save money every month in 2020
How to save and invest money
Buying stocks is a good way to save and invest money in Nigeria. People have been misguided over the years that stocks are only for the rich and have lost out on juicy opportunities. The rich get richer because of financial literacy.
According to Investopedia, a stock also known as equity is the security that shows ownership of a part or fraction of cooperation. Stocks are mainly sold through stock exchanges.
The purpose of selling stocks buy companies is to raise funds to enable the smooth run of the business.
The person who bought the stock is referred to as a shareholder.
With as little as 5,000 naira, you can acquire stocks or shares in several companies. Stock trading is akin to killing two birds with one stone because you are saving and investing at the same time. With the maturation of the stock, you can make a profit of more than two times your down payment.
2) Mutual funds
With mutual funds, it becomes easy to save and invest money in Nigeria.
A mutual fund in layman’s terms is a collective Investment scheme or program set up by a money manager. The manager stands as a broker, gathers money from different individuals, and invests it into profitable financial schemes.
To use mutual funds, you do not have to be very informed about the financial market. The financial manager can stand in for you and also offer financial advice where necessary.
The average returns of mutual funds gross about 15%.
Some of the best mutual funds include Stanbic IBTC Equity Fund, ARM Aggressive Fund, United Capital Balanced Fund, FBN Money Market Fund, United Capital Money Market Fund, Stanbic IBTC Money Market Fund, ARM Money Market Fund, Cordros Money Market Fund, and Coronation Money Market Fund.
3) Online savings and investment applications
Technological advancement has made it easy and has shown how to save and invest money. Several online applications exist and can be used to save and invest money from the comfort of your home. It takes away the hassles and stress of going to a bank, queuing up, speaking to financial managers, and all.
Online savings applications can be connected to your checking account, where deductions are made on a weekly or monthly basis.
Examples of such online applications include
It is an automated online and Investment platform dedicated to helping Africans achieve financial literacy. Saving with Sumotrust earns you a yearly mouth-watering interest of about 10-15%. Saving with Sumotrust takes away the frustrating bank charges and hidden fees.
It was founded to encourage the poor rate of svavings and investment in Nigeria, especially amongst the younger age group. Sumotrust has a high interest rate and one can join with as low as 100 naira. This top online investment platform is open to people from all walks of life and occupation ranging from freelancers, to students, civil servants etc.
One of the good features that made SumoTrust number one on this list is its high taste for customer’s account security. Even if your Sumotrust account gets hacked, the hacker won’t be able to change your bank details and withdraw your money, a KYC form will be needed to be submitted before the approval to change bank details can be given. Sumotrust as the best digital savings platform also uses a powerful blockchain security protocol to protect accounts that has it activated.
It is also on a quest to raise 1 Million African entrepreneurs in partnership with Entrepreneur Platform to access discounted-free Online Business Academy for its users and African business forum to collaborate and work with like minds in building better and sustainable businesses.
With Sumotrust, you also get access to various business leaders in different industries at discounted fees (for business consultations) to help you grow and scale your business.
Even though you can use Sumo Trust to save for any reason (Business, travel, school, emergency funds, school fees, shopping, property, etc) it’s core value is tailored to helping young Africans build wealth with little efforts.
Sign up and start saving with Sumo Bank at Sumotrust.com
This is another online savings platform in Nigeria. It helps individuals achieve financial freedom by allowing you to save responsibly and on the go. It offers up to 10-15% interest on savings yearly and almost up to 25% interest in Investments.
There are options available for co-investments with other Piggyvest users. With Piggyvest, you have the right to decide on your investment of choice and engagements. The application also has a feature for the best saver of the month which spurs other individuals to want to save more.
This is an online Investment platform that enables people to purchase securities and other bank securities without the aid of a broker. It has a dashboard that helps customers track Investment portfolios and create a way for retail investors to save money.
The online Investment platform also offers attractive interest rates. Examples of investments that can be done using the platform include Eurobond, which are Investments issued in a currency not native to the issuer’s home country.
Other examples are equities and treasury bills.Getting started on the platform is as easy as just downloading the application, register, log in and invest. Visit here for more information.
This is another great online Investment platform good for saving money and making Investments. Saving money on this platform can exist under different plans. It includes the regular savings where money can be saved on your own terms for up to three months. Life goal savings are great for long term plans and can last for up to one year with great interest rates. Halal savings are plans that exist for Muslims. Investment plans also exist.
4) Treasury bills
Another great method to save and invest money in Nigeria is to buy treasury bills. Treasury bills are guaranteed debt instruments by the government to finance expenditure. They are sold through a bi-weekly auction carried out by the Central Bank of Nigeria. Buyers make bids after which the minimum bid is selected.
Treasury bills can be bought through a dealer or can also be bought through the i-invest platform. They are sold for as low as #1000.
The above article has dealt extensively on how to save and invest money in Nigeria.
Saving could be for a long term or short term goal but whichever it is, saving is not just enough. Investing money brings greater returns and provides profit too.
Following Investment, you tend to sail above inflation tides. Saving does not protect you from inflation.
Investment helps you build wealth. It’s a steady process requiring consistency and effort in the right direction. Temptations may arise for the easy way out but one way of sidestepping it is by making financial goals.