INVESTING & WEALTH BUILDING
This section answers real questions about investing in Nigeria. Learn how to invest in stocks market, treasury bills, bonds, NIDF, Commecial Papers and other opportunities. Whether you are a beginner or experienced, you will find simple guidance to grow your money.
Share
Can a Money Market Fund Lose Money in Nigeria?
Mama Ngozi: Ah, my dear, let me explain why your Mutual Money Fund (MMF) doesn't yield interest and why it dropped by ₦5000.You see, investing in an MMF is like planting a seed in your farm. You hope it will grow into a big, healthy tree. But sometimes, just like farming, the weather can be unpredicRead more
Mama Ngozi: Ah, my dear, let me explain why your Mutual Money Fund (MMF) doesn’t yield interest and why it dropped by ₦5000.
You see, investing in an MMF is like planting a seed in your farm. You hope it will grow into a big, healthy tree. But sometimes, just like farming, the weather can be unpredictable. In the case of your MMF, the value can go up and down, just like crops can flourish or struggle depending on the weather.
Now, MMFs pool money from different people like a group contribution in the village meeting. This money is then invested in short-term, safe instruments like Treasury Bills – kinda like lending money to the government, which is considered low risk but doesn’t yield high interest. So, the growth in an MMF doesn’t come mainly from interest but from the underlying investments.
When there are changes in the economy or market conditions, just like sudden rain can affect your crops, the value of your MMF can also drop. It’s part of the cycle of investing. Removing your investment in a panic when the value drops may not be the best move. It’s like uprooting your crops because of a sudden heavy rain. It’s important to stay calm and think long-term.
If you need the money urgently or if your goals have changed, then it might be wise to reconsider. Otherwise, try to understand the reasons behind the drop. Remember, investing is a journey with ups and downs, just like farming. Patience and a long-term view are key.
Remember, dear, investing is like farming. It requires patience, resilience, and a long-term perspective. Don’t let a sudden drop discourage you. Just like in farming, a steady hand and a watchful eye will help you weather the storms and reap the rewards in due time.
See lessHow Long Does It Take to Start Earning Returns From a Mutual Fund Investment in Nigeria?
Let me tell you a simple story that Mama Ngozi, who sells tomatoes in the village, can understand. Imagine you decide to invest your money in a mutual fund. It's like when Mama Ngozi goes to buy tomatoes from a trusted supplier at the market. She gives the supplier her money and selects the best tomRead more
Let me tell you a simple story that Mama Ngozi, who sells tomatoes in the village, can understand. Imagine you decide to invest your money in a mutual fund. It’s like when Mama Ngozi goes to buy tomatoes from a trusted supplier at the market. She gives the supplier her money and selects the best tomatoes she wants to buy. The supplier promises to give her back more tomatoes later on.
Now, once you invest your money in a mutual fund, your money is pooled together with money from other investors, just like Mama Ngozi’s money joins with other customers’ money at the market. This pooled money is then used to buy a variety of investments like stocks, bonds, and other securities.
When will you start seeing returns on your investment? Well, just like Mama Ngozi doesn’t immediately see more tomatoes right after she buys, it takes some time for your investment to grow. The time it takes for you to start earning returns can vary depending on how the investments in the fund perform. It could be a few months or even longer before you see significant returns.
As for how often you receive the returns on your investment, it’s a bit like how Mama Ngozi may not get tomatoes every day from her supplier. In a mutual fund, the returns are usually paid out periodically. Some funds pay out dividends regularly, while others reinvest the returns to buy more investments, which can help your investment grow over time.
So, investing in a mutual fund is like Mama Ngozi investing in tomatoes at the market. It takes time for your investment to grow, but with patience and the right choices, you can see your money multiply over time. Just like Mama Ngozi carefully selects her tomatoes, you can choose the right mutual fund that suits your financial goals and watch your investment grow over time. Do you understand now?
See lessIs dangote cement preparing for a secondary listing on the London stock exchange?
Imagine if Dangote Cement were a popular tomato seller like Mama Ngozi in the village. Now, let's imagine that Dangote Cement is thinking of opening another shop in a different market where more people come to buy tomatoes. This new market is far away, in a city called London. Just like Mama Ngozi wRead more
Imagine if Dangote Cement were a popular tomato seller like Mama Ngozi in the village. Now, let’s imagine that Dangote Cement is thinking of opening another shop in a different market where more people come to buy tomatoes. This new market is far away, in a city called London. Just like Mama Ngozi wants to attract more customers by opening a new shop, Dangote Cement wants to attract more investors by listing on the London Stock Exchange.
As a Nigerian investor, this move could mean a few things for you. Firstly, it could potentially attract more foreign investors to buy shares in Dangote Cement. This increased demand for the company’s shares could lead to a rise in the share price, benefiting current shareholders like you. On the other hand, it could also mean more competition for shares, making them more expensive to buy.
If Dangote Cement’s secondary listing on the London Stock Exchange is successful, it could enhance the company’s reputation globally, which might reflect positively on its Nigerian operations as well. This could potentially boost the company’s performance and profitability, indirectly benefiting shareholders.
However, it’s important to remember that stock prices can be influenced by various factors such as market conditions, company performance, and investor sentiments. So, while a secondary listing may have some impact on the share price, it’s just one of many factors to consider when investing in a company like Dangote Cement.
In conclusion, a secondary listing on the London Stock Exchange by Dangote Cement could have both positive and negative implications for Nigerian investors like you. It’s essential to stay informed about the company’s developments and the broader market to make informed investment decisions. Remember, investing always carries risks, so it’s wise to diversify your portfolio and consult with a financial advisor if needed.
See lessHow Does the Coronation Infrastructure Fund Work?
Do you know those big pots they use at naming ceremonies in the village to cook lots of delicious food for everyone? Imagine there is a big pot like that, but instead of cooking food, it helps people like you and me save money and invest for the future. That big pot is where Coronation InfrastructurRead more
Do you know those big pots they use at naming ceremonies in the village to cook lots of delicious food for everyone? Imagine there is a big pot like that, but instead of cooking food, it helps people like you and me save money and invest for the future. That big pot is where Coronation Infrastructure Fund comes in.
Now, this pot is like a special place where many people come together to put their small small money. With all these small small money inside the pot, the people who manage the pot can use it to invest in big big things like building new roads, bridges, or even power plants in Nigeria.
So, Coronation Infrastructure Fund is all about bringing people’s money together to invest in important projects that can help the country grow and develop. When you put your money in this pot, you become a part-owner of these big projects, just like owning a share in a company.
By investing in Coronation Infrastructure Fund, you are not just saving money for yourself, but you are also helping to build things that can make our country better for everyone. It’s like being a superhero with your money, making a difference in the development of Nigeria.
Now, if you want to be a part of this and join others in investing in important projects for our country, you can consider putting your money into Coronation Infrastructure Fund. Just like you add meat to the pot at a naming ceremony, you can add your money to this special pot for a chance to grow your savings and contribute to the country’s progress.
See lessHow Can a Child Claim His Late Father’s Shares and Investments in Nigeria?
In Nigeria, a child can ultimately inherit a late father's shares, mutual funds, bonds, money-market investments and other financial assets, but normally the child cannot simply approach the stockbroker and withdraw or transfer them. The assets first have to be dealt with as part of the deceased's eRead more
In Nigeria, a child can ultimately inherit a late father’s shares, mutual funds, bonds, money-market investments and other financial assets, but normally the child cannot simply approach the stockbroker and withdraw or transfer them. The assets first have to be dealt with as part of the deceased’s estate.
See less1. First establish whether there was a Will
There are two main situations:
A. Father left a valid Will
The Will should identify the beneficiaries and appoint an executor/executors.
The executor obtains a Grant of Probate from the appropriate Probate Registry.
The executor then administers the investments according to the Will.
B. Father died without a Will
The family applies for Letters of Administration.
The Probate Registry appoints the administrator(s).
The administrator(s) collect and administer the deceased’s investments before distributing them to the lawful beneficiaries.
For shares specifically, SEC rules provide for transmission to the deceased’s legal representatives, subject to the required documentation. �
SEC Nigeria +1
2. Find all the father’s investments
This is very important because families sometimes know about only one or two investments.
Look for:
CSCS statement/CHN
Stockbroker account details
Share certificates
Dividend warrants or e-dividend records
Bank statements showing dividend payments
Mutual fund statements
Money-market fund accounts
Treasury bills/bonds
Investment apps/platforms
Pension or insurance investments
Fixed deposits
Other securities
If the family doesn’t know which shares he owned, CSCS has services such as Global Search, stock-position statements and portfolio valuation that can help establish holdings. �
CSCS
3. Obtain the death certificate
The original death certificate or acceptable certified documentation will normally be required when processing the deceased’s investments. SEC’s published transmission requirements specifically include the original death certificate for sighting. �
SEC Nigeria
4. Obtain Probate or Letters of Administration
This is usually the critical step.
The family should approach the Probate Registry of the appropriate State High Court to process the estate.
The legal representative—not simply one of the children—will generally be the person authorised to deal with the investments.
5. Approach the stockbroker/registrar/CSCS
Once Probate or Letters of Administration has been obtained, the legal representative can approach the relevant institutions.
For Nigerian shares, the process can involve:
CSCS → Stockbroker → Registrar
CSCS confirms that for an estate account, documentation can include the Will/Letter of Administration, along with identification for the person being captured on behalf of the estate. �
CSCS
The registrar may require documents including:
Letter introducing the executor/administrator
Death certificate
Probate or Letters of Administration
Newspaper advert/Gazette where applicable
Evidence that the deceased owned the shares, such as CSCS statements, share certificates or dividend records. �
SEC Nigeria
6. The assets are then distributed to the beneficiaries
Suppose the deceased left:
₦20 million in Nigerian shares
₦10 million in a money-market fund
₦5 million in Treasury bills
₦3 million in other investments
The total investment estate could be ₦38 million.
The executor/administrator doesn’t simply give the entire ₦38 million to the eldest child. The assets are administered according to the Will or applicable succession law, after settling legitimate estate obligations and expenses.
If the child is a minor, the situation is different. The child’s inheritance may need to be held and administered by an appropriate legal representative/trustee until the child reaches the relevant age or pursuant to the court’s directions.
Important point
Being the deceased’s biological child does not, by itself, give the child authority to sell or withdraw the father’s shares.
The safer sequence is:
Father dies → locate investments → obtain death certificate → Probate/Letters of Administration → identify estate assets → transmission/collection → settle estate obligations → distribute to beneficiaries.
Also, don’t allow a family member to sell the deceased’s shares merely because they possess his CSCS statement, password, phone or broker details. There have been regulatory cases involving unauthorised dealings in deceased investors’ shares, and the SEC has required restoration of shares to estates.
SEC Nigeria
Is Portfolio Diversification Better Than Investing More Money in One Nigerian Stock?
Have you ever seen a farmer plant only one type of crop in the entire farm? No, right? Just like a farmer plants different crops to reduce the risk of losing everything to pests or bad weather, diversifying your investment portfolio means spreading your money across different types of investments toRead more
Have you ever seen a farmer plant only one type of crop in the entire farm? No, right? Just like a farmer plants different crops to reduce the risk of losing everything to pests or bad weather, diversifying your investment portfolio means spreading your money across different types of investments to reduce risks in case one doesn’t perform well.
Let me break it down for you like this: Imagine you have a basket of eggs. If you put all the eggs in one basket and something happens to that basket, you will lose all your eggs. But if you put the eggs in different baskets and one basket falls, you still have eggs left in the other baskets.
Similarly, rather than putting all your money into just one company’s shares, it’s wiser to invest in different sectors like agriculture, real estate, technology, and more. This way, even if one sector is not doing well, your overall investment can still grow because other sectors are thriving.
So, diversifying your portfolio can help protect your money from unexpected changes in the market. It’s like having multiple streams of income instead of relying on just one source. Mama Ngozi understands this principle well because she knows that not every tomato will ripen at the same time in her farm.
Remember, investing is a journey, and by diversifying your portfolio, you are building a strong financial foundation that can weather different storms in the market.
See lessWhat Does Decentralization Mean in the Nigerian Stock Market?
Decentralization is like when Mama Ngozi, the tomato seller, decides to divide her tomato business into different sections and gives each of her children a section to manage. This way, Mama Ngozi doesn't have to oversee everything by herself; instead, each child takes care of their part independentlRead more
Decentralization is like when Mama Ngozi, the tomato seller, decides to divide her tomato business into different sections and gives each of her children a section to manage. This way, Mama Ngozi doesn’t have to oversee everything by herself; instead, each child takes care of their part independently.
In the Nigerian stock market, decentralization means spreading your investments across different types of assets, like spreading the tomatoes in different baskets. By investing in a variety of stocks, bonds, and other securities, you reduce the risk of losing all your money if one investment performs poorly. It’s like not putting all your tomatoes in one basket.
The effect of decentralization on an investor’s portfolio is that it helps to lower risk. If one investment doesn’t do well, the others can still perform positively and balance out the overall outcome. It’s like having different tomato varieties – if one type doesn’t sell well, the other types can make up for it and keep the business going.
By decentralizing your investments in the stock market, you are reducing the impact of any single investment on your overall portfolio. This way, you can protect your money and have a better chance of seeing positive returns over the long term. Just like Mama Ngozi diversifying her tomato business to ensure steady income, decentralization in the stock market helps investors manage risk and increase the likelihood of financial success.
See lessHow Can I Invest in MTN Nigeria Shares as a Beginner?
Alright, let's explore how someone can invest in MTN in a way that even Mama Ngozi in the village will grasp easily.Imagine you love MTN, not just using their services but also owning a piece of the company. Investing in MTN is like being a part-owner of the business, just like when you own a shop iRead more
Alright, let’s explore how someone can invest in MTN in a way that even Mama Ngozi in the village will grasp easily.
Imagine you love MTN, not just using their services but also owning a piece of the company. Investing in MTN is like being a part-owner of the business, just like when you own a shop in the market.
Here’s how it works: When you invest in MTN, you are buying what is called shares or stocks. These shares represent your ownership in the company. It’s similar to owning a small piece of a big pot of soup in the village. The more shares you have, the bigger your portion of the company.
To invest in MTN, you need to go through a stockbroker. Think of a stockbroker as your market friend who helps you buy or sell your shares in the stock market. You give the stockbroker your money, and they buy the MTN shares for you.
Once you have bought the shares, these shares will rise or fall in value depending on how well MTN is doing. If the company does well, the value of your shares goes up, just like when you plant tomatoes and they grow big and red.
It’s important to know that investing in shares comes with risks. If MTN doesn’t do well, you could lose some or all of your money. It’s like planting tomatoes and some bad weather destroys your entire crop.
So, before investing in MTN or any company, you need to research, understand the risks involved, and only invest money you can afford to lose, just like when you decide to plant new crops in the farm.
Remember, investing is like tending to your tomato farm. It requires patience, care, and understanding to reap a good harvest. If you’re ready to invest in MTN, consider speaking to a stockbroker for guidance on how to get started. Happy investing, just like planting and watching your tomatoes grow in the village!
See lessWhat Are the Benefits of Investing in a Money Market Fund in Nigeria?
In the bustling city of Lagos, where Mama Ngozi sells her fresh tomatoes, there is a special place called the money market fund. Imagine this fund as a gathering of people who want to keep their money safe but also want it to grow. So, they come together to pool their money in a safe basket.Now, theRead more
In the bustling city of Lagos, where Mama Ngozi sells her fresh tomatoes, there is a special place called the money market fund. Imagine this fund as a gathering of people who want to keep their money safe but also want it to grow. So, they come together to pool their money in a safe basket.
Now, the major advantage of this money market fund is that it offers a safe place for people, like Mama Ngozi, to invest their money. In this fund, the money is invested in short-term, low-risk securities such as Treasury Bills and Commercial Papers. These are like little loans given to the government or companies, which are very likely to pay back the money with a little profit.
The beauty of the money market fund is that it provides a balance between safety and returns. While the returns may not be as high as riskier investments like stocks, the money market fund ensures that Mama Ngozi’s hard-earned money is secure and earns a modest profit. It is like planting your seeds in a well-protected garden where they grow steadily without the fear of them being eaten by pests.
So, Mama Ngozi, by investing in a money market fund, can enjoy the peace of mind that her money is safe and growing, just like her ripe tomatoes in the market. It’s a smart way for her to preserve her wealth while still making some profit, ensuring a brighter future for herself and her family. And that, my dear reader, is the beauty of the money market fund – safe, steady, and reliable growth for ordinary Nigerians like Mama Ngozi.
See lessWhat Books Should Beginners Read to Start Their Financial Journey in Nigeria?
Once upon a time in a bustling Nigerian market, there was Mama Ngozi, a hardworking tomato seller with a dream of securing her financial future. Mama Ngozi realized the importance of learning about money and investing, so she decided to start her financial journey by reading books.If you're just likRead more
Once upon a time in a bustling Nigerian market, there was Mama Ngozi, a hardworking tomato seller with a dream of securing her financial future. Mama Ngozi realized the importance of learning about money and investing, so she decided to start her financial journey by reading books.
If you’re just like Mama Ngozi, eager to learn and grow financially, here are some book recommendations to guide you on your journey:
1. “Rich Dad Poor Dad” by Robert Kiyosaki: This classic book uses simple storytelling to teach important lessons about financial independence, investing, and building wealth. Mama Ngozi found this book eye-opening and believes you will too.
2. “The Richest Man in Babylon” by George S. Clason: Mama Ngozi loves this book because it uses parables set in ancient Babylon to explain timeless principles of saving, investing, and growing wealth. It’s an easy read with valuable lessons.
3. “The Psychology of Money” by Morgan Housel: This book explores the complex relationship between money and our emotions, behaviors, and decisions. Mama Ngozi learned a lot about the mindset needed for financial success from this insightful read.
4. “Broke Millennial” by Erin Lowry: Mama Ngozi recommends this book for its practical advice on budgeting, saving, and navigating financial decisions, especially for young adults starting their financial journey.
5. “One Page Financial Plan” by Carl Richards: Mama Ngozi finds this book helpful for its straightforward approach to creating a simple yet effective financial plan. It emphasizes the importance of setting clear financial goals and taking action.
Remember, just like Mama Ngozi, reading these books is a great first step, but it’s essential to apply the knowledge you gain to your own financial situation. Take small steps, stay consistent, and always seek to learn more. Before you know it, you’ll be well on your way to financial success, just like Mama Ngozi in her tomato stall. Happy reading and investing! 📚💰🍅
See less