One thing I have noticed in recent times is Nigeria has a lot of up and coming “personal finance gurus”! I put that in quote because I am of the suspicion that many of them are merely just getting by based on copying American Finance personal finance models. I am going to go for the jugular here – please feel free to express your opinion on this. I am dripping with sarcasm and full of irritation today.
50 cents or as my mother calls him (fidy cents) was asked to Pay Rick Ross’ baby mother or ex wife a settlement for a sex tape he circulated. Fidy runs to file for bankruptcy – a Nigerian finance coach got on instagram and had the uneducated nerve to advise youths not to live flashy lives because fidy cents is now broke because he filed for bankruptcy. Uhm Young lady if you don’t understand a system, google is your friend- even Donald Trump has filed for bankruptcy- it doesnt mean you are piss poor and eating bread for breakfast, lunch and dinner (Ms. Lily sorry😅), it means you are unable to meet particular obligations or you need to be protected from certain things or debts. A simple google search would have told her that – I simply unfollowed her for disseminating unreasonable information.
Nextly (I don’t know if it’s a word, but I am using it), people are coming on board with the savings formulas the likes of Suze Orman created way back when…? The save 20%, invest 60% type formulas. The truth is this works for America- my finances were straight when I earned in USD – even when I lived in the Middle East i had spreadsheets – expense trackers, investment trackers etc. In Nigeria these things arent quite reasonable…outside of the apt advice of not spending beyond your means everything else is like operating in a lunatics jungle.
So you are saving for xyz, guess what when you went to sleep you had N1 million at N237/$, when you woke up – it had moved to N247/$..for an import and forex dependent economy – you just woke up how much poorer? Your money lost 5% of its value in one day – sorry how much are the banks paying on time deposits? Last I checked the rates hovered around 15% per anum- do the math – what you could lose in 3 days it would take you the entire working year to gain, if it doesnt continue on a losing streak. So the big question which these gurus are unable to answer is where you should invest your money for it to make any sort of sense…we have not added on inflation and the associated impact on your increasing cost of living, stability in income (it wont go up- but you must dedicate the same amount of effort to it).
Everyone shouts about buying real estate- real estate is not always liquid- have you ever heard of folks trying to sell property and done it in 2 weeks in Nigeria? Rarely. People tout land in Lekki which is more like EPE- nobody is likely to buy that off you for a few years at a minimum. Forget central areas even if you own property in VI- offloading is hard and finding tenants in the current market is harder because of a broader devaluation of currency and lower funds in circulation literally.
Oh have you considered the stock market? Follow the trends and many of the companies have flawed fundamentals. What makes a stock worthy in Nigeria isn’t always the actual work they are doing – sometimes its premised on relationships. A certain bank traded around N4 to N5 in 2013 due to its MD or Chairman’s relationship with lagos State and FG. This bank isnt even holding at N3 as we speak. Is that where you want to put your liquid assets? Or is it transcorp you want to buy? Even if you buy Nestle kwa, many foreign investors are still jittery about the stability of their funds in the Nigerian market and many are still playing wait and see to invest best on what policies the new administration will bring to the table.
The only current fix for personal liquidity in the cluster f*ck called Nigeria is to save in dollars or pounds- oh you can achieve that with a domiciliary account – but oh i forgot- you do have to go and change the money at the black market rate and bring it to the bank. The same bank won’t convert or transfer money from your Naira account to a dollar or Pound or Euro account. Oh and sorry I forgot to mention the Bank who has red as their main color for instance charges you N5,000 to get a debit card and 5% commision to spend your own hard earned money ($, €, £). God bless you if you have accounts overseas or dual citizenship – run and quickly go and open an account because at least inflation in that country won’t move as fast as the interest rate you are receiving on your money. If you live in the West- its likely the Naira will be further devalued- you can bring in your dollars and feel richer.
My goal is not to quite answer questions – its partly to shame some of these “gurus” without calling them by name, and another is for someone – anyone to make suggestions on how best we can manage to go to sleep and not wake up poorer in the morning.
In an economy where our currency is in freefall, our inflation is high and we are heavily dependent on imports and oil exports aka the almighty dollar, how can we hedge our liquid assets? I am not trying to be wealthy off my liquid assets- but please maintaining the same level of purchasing power is important for a dignified existence.
If you need advice on personal finance I can’t recommend anyone – Maybe Nimi Akinkugbe coming to think about it. She seems very good- but I am not sure she tackles the whole thing i have stated above. If you want the American Model – Suze Orman; any of her books is a great place to start, but remember no one is giving you a 6% student loan or a 10% mortgage or bundling a well packaged FDIC insured financial assets portfolio for you- neither is inflation under control and a currency band in place. She can help you build a good relationship with money if you already don’t have one.
You can still win that Phone credit HERE