CareersNG

u guys are doing a great job i must confess.
i just want to share with you my thoughts about investing and retirement.
do you know it takes 20 yrs of serious financial investment to comfortably retired at 45 .
do you know that at a stage in life u wont have the energy to run around.
the question then is how soon can you start investing and where should you invest. lets start this way

tips for building a good retirement package
1. start early. i mean start investing from your first salary.
2. have a balanced portfolio (wiil explain later)
3. go for basics not luxury
4. dont wait till you start earning that fat salary. nothing is too small
6. get a good financial adviser.
7.do not spend above what u earn (difficult i guess)

lets deal with the issues raised one by one
1. if u start investing 10% of ur income( not nessesarily salary) every month for 20 yrs. the return on investment wiil be enough to take care of ur basic need while you are stiil make money(u wiil stiil be young by then) lets paint a scenario.

1000 unit of first bank share was worth 21000.00 by oct 2004. after their year end a bonus of 1 f0r 4 was given. i.e the number of unit increased to 1250. plus a divided on 1.60 per share.

return on invesment
dividend 1000 * 1.60 =1600.
bonus 250 units with value 250 * 21 = 5,250

value of investment =27,850.

the good news is that first bank shares is worth N52 per share as at today 06/07/06. value of investment now is
1250 * 52 = 65,000.
% return on invetment = 309% in less than 2yrs
can you beat that.


to be continued.

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love your job not your company.

my people dey call this kain word .."ORO IJINLE"
i am really interested in this topic. u seem to be a guru in this area.
how do you get a financial adviser?
i thought we only had to border with personal lawyer, personal doctor and at most bank account manager.. do i still need someone to teach me how to spend my money?
i like the 10% principle, but is it practicable...
ive emptied my savings times over ( no regrets).... any wrong in that?
so many questions... abegg carrry go Femi!
Gb!

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Building a Solution Colony. Gb!

Yes ooo, this topic is a goldmine, i ve tested it, and it worked.
I know of someone who invested 74k in firstbank just for give it a try sake, and he made 100k within 2months!
I think investment in shares is a very good thing; its the best when u ve got long time plans, and u buy the consistent and very profitable companies.

I think we go gbadun this topic!

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Fowe.
Choices make or mar Chances ... add extra care to your choices today.

Welcome to the second edition of the topic, let your money work for you. Today we shall be focusing on how to invest.

Basically an investment portfolio must be able to take care of both short and long term needs. When building a portfolio it is important to set goals and priorities and decide whether a given investment is on a short term basis or long term as this is crucial. A portfolio should be made up of the following
1. Shares and equities.
2 insurance
3. Real estate
4. Savings account
5. Mutual funds, govt bonds
6. savings for a particular event e.g marriage, school fees e.t.c.
lets now consider the peculiarity of each of the elements of the portfolio

1.shares and equities. High risk, high returns. Investment in shares is highly risky but as the maxim says the higher your risk , the higher the likelihood of returns. my advice here is that before you invest in stock and equities check on the following
a. the annual result of the company for the past five years
b. the management of the company .are they credible? What is the track record? Particularly the chairman and M.D.
C .what is the relative strength of the company to its competitors e.g. in the beer industry the leaders are Guinness and Nigerian breweries. it wont make sense to invest in champion breweries in that sector.
d. what is the dividend payout in the last 5 yrs e.g GTbank has consistently been giving out dividend in the last 5 yrs. this year they gave a dividend of 96 kobo per share.

it is important to note that investing in shares is good mainly on the long term basis if u want to consider the fundamentals as highlighted above. People also invest based on speculation but it can back fire seriously, leading to loss of investment.
e. also consider how easy it is to sell of the shares. I.e. how liquid.

INSURANCE: often considered useless in this part of the world but i can tell you is necessarily to have an insurance policy in your portfolio. An insurance company carries your risk. so the return is low compared to stocks but you are sure of getting the agreed rate at the expiration of the policy. before you take up a policy it is also important to do your due diligence on the insurance company, management, capitalization e.t.c aiico,leadway,GT assurance are examples of good insurance company.
(Check today’s guardian for leadway assurance end of year report)
REAL ESTATE: this includes landed property; houses e.t.c. investment in real estate varies between long and short term. When thinking of acquiring a property, ask yourself these questions.

Location
Gone are the days when we build houses only for residential purposes or the urge to have a house in my town. If you have a 2million naira house in a strategic location you can always use it as collateral for bank loan. a 20miilion naira house in my hometown ijero cannot be used as collateral for 2miilion naira loan because it wont be easy to dispose off by my bank should I refuse to pay back the loan. This is particularly applicable to my eastern brothers pls don’t build for pride (APOLOGIES).
Authenticity
don’t buy a land if u are not sure is authentic.
What is the prospect for the area in terms of development? a place to consider now is ikorodu .one day there will be a fourth mainland bridge linking ikorodu to the island. May be 15 yrs or more but its a prospect. a 200k land may sell for 30 million in the next 20 yrs. an uncle of mine who once worked with the construction co that started VGC told a land around that place as at 1992 was 500k, but i bet you can get it for less than 15million now.

SAVINGS: no matter what you still need a savings account although with low returns you can easily fall back on it on a short term basis, but there is need for discipline here. Banks pay on the average 10% interest on savings account (money fixed in banks).this is low risk low return. Next time you get an upfront fix it for a period before you start spending it. i am sure you will make some extra money.
if the bank is not attractive enough try cooperative. This can be with 10 trusted friends. let say 10k/month. if u collect yours in the first month it means you have an upfront of 100k which you can invest in equities, bonds e.t.c. the advantage here is that you don’t have to wait for 10 months to save 100k .
u can quickly get return on the investment as against doing it alone.

As u can see my emphasis is that investment is on a long term basis. Don’t ever think 15 yrs is too far. Can you still remember when you finished SSCE and it seems like yesterday. If you are young and not married you can be aggressive with investment before junior comes. Go for 30- 40% savings this is the only chance you have to build a strong portfolio.
To be contd

gholahan: the truth is that you need to have your strategy first; you are the best financial adviser to your self. after determining what you want, contact stockbrokers, insurance e.t.c for the specifics but read about companies , annual results , industry dynamics e.t.c so that you can verify the advice you get.

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love your job not your company.

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love your job not your company.

As a fresh graduate who just started working, what kinda investment is good for a start between buying a landed property, and buying shares?

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Fowe.
Choices make or mar Chances ... add extra care to your choices today.

yemi,
i wiil advice the young graduate to open a saving account and build up to say 20 k he can then start talking to a stockbroker , the truth is that little drops of water makes the ocean. nothing is too small and dont wait becuase the future is now.

_________________
love your job not your company.

Hello Femi!,
Great work here. it is important that getting a good paying job is paramount to meeting financial needs but i think it is of utmost importance to manage this resources well so as to stay out of debt or the "process" of being in the rat race.

So looking at the Stock market as it is, where exactly should one invest his money? talking about stock brokers, they are only there to collect ur money without offering you any solid investment tips and info once they realise u are not "high networthy".

do i have to sit with calculators and financial digest to know what to invest in, or what returns to expect from investing in a particular company?

what sector of the market would you advise anyone to put his money for high profitability?

thank you.

aytope,
what is your definition of a good job, is it earning 200k per month or working with a multi natinal. i can bet u that i know of guys working in mobil and they are practically broke by the middle of the month. 10% of 30k is 3,000 which is stiil enough to buy 1000 units of access bank shares. my personal philosophy is that i must save no matter what i earn . when u have this mentality by the time the money starts arriving u already know what to do with it. the key word here is invest no matter what.
on stockbrokers and investment my take on that is that u need to understand the terrain very well. the stockbroker is just to validate ur thinking becuase they also have some information which may not be readily available.this they get on the floor of the stock exchange. e.g they are likely to know when a company is likely to give bonus shares.
on the stock to buy i wiil approach it systematically by giving a run down of each sector beginning with the banking sector.

banking sector.
strenght.
the banking sector of the stock exchange is the most active i.e trading on bank stocks is always more than for other sector ,the implication of these is that u can easily sell it.
the banking sector is stronger than before due to the recent capitalisation of the sector (soludos 25bn capitalisation).most bank are declaring huge profit due to the fact that they have more working capital.

opportunity.
likelihood of managing nigerians external reserve. this is expected to increase profitability

weakness.
very suceptible to insider abuse by top management.
threat

most of the bank are stiil struggling with post merger problem. this can significantly impart on profitability if not properly addressed.


stocks to watch out for


GTbank : currently trading at 14:16 per share, GTbank is a well managed bank with good return on investment. the last dividend pay out was 96k per share with a bonus of 1 for 3. i.e u get one new share for every three. it is estimated that the fair price based on this return is 20.00 so it is stiil selling at a price below its fair price.

UBA. : The biggest bank in nigeria based on branch network. presently selling at 15:00. it is believed that when they overcome the teething problem of merger with STB the bank is big enough to generate returns on investment that wiil push up the price to 21.00 .

first bank: likely to merge with ecobank trans international to create a mega bank that can compete in africa. presently selling at 58:00 per share. they are likely to give a bonus of 1 for 1 and when this happens the price wiil be marked down by half. my advice is to wait for the marked down price before buying as it is selling at a very high price mainly due to high demand by people who want the bonus share.

Eco bank. likely to merge with first bank and presently selling at 6.21k. it could be a good way of entering first bank.recently declared 1 for 1 for its share holder and 9k per share. they came out with offer of 3.20k per share .it got to 11.00 per share and was adjusted for bonus and dividend to 5.50k. but it is going up again. assuming you bought 1000 unit(during their public offer) at 3.2k u will have 2000unit at 6.21k now.

oceanic bank

nine months result shows a profit after tax of 8.704 bn 91% more than the corresponding period last year( nine months result last year was 4.55bn).presently selling at 9.00 per share. the price is expected to move up in anticipation of a better dividend this year.

_________________
love your job not your company.

BREWERY SUB SECTOR. one of the most active sector in the stock exchange. the sector is dominated by two major players NB and guiness plc.

strenght:the products are associated with celebration and as africans we wiil always have something to celebrate therefore sales of product is not really a problem.the population of nigeria is a key factor here 120 miilion people is significantly big for these companies to keep making profit. cost of production is also relatively low .

opportunities: a great number of the 120milion nigerians are within the beer consumption age. 18- 45. also as we approach 2007 the money in circulation is likely to increase leading to increase patronage.

weakness: the sector operates in the luxury segment.any policy that reduces the diposable income wiil drastically affect this segment.

threat: increase in religious awareness(sharia and penticostalism) and health implication of drinking beer is likely to become a serious factor .

stock to watch out for:

NBPLC: NBPLC has started reaping the benefit of investing in a brewery in enugu as the cost of production has been on the decline. presently selling as 35.73. nbplc gave a dividend of 1.05 k last year.it is expected that the price wiil improve as dividend yield this year wiil be better.the estimated price is 45.00. a major weakness of nbplc is the large number of shares around 7bn. so for it to pay 2.00 dividend it must at laest make profit after tax of N14bn.

guiness plc. a good company with good fundamentals. presently selling at N123.00.this is due to the speculation that they wiil give bonus share. i recommend that u hold on and allow the price to be marked down for bonus and dividend adjustment before buying.

_________________
love your job not your company.

I do agree. May I add that my most profitable share has been 1st bank and my worst has been NB plc.

his saving for an exam a form of investment

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hi,its so wonderful beenon this site, i hope to have a wonderful time here.

also, do we need to have savings if investment gives more return on investment and its less taxed?
Abegg.. flow well to your guyz.
Gb!

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Building a Solution Colony. Gb!

Savings account: Savings is always a good option but needs careful consideration. my take on saving is that save only for special purpose like going to school, towards marriage, household equipment acquisition e.t.c. apart from this it is advisable to invest in something that wiil beat inflation rate.if u keep 100,000 in the bank for one year you are probably going to get a 10% interest, but you wiil agree with me that the inflation rate in nigeria is like 15% so the wise thing to do is to always try to beat inflation with your investment so that the value of ur hard earned money is not eroded. shares , landed property,mutual funds have proved overtime to beat inflation rate. keep money only for special purposes..

register @ nigerianstockexchange.com to find stock broker nearest to you.

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love your job not your company.

Wa sere padi miiiiiii. Now i don dey money wise

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Fowe.
Choices make or mar Chances ... add extra care to your choices today.

the nigeria stock exchange site no dey work o
abi na my system?
Gb!

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Building a Solution Colony. Gb!

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If what you did yesterday still looks big to you, you haven't done much today .
......Mike Bertola.

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I can do ALL things with the Help of God

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Fowe.
Choices make or mar Chances ... add extra care to your choices today.

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If what you did yesterday still looks big to you, you haven't done much today .
......Mike Bertola.

Femi,
This is a personal appeal to say we are waiting for your response on Dangote and for those of us who do not understand finance jargon enough to explain it to someone else, could you please break down the terms and their implications -profit before and after tax,wait for the bonus something something,price that beats inflation, bla bla?
How about mutual funds like IBTC's ethical and equity?does the 'safety' of investing there come from the pooled resources of the investors or simply from their(ie IBTC)ability to beat Inflation?

I recently heard of the new introduction of Commodities Exchange in Nigeria and speculations are it might get to a point where it beats Securities Exchange. Do you know about it and what do you think? How can we get involved?

I agree with you on investment.Recently, a friend and i were talking and he told me how he had moved 6 or more jobs in search of better pay. Then he stopped.
He said in 1999, when he was with GTB, the money then was like 350k. He used 350k to buy shares in one of the banks( i think, Intercontinental) and 250k to buy a small Jetta,which his dad yabbed, saying that his fellow bankers were buying padded benzes(some on borrowed money). He said his shares are now worth 14M at current market price.This excludes the shares he owns in other banks. And when he lost 2M in a structure he was trying to set up in ABj(El-rufai et al...lets not even go there!), he was unfazed.

In my opinion, i think that one of the inhibitors of investment is an erractic need to impress. And we dont owe anyone anything!

We're eagerly waiting.

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too many limits to our dreams,inhibiting us from being who we are...
still we need inhibitions that protect us...
may we find the divide,oh Lord, and accept the difference!

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More twisted than dreadlocks

Gaskia

but lets talk about this thing for a moment o.

One thing about the north is i am not under any obligation to impress anyone, unless i put that pressure on myself by myself.
The craze in Ph, in Lagos and Abuja is outrageous.
We just want to be seen(like the biblical pharisees) to be who and what we are not.
There's more than a veneer of superficiality in us Nigerians that we actually gasp when we see anything that reminds us of the original(and its not a cuss word).We either fight it(because it reminds us of who we could have been had we stayed in the strait and narrow) or we inhale a much-needed breath of fresh air and enjoy the moment.
We buy more clothes than we would ever need(without giving the old onesout). We shop in overpriced places, not because of the quality, but because of the name. The town where i lived in the south, babes would come and spend hours in the salon on a queue, just to be seen and to say ' i made my hair at...'
Me, i hate queues. Places where i dont like to wait are the places the whole world has learnt to wait at- banks and saloons. I would go early in the morning during a week day to make my hair and it turns out much better cos the hair stylist has more time to experiment. I cant bank in UBA(even with the fine blokes that were hired as STB) no offense ,but the place can be a marketplace. My most longest transaction in the bank is 30mins. Not cos am broke ass, but cos i value my time.Thank God for the gift of ATM!!!

Some times, its we ladies who pressure our men to impress. For some of us: ''men go, men come and even after you married a man, after you guys have steadily built up for years , he wakes from the grave, calls you a witch ,throws your things out and finds one sweet-sixteen.So which one is my own, wetin concern agbero with overload?''. It becomes for us a 'grab all you can' affair.

People always say a lagos guy can be dead broke and be pulling an End -of- Discussion. My father says an Ibo trader can be sitting on top of millions and eating mama-put, because he has purpose and a dream. He has boys to 'settle', a whole village to 'impress' (that word again )with his empty-except-at-christmas mansion and clout to create.
We gats to have goals, financial goals. Cos in this time of enlightenment, we have no excuse not to succeed(unless you have dipped your hand in blood, ole!).
When i was a child, i learnt two principles:
1. the principle of tithing(and since this is not a religious forum, id let it go)
2. the principle of dropping my money into a small-box a carpenter made just for me!
As i grew older, i added to those, the principle of investing. i ask questions and read and look around and improve myself.
Because,You see,Time puts things in perspective! You determine what is important to you, when you take into cognisance how much time you have on your hands.You take your life a lil mo seriously, when you look at time from eternity. When you look at things in retrospect while still standing at introspect(before the event happens as opposed to the all-knowing ''in retrospect'' view),certain things begin to lose value .

_________________
too many limits to our dreams,inhibiting us from being who we are...
still we need inhibitions that protect us...
may we find the divide,oh Lord, and accept the difference!

_________________
More twisted than dreadlocks

_________________
too many limits to our dreams,inhibiting us from being who we are...
still we need inhibitions that protect us...
may we find the divide,oh Lord, and accept the difference!