Are you looking for where to invest money in Nigeria and get food returns? Perhaps you are a salary earner looking for the best investment options for salary earners. In this article, we will be looking at some investment options that can yield good returns in Nigeria.
Although there is no proof that any particular investment can make you productive or generate good returns every time, all investments have their own risk. You may have come across various investments adverts telling you the investment is a low risk or very legit one, but always remember that there is no investment that doesn’t have a risk attached to it.
The truth is there are different measures of risk for various investment options. We are going to explain the best investment options based on the forecasts of the experts about where to invest money in Nigeria and get good returns and also on the best investment options for salary earners.
What this article contains: We will be showing you the four best investment options that you can put your money into in Nigeria and consistently get good results. These options are ranked based on their level of risks, so that means the first option has low risk and so on.
Also, before making a move to invest your money in any of these investment options listed below, you can consult experts to give you a bit of advice on which is best for you. Some of the experts you can call may include; Accountants, Stockbrokers, or a financial adviser.
Best Investment Options for Salary Earners in Nigeria:
1. Federal Government Bonds:
These bonds are popularly known as FGN BONDS; they are government bonds issued by Debt Management offices for the federal government. The FGN bonds are long term bonds that range from two to twenty years. These bonds are released to the public in other to raise capital for the development of infrastructures. Such as roads, railways, public water systems, and so on.
The FGN bonds have a minimum subscription of ten thousand naira so you can start investing with as little as 10,000 Naira. The interest on FGN bonds is given semi-annually; this is done till the bond is matured and then the principal would be given to the investor.
However, some investors find it difficult to wait for the maturity of these bonds; the investment can be sold in the secondary market.
The investment could be sold in either FMDQ OTC platforms or the NIGERIAN STOCK EXCHANGE. Secondary trading of bonds takes place regularly. If you would like to invest in FGN bonds, you will need to consult a stockbroker for appropriate guidance. So this could come in as a good place to invest your money as a salary earner in Nigeria.
2. Federal Government Saving Bonds:
These bonds were introduced in 2016 with the sole aim of providing the opportunity for everyone, not minding their salary level to contribute to national growth by lending their money to the government. Another objective of these bonds is to make the average Nigerian interested in savings.
The FGN saving bonds have a minimum subscription of five thousand naira and a maximum subscription of fifty million naira; the bond’s maturity is not as long as the FGN bonds; it usually takes two to three years for the FGN saving bonds to mature. Primary auctions on these bonds are done monthly.
The FGN saving bonds are also best for individuals who have low income but have the passion for saving and creating wealth. The FGN savings bonds can also be sold if the need arises or if the individual is unable to wait till maturity date. The bonds can be sold in the NIGERIAN STOCK EXCHANGE MARKET.
The interest that FGN saving bonds pay is relatively higher than any commercial bank’s interest rate; this interest ranges from 11% to 12%. Another added advantage of these bonds is that you can use them as collateral when applying for loans in commercial banks. To invest in the FGN saving bonds, contact a stockbroker.
3. Treasury Bills:
Treasury bills are one of the best popularly known investment options for fixed income earners. These bills are short term instruments that are issued by the federal government through the central bank of Nigeria to control or manipulate money supply in the economy and also help pay some of the federal government debts.
The central bank of Nigeria auctions treasury bills on a bi-weekly basis, maturity date ranges from 91, 182 and 364 days. Since this instrument is short term, it cannot be sold in the Nigerian stock exchange market, it can only be sold in money markets, and these markets accept short term instruments they include; commercial banks and other financial institutions.
The treasury bills are considered the most liquid and low risk investment option. Returns are guaranteed simply because they are backed up by the federal government. The minimum investment rate for treasury bills varies depending on which financial institution you are buying from; however, the treasury bills are not considered for low-income earners.
If you are looking for where to invest in Nigeria and have good returns as a low income earner,this might not be the best for you as the Treasury bill is an investment that requires a reasonable amount of money, e.g. two hundred thousand naira. Treasury bills have a face value, this face value is the actual amount of the bill when it’s matured.
The bills are every time sold below their face value. For instance, if you acquire a treasury bill that is worth N200, 000, you might pay N180,000 when it’s matured, you would thereby be giving N200, 000 which simply means you have earned a 20% interest on the bill. To invest in the treasury bills, visit any bank for forms and information.
4. Commercial paper:
These instruments are short term instruments that are usually issued by big corporate organizations or companies to borrow money from investors in society to finance special projects. A commercial paper can be said to be a promissory note, and they also approximate to treasury bills in a way because it is a short term instrument which maturity ranges from 15 and 270 days.
We have listed some of the active companies that deal in the commercial paper below;
• Nigerian Breweries
• Guinness Nigeria PLC
• Access Bank
• United Bank of Africa
• Eco bank and others.
To invest in commercial papers, simply walk into any of the listed banks above or any other bank and tell the customer care that you are interested in investing in commercial papers.
5. Invest in Buying and Selling of Different Currencies:
This is a particularly good investment option you can venture into in volatile times, especially if you are economically sound and understand how the global economy works.
For example, sometime in February, when crude oil prices dropped drastically… my mentor told me to quickly buy US dollars because the primary product Nigeria sells is crude oil and so the Naira would be devalued… I did. In only about a month or so, Naira was devalued and the price dropped from N357/$ to about N420/$.
You can do the maths.
What if you could predict such global economic events so that you can buy different currencies and sell off others? Taking a course on Forex Trading can give you a good grip of how to predict these kind of events and make money without stress.
The investment options listed above can be regarded as the best investment options for salary earners since it is almost guaranteed you will receive your income monthly.
If you still need other options on best investment options for salary earners, you can consider investing in:
• Agricultural Businesses: This sector is an evergreen sector because people will always eat and so when you invest in this sector, you can’t be wrong. Here are a few ideas for you to explore when it comes to investing in Agriculture-
a. Egg Production – There is always a demand for eggs as some parts of Nigeria does not even produce enough eggs and have to bring in from the western states. Depending on how much cash you have to invest, this might require significant capital to start.
b. Meat Packaging and Distribution – This is another fantastic idea as there is a demand for properly prepared and packaged meat in Nigeria. If you invest in this idea with a few other salary earners do to it well, you can be sure of getting very good returns consistently as people will gladly pay for this.
c. Nuts Processing, Packaging and Distribution – This is one of the best investment options for salary earners in Nigeria who want to invest in agricultural sector because you can start with as little as 20,000 Naira.
Some of the best nuts you can invest for a good return include Groundnut and Cashew nuts.
Source for them, have them fried and put them inside clean bottles or plastic recyclable containers and seal them. I really love this so I would write another article to show you how to start a groundnut business in Nigeria.
• Logistics and Transport Business: You can invest in logistics and transportation business because humans will always have the need to move from one place to another.
You can either get involved part-time using services like Taxify and Uber or you can buy a car and look for a driver to use it for you and pay you weekly returns.
You can also start a delivery company where you help people deliver parcels for a fee.
We hope these options on where to invest money in Nigeria and get good returns as a salary earner will guide you to make a decision the right way.
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You can also read our other article on 3 Businesses you can start with your spouse and make millions here on The Graduateboss.com