Invest or Save?

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.

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18 Comments on Invest or Save?

  1. You’ve said it right!
    It’s almost frustrating trying to work out steady profitable investments in Nigeria. Our economic situation is quite peculiar.

    Even the time deposits don’t give 15% no more o, Pynk! I went to banks yesterday to enquire about best options, the most at this time is 8% because of the Naira- dollar situation. Now, the interest will still be taxed o.
    Treasury bills and FG bonds, same currency value challenge.
    Mutual funds is one I’m not so sure about.

    The real estate isn’t even so liquid like you pointed out. I know about a few plots in good be enough places that haven’t actually appreciated in value for over a year, now add the difficulty in getting buyers to that.

    Two things that are working so far are
    i. personal loans and interest: High risk though!
    ii. trade in dollars- black market exchange then take to the bank. Even with that, I think it’s even more profitable if you earn in dollars, watch closely for fall and rise in exchange rates and trade fast.
    Though I must add that investing for long term benefits still has better advantages.

    Now with our finance instructors, the property thing to do, is to make sure you read and understand the true needs- select what is applicable.
    * don’t spend over your income
    * make list of expenses + give room for inflation
    * keep improving saving habit even if you don’t know what to invest in
    * invest for long term plans
    Anyway, one can only keep trying.


    • Lounge, its like we decide to be happy in Nigeria and its short lived. As for investing the options like you have pointed out are few. That personal loan business while the returns seem attractive – it’s a bit too high risk for my palate. We aren’t exactly the most trustworthy and honorable bunch as Nigerians.


  2. LOL! I actually had to refrain from shaming this finance guru, like excuse me- do you watch Tv? Fifty cent is so fucking petty. Trust me effn vodka and Sms audio are fine. He wanted to get out of paying please stop saying rubbish. But I didn’t say anything because I’m learning that – minding your business is good for the soul. I’m wary about anyone who comes to tell me how to spend my money when they aren’t aware of my obligations and how much I earn. I balk when ” finance guru’s” say things like no matter how little you earn save something, because in Nigeria there is nothing more certain than an unforeseen to come and finish your money.

    Personally I would abstain from putting my hard earned money in any Nigerian bank for now. If one has liquid cash, one of these things to do- which I currently do, is to speak to your bank account manager to introduce you to someone who does a sort of business that needs instant injection say 1m, and the returns are 50k or so. The terms are flexible, in a year you make 600k from the 1m.

    It’s crude. The risks are so high, you literally have to take the persons name to pastor because -Nigeria. But then again no risk, no reward.

    Finally you guys need to stop buying into this rubbish land in Lekki that ends up in epe. Please stop. You are better off looking for property and taking out a mortgage. If you are in paid employment, look into the National housing fund, the rates they offer are really good not like the PMi’s that fleece you off.


    • Mnnn Ore pls tell me more about thsi business investment thing I keep a minimal amount in Naira but its always just sitting there (I keep all my money abrooad) But I woudl lie t find something to d with my naira iko . Sometimes I put in bonds for 3 months to 6 months but interested in exploring other options


    • Please Ore expatiate on this National Housing Fund scheme, I’m about to open an account with an investment bank, the rates are low but then again better than the rates banks are offering.


    • Oreoluwa – is minding our business always the best option? I mean there may be ways the person can be called out. I understand wanting to be a finance or life coach, but please learn first. If i counted the amount of personal loans that have not been repaid – I would have more than enough start up capital to run my creche/ Nursery school business for 2 years. So uhm as for loans – one bitten, shy for a lifetime.

      As for lekki lands – its not a case of don’t buy into it – its just not quite a valuable asset in the next 3 to 5 years. A longer term view sure, but nothing immediate about it.

      National Housing fund has a cap, I doubt they would be willing to give a mortgage for a property worth more than N20 million and frankly speaking unless you are going to Sangotedo, or Mowe its hard to find anything.


  3. The so called finance gurus always succeed in deceiving people because there are always legions willing to be deceived. I can jump out today and claim to be a finance guru and in the midst of my nonsense speaking, I’ll still have followers who believe all that drops out of my lips. People don’t like thinking for themselves. They prefer putting their trust in someone they believe is smart especially when you have a catchy title. Why do you think lots of fraudsters attach ‘pastor’ to their name? It gains you acceptance and immediate trust.
    As for the buy a land in Lekki thing going on, most don’t even bother checking that it’s truly Lekki. Even environs are called Lekki. God dey!


    • Mrs. Fab, the thinking for ourselves may be a generational thing.. could that be possible? My thing is when its about my money or my health I question literally almost everything. And if i still don’t understand I will ask you to explain it to me like I am 5 years old.

      As for the pastors – they wont thrive unless people are feeding into their BS which unfortunately people are. Laziness has caused people to stop thinking. Imagine my surprise when a counselor at a church told me my husband and I were not properly married because we married by an Anglican Priest and at the registry and we would have to remarry in the church. I laughed in his face oh. I was like MBANU God didnt say all this one so just negodu.


  4. All this finance Gurus in Nigeria know an average Nigerian is lazy and will just read and not research cos the person providing the info is a said Guru,so they just feed us whatever they want
    I need to read more finance books thou lemme start with this Author you named


  5. Miss Pynk, always coming through…. insightful piece.


  6. Spot on Pynk. Honestly investing in this country is crazy. How can one save when inflation is killing us.

    paint bucket of tomatoes is 2500 o, I usually buy at btw 400 to 600 per bucket from mallo’s.

    House keep money has jumped from 70k to 100k per month.

    How much is the salary. Please I need business ideas to make extra income. OAD, please let’s talk about this soonest.

    Bonds don’t offer much rewards. I’d like to explore the angle mentioned about investing in business that yields fair rewards.

    Who can give insight into the National mortgage thing. Does it work?

    Details please, while I go do my own research.


    • Clare – you and me both are looking for income generating ideas. But when you even start to think about half of them, one is put off. because the Nigerian factor is like a black cloud hanging over whatever business idea it is you come up with. Sometimes I am just tired. Maybe I should go to tailoring school at this rate.


  7. Ikoya Adewale // July 23, 2015 at 20:47 // Reply

    Dang!!! so lost here…didnt know the direct impact of exchange rates on our daily lives as mentioned above…..really need to improve my knowledge about money and finances..


  8. Chrisyinks // July 24, 2015 at 08:02 // Reply

    Nice one. really learnt a lot.

    I must remark that mutual bonds seem to be doing better than other investment strategies. Investing in stable businesses where you as an investor can have a say in the business strategy is another option as it gives one the opportunity to control the usage of capital and potentially determine one’s reward (interest).


    • Chrisyinks – business with other people? In this Nigeria? Sometimes till you get your fingers burnt some things seem like a great idea. As for mutual funds – i worry about their security as I also worry about the greater regulatory environment in Nigeria.


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