Where to invest N100,000 now
Life can often be difficult for people who can barely make ends meet with their income, especially in a harsh environment like Nigeria with high inflation and a currency prone to devaluation.
According to a recent World Bank report on the level of poverty in Africa’s largest economy, more than 10 million Nigerians could be pushed into poverty by the economic effects of the COVID-19 crisis alone and with this, the national poverty rate is expected to drop from 40.1% in 2019 to 45.2% in 2022, implying that 100.9 million Nigerians will live in poverty by 2022.
READ: The best savings app in Nigeria with good interest rates
Despite this daunting prospect, wealth can be built on certain time-tested habits and principles, such as living below one’s means, regularly putting money aside, and curbing frivolities.
To go further, once an individual has spare capital to play with, they can start investing.
Nairametrics surveyed investment experts, entrepreneurs and business leaders, asking their opinion on what assets they would invest in if they had 100,000 naira. Their responses were as interesting as they were varied – ranging from investing in certain financial market instruments to investing in skills training.
READ: How to survive Nigeria’s skyrocketing inflation rate
Abiodun Keripe MD, Afrinvest Research & Consulting
1) The FGN Savings Bond
The Savings Bond is issued by the federal government and designed to allow low-income people to help fund government infrastructure development initiatives while earning interest. The minimum subscription amount is 5,000 N with a multiple of 1,000 N in subsequent additions. The bond is issued monthly by the DMO and is available as 2-year bonds and 3-year bonds. As of May 2021, their coupon ranges were between 8% and 9% per year. These bonds can be purchased through a licensed brokerage firm.
2) Mutual funds
This is a good option for an investor looking to invest for a short period. These funds are set up to pool the financial resources of low-income people to invest in asset classes that otherwise would have been unaffordable for this set of investors. These funds give investors a slice of a bigger pie and are managed by a professional fund manager. The funds pay decent interest above the 90-day Treasury bill rate and are available from regulated asset management companies. An example is the Afrinvest Plutus Fund.
3) High yield savings plan
This is very similar to traditional bank savings, however, it offers higher interest rates than banks. This product is offered by fintech platforms where you can set up a savings plan that allows you to earn over 8% per year while your money is working for you. With this plan, you define your preferences and your savings period. You also get flexibility in terms of liquidation in the event of an emergency. Also, there is no limit to how much starting quantity you can start with, as it goes as low as N100.
4) Agriculture-based crowdfunding platforms
This is another viable investment for low income earners. It offers a higher interest payment above 15% and up to 40% in some cases. However, it carries a higher risk than the three mentioned earlier. This type of investment is usually backed by an agribusiness company, as such a loss to the business can affect the interest that investors would receive.
Thelma Ugonna Ohiri-Anyanwu, CFA, banker
If I had an N100,000 right now, being a long term investor looking for a higher rate in this low interest rate scheme, I would invest a percentage of the fund, with an agrotech company that is currently giving returns decent 15% – 32% for a 3-9 month investment cycle. The balance of the funds will be invested in the stock market as there are currently some valuable companies with good prices resulting from the market downturn. I would hold these stocks for a minimum of 6 months to 1 year to allow the market to recover from the current decline.
Alternatively, with my future dollar bonds and the current pressure on the naira, I would convert the funds to dollars and invest the dollars in the US stock market using fintech investing apps like Bamboo, Passforlio, etc.
Silas OZOYA Founder / CEO, SUBACapital
For middle and low incomes who are cautious or averse to risk and who wish to invest 100,000 N in a relatively secure investment, my choices would be:
First, Agriculture – While this may seem like an obvious answer from me due to my role in this industry sector, investing in agriculture is relatively safe and sustainable, especially when managers have a chain of active and profitable value of production to trade in commodities and are invested in staple foods (which are currently in great shortage, by the way). So with a portfolio of N100,000 my first choice would be farming.
My other choice would be rental real estate. As shocking as it may sound today due to the size of the portfolio, in today’s world there are some FinTech applications that have made it possible to invest in rental property at relatively low entry levels.
So, with this N100000, a medium or low income potential can take advantage of these types of fintech apps to invest in rental real estate for monthly or quarterly returns given the semi-stable nature of real estate investments as well as the risk. way. exposure.
These are my “2 kobos” that middle and low income earners can invest N100,000 in right now.
Chinedu Obidiegwu Business Development Manager, Luno Nigeria
The first thought that comes to my mind is the most important investment advice I know of; “Invest in what you understand,” which is the wisdom of the popular book I recommend, “The Richest Man in Babylon”.
As the risk is generally classified as low, medium and high, I think self-investing is important enough to be self-sufficient. Investing some money in skills development is my decision, as it improves the potential for future income. This should be mixed with an investment in what you understand, as a rule of thumb, and I’ll be happy to allocate 40% here.
The remainder can be divided into equal ratios of 20% of low, medium and high risk companies. Government-backed instruments, a little side hustle, agency banking, agrotech platforms, and cryptocurrency come to mind. I generally like to make sure I get on top of the inflation rate on any investment. It is not financial advice.
Taiwo Megbope, Head of Equity Research, Co-Founder of Investor Hangout
N100,000 is now around $ 200. A 100% return on investment is difficult to achieve anywhere and especially for low income earners – remember the higher the expected returns, the higher the risk.
My opinion is that the investor should invest in the acquisition of digital skills.
The world is currently in a period of transition and new technologies are developing every day. Investing in acquiring a digital skill might be one of the best ways to invest $ 200 (sorry N100,000) today.
Warning: Please note that these are opinions and should not be construed as investment recommendations or financial advice from Nairametrics. Please consult your financial advisor for professional advice.