One of the surest ways to make more wealth is via investments. Investments are a way of making your money keep working and generating even more for you. Bear in mind that every investment option has its own risk. A good investment is one that grants you more guarantee and securities. Many also believe you need to have huge funds in order to make investments but this is not so. There are investment options that allow you to make start-up funds for as low as N5000. There are different sectors and legitimate methods through which you can invest in Nigeria.
10 Best Investment Options in Nigeria
This article provides you with information on the 10 best investment options in Nigeria with their advantages and risks involved.
Investing in FGN savings bonds
FGN bonds can simply be explained as a means of lending the Federal government some money for a specific period of time. The FGN bonds were founded as a means of providing Nigerians of different strata the opportunity of contributing to national growth and development. The money gotten from the bonds is used for specific national projects. The Federal government is obliged to pay the bond buyer the principal and agreed interest at the agreed time. It is also intended to promote the savings culture among Nigerians. FGN bonds are referred to as the safest form of investments because it is backed up by the Federal government. It is thus referred to as a risk-free investment. The minimum amount you can invest is N5000 while the maximum is N50, 000, 000. The interest income from the savings bonds is tax-free. The FGN savings bonds is issued monthly with quarterly payment of interest to investors.
Investing in Treasury Bills
This is another investment option in Nigeria with no or minimal risks. Treasury bills have low-interest rates due to its security. They are short term investment opportunities aimed at providing short term funds for the federal government. Treasury bills are issued by the Federal government via the Central bank. The Central bank of Nigeria auctions Treasury Bills bi-weekly in tenors ranging from 91 – 364 days. Banks and other financial institutions also sell out treasury bills. The real value of a treasury bill is sold at 10% discount when it is being auctioned. So for example, if the actual worth of a treasury bill is 10 million naira, it will be auctioned out at 9.9 million naira (10% deductions). When the time period as matured, you will be paid the original worth of the treasury bill. That way, you have gained the deducted 10% extra on your investment. Treasury bills are generally agreed to be the most secured means of investments in Nigeria with low risk and high returns.
Invest in Gold
Gold serves as a store of value because it does not depreciate in value. This makes it a good investment opportunity in Nigeria. For example, if you have a 15 karat gold today, it will still be 15 karats even after many years. In fact, it might have increased in its price over the years.
Before you start to make investments in gold, you must first learn the basics of doing Gold business. These are:
How to derive the measurement, worth and value of gold
Where to source gold
How to identify original gold for investment.
You can invest a minimum of 200,000 Naira to 1 Million in gold. You also have the option of investing in gold-based network marketing companies. Ensure you do a proper research before venturing into this.
Investing in stocks
In spite of the market crash that occurred in 2008, where-in many lost their money, stock is still one of the surest ways to make long term wealth in Nigeria. The stock exchange market is an organized and regulated financial market where securities such as bonds, notes, shares are bought and sold at prices governed by the forces of demand and supply. The stock exchange market is the primary market open to corporations and governments to raise capital. They do this by channeling the savings of other investors into productive ventures. Other investors can also sell their securities to other investors for cash. In order to make investments in the stock exchange market, you need to do the following:
Research on your most preferred stock broker
Hire a brokerage firm to buy the stock on your behalf.
Register with your chosen stockbroker by filling the appropriate registration form and supplying the relevant documents.
When investing in the stock market. Your return on investments can come in three ways:
It is important you do a proper research and invest in quality stocks and also pay attention to market developments. Remember that the degree of your success depends on the stock brokerer you employ.
Invest into Real Estates by buying Properties
Buying properties in Nigeria have been one of the surest investment ones can make in Nigeria. Nigeria is a country just developing in terms of land and housing. In real estate, your returns depends on the location. High-end places like Abuja and Lagos have greater profits than places such as Enugu and Benin.
If you are considering long term investments and profits, it is best to invest in towns or villages that are not yet well developed. This way, you can buy lands in local areas that have huge potentials for development and then sell them years later when the value of the properties have appreciated.
However, before you make investments in real estate, ensure you conduct proper research on the safest places and best deals.
Investing in Agriculture
The Nigerian government is once again looking into the agricultural sector. The agricultural sector is making new set of millionaires as the Nigerian government starts to reinvest in this sector as a means of diversifying the economy.
Subsectors of agriculture that are open to investment include:
- Poultry farming
- Pig farming
- Snail farming
- Fish farming
You can also take the option of investing in organizations that are engaged in large scale farming. These companies use your money to carry out the farming processes and then pay your returns at the agreed time.
Digital crowd farm funding platforms
These platforms provide a bridge between farmers and investors by creating a platform where people who have the resources put the money in and then farmers who need the funds for their projects can have access to them. You can receive your returns, quarterly, half a year or annually.
The level of returns depends on what sector of farming you invest into.
Mutual funds works by pooling your money with the money of other investors and investing it in a portfolio of other assets (e.g., stocks, bonds). Mutual funds allow you to invest in assets you ordinarily will not be able to do alone such as biotechnology, communication etc. There are also funds that appeal to ethical and religious beliefs, in case you are particular about these things. The most popular companies with the most thriving funds include Stanbic IBTC, ARM, UBA group, FBN capital etc. You can contact these companies in order to discuss your investment choices.
Digital savings and Investment platforms
There are many digital platforms that allow you save and invest in assets from the comforts of your home while earning high returns. The secret to this type of investment is making sure you choose only those that are popular and widely accepted.