WHAT YOU MUST DO WITH YOUR NAIRA NOW II

WHAT YOU MUST DO WITH YOUR NAIRA NOW II

I must say well done to you for checking on this blog. Suffice to add that there is serious dearth of financial knowledge on what to do right now that the naira weakens almost on a daily basis against other world currencies. And as Standard and Poor’s released yesterday, Nigeria is not alone in this apparent global struggle, so if you are reading this from other countries, you need to know and apply quite as much as the Nigerian person reading this should.

Since my last post

The following are the updates since my last post some two days ago:

-         US Dollar closed at N204/$1 and opened at N207/$1 the next day

-         British pound closed at N307/$1 and opened at N317/$1 the next day

-         The government bond sold lesser than the prediction, at a little less than N100b.

-         Standard and Poor’s rated Nigeria’s economy BB-

All these can be interpreted differently, with some of the analysis pointing in the right direction while others point in the wrong direction. But looking at the goings-on, it will not be out of place to say that a new financial culture is evolving among the spending elite and the bourgeoisie. It was even reported that Dangote’s wealth has fallen by about half its value over the past six months. I’m going to treat that as a rumour though.  

The CBN governor has also come out to restore confidence in the Nigerian populace about the dwindling economic conditions, assuring that the needful was being done by the government to arrest the situation, and that things will soon return to normalcy. I’m happy he is saying that, at least people can trust the government more granted that the current political wave will not exacerbate the economic woes of the country.

From my interaction with people in the last two days, my fear has been more than confirmed about the ignorance of people and the obvious what-do-I-do posture that will emanate when the reality of the economy stares at them in the face. The more need for the information and knowledge that I’m churning out via this medium. The fact that a plate of food in the regular buka still sells for N300 and transport fare is relatively stable does not mean things are not happening. As a matter of fact, you need to take a shower if you think you are not affected in any way.

I’m an advocate of proactivity. We need to always put plans in place that will help us mitigate losses that might come our way.

The government is doing everything it possibly can to entrench macroeconomic stabilization policies that will not make the public feel the pinch so badly, part of that is what leads to the constantly declining Excess Crude Account. I may consider discussing other policies of the government targeted at stemming the economic tide in my subsequent posts, but right now, I need to give you what you’ve been waiting for.

What Should You Do With Your Naira Now I?

I will deepen the discussion I started in my last post here. We talked about investing your naira in assets now, discouraging arbitrary savings and encouraging that you put your currency in assets that increase in value. Today, we will take about making your currency current.

Send Your Money On Errand, Do Not Park It

What we popularly refer to as money – the currencies that we have, actually are not to be stored up. They are current (cies). They are meant to move. It is in moving that they improve and increase in value. Can you tie current down? It needs to flow to make sense. Same applies to your money, and there is no better time to apply this knowledge than now.

I gave a prelude to this discuss in the last post when I stated that there is no worse time to save than now. The same point I buttressed when I appeared on a radio show this morning at CoolFM 96.9 Kano. We must make a shift in our financial paradigm. We must make our money work for us, and that, now.

I don’t know what activities interest you, but if you have anything positive you can put your money into that will guarantee addition as often as possible, I guarantee that that is better than fixing the money in the bank.

You need to oil the wheel of your finance now. If you can, trade with it, do something that takes the money out in the morning, and brings it back in the evening better than it took it. Do not park the money, send it on errand.

Instead of holding back, it is time to spend.

If you want to, you might want to consider putting that savings of yours into some start-ups, or existing businesses that need money to run properly. What you MUST do here however is:

-         Examine the books of that business and be sure you want to invest, get expert opinion on them before you put your money into them.

-         Settle the issue of trust early by signing whatever papers you need to sign, and ensure that the deal is validated.

-         Determine what nature of business relationship you are going to have with them – full-time partnership, project partnership, etc, and for how long this will be, the profit due to you, etc. These are very salient issues that you must never trivialize in your quest to hurriedly deploy your naira.

-         Be sure you know the personality behind the business, the capacity and capability.

-         Check, check and check again. You can never check enough before you put your whole savings into a business.

You are probably wondering why I push for you to put your money into entrepreneurial initiatives like start-ups and growing businesses rather than large corporate outfits. It is for obvious reasons:

-         The capital market will swallow whatever is left of your money because of the current bearish nature of the market;

-         You are probably not a long-term investor looking for where to rather save your money while the economic madness subsists;

-         The ease of fund withdrawal here is higher than the capital market, etc.

What Should You Do With Your Naira Now II?

Put it into real estate.

There is mass exodus of people from one part of the country to the other as a result of the election, and very many of these people are moving on a permanent basis, or at least will be away for a long-temporary time.

If you observe where the deluge is flowing into, you will note that the need for houses, landed property, and the like will be much higher there than ever. As a matter of fact, that is one of the conditions favourable for investment in the real estate business. If you invest in real estate in such places, you can never go wrong.

What You Must Do With Your Naira Now III?

Serve the deluge of people who have moved in their new environment.

You might want to say to me, I don’t have the capital that real estate requires, maybe you can at least start doing something for the people who have moved. You might want to start a business that will cater to their needs. Their children will go to school, their need for food (raw and processed) will be higher, their need for clothing will also be upward looking, etc, you might want to see which of these needs you can effectively take care of in accordance with the particular conditions that you have discovered.

Conclusion

My friend, if you do not do exactly what I have admonished here but you have seen that you need to deploy your naira somehow, and not park it, then my point is made. That certainly is the point I am trying to make. Spend your money now, that is the only way to save it.