Investing is always a complicated subject for a lot of people. That does not tone down the goals people have for the future. One of the major reasons people do not invest is that they feel they do not have enough to even begin with. Another reason people do not invest is fear, the fear of losing their money. The hard truth about investing is that it always carries risk. Even with that, they are, however some low-risk investments you can make to make sure your money is working for you. One thing to keep in mind is that low-risk investments usually carry low ROI(Return On Investment). If you are more inclined to making a larger ROI, there some investments you can make which we will also touch on.
Before You Go About Investing
When you are about to go into investments, you must be careful not to be over expectant. You have to set realistic targets. Obviously, you have to take your time to examine all the opportunities available to you. Which also means you have to set realistic timelines on your investment. Pick an amount you wish to invest and the return you plan to get based on the information you have been able to gather.
That being said, if you feel like you don’t have enough to invest you are not alone. Unfortunately, research has shown that fixed income doesn’t increase all that regularly, on the other hand, expenses tend to increase when a person decides to start a family, move, get a new car or make other big moves. Saving a little bit of your fixed income can help with this. Your bank can assist you in setting aside a little and that would take it out of your control. Which brings us to the first low-risk investment opportunity.
Most banks allow people to make fixed deposits and offer interests rates from 4% to even 10% depending on the amount and maturity period. The average maturity period for long term investments is 1 to 2 years. Short term investments mature between 30 to 90 days. The average bank accepts a deposit of N100.000 minimum. The terms tend to vary from bank to bank so you will need to get more information from your bank about the peculiarities of their plans.
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A mutual fund is a professionally managed portfolio. The capital is pulled from multiple investors and invested back into a number of options. Any and all profits are shared among the investors, usually every 6 months to 1 year. The major advantage of mutual funds is that the investments are diversified. This means that the money is put into different opportunities like stocks, bonds and others. Some of the opportunities are the Nigerian Stock Exchange, Fixed Income funds and Mixed-income funds. Fixed Income funds are usually the safest as they do not fluctuate as much as the rest.
Government Savings Bonds
The Debt Management office of the Government offers these types of savings bonds to people. When the government takes on projects it tends to tap into this fund. The reason why this opportunity is very attractive is that it carries welcome interest rates and collecting your money is pretty much a guarantee. Options for investing usually range from 2 to 20 years.
Real estate funds are usually attractive opportunities as well. The fund is usually pulled for real estate projects. Some people recognise the value of acquiring land and properties but fall short of the funds. Whatever the project is, a development of a property, complete acquisition for sale or rent, the income or profit is split among the investors according to their investment.
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In this situation, your bank handles the investment for you. The CBN holds auctions to buy treasury bills on their website. Interested parties can go ahead and bid. The CBN also uses these bills to raise money for government projects and so your risk is not that great.
The More Volatile Investments
The most popular opportunities now are Cryptocurrency and Forex. These opportunities can be very rewarding and the traffic and likelihood of trades are usually very high. You will most likely find someone willing to buy your stake whenever you are willing to sell. If you have enough information at your disposal and you have gone in for a large sum, you can sell while the market is doing very well. This will guarantee that your return is very good. The negative side of it is that the markets fluctuate a lot and you can end up losing all your money. If you are going into it, be sure you can handle the risk.