Let’s start with the basics. What is a Mutual Fund?
A mutual fund is a type of financial vehicle made up of a pool of money collected from many investors to invest in
stocks, bonds, money market instruments, and other assets. These funds are managed by professional money managers, and these organizations abound in the country.
If you are a low income earner, your safest bet in terms of investing is mutual fund. At the end of the month when your salary hits your bank account, it might be the current norm that you are participating in a casual form of ‘Esusu’ or in today’s parlance, ‘Co-operative’ with a group of friends or colleagues. The advantage of participating in a ‘Co-operative’, is the opportunity it affords to raise moderate to large sum of money, if you are investing for the future.
Assuming you have N5,000 – N10,000 monthly to allocate for investment, I will highly recommend you set aside this sum and invest in a mutual fund over a long period of time. You might want to ask ‘When can I withdraw from a mutual fund?’ As soon as your monthly income is doubled or tripled, you can withdraw your invested sum and start allocating it to any money market instruments you select.