How to Wisely Invest Small Amounts of Money in Nigeria

In the vibrant landscape of Nigeria, there’s a hidden treasure waiting to be discovered – the art of investing even with small amounts of money. Many hold the misconception that investing is a privilege solely reserved for the affluent. But today, I’m here to debunk that myth and show you six practical ways to make your money work for you, no matter the size of your wallet.

1. FGN Savings Bond (FGNSB)

Imagine a world where the Federal Government of Nigeria opens its doors to retail investors. Well, it’s not just a dream; it’s a reality with the FGN Savings Bond. These bonds come in two- and three-year tenures, offering enticing interest rates ranging from 12 to 14 percent per annum. These rates not only beat the returns of regular bank savings accounts but also outpace inflation, ensuring your money grows. And guess what? You can get started with as little as N5,000 – just reach out to your stockbroker, and you’re on your way.

2. Mutual Funds

Let’s talk about simplicity. Mutual funds are your ticket to effortless investing in Nigeria. With a humble N5,000, you can join various promising mutual funds. Picture this: professionals handle the management, pooling funds from diverse investors and wisely investing them in profitable financial instruments. It’s perfect if you’re not a financial whiz or if time isn’t on your side. In 2018, Nigeria’s mutual fund market was worth an impressive N600 billion ($1.96 billion), with an average return of about 15 percent.

3. Online Investment Apps

The rise of financial technology startups in Nigeria is revolutionizing the investment game. These apps are making it easier than ever for everyday individuals to dive into the world of finance. Here are a few gems to consider:

• Cowrywise: Cowrywise is a prominent digital-first wealth management platform that primarily targets the younger generation of Nigerians and Africans. Its mission is to simplify and democratize access to savings and investment products. Cowrywise boasts the largest pool of mutual funds in Nigeria and offers various savings options such as Regular savings, Emergency savings, Halal savings, Savings circles, and Money Duo. Additionally, the platform provides investment opportunities, including Naira and Dollar mutual funds. Cowrywise also places a strong emphasis on financial education through its blog, making it a comprehensive financial platform.
• Piggyvest: Piggyvest is a leading online savings and investment platform in Nigeria with a user base of over 4 million customers. The platform offers a range of in-app features designed to help users save and invest their money effectively. Piggyvest Investify allows users to initiate investments with as little as N5000, making it accessible to a wide range of individuals.
• Bamboo: Bamboo is an investment platform that focuses on providing access to stocks. It enables users to buy and sell stocks in both the Nigerian and US markets, giving them the opportunity to participate in the world of stock trading.
• Trove: Trove is a digital investment app in Nigeria that facilitates investment in both local and foreign stocks, bonds, ETFs, and other securities. The platform allows users to start investing with a minimum of N1000, making it accessible to those with varying budget levels. Trove offers a diverse selection of over 4000 stocks for investment, providing users with ample choices.
• Risevest: Risevest is a digital investment app that functions as a dollar asset manager. It connects Nigerians to foreign investment opportunities, including fixed income, US real estate, and US stocks. Risevest acts as a fund manager, assisting users in growing and managing their money effectively within these foreign investment options.

4. Online Agric Investment Portals

Some standout options here are Farmcrowdy and Thriveagric, where you can invest in agriculture by sponsoring different farm projects. The return? A guaranteed up to 50 percent per farming cycle.

5. Money Market Instruments

Now, let’s talk about making the most of your money. Money market instruments open doors for regular folks to start investing with modest funds. Consider regular bank savings and fixed deposit accounts – find the bank with the best interest rates. There are also options like Commercial Papers, Bankers’ Acceptances, and Treasury Bills. While some require larger initial investments, you can jump into the Treasury Bills market with just N100,000. For the simplest approach, dive into money market funds – they focus on money market instruments and often offer returns above inflation rates.

6. Stocks

Lastly, let’s shatter the myth that stocks are only for the elite. With as little as N5,000, you can begin your stock market journey. Here’s how it works: you can earn through capital appreciation as stock prices rise, cash dividends from a company’s profits, and even bonus issues that give you additional shares.

In conclusion, your financial journey doesn’t depend on having deep pockets. Start small, and in no time, you’ll see your financial future brighten. Establish a solid financial plan, minimize debt, create an emergency fund, and regularly invest in interest-yielding financial instruments.

Align your investments with your short, medium, and long-term financial goals. Remember the golden rule: stash away money needed soon in interest-yielding savings accounts, funds for the next year in bank deposit accounts or high-yield online investing apps, and funds for 2-3 years in FGN Savings Bonds, Mutual Funds, or stocks.

For longer-term goals, consider dividend-paying stocks, FGN Bonds, Corporate Bonds, or investment property if you have sufficient capital. So, what are you waiting for? Start your journey to financial prosperity today!