Sign Up to our social questions and Answers Engine to ask questions, answer people’s questions, and connect with other people.
Login to our social questions & Answers Engine to ask questions answer people’s questions & connect with other people.
Lost your password? Please enter your email address. You will receive a link and will create a new password via email.
Please briefly explain why you feel this question should be reported.
Please briefly explain why you feel this answer should be reported.
Please briefly explain why you feel this user should be reported.
Can I Withdraw Only Profit from an Equity or Money Market Fund in Nigeria and Reinvest My Capital?
Yes — what you're describing is called "withdrawing profit while keeping capital invested". You can absolutely do this with most Money Market Funds and Equity Funds — but the method depends on how the fund handles withdrawals. Let me break it down clearly. How It Works (Your Example) You invest: CapRead more
Yes — what you’re describing is called “withdrawing profit while keeping capital invested”. You can absolutely do this with most Money Market Funds and Equity Funds — but the method depends on how the fund handles withdrawals.
See lessLet me break it down clearly.
How It Works (Your Example)
You invest:
Capital = ₦10,000
After 90 days = ₦15,000
Profit = ₦5,000
You want to:
Withdraw only ₦5,000
Leave ₦10,000 invested
This is possible — you simply redeem ₦5,000 units.
Step-by-Step Method
After 90 days:
Go to your investment app
Click Redeem / Withdraw
Enter ₦5,000 (not full balance)
Confirm withdrawal
Remaining ₦10,000 continues earning
Important Things To Check First
Before doing this, confirm:
1. Is There a Lock-in Period?
Some funds have:
30 days
60 days
90 days
After lock-in, you can withdraw anytime.
2. Minimum Balance Rule
Some funds require:
Minimum ₦5,000
Minimum ₦10,000
Example: If minimum is ₦10,000 → You can’t withdraw profit if it drops below minimum.
Best Strategy (Smart Investors Use This)
Instead of waiting 90 days only, you can:
Option A — Quarterly Profit Withdrawal
Invest ₦10,000
Every 3 months withdraw profit only
This builds steady cash flow.
Option B — Compounding Strategy (More Powerful)
Example:
Start: ₦10,000
After 90 days → ₦15,000
Don’t withdraw → reinvest
Next cycle:
₦15,000 grows faster
This builds wealth faster.
My Advice (Based on Your Situation)
Since you’re focused on steady income + growth, best strategy:
Hybrid Strategy
Withdraw 50% of profit
Reinvest 50%
Example:
Profit = ₦5,000
Withdraw = ₦2,500
Reinvest = ₦2,500
Result:
You earn income
Your capital grows
This is very powerful long-term.
One More Important Tip
Money Market Fund is safer for this strategy than Equity Fund.
Because:
Fund Type
Risk
Best Use
Money Market Fund
Low
Withdraw profit regularly
Equity Fund
Higher
Long-term growth
Since you’re building wealth gradually (and you’ve mentioned before you’re growing your investments carefully), I recommend:
Start with Money Market Fund first.
How Do You Create a Family Trust Fund and What Are Its Advantages and Disadvantages?
Starting a family trust fund is a smart way to manage wealth for your family’s benefit, protect assets, and plan for long-term financial security. Here’s a clear step-by-step guide tailored to a Nigerian context, though most principles are universal: 1. Define the Purpose of the Trust Decide why youRead more
Starting a family trust fund is a smart way to manage wealth for your family’s benefit, protect assets, and plan for long-term financial security. Here’s a clear step-by-step guide tailored to a Nigerian context, though most principles are universal:
1. Define the Purpose of the Trust
Decide why you’re creating it. Common goals:
Provide for children’s education or future.
Protect family assets from creditors or disputes.
Ensure smooth transfer of wealth across generations.
Support family members with special needs.
Be specific: the clearer the purpose, the easier the trust is to structure.
2. Choose the Type of Trust
There are different kinds of trusts:
Type
Description
Typical Use
Revocable Trust
Can be changed or terminated by the grantor
Flexibility during lifetime
Irrevocable Trust
Cannot be changed once created
Asset protection, tax planning
Living Trust (Inter vivos)
Set up while you’re alive
Manage assets and reduce probate hassles
Testamentary Trust
Created via a will, effective after death
Pass wealth to children or heirs
For a family trust, an irrevocable living trust is often preferred for asset protection and long-term security.
3. Identify the Assets
Decide what assets you want to put in the trust:
Cash or investment accounts (stocks, bonds, mutual funds)
Real estate (house, land)
Business interests
Other valuable assets (art, jewelry, vehicles)
💡 Tip: Start with assets you can legally transfer to a trust without penalties.
4. Choose the Trustee
The trustee manages the trust for beneficiaries. Options:
Family member (trusted, responsible)
Professional trustee (bank or trust company, more formal)
Lawyer or accountant (for smaller, simpler trusts)
The trustee must act in the best interest of the beneficiaries and manage assets responsibly.
5. Name the Beneficiaries
Decide who benefits from the trust:
Children
Spouse
Grandchildren
Other family members
You can also set conditions for distribution, e.g., education completion, age milestones, or health needs.
6. Draft the Trust Deed
The trust deed is the legal document that governs the trust. It should include:
Purpose of the trust
Trustee powers and duties
Beneficiaries and their rights
How income or assets are distributed
Rules for adding or removing assets
✅ Always have a lawyer experienced in trusts draft or review this.
7. Fund the Trust
Transfer the chosen assets into the trust. In Nigeria, this may include:
Registering properties in the name of the trust
Transferring bank accounts or investments
Transferring business shares
The trust officially owns these assets, not the individual anymore.
8. Register & Comply
In Nigeria, you may need to register the trust deed with the Corporate Affairs Commission (CAC) if it involves a corporate entity or formal structure.
Keep proper accounting and reporting to avoid disputes or legal issues.
9. Review & Update Periodically
Even if the trust is irrevocable, you may want to:
Adjust distributions if family needs change
Add new assets
Replace trustees if necessary
Practical Tips
Start small: you can begin with investments like mutual funds or stocks for children or family members.
Keep clear records of all contributions.
Ensure trustees understand their responsibilities—this avoids mismanagement.
See less