To think of sustainable wealth despite all that came with the year seems unthinkable! The year 2020 may be a year that a lot of Nigerians and therefore the world won’t forget in a hurry. This is often due to the events that happened throughout the year. The Covid-19 pandemic, the constant economic decline, including the safety challenges the country faced was the main explanation for the distress most of the people experienced. Many of us either lost their jobs, had their wages slashed, or had their business pack up because they couldn’t deal with the sudden negative economic impact. Plans were scuppered, and hopes were dashed.
At the time of scripting this piece, the rate of inflation stands at 14.23% (which was quite a 30% increase from the previous year), including the huge job loss and an impending recession. The question that seems to get on everybody’s lips “How do I survive and become financially free despite the rising inflation cost within the country?” and “How do I create lasting wealth and ensure an honest quality of life?”
Hence the rationale this text was written. Not only will it address the way to create sustainable wealth in unstable times, but I will be able to also discuss investment options available within the country and the way these investments are often drivers to making the type of life you desire. But first, we might discuss inflation and the way it affects you and your income. Sorry, we will not overlook it.
Inflation
Inflation is just a rise in the prices of products and services, resulting in a huge decline in the purchasing power of the currency. So as words, you’d require extra money to get the precise belongings you have purchased within the past which ends up during a rising cost of living”. An easy example would be the Onion situation within the country that became a trend on the web. Before the onion scarcity, If it had been commonplace to shop for a bag of onions for N1, 000 naira due to the inflation that caused a rise of onions by 200 percent you’d need to buy an equivalent bag of onions for N3, 000.
Generally, inflation may be a measure of the speed of inflation of products and services in an economy. Inflation can occur when prices rise thanks to increases in production costs, like raw materials and wages. A surge in demand for products and services without a rise in supply or production also can cause inflation as consumers are willing to pay more for the merchandise. When there’s a rise in non-discretionary items like food and fuel then it adversely affects the lives of the people. Below are quick facts on the rate of inflation from 2016- October 2020.
How do I create sustainable wealth despite this Inflation?
With uncertainties still hovering over the economy, how does one create sustainable wealth? An excellent thanks to achieving this is often to adopt an investor lifestyle.
Cozy Havens believes money is the currency of life. So simply put, not ignoring several definitions of creating sustainable wealth is that the process of creating enough money and keeping it safe while listening to economic circumstances that will affect this flow or expected returns. Creating sustainable wealth may be a long-term project. It’s a never-ending continuum. It’s not a get rich quick scheme.
To create sustainable wealth let’s check out a couple of investment options and the way they’re thriving against these harsh economic factors.
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Term bank account
This is a secure thanks to store and is usually utilized when the goal is to stay money in an account for a brief period. Although it’s termed safe, it’s unproductive in creating wealth due to the constant rise in inflation and therefore the meager interest rates often offered by banks. A savvy investor would only keep his money during a term bank account when he/she is yet to make a decision on the acceptable wealth creation tool. From research, we discover that wealthy people within the world have little funds stored within the bank, apart from emergency funds, rather they invest in instruments that help them create more income.
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Treasury Bills:
Treasury bills are short-dated instruments issued by the govt through the financial institution to regulate the cash supply and supply short-term funding for the govt. The Treasury bills are a “safe” investment especially for those with a low-risk appetite. The interest element of a Treasury bill is paid to you upfront and credited to your checking account. Considering the present 0.09% rate of interest, there’s a risk that you simply could have earned better money elsewhere. Investing decisions are always a tradeoff between risk and reward. Within the light of recent happenings investing in treasury bills isn’t advised since your returns are within the negative.
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FGN Savings Bonds:
The FGN government bond may be a retail investment program. Its purpose is to supply Nigerians of all income levels the chance of contributing to national development by lending to the govt.
Interest payable ranges from 11% to 13%which are above what you’ll get from a daily bank account. Are often “> this is often tax-free and therefore the bonds can be used as collateral to get loans from the banks.
Inflation erodes the worth of cash. … However, inflation eats into the purchasing power of each naira you receive from a bond interest within the future. Since those interest payments are now less valuable as inflation rises, your bond is a smaller amount valuable. This causes the worth of the bond to drop.
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Stocks:
Nigerians are still nursing fear because of the market crash that happened in 2008 where a lot of people lost money but this does not take away the importance of owning one. It is very liquid, comes in handy in times of emergency, and yields incredible returns. When Inflation is on the upswing, income-oriented or high-dividend-paying stock prices generally decline. Stocks overall do seem to be more volatile during high inflationary periods.
- Farm Funding/Investment:
This here is one of the most guaranteed ways of creating sustainable wealth. As a basic necessity of life, the importance of Food cannot be overemphasized. This explains why farm crowdfunding seems to be one of the most lucrative investments in Nigeria with an incredible return on investment. Due to the growing population of Nigeria, Farming will continue to be viable and that is why a lot of investors are looking in that direction. Digital Platforms are created to help bridge the gap between investors and farmers who don’t have access to bank loans. You get a periodic return on investment either quarterly, half-yearly, or annually. You have the option to exit when the investment matures or reinvest for the next farming. And they are usually insured. The investor makes between 20%-45% depending on the farm produce or livestock. One such company is the Oxford agrovest, their investment options is one of the best in the market. Explore it
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Real Estate:
It is a proven fact that over the last two centuries, about 90 percent of the world’s millionaires have been created by investing in real estate. Real Estate has generated the most wealth in our history and that’s a fact and for the low risk & average investor, real estate offers the best way to create, develop sustainable wealth.
Some noteworthy statistics:
Only 29% of the Earth consist of land
There is a global annual increase in the population of at least 80 million people added every year
Nigeria is recorded as the 7th most populous country in the world with over 213 million people.
With an annual population growth rate of over 2.6 %
With a fertility rate of 5 births per woman
What anyone and everyone can deduce from the above is that for something so limited and scarce, a lot of people need it. Either to live or for investment purposes. The population outbursts in places like Berger, Ibafo, Mowe, Lekki, Ajah, Victoria Island, and recently Epe in no particular order show that people are moving and the population is no doubt growing in size. And you still think you have a luxury of choices. You either make excuses or make money or take action.
The real estate market and housing conditions are in tiptop shape, hence, you can rest assured you will make money if you invest in the right locations aided with expert advice. It is a simple equation, if the population seems to be growing, it will increase demand for housing hence causing the housing market to flourish and creating a massive opportunity for property investors to make lots of income.
WHAT REAL ESTATE IS NOT
There are a few misconceptions that are myths and untrue,
Firstly it is assumed that you need to be a Billionaire to be an investor in the real estate
Industry.
- Some think that you would require a loan.
- Or that they would need an enormous capital to get started.
- Or worse, sell existing assets to get by.
Start with what you have, and consider paying in installments.
When it comes to real estate income, there are two ways to generate cash according to cozy havens. You can generate passive income by buying and holding e.g. Short lets, Renting, leasing, while you can generate an active income by providing real estate-related services like flipping contracts, doing renovations, or adding value in other ways.
This could be done through:
- Open Space Rental: This is where you acquire land, get the proper documentation, and put it up for rent. It helps generate a steady cash flow despite not having anything erected on your land. it also helps prevents encroachment on the land.
- Rental Property: Aside from taking the Landlord wahala and Palava off your back, steady cash flow can be made from owning your own house and renting it out. It is a key to generational wealth as this asset can also be passed down as an inheritance. The migration into urban areas will always make this option very lucrative because people will always require a place to live. It is inflation and recession-proof. Cozy Havens have the luxury of both options.
Here are what you are missing out on if you don’t invest in real estate with cozy havens;
- Steady Income
- Long Term Financial Security
- Real Estate Appreciation
Finally, you are your decision-maker. The best part about owning your property investment is you do not have to pay rent to any landlord. You can decide whatever happens to the property at any time, any day. Isn’t that cool?
Like anything in life, the more you get into real estate investing the more experienced you become. The easier it will be in the future.
It is a proven fact that when everything else fails, especially when you have an eye on the future, Land and properties are the only investment that does not get affected by unforeseen uncertainties.
Investors take advantage of a crisis, they don’t go on hoping and praying that the money stashed doesn’t finish. True sustainability is in recycling not in saving especially when there is no interest to be gained.
With the autumn of the treasury bills, drop by stock price, and therefore the cryptocurrency suffering its worst drop by 7 years, nowhere seems safe. Regardless of which sort of real investing works bent be your favorite now’s the time, to start with, cozy havens. It’s far better to form a mortgage payment to the bank instead of sending the rent check to a landlord. It’s vital altogether investment opportunities to accumulate assets and hold on for the long-term. As history has proven, the land is often especially rewarding to those that start at a young age.
Asides from it being an imperishable & transferable asset, land guarantees access to credit and is the right legacy for your children. Provides an income, regardless of the economic situation it keeps giving a high rate of returns (ROI) it’s the sole INVESTMENT THAT doesn’t DEPRECIATE.
Cozy Havens can assist you to begin.
