Things You Must Know to Effectively Invest in Nigeria

Many Nigerians know the importance of investment for financial freedom and security. They know the right investment can turn them into an overnight millionaire. While they can equally lose tons of money if it turns out to be the other way. And that is why many of them are very reluctant when it comes to investing money in Nigeria. 

Hundreds of times, people ask me daily how they can invest their money in Nigeria.

“Which investment platform can I recommend?”

“Should I join a particular trending Ponzi scheme business or buy some cryptocurrency and hold?”

“My friend told me there is money in Agriculture and if I can invest one particular amount, I will be getting a particular amount in return. What is your say to this?”

The inquiries are endless. 

Something often struck my mind in all efforts to provide suitable responses to most of these questions. Many Nigerians don’t really understand the full concept of what investment means. They only have a vague idea, and that is why making investment decisions is complex to them.

What is an investment?

An investment is anything you acquire that can yield either extra income in the future or appreciation. Appreciation is the term used to describe an increase in an asset’s value over time. Purchases of goods as investments are made not to consume the goods but rather to use them in the future to generate wealth. 

In simple layman’s terms, investment is anything that, if you purchase it now, has the potential to generate a higher return. 

What are the things you must know to invest in Nigeria effectively?

1. Understand The Investment Market

Generally speaking, taking the path of investing your money in Nigeria can be very confusing. At times that it seems like all you are doing is gambling. As a matter of fact, the two involve risk and choice – the risk of staking your money with the hope of higher returns in the future. The only difference is that gambling depends heavily on chance, and the returns often come quickly. However, investment can be easily scaled with an excellent technical analysis of the market. And this is why you need to understand the market you are venturing into. Why do you want to invest your money? Which platform do you find fascinating that you are willing to dig through the nooks and crannies? Below are a few popular investment opportunities you can explore. Take your time to research it and see the one that interests you most. 

• Stocks & Indices
• Forex and CryptoCurrency
• Bank Savings & Fixed Deposit
• Mutual Funds or Unit Trusts ETFs
• ETFs o
• Bonds
• Real Estate
• Commodities
• FGN Savings Bond (FGNSB)

Whichever forms of investment you are planning to venture into, you must create time to understand the market to invest in Nigeria effectively. 

2. Set up your investment goals

To effectively invest in Nigeria, it is important you have a defined goal. As in, why do you want to become an investor in Nigeria? Why not just venture into one kind of business or use the money you want to invest in having a fulfilled, luxurious vacation? What do you want to do with the return on investment (ROI)? When do you want to use the interest you will generate from this investment? Asking yourself those simple questions will be a great starting point in your investment journey as a Nigerian. They will also help you decide which investment plan is best for you. You wouldn’t venture into real estate when you know that you will need the money back in less than 6 months. 

3. Define Your Investment Strategy 

After establishing your investing goal, the next line of action is defining your investment strategy. One of the things many Nigerians get wrong when it comes to investment is following the crowd. This can never work. You, as an investor, need to define the best strategies that work for you. 

What is your regular income? How much can you invest for long-term gain; how much can you stack for short-term gains? What are your impious like? Are you a risk-taker, or do you prefer to play it safe? What happens if this investment goes to zero? All these questions will help you analyze 

4. Find the Right Platform

Now that you have your goals set and you know the best strategies that work for you, it is high time you start looking for the right investment platform that matches your metrics. You can check here to read 20 different ways you can invest your money in Nigeria. Whichever platform you want to settle for, ensure it aligns with your investment goals and strategies.

5. Follow the rule of thumb 

Like I have established at the beginning of this article, investment can be a likeness to gambling at times. They both involve staking your money for a higher return. As such, there is a rule of thumb when it comes to investing your money, especially in a country like Nigeria.

“Don’t put all your money inside one basket.” I understand. I suggest you stick to the market you know. However, taking your time to explore other investment industries shouldn’t be a herculean task, especially now that you have one that you find more reliable. Just look for a means to diversify.

As a beginner, it will be fantastic if you still stay within the same circle. For example, instead of using all your capital to buy Shiba coins, you can consider investing a portion in other coins like Etherium, Doge, and even bitcoin. That way, you aren’t putting your money into one basket. And for senior investors, rather than investing all your money in real estate, you can invest a portion of your money in share with a promising company. 

Also read: How to Choose Between Investing and Trading

6. Consider stacking in long term 

Generally, a good investment takes time. Most short-term investments often require high risk, which might not be a good option for beginners. Plus, long terms investment often has higher returns. So, you must consider this when venturing into investment in Nigeria. It is okay if the market fluctuates. So far, you are in for long-term gain; you don’t have to overwhelm yourself. Rather than selling the stock or coins because it is dropping, giving it sometimes until it appreciates will save you from losing your capital and interest.

7. Be Willing to Learn

Investment is a risky business venture. You are at the stake of risking money, so don’t, and it is essential you know this if you want to do well as an investor in Nigeria. Going through the stress to understand the area you want to specialize in is worth working towards. Always be open to learning from other successful investors in your area of interest. Read financial and investment books. Join communities that can help you grow as an investor. Be open to corrections. Network with other investors. 

8. Remember this is Nigeria 

I wish I could sugarcoat this for you without brewing it directly to your face. However, since I am more concerned about opening your eyes to essential things you must know to help you maximize your investment journey in Nigeria, it will be unfair if I fail to mention this to you.

Nigeria’s economy is not entirely stable, and government decisions in the financial market can sometimes be very funny. You can’t entirely predict how things can go. Take a quick look at how the ban on cryptocurrency forces crypto traders and investors need to start cutting corners to carry out simple transactions that they could have run directly with their bank. Look closely at the conflict between CBN and fintech firms in the country. Imagine if you had a share with AbokiFx when the CBN started their accusation with him. Just take a close look and see for yourself. All these factors can be so funny that you must watch twice before investing in the country. 

Simple tips to help you maximize your investment career in Nigeria 

1. Invest in Dollars, not Naira

The Nigeria economy is never stable. The Naira currency keeps depreciating day by day, and investing your money in Naira can make you lose a huge substantial amount of money due to economic inflation. Instead of putting your money in a Fixed deposit, it would be more rational to invest in a foreign share or cryptocurrencies.

2. Avoid Network marketing; it never lasts

Network marketing, relatively close to Ponzi Scheme, is one of the trendiest investment schemes in Nigeria. Once every 3 months, one network marketing always pops up in the Nigerian industry, and people often flock to it. The absolute truth is network marketing in Nigeria is not a reliable form of investment; instead, it is more like a Ponzi Scheme. Talking about MMM, Racksteli, givers forum, to mention a few, are purely Ponzi schemes. 

3. Investment is not a get-rich-quick venture.

Don’t jump into any forms of investment because you are looking for a get-rich-quick venture. If your regular income is not enough to venture into an investment, consider boosting your income through different business forms before considering joining the investment. You can also make the sacrifice of looking for an avenue to generate regular income. Don’t invest when your regular payment is insufficient to help you survive. You can consider savings instead.