In the last two episodes of this series, I’ve discussed different investment options in Nigeria, ranging from treasury bills to fixed deposits to mutual funds to investment deposits etc., most of which are short term. Today, I’ll be sharing other investment options which may be long-term in nature.
Long term investments are investment which spans for a longer period, mostly more than three years. Examples include Real estate, stock investing, business, bonds etc.
Real estate
Real estate is investing in land and other properties anywhere in the world. This is one of the high-yielding and secured investment options we have. However, it can be capital intensive. There is the traditional real estate which is the common way of acquiring a land or property and renting/leasing it out. There is also the virtual slot real estate, a less capital-intensive means to investing in real estate. This is a co-investing approach which enables you to own a part (slot) of equally divided real estate for a minimum amount, as low as N50,000 or even lower (an example of companies that offers this approach is Coreum Group)
Bonds
As an investor, when you buy bonds, you loan money to a borrower, usually corporate or governmental. The issuer of the bond/borrower will pay a stated amount of interest during the lifetime of the bond and will repay the stated face value of the bond at maturity. Bonds are fixed income instruments (i.e. they carry a fixed interest rates (coupons)) and it can be sold at a discount, at par or premium. An example of bonds in Nigeria is the FGN Bonds issued by the Debt Management Office (DMO).
Stock- Owning a part of a company
When you buy ordinary shares (also called stock), you become a part-owner of the company. Shareholders earn money by receiving dividend payment (the income distribution to shareholders by the company) or selling off their shares when it is appreciated. There is no guarantee you will earn money as a shareholder. In investing in shares, you take a risk on the company making a profit and paying dividend or the value of the share appreciating. To invest successfully in stock, make a good evaluation of the past financial performance and management of the firm.
Business
Business is also an investment, but one that requires active participation. Success in business requires planning, analysis, know-how, capital and an entrepreneurial spirit.
Finally, to invest, take notes of these salient points
- Successful investors are well informed
- Understand your investment goals before launching out
- Beware of investment that seem too good to be true, the may actually be so
- Understand the timing of your investments.
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Other Investment Options
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