But invest in what?
Due to what is probably a fear of risk, a lot of Nigerians would rather let their money sit in a savings account than invest. Because of that, we compiled a list of the best investment options in Nigeria right now along with explanations.
1. Mutual Funds
A mutual fund is a pool of investments made by different investors for the purpose of investing in a wide array of securities (real estate, equity, bonds etc) in an attempt to avoid major risk. Basically, it’s a company that brings a group of people looking to invest money and does that on their behalf.
Mutual funds are managed by professional money managers who allocate the fund’s investments and try to produce capital gains and/or income for the fund’s investors (depending on the investment objectives outlined in its brochure). Each investor owns shares of the mutual funds and these represent a share of the fund’s holdings.
2. Stock Market
A stock is a financial instrument sold by companies as a means to raise capital that represents ownership in a company and proportionate claim on its assets and earnings. When a person owns shares in a company, it means that the shareholder owns a slice of the business equal to the number of shares held (out of the total number of the company’s outstanding shares). E.g. If a company has 1 million shares and an individual possesses 100,000 shares, that person owns 10% of the company.
3. Bonds
A bond is a long-term agreement between a borrower (usually corporate or governmental) and a lender (investor) that contains the details of a loan and its payments. A bond has an end date when the principal of the loan is due to be paid to the bond owner (investor) and usually includes the terms for variable or fixed interest payments that will be made by the borrower.
Bonds are used by companies, municipalities, states, and governments to finance projects and operations.
4. Real Estate
Investing in real estate is one of the safest ways to invest money. Build/buy a house or land and rent or lease it out for a regular montly or yearly income. As long you don’t do it in a war torn area, you should be good.
