3 Things You can Invest Your Money in Right Now

Having a savings account is good. It helps to have money saved for a rainy day. However, leaving large sums of money sitting idle in your account may not be the best idea. Yes, you may get interest every month; these periodic payments may look significant. However, there are different ways to increase wealth, and boost your cash reserves.

Investment Opportunities

There’s a common misconception that you need huge amounts of money to invest. In addition, there also seems to be a vacuum between people and the information on different investment instruments that are available. Here, we will highlight the different investment instruments which are right at your finger tips that you can take advantage of.

These are three value yielding investments in Nigeria currently.

Treasury Bills

Treasury bills are discountable instruments used by the Central Bank of Nigeria (CBN) to manage liquidity in the system, usually on a short-term basis. T-bills (as they’re commonly called) are tax free. They are considered to have zero default risk as they are issued by the Federal Government through the Central Bank of Nigeria (CBN).

Interests are paid upfront allowing investors take advantage of time value of money. These interests are determined by CBN. The time period, the tenor, will last for 91 days, 182 days or 364 days. The length of time you wish to invest will also determine the interest rate for your investment. In the past year, the interest payments to buyers have ranged between 11% and 22%. In addition, treasury bills are a good for clients with disposable cash and those who wish to save.

While it is unlikely to obtain treasury bills from a Central Bank public auction (takes place every two weeks), you may purchase them from banks, discount houses and stock brokers for as little as ₦100,000. The prevailing interest, amount invested and the tenor time will determine your returns.

FGN Savings Bond

FGN Bonds are debt securities (liabilities) of the Federal Government of Nigeria (FGN) issued by the Debt Management Office (DMO) for and on behalf of the Federal Government. When you buy FGN Bonds, you are lending to the FGN for a specified period of time. The minimum tenor for the FGN Bond is 2 years with interest payments made quarterly. In addition, there are bonds with maturities of 3, 5, 7 and 10 years periods. The FGN Bonds are considered as the safest of all investments in domestic debt market because it is backed by the ‘full faith and credit’ of the Federal Government, and as such it is classified as a risk free debt instrument. They have no default risk, meaning that it is absolutely certain your interest and principal will be paid as and when due. The interest income earned from the securities are tax exempt.

Stock Market

The equities market has been on a downtrend in the last few months and September has shown signs of following the same pattern. This has largely been due to investors fleeing emerging markets and exiting the country ahead of the elections in 2019. For new investors, it is advisable to have an investment plan/strategy in place before putting money on any financial instrument. An investment strategy will clearly state, what to invest in, when to buy and sell, it would state prices at which to take profit or stop losses. It is also advisable to speak to a stock broker, as they can offer investment tips.

In addition, watching/reading financial and economic news, and being in the know as to what is happening in the market helps to understand how it affects your investment. Nonetheless, as the equities market has been on a downward trend, the value of stocks have fallen on a whole. This is possibly the best time to invest in stocks that may have been highly valued to invest.

You need as little as ₦5,000 to invest in stocks. Nonetheless, volatility of the market due to different factors makes investing in the stock market quite risky.

The sole aim of any decision is to increase wealth and reap impressive yields. Therefore, it is advisable that investors consult an investment advisor or stock broker before taking investment decisions.

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