Yes, the CBN's reduction in interest rates can affect the returns from these investments, but the impact is different for each one. For example, if market rates fall from 20% to 16%, a new ₦1m Treasury Bill investment at 16% would give roughly ₦160k annualised, compared with ₦200k at 20%, before appRead more
Yes, the CBN’s reduction in interest rates can affect the returns from these investments, but the impact is different for each one.
For example, if market rates fall from 20% to 16%, a new ₦1m Treasury Bill investment at 16% would give roughly ₦160k annualised, compared with ₦200k at 20%, before applicable deductions.
For Fixed Deposit, a bank that was offering 18% may reduce its rate when you renew the deposit because banks’ funding costs and market rates have changed.
FGN Savings Bonds are slightly different. If you already bought a particular issue with a fixed coupon, the CBN rate cut doesn’t normally change that coupon. However, future bond issues can come with different rates.
Equity Funds are different again. Their return isn’t fixed. Lower interest rates can influence investors to move some money from fixed-income investments into equities, which can support stock prices, but the fund can still make a profit or loss depending on the performance of the companies it holds.
So I would look at it this way:
Rate cuts → fixed-income yields can gradually fall → new/renewed T-bills and fixed deposits may offer lower rates.
Equity funds → no fixed yield → returns depend mainly on the performance and valuation of the underlying stocks, although interest rates can influence the market.
The important thing is not to move money simply because rates have been cut. Compare the current yield, investment duration, liquidity, risk and your financial goal before deciding.
Good day. I wouldn't panic yet, especially since you're a first-time investor and you subscribed through your bank. One important thing is that subscribing to the IPO and receiving your CSCS details are two different processes. The official Dangote IPO information provides for first-time investors wRead more
Good day. I wouldn’t panic yet, especially since you’re a first-time investor and you subscribed through your bank.
One important thing is that subscribing to the IPO and receiving your CSCS details are two different processes. The official Dangote IPO information provides for first-time investors who don’t already have a CSCS account. If shares are eventually allotted to such an investor, the shares can be held temporarily under the Registrar’s process until the required CHN/CSCS details are provided.
For example, if you applied for 1,000 shares through your bank, you may receive a subscription confirmation showing that your application was successfully submitted. That does not necessarily mean the shares have already been allotted or that your CSCS details must immediately appear.
The offer is currently scheduled to run from 14 September to 13 October 2026, and the official IPO information currently says the allotment and listing dates are still to be confirmed.
What I would do now is:
1. Check your bank’s app/email/SMS to confirm that the subscription was successfully submitted.
2. Contact the bank’s investment/IPO support team and ask specifically for your CSCS/CHN details or the status of your investor registration.
3. Give them the transaction/reference number, subscription date and amount.
4. If the bank confirms that your application was successfully captured, keep the confirmation safely and wait for the allotment process.
5. Don’t pay anyone on WhatsApp who claims they can “release” your CSCS or guarantee your allotment. The SEC specifically warns investors to use only approved channels.
So, not receiving a CSCS number immediately does not by itself mean that your Dangote IPO application failed. The first thing is to get confirmation from the bank that your application was successfully captured.
Since you subscribed on 14 September, I would contact the bank now rather than simply waiting, just to make sure there isn’t a KYC or account-detail issue.
Yes, you can consider borrowing to start a business even if you don't have a job, but I wouldn't recommend taking a loan simply because you haven't found a job yet. A loan creates a fixed obligation, while a new business may not generate steady income immediately. For example, if you borrow ₦1m andRead more
Yes, you can consider borrowing to start a business even if you don’t have a job, but I wouldn’t recommend taking a loan simply because you haven’t found a job yet.
A loan creates a fixed obligation, while a new business may not generate steady income immediately. For example, if you borrow ₦1m and your monthly repayment is ₦100k, you must find that ₦100k every month whether the business makes a profit or not.
If you already have a business idea with proven demand, understand the numbers, know your expected profit and have a backup plan for repayment, then borrowing may make sense.
But if the plan is simply “I don’t have a job, so let me borrow money and see what business I can do,” I would be very careful. It may be better to start something small with your available resources, test the market, build cash flow and then use financing to expand.
The important thing is to make sure the business can realistically repay the loan, rather than depending on the business succeeding immediately.
With a ₦4m loan and a ₦400k monthly repayment, I would be very careful about choosing a business based on the hope of making ₦500k profit every month. You need a business that can generate enough cash flow, not just profit on paper. For example, if the business makes ₦500k profit monthly, after payiRead more
With a ₦4m loan and a ₦400k monthly repayment, I would be very careful about choosing a business based on the hope of making ₦500k profit every month. You need a business that can generate enough cash flow, not just profit on paper.
For example, if the business makes ₦500k profit monthly, after paying the ₦400k loan repayment, you’re left with only ₦100k. And if there is one bad month, you may struggle with the repayment.
I would first calculate the total cost of the loan, repayment period and interest. Then choose a business where the ₦4m can generate relatively fast and consistent cash flow.
For example, if you go into trading/distribution and invest ₦3m in stock while keeping ₦1m as working capital and emergency reserve, you could target a reasonable profit margin and reinvest part of the profit. But the actual profit will depend heavily on the particular products, turnover and operating costs.
Personally, I wouldn’t borrow ₦4m simply because I have an idea. I would first test the business with smaller capital, understand the demand, calculate the expected monthly revenue, expenses, net profit and worst-case scenario, then compare that with the ₦400k monthly repayment.
The most important question is not “What business can make ₦500k?” but “What business can reliably generate enough free cash flow to pay ₦400k every month and still leave me with meaningful profit?”
The difference is that business performance is about how the company is actually doing, while share price is what investors are currently willing to pay for the company’s shares. For example, imagine a company has 1 billion shares and makes ₦10bn profit this year. If next year its profit increases tRead more
The difference is that business performance is about how the company is actually doing, while share price is what investors are currently willing to pay for the company’s shares.
For example, imagine a company has 1 billion shares and makes ₦10bn profit this year. If next year its profit increases to ₦20bn, revenue grows and debt reduces, the business performance has improved.
But the share price doesn’t have to automatically double. It could rise, remain the same, or even fall because the market also considers investors’ expectations, interest rates, economic conditions and other factors.
For example, a stock can be trading at ₦100 even though the company is performing well, but if investors expected much better results and the company disappoints, the price could fall to ₦80.
So when analysing a stock, I don’t look at the share price alone. I look at how the business is performing and then ask whether the current share price is reasonable compared with its earnings, cash flow, debt, assets and future growth prospects.
Fundamental analysis is basically looking beyond the share price to understand the actual business behind an NGX stock. For example, assume Company A is trading at ₦100 and has 1 billion shares, while its annual profit is ₦20 billion. EPS = ₦20bn ÷ 1bn shares = ₦20 per share. P/E = ₦100 ÷ ₦20 = 5x.Read more
Fundamental analysis is basically looking beyond the share price to understand the actual business behind an NGX stock.
For example, assume Company A is trading at ₦100 and has 1 billion shares, while its annual profit is ₦20 billion.
EPS = ₦20bn ÷ 1bn shares = ₦20 per share.
P/E = ₦100 ÷ ₦20 = 5x.
Now assume Company B is also trading at ₦100, but it only makes ₦5 billion profit.
Its EPS is ₦5 and its P/E is 20x.
So although both stocks cost ₦100, you’re getting very different levels of earnings for the same share price.
But I wouldn’t stop at P/E. I would also check revenue and profit growth, debt, cash flow, dividends, ROE, the company’s industry, future growth prospects and the risks facing the business.
That’s how I would use fundamental analysis: understand the business first, then determine whether the price makes sense relative to what the business is actually producing.
If I want to research different equity funds in Nigeria, I wouldn't just look for the one with the highest return. I would first understand my investment goal, how long I want to invest and how much risk I can tolerate. For example, if I have ₦1 million and I'm investing for 5–10 years, I can comparRead more
If I want to research different equity funds in Nigeria, I wouldn’t just look for the one with the highest return. I would first understand my investment goal, how long I want to invest and how much risk I can tolerate.
For example, if I have ₦1 million and I’m investing for 5–10 years, I can compare 3–5 equity funds based on:
1. Historical performance – Look at 1-year, 3-year and 5-year performance rather than just the most recent return.
2. Performance against its benchmark – A fund making 20% isn’t necessarily impressive if its benchmark made 30%.
3. Fees and charges – Higher fees can reduce my actual return over time.
4. Portfolio holdings – I want to know which companies and sectors the fund invests in and whether the portfolio is well diversified.
5. Risk and volatility – Two funds can have similar average returns but very different levels of risk.
6. Fund manager – I would look at the manager’s experience and track record.
7. Liquidity and withdrawal terms – I need to understand how easily I can get my money out and whether there are any penalties or restrictions.
8. Investment strategy – I should understand exactly what the fund is trying to achieve and whether that strategy fits my own objective.
For example, suppose Fund A returned 40% last year, Fund B returned 30% and Fund C returned 25%. I shouldn’t automatically pick Fund A. If I check five years of performance and discover that Fund A is very volatile while Fund B has been more consistent and has lower fees, Fund B may fit my investment objective better.
So my approach would be: define my goal → shortlist SEC-approved funds → study the prospectus/fact sheets → compare returns, fees, holdings, risk and benchmark → then choose based on my own investment horizon and risk tolerance.
The “best” equity fund isn’t necessarily the one with the highest return; it’s the one whose strategy and risk profile are suitable for my particular investment goal.
Yes, I saw the MPC decision. I think the MPR cut is a good reason to review the portfolio, but I wouldn't advise moving everything from the money market fund into equities immediately. For example, if you have ₦10 million in an MMF earning around 25%, that's roughly ₦2.5 million in a year if the ratRead more
Yes, I saw the MPC decision. I think the MPR cut is a good reason to review the portfolio, but I wouldn’t advise moving everything from the money market fund into equities immediately.
For example, if you have ₦10 million in an MMF earning around 25%, that’s roughly ₦2.5 million in a year if the rate remains constant. If yields eventually fall to 20%, the return could reduce to about ₦2 million.
That could make equity funds more attractive for money you don’t need in the short term. But equities also carry higher risk. If you move ₦4 million into an equity fund and it gains 15%, it becomes about ₦4.6 million. But if the market falls by 15%, it becomes about ₦3.4 million.
So rather than moving the entire ₦10 million at once, I would consider gradual rebalancing—for example, keeping ₦6 million in money-market/fixed-income investments for stability and liquidity, while gradually moving ₦4 million into a diversified equity fund for long-term growth.
I would also look at the investor’s time horizon, liquidity needs, inflation, current equity valuations and risk tolerance.
So, for me, the MPR cut is a reason to review the allocation, not necessarily a signal to move everything from MMFs into equities. The goal should be to have the right balance between capital preservation, liquidity and long-term growth.
I think both sides have a point, but from a personal finance perspective, I believe saving should be planned before discretionary spending, rather than waiting to see what is left at the end of the month. For example, imagine someone earns ₦200,000 and currently saves ₦2,000 every month. He says, “WRead more
I think both sides have a point, but from a personal finance perspective, I believe saving should be planned before discretionary spending, rather than waiting to see what is left at the end of the month.
For example, imagine someone earns ₦200,000 and currently saves ₦2,000 every month. He says, “When my salary increases to ₦300,000, I will start saving ₦20,000.”
My concern is that he may eventually earn ₦300,000 and still say, “Things are expensive now, let me wait until my salary increases again.” Before he knows it, his income has increased but his savings haven’t.
Instead, suppose his salary increases to ₦300,000 and he immediately increases his savings from ₦2,000 to just ₦5,000.
He now has ₦295,000 available instead of ₦300,000. The difference is only ₦5,000, and after some time he may adjust his spending and realise that he can actually live with it.
Then when his salary increases again, he can move from ₦5,000 to ₦10,000, then ₦15,000 and eventually ₦20,000.
The important lesson for me is that we shouldn’t wait for a “perfect income” before developing the habit of saving.
However, I’m not saying someone should save so much that they cannot afford food, rent, transportation or other necessities. The amount saved must be realistic.
For example:
Income: ₦200,000
Essential expenses: ₦170,000
Savings: ₦5,000
Balance for other spending: ₦25,000
When income increases to ₦250,000, instead of allowing the entire ₦50,000 increase to disappear into new expenses, maybe increase savings to ₦10,000.
So for me, the principle is simple: don’t save only what is left after spending. Decide what you can realistically save first, then organise your spending around what remains.
Because if we keep waiting for our income to become “enough” before saving, there is a real possibility that our lifestyle will keep increasing alongside our income.
An underwriter is basically a bank or financial institution that helps guarantee an IPO. For example, if a company wants to raise ₦10 billion through an IPO but the public only subscribes for ₦7 billion, an underwriter may be required, depending on the agreement, to take up some or all of the remainRead more
An underwriter is basically a bank or financial institution that helps guarantee an IPO.
For example, if a company wants to raise ₦10 billion through an IPO but the public only subscribes for ₦7 billion, an underwriter may be required, depending on the agreement, to take up some or all of the remaining ₦3 billion.
So, in simple terms, the underwriter gives the company some assurance that the IPO can raise the required funds, while taking on the risk of the shares that the public doesn’t buy. In return, the underwriter usually receives a fee.
That’s why, when looking at an IPO, it’s important to check whether there is an underwriter and what exactly their agreement covers.
How Does a CBN Interest Rate Cut Affect Equity Funds, Treasury Bills, FGN Savings Bonds and Fixed Deposits in Nigeria?
Yes, the CBN's reduction in interest rates can affect the returns from these investments, but the impact is different for each one. For example, if market rates fall from 20% to 16%, a new ₦1m Treasury Bill investment at 16% would give roughly ₦160k annualised, compared with ₦200k at 20%, before appRead more
Yes, the CBN’s reduction in interest rates can affect the returns from these investments, but the impact is different for each one.
For example, if market rates fall from 20% to 16%, a new ₦1m Treasury Bill investment at 16% would give roughly ₦160k annualised, compared with ₦200k at 20%, before applicable deductions.
For Fixed Deposit, a bank that was offering 18% may reduce its rate when you renew the deposit because banks’ funding costs and market rates have changed.
FGN Savings Bonds are slightly different. If you already bought a particular issue with a fixed coupon, the CBN rate cut doesn’t normally change that coupon. However, future bond issues can come with different rates.
Equity Funds are different again. Their return isn’t fixed. Lower interest rates can influence investors to move some money from fixed-income investments into equities, which can support stock prices, but the fund can still make a profit or loss depending on the performance of the companies it holds.
So I would look at it this way:
Rate cuts → fixed-income yields can gradually fall → new/renewed T-bills and fixed deposits may offer lower rates.
Equity funds → no fixed yield → returns depend mainly on the performance and valuation of the underlying stocks, although interest rates can influence the market.
The important thing is not to move money simply because rates have been cut. Compare the current yield, investment duration, liquidity, risk and your financial goal before deciding.
See lessWhy Haven’t I Received My CSCS Account After Subscribing to the Dangote IPO?
Good day. I wouldn't panic yet, especially since you're a first-time investor and you subscribed through your bank. One important thing is that subscribing to the IPO and receiving your CSCS details are two different processes. The official Dangote IPO information provides for first-time investors wRead more
Good day. I wouldn’t panic yet, especially since you’re a first-time investor and you subscribed through your bank.
One important thing is that subscribing to the IPO and receiving your CSCS details are two different processes. The official Dangote IPO information provides for first-time investors who don’t already have a CSCS account. If shares are eventually allotted to such an investor, the shares can be held temporarily under the Registrar’s process until the required CHN/CSCS details are provided.
For example, if you applied for 1,000 shares through your bank, you may receive a subscription confirmation showing that your application was successfully submitted. That does not necessarily mean the shares have already been allotted or that your CSCS details must immediately appear.
The offer is currently scheduled to run from 14 September to 13 October 2026, and the official IPO information currently says the allotment and listing dates are still to be confirmed.
What I would do now is:
1. Check your bank’s app/email/SMS to confirm that the subscription was successfully submitted.
2. Contact the bank’s investment/IPO support team and ask specifically for your CSCS/CHN details or the status of your investor registration.
3. Give them the transaction/reference number, subscription date and amount.
4. If the bank confirms that your application was successfully captured, keep the confirmation safely and wait for the allotment process.
5. Don’t pay anyone on WhatsApp who claims they can “release” your CSCS or guarantee your allotment. The SEC specifically warns investors to use only approved channels.
So, not receiving a CSCS number immediately does not by itself mean that your Dangote IPO application failed. The first thing is to get confirmation from the bank that your application was successfully captured.
Since you subscribed on 14 September, I would contact the bank now rather than simply waiting, just to make sure there isn’t a KYC or account-detail issue.
See lessIs It Advisable to Borrow Money to Start a Business in Nigeria Without a Job?
Yes, you can consider borrowing to start a business even if you don't have a job, but I wouldn't recommend taking a loan simply because you haven't found a job yet. A loan creates a fixed obligation, while a new business may not generate steady income immediately. For example, if you borrow ₦1m andRead more
Yes, you can consider borrowing to start a business even if you don’t have a job, but I wouldn’t recommend taking a loan simply because you haven’t found a job yet.
A loan creates a fixed obligation, while a new business may not generate steady income immediately. For example, if you borrow ₦1m and your monthly repayment is ₦100k, you must find that ₦100k every month whether the business makes a profit or not.
If you already have a business idea with proven demand, understand the numbers, know your expected profit and have a backup plan for repayment, then borrowing may make sense.
But if the plan is simply “I don’t have a job, so let me borrow money and see what business I can do,” I would be very careful. It may be better to start something small with your available resources, test the market, build cash flow and then use financing to expand.
The important thing is to make sure the business can realistically repay the loan, rather than depending on the business succeeding immediately.
See lessWhat business can I start with a ₦4 million loan to generate ₦500,000 monthly profit in Nigeria?
With a ₦4m loan and a ₦400k monthly repayment, I would be very careful about choosing a business based on the hope of making ₦500k profit every month. You need a business that can generate enough cash flow, not just profit on paper. For example, if the business makes ₦500k profit monthly, after payiRead more
With a ₦4m loan and a ₦400k monthly repayment, I would be very careful about choosing a business based on the hope of making ₦500k profit every month. You need a business that can generate enough cash flow, not just profit on paper.
For example, if the business makes ₦500k profit monthly, after paying the ₦400k loan repayment, you’re left with only ₦100k. And if there is one bad month, you may struggle with the repayment.
I would first calculate the total cost of the loan, repayment period and interest. Then choose a business where the ₦4m can generate relatively fast and consistent cash flow.
For example, if you go into trading/distribution and invest ₦3m in stock while keeping ₦1m as working capital and emergency reserve, you could target a reasonable profit margin and reinvest part of the profit. But the actual profit will depend heavily on the particular products, turnover and operating costs.
Personally, I wouldn’t borrow ₦4m simply because I have an idea. I would first test the business with smaller capital, understand the demand, calculate the expected monthly revenue, expenses, net profit and worst-case scenario, then compare that with the ₦400k monthly repayment.
The most important question is not “What business can make ₦500k?” but “What business can reliably generate enough free cash flow to pay ₦400k every month and still leave me with meaningful profit?”
See lessWhat Is the Difference Between Share Price and Business Performance on NGX?
The difference is that business performance is about how the company is actually doing, while share price is what investors are currently willing to pay for the company’s shares. For example, imagine a company has 1 billion shares and makes ₦10bn profit this year. If next year its profit increases tRead more
The difference is that business performance is about how the company is actually doing, while share price is what investors are currently willing to pay for the company’s shares.
For example, imagine a company has 1 billion shares and makes ₦10bn profit this year. If next year its profit increases to ₦20bn, revenue grows and debt reduces, the business performance has improved.
But the share price doesn’t have to automatically double. It could rise, remain the same, or even fall because the market also considers investors’ expectations, interest rates, economic conditions and other factors.
For example, a stock can be trading at ₦100 even though the company is performing well, but if investors expected much better results and the company disappoints, the price could fall to ₦80.
So when analysing a stock, I don’t look at the share price alone. I look at how the business is performing and then ask whether the current share price is reasonable compared with its earnings, cash flow, debt, assets and future growth prospects.
See lessHow Does Fundamental Analysis Work for NGX Stocks?
Fundamental analysis is basically looking beyond the share price to understand the actual business behind an NGX stock. For example, assume Company A is trading at ₦100 and has 1 billion shares, while its annual profit is ₦20 billion. EPS = ₦20bn ÷ 1bn shares = ₦20 per share. P/E = ₦100 ÷ ₦20 = 5x.Read more
Fundamental analysis is basically looking beyond the share price to understand the actual business behind an NGX stock.
For example, assume Company A is trading at ₦100 and has 1 billion shares, while its annual profit is ₦20 billion.
EPS = ₦20bn ÷ 1bn shares = ₦20 per share.
P/E = ₦100 ÷ ₦20 = 5x.
Now assume Company B is also trading at ₦100, but it only makes ₦5 billion profit.
Its EPS is ₦5 and its P/E is 20x.
So although both stocks cost ₦100, you’re getting very different levels of earnings for the same share price.
But I wouldn’t stop at P/E. I would also check revenue and profit growth, debt, cash flow, dividends, ROE, the company’s industry, future growth prospects and the risks facing the business.
That’s how I would use fundamental analysis: understand the business first, then determine whether the price makes sense relative to what the business is actually producing.
See lessHow can I research different equity funds in Nigeria to find the best one for my investment goals?
If I want to research different equity funds in Nigeria, I wouldn't just look for the one with the highest return. I would first understand my investment goal, how long I want to invest and how much risk I can tolerate. For example, if I have ₦1 million and I'm investing for 5–10 years, I can comparRead more
If I want to research different equity funds in Nigeria, I wouldn’t just look for the one with the highest return. I would first understand my investment goal, how long I want to invest and how much risk I can tolerate.
For example, if I have ₦1 million and I’m investing for 5–10 years, I can compare 3–5 equity funds based on:
1. Historical performance – Look at 1-year, 3-year and 5-year performance rather than just the most recent return.
2. Performance against its benchmark – A fund making 20% isn’t necessarily impressive if its benchmark made 30%.
3. Fees and charges – Higher fees can reduce my actual return over time.
4. Portfolio holdings – I want to know which companies and sectors the fund invests in and whether the portfolio is well diversified.
5. Risk and volatility – Two funds can have similar average returns but very different levels of risk.
6. Fund manager – I would look at the manager’s experience and track record.
7. Liquidity and withdrawal terms – I need to understand how easily I can get my money out and whether there are any penalties or restrictions.
8. Investment strategy – I should understand exactly what the fund is trying to achieve and whether that strategy fits my own objective.
For example, suppose Fund A returned 40% last year, Fund B returned 30% and Fund C returned 25%. I shouldn’t automatically pick Fund A. If I check five years of performance and discover that Fund A is very volatile while Fund B has been more consistent and has lower fees, Fund B may fit my investment objective better.
So my approach would be: define my goal → shortlist SEC-approved funds → study the prospectus/fact sheets → compare returns, fees, holdings, risk and benchmark → then choose based on my own investment horizon and risk tolerance.
The “best” equity fund isn’t necessarily the one with the highest return; it’s the one whose strategy and risk profile are suitable for my particular investment goal.
See lessShould I rebalance my portfolio from money market funds to equity funds after an MPR cut?
Yes, I saw the MPC decision. I think the MPR cut is a good reason to review the portfolio, but I wouldn't advise moving everything from the money market fund into equities immediately. For example, if you have ₦10 million in an MMF earning around 25%, that's roughly ₦2.5 million in a year if the ratRead more
Yes, I saw the MPC decision. I think the MPR cut is a good reason to review the portfolio, but I wouldn’t advise moving everything from the money market fund into equities immediately.
For example, if you have ₦10 million in an MMF earning around 25%, that’s roughly ₦2.5 million in a year if the rate remains constant. If yields eventually fall to 20%, the return could reduce to about ₦2 million.
That could make equity funds more attractive for money you don’t need in the short term. But equities also carry higher risk. If you move ₦4 million into an equity fund and it gains 15%, it becomes about ₦4.6 million. But if the market falls by 15%, it becomes about ₦3.4 million.
So rather than moving the entire ₦10 million at once, I would consider gradual rebalancing—for example, keeping ₦6 million in money-market/fixed-income investments for stability and liquidity, while gradually moving ₦4 million into a diversified equity fund for long-term growth.
I would also look at the investor’s time horizon, liquidity needs, inflation, current equity valuations and risk tolerance.
So, for me, the MPR cut is a reason to review the allocation, not necessarily a signal to move everything from MMFs into equities. The goal should be to have the right balance between capital preservation, liquidity and long-term growth.
See lessShould You Save Before Spending or Spend Before Saving?
I think both sides have a point, but from a personal finance perspective, I believe saving should be planned before discretionary spending, rather than waiting to see what is left at the end of the month. For example, imagine someone earns ₦200,000 and currently saves ₦2,000 every month. He says, “WRead more
I think both sides have a point, but from a personal finance perspective, I believe saving should be planned before discretionary spending, rather than waiting to see what is left at the end of the month.
For example, imagine someone earns ₦200,000 and currently saves ₦2,000 every month. He says, “When my salary increases to ₦300,000, I will start saving ₦20,000.”
My concern is that he may eventually earn ₦300,000 and still say, “Things are expensive now, let me wait until my salary increases again.” Before he knows it, his income has increased but his savings haven’t.
Instead, suppose his salary increases to ₦300,000 and he immediately increases his savings from ₦2,000 to just ₦5,000.
He now has ₦295,000 available instead of ₦300,000. The difference is only ₦5,000, and after some time he may adjust his spending and realise that he can actually live with it.
Then when his salary increases again, he can move from ₦5,000 to ₦10,000, then ₦15,000 and eventually ₦20,000.
The important lesson for me is that we shouldn’t wait for a “perfect income” before developing the habit of saving.
However, I’m not saying someone should save so much that they cannot afford food, rent, transportation or other necessities. The amount saved must be realistic.
For example:
Income: ₦200,000
Essential expenses: ₦170,000
Savings: ₦5,000
Balance for other spending: ₦25,000
When income increases to ₦250,000, instead of allowing the entire ₦50,000 increase to disappear into new expenses, maybe increase savings to ₦10,000.
So for me, the principle is simple: don’t save only what is left after spending. Decide what you can realistically save first, then organise your spending around what remains.
Because if we keep waiting for our income to become “enough” before saving, there is a real possibility that our lifestyle will keep increasing alongside our income.
See lessHow does an undersubscribed IPO work in Nigeria?
An underwriter is basically a bank or financial institution that helps guarantee an IPO. For example, if a company wants to raise ₦10 billion through an IPO but the public only subscribes for ₦7 billion, an underwriter may be required, depending on the agreement, to take up some or all of the remainRead more
An underwriter is basically a bank or financial institution that helps guarantee an IPO.
For example, if a company wants to raise ₦10 billion through an IPO but the public only subscribes for ₦7 billion, an underwriter may be required, depending on the agreement, to take up some or all of the remaining ₦3 billion.
So, in simple terms, the underwriter gives the company some assurance that the IPO can raise the required funds, while taking on the risk of the shares that the public doesn’t buy. In return, the underwriter usually receives a fee.
That’s why, when looking at an IPO, it’s important to check whether there is an underwriter and what exactly their agreement covers.
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