When I discuss the future with some of my friends, I receive the response “the future will take care of itself”. To this statement I always say, “The future will take care of those who have taken care of the future”. Every human being who receives a reasonable sum of money as a monthly income should start investing for the rainy days. If you’re still procrastinating on saving for the future, these are some of the reasons you should consider.
Inflation – we’re all aware that inflation erodes the real value of money. What N100.00 could buy a year ago, the same amount cannot buy the same item currently. If you’re committed to saving N100 daily by trimming on items that you really do not need, you would be saving a total amount of N3,100 weekly and N37,200 on an annual basis. If you invest this amount in an investment or mutual fund such as “the ARM Discovery Fund” with an annual return rate of 8% per annum. In five years, this principal capital would have returned a total sum of N52, 080.
Future value of the Naira – a lot of individuals I know are quite pessimistic at the slow economic growth rate being experienced within Nigeria. I always point out that if our economic growth rate is slow and not rapid, why do we have a lot of foreign investments within the economy. (Think about the recent re denomination policy by the CBN)
Let’s be honest with ourselves, we may not be satisfied with where we are economically and socially as a nation and as a people; but the government of the day is gradually putting in place policies that will transform the economy of this nation. When I was growing up, I was taught by Ghanaian teachers but nowadays, where are they? They’ve gone back home to a country that has become one of the fastest growing economies within Africa.
Financial Freedom – while watching the “Oprah Show” today, I was struck by the saying of the doctor who was invited on the show to talk about cultivating healthy eating habits. He said, “You don’t have to be motivated before cultivating an healthy lifestyle, doing it is enough motivation”. When I began my journey towards financial freedom, early retirement was the main motivation and I had a fixed figure in mind that I needed before I could retire. I never assumed that what I earned was insignificant. I made up my mind to save as much as I could with my mind fixed on the pictures of what I intended to do after retiring.
Capital gains – our parents grew up with the mindset of working and eventually retiring to paid pensions by the federal government. Many of them did not take advantage of the gains to be made on the capital market due to limited awareness and knowledge about investing in stocks. Imagine what the net worth of an individual who purchased stocks when they were being sold for less than a kobo would be by now. Such an individual would be worth several millions or billions of naira. Friends tell me that investing in the capital market requires huge funds to which I disagree. If you fail to take advantage of the knowledge that’s prevalent nowadays and kick start your investment goals, some few years down the line, the same stocks that are being sold for N30 max will be sold for N100. So, what are you waiting for?
Just how rich is rich? – When I graduated, earning a monthly income of N50,000 seemed like a huge sum of money and I thought of what I could do with such an amount. Two years later, the same sum does not seem so huge anymore. Now I think of how much I would be able to invest if I was earning half a million naira monthly. Some few years down the line, half a million might not seem a big deal anymore depending on where I am on my career path. You’re the only one who can determine how much you’ll need to be wealthy or rich. The earlier you start, the better off you’ll be.
Your Retirement fund is not enough to live the kind of life you desire. While saving for retirement is important, if you don’t have enough funds set aside for emergencies and life’s little luxuries, you may have to dig yourself out of debt.
One thing you can be certain of is that nobody will pay for your financial indiscipline if you don’t kick the habit in the bucket. I know of individuals who are waiting for their spouses to bring in the dough, waiting for an inheritance that may never come or hoping to win the American lottery or Who Wants To be a Millionaire cash prize of N10 million naira which may never materialize.
Luxury – if you’re having problems denying yourself a little bit of luxury, think of saving for investment as a means of buying financial freedom for yourself. Otherwise, open a separate account that will take care of occasional splurges on luxury items.