5 simple and legal investments for Nigerians post-pandemic

“Investment” is a popular word in Nigeria. Its popularity is driven unfortunately by Get-Rich-Quick schemes that promise ludicrous short term returns on investment. Of course, the result is that a lot of ordinary Nigerians now regard the word with a degree of suspicion.

But investing doesn’t have to be difficult, confusing, or shady. And you don’t have to be a financial mogul or even have a lot of money before you start investing. Add to that the fact that investing is probably the best way to save your money – and in fact, that is exactly what your bank does with your money. So why not do it yourself if you can? Of course, you can!

With that said, we’ll take a quick look at some of the top five simple and legal ways you can invest your money with good reason to hope for making gains on your return or preserve your capital.

5 Ways You Can Invest Your Money in Nigeria

If you have built a good saving habit and you have any significant sum that you’d rather not touch, investing is one of the best options for growing or preserving your stash. Instead of stashing your money in the bank and enduring the constant annoyance of getting arbitrary and often costly deductions and bank charges, you should explore different investment options.

Another reason for moving the bulk of your dormant cash into an investment vehicle is the growing inflation rate of the Nigerian economy. At 12.40% and a recession looming, it makes sense to at least protect your money from losing value by investing in something simple and legal.

  1. Invest in the Nigerian Stock Market
  2. Invest in the United States Stock Market
  3. Invest in Agriculture
  4. Invest in Cryptocurrencies
  5. Invest in Yourself

#1. Invest in the Nigerian Stock Market

 Traditionally, the Nigerian Stock Exchange (NSE) is the default financial asset investment vehicle available to Nigerians. Although it has been performing poorly recently, with very little sign of recovery, the NSE is one of the ways you can invest your money.

Investing in the NSE means you buy shares in companies that are listed and you earn a share of the company’s profits (dividends). You can choose to invest in specific companies, or invest in mutual funds depending on what your investment goal is.

You may need expert advice from a qualified financial advisor to sift through the many captions available and choose the best one which serves your interests.

 #2. Invest in the United States Stock Market

The United States Stock Market is one of the best performing stock markets in the world. It lists most of the biggest companies from all over the world, including Apple, Facebook, and even Nigerian companies like Interswitch and Jumia. For perspective, the entire Nigerian Stock Exchange has a capitalization of only ~$37 billion. By contrast, Apple (one of the many blue-chip companies listed on the New York Stock Exchange) has a market capitalization of more than $2 trillion.

The Dow Jones tracks 30 of America’s largest companies listed on NASDAQ and the NYSE.
Photo by Markus Spiske on Unsplash

Startups like Rise Vest, Chaka.ng, and Trove can help you invest in US-listed companies like Apple, Facebook, and Zoom. You can start with as little as $10.

#3. Invest in Agriculture

Farmcrowdy has raised over $15 million to support local Nigerian farmers

 Agriculture remains an underexploited feature in Nigeria’s economy even though it contributes more than 20% of Nigeria’s GDP and employs more people than any other sector. With a little help (training and proper guidance) and some initial capital, you can invest in different agricultural operations from the popular poultry and fish farms to the less known but even potential more lucrative sesame seed farming.

Asides starting and running your farm, you can invest through crowdfunding platforms that allow you to farm with your money. Startups like Farmcrowdy (now CrowdyVest), Thrive Agric, and FarmKart are leading crowdfunded farming platforms that help you invest in different agricultural products and earn a decent return on your investment.

There’s a caveat though, the Nigerian Securities and Exchange Commission (SEC) is reportedly working on draft regulations for crowdfunding platforms. While this is welcome news for a nervous investor, some sections of the draft rule will threaten some already established crowdfunding platforms.

In the meantime, however, agriculture, whether it’s crowdfunded or not is a viable investment option you should explore.

#4. Invest in Cryptocurrency

That cryptocurrency or at least digital currency of some form is the future of money is no longer in question. The only question that has any relevance to the looming global adoption of cryptocurrency is simply when.

One of the reasons behind the recent increase in the global adoption of cryptocurrency is the decline of investor confidence in the United States dollar, the default global reserve currency. While fears of a dollar collapse may be vastly overblown, it still makes good sense to diversify your investment portfolio with a few cryptocurrency assets.

Back here in Nigeria, (who doesn’t have a friend or family member constantly posting on their WhatsApp status or creating those annoying group chats?), the crypto craze is fueled by an obsession with making quick profits and earn in dollars.

Like most viable opportunities in Nigeria, the cryptocurrency field is heavily populated. Meaning you have an abundance of choice, but also meaning you run significantly more risk of choosing a scam or Ponzi crypto operation.

No one will advise you to dump all your hard-earned cash in cryptocurrencies and you will still need to do some learning and research on your own before choosing to invest in cryptocurrencies. The immediate payoff for investing in a cryptocurrency is some sort of insulation from traditional currency shocks, even though cryptocurrencies are by nature very volatile. In the long term, however, cryptocurrency investments are certainly an option you should have on your table.

 #5 Invest in Yourself

The world of investment is more complex today than ever before, and investment options are almost endless. Investing will keep evolving and in ultrafast age, the evolution will be equally fast. All of this means that being able to make good investment decisions will depend on your ability to learn and refine your knowledge continuously.

Ultimately, the best investment you can make is to invest in yourself. Taking time to read this article is one good example of investing in yourself. Taking new courses in self-discipline, personal finance management, and investing are other important ways to constantly refine and improve the body of knowledge at your disposal. It’s not a cliche to say that “the more you learn, the more you earn” because it’s true!

Investing is a long game. Think about it, the many years you spent getting an education? the many invaluable years of experience you’ve gained over the course of your career? What is common in both scenarios?

The answer of course is time. Investing takes time, constant effort, and a commitment to making the best decisions instead of yielding to the temptation of eating all now or the pseudo-risk-free strategy of losing money by saving in a bank that profits by investing your money.

Remember to talk with a certified financial advisor before making any investment decisions, best of all, remember to learn as much as possible and commit to constant improvement before jumping into the investor’s world. Welcome!

Featured image by Prince Akachi on Unsplash

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