When you keep your money in USD and get 0.01% nko? FPIs are not coming to invest in Nigeria because they are mugus.
Naira is not as useless as some of us think it is o. It’s just finding the right opportunities that the problem is.
If you spend in Naira, you are stressing your life by converting all your money to USD offshore. Abi you will need to be transferring money between accounts. By the time you see the fees and charges involved, you will understand.
Best thing is to accept the devaluation risk (for funds to be spent in Naija) and just find the best investment opportunities you can find around. You get your money in Naira and spend in Naira so it can’t be as bad as someone making money abroad and bringing back home to invest and then repatriate.
If you can, allocate some money that you do not need and invest in offshore mutual funds if you are able to (NOT save in an offshore bank account) It is not easy but doable. Just accept that the money is for your kids college education in the US and continue adding to it when you can. At least you are using the money for something instead of just converting to beat devaluation.
Correct, we had the same discussion on a WhatsApp group.
The landlord who wanted to use rental income from properties in Nigeria to finance University education of his children in the US.
Rental income increased by just 60% in the last 10 years.
If he had invested 50% of the rental income in dollar denominated Investments in the last 10 years he should not have a problem
You see sir, if I had N1B in the bank, with fund mgrs or basically lying fallow anywhere just February last year when USD was like N365, though I have same quantity now in 2021, the value has been seriously eroded by this devaluation thing. My grouse is that the speed they devalue Naira with is unsettling and though I wouldn't know what it is but something is very wrong and I wouldn't want to be caught up in whatever they're cooking when it's done; our trajectory is obviously not good at all.
See, just within 1yr, my money saved/managed in a fund has lost (510-365)USD just by devaluation. If I had saved my money in FX form that Feb last year and did nothing, it would have 'yielded' me that much and not just the regular 0.01%....my cash value wudav been preserved. So you see why it's hard for me to accept the devaluation risk..it's too much too frequently done.its madness it's not risk anymore, it's become a constant that's sure to happen
With N1 billion networth in Nigeria you have numerous or endless opportunities, now you are talking about N1 billion in liquid cash
I was just listening to a Forbes interview of Cosmos Maduka, the founder of Coscharis Group. He was asked what his worst day in business was. He said he had two worst days in business, as follows.
The first, he was in Lagos and received a phone call that there was commotion at his branch office in the eastern part of the country. He rushed there and found out that all his staff there had disappeared with money they had collected in advance from customers for supplies. He was sued by 53 traders and had to repay all the stolen money.
The second, a friend needed financial assistance to bring a shipment to Nigeria. He then stood as guarantor for the bank loan collected by this friend. Till today, the shipment never arrived. The friend sold off the shipment on the sea and disappeared with the money, leaving Mr Maduka with N21 billion in debt, producing interest of N300 million monthly. He had to sell of his entire majority shareholding in one the major banks in order to pay it off.
With N1 billion networth in Nigeria you have numerous or endless opportunities, now you are talking about N1 billion in liquid cash
Ok yes sir, all along I've been referring to cash and near cash assets like investments in fixed income securities.
The money put away per savings, not meant for spending in the near term.
But even if the asset were a building yielding rental income, just like you mentioned in your post earlier, the rental income is still losing value disproportionately even thou the rental charge increased.
Yesterday,I read your list of accounts maintained for diff purposes all serving you well..laudable...but I was just thinking all are held in same Naira and wondering if you wouldn't really be making more in VALUE if they were all domiciled in FX rather.
You see sir, if I had N1B in the bank, with fund mgrs or basically lying fallow anywhere just February last year when USD was like N365, though I have same quantity now in 2021, the value has been seriously eroded by this devaluation thing. My grouse is that the speed they devalue Naira with is unsettling and though I wouldn't know what it is but something is very wrong and I wouldn't want to be caught up in whatever they're cooking when it's done; our trajectory is obviously not good at all.
See, just within 1yr, my money saved/managed in a fund has lost (510-365)USD just by devaluation. If I had saved my money in FX form that Feb last year and did nothing, it would have 'yielded' me that much and not just the regular 0.01%....my cash value wudav been preserved. So you see why it's hard for me to accept the devaluation risk..it's too much too frequently done.its madness it's not risk anymore, it's become a constant that's sure to happen
I understand ma. What I’m trying to say is that if you convert all your money and move offshore, you will have to deal with stress to open the account, move money around and then pay fees and charges every time you move money.
It may work to transfer all your money to USD (and keep in a dom account in Naija ) and then only change when you need it but this usually only works for people with small amounts because of CBN regulations.
You see the problem with this devaluation of a thing is that we are in it. There is nothing we can do about it and I can tell you that those that feel it more are people bringing money from abroad. If you are earning and spending mainly Naira, trust me you don’t feel that devaluation is killing you that much until people start talking about it and then you start doing the maths. It happens to all of us.
What I think is a smart thing to do is convert some (up to CBN maximum) and keep in a dom account, then find the best investment to put a percentage of the NGN, and then find an offshore mutual fund (and/or other alternative asset classes if you are brave and like to take risks) to invest (not save) for long term offshore uses (like buying cars from US, children US university fees, travel/shopping, relocation, retirement abroad etc). This is not an investment advice o b4 anybody come insult me.
When you keep your money in USD and get 0.01% nko? FPIs are not coming to invest in Nigeria because they are mugus.
Naira is not as useless as some of us think it is o. It’s just finding the right opportunities that the problem is.
If you spend in Naira, you are stressing your life by converting all your money to USD offshore. Abi you will need to be transferring money between accounts. By the time you see the fees and charges involved, you will understand.
Your points are valid, but it's not stress as you think. If i need 50k naira right now, all i have to do is sell 100 USD. This was something I bought at 420 or so. Besides my USD is also not lying idle. Of course I may be biased with my advice because i earn 90% of my income in USD, but trust me even I earned naira, this is still what I would do.
And about the 0.001%, na savings account be that na. Even naira savings account won't give you more than 5% per annum, which is crap considering devaluation.
Now there are a lot of good USD instruments, but even if all you do is dump your money in VOO. You will make around 8% averagely asides dividends. With this knowledge, except naira will give you 35%, pull out your money asap.
Luckily I've done 38% on VOO this year, far above my projection of 8%.
Ok yes sir, all along I've been referring to cash and near cash assets like investments in fixed income securities.
The money put away per savings, not meant for spending in the near term.
But even if the asset were a building yielding rental income, just like you mentioned in your post earlier, the rental income is still losing value disproportionately even thou the rental charge increased.
Yesterday,I read your list of accounts maintained for diff purposes all serving you well..laudable...but I was just thinking all are held in same Naira and wondering if you wouldn't really be making more in VALUE if they were all domiciled in FX rather.
The money market funds have an average of 11% annual return in the last 10 years, while the fixed income funds have an average return of 15% in the last 10 years.
I was just listening to a Forbes interview of Cosmos Maduka, the founder of Coscharis Group. He was asked what his worst day in business was. He said he had two worst days in business, as follows.
The first, he was in Lagos and received a phone call that there was commotion at his branch office in the eastern part of the country. He rushed there and found out that all his staff there had disappeared with money they had collected in advance from customers for supplies. He was sued by 53 traders and had to repay all the stolen money.
The second, a friend needed financial assistance to bring a shipment to Nigeria. He then stood as guarantor for the bank loan collected by this friend. Till today, the shipment never arrived. The friend sold off the shipment on the sea and disappeared with the money, leaving Mr Maduka with N21 billion in debt, producing interest of N300 million monthly. He had to sell of his entire majority shareholding in one the major banks in order to pay it off.
Also I recommended Standard Chartered Kenya because with $15 monthly, your account is basically fee free. Wire transfer to any country is free. Everything is free. It's called the One-Fee Tariff account.
My friend that uses UBA dorm is charged over $20 for a single transfer. And now they have to deal with bull shit limits and restrictions by Meffy.
Once again, it may appear as if an off shore account is stress, but by the time you open it you will realize how useless and expensive these traditional Nigerian banks have been.
Your points are valid, but it's not stress as you think. If i need 50k naira right now, all i have to do is sell 100 USD. This was something I bought at 420 or so. Besides my USD is also not lying idle. Of course I may be biased with my advice because i earn 90% of my income in USD, but trust me even I earned naira, this is still what I would do.
And about the 0.001%, na savings account be that na. Even naira savings account won't give you more than 5% per annum, which is crap considering devaluation.
Now there are a lot of good USD instruments, but even if all you do is dump your money in VOO. You will make around 8% averagely asides dividends. With this knowledge, except naira will give you 35%, pull out your money asap.
Luckily I've done 38% on VOO this year, far above my projection of 8%.
Okay. I was talking about doing offshore. For example, If I have money in HSBC London and need to transfer to my FBN account, first HSBC will cheat me to convert at poorer than market rates and then still charge me for the transfer of which FBN go still collect their own. It adds up especially if you do it a lot.
I agree with you as per the USD investment versus keeping it in a savings account. That’s what I was saying in an earlier comment. Invest some money in a mutual fund offshore or if you are brave do an index fund. If you can buy directly. But how many people can?
Tobex4realTobex234: Also I recommended Standard Chartered Kenya because with $15 monthly, your account is basically fee free. Wire transfer to any country is free. Everything is free. It's called the One-Fee Tariff account.
My friend that uses UBA dorm is charged over $20 for a single transfer. And now they have to deal with bull shit limits and restrictions by Meffy.
Once again, it may appear as if an off shore account is stress, but by the time you open it you will realize how useless and expensive these traditional Nigerian banks have been.
Haba, Nigerian banks are cheaper o. Offshore bank charges are ridiculous. Especially for wire transfers.
I was just listening to a Forbes interview of Cosmos Maduka, the founder of Coscharis Group. He was asked what his worst day in business was. He said he had two worst days in business, as follows.
The first, he was in Lagos and received a phone call that there was commotion at his branch office in the eastern part of the country. He rushed there and found out that all his staff there had disappeared with money they had collected in advance from customers for supplies. He was sued by 53 traders and had to repay all the stolen money.
The second, a friend needed financial assistance to bring a shipment to Nigeria. He then stood as guarantor for the bank loan collected by this friend. Till today, the shipment never arrived. The friend sold off the shipment on the sea and disappeared with the money, leaving Mr Maduka with N21 billion in debt, producing interest of N300 million monthly. He had to sell of his entire majority shareholding in one the major banks in order to pay it off.
I understand ma. What I’m trying to say is that if you convert all your money and move offshore, you will have to deal with stress to open the account, move money around and then pay fees and charges every time you move money.
It may work to transfer all your money to USD (and keep in a dom account in Naija ) and then only change when you need it but this usually only works for people with small amounts because of CBN regulations.
You see the problem with this devaluation of a thing is that we are in it. There is nothing we can do about it and I can tell you that those that feel it more are people bringing money from abroad. If you are earning and spending mainly Naira, trust me you don’t feel that devaluation is killing you that much until people start talking about it and then you start doing the maths. It happens to all of us.
What I think is a smart thing to do is convert some (up to CBN maximum) and keep in a dom account, then find the best investment to put a percentage of the NGN, and then find an offshore mutual fund (and/or other alternative asset classes if you are brave and like to take risks) to invest (not save) for long term offshore uses (like buying cars from US, children US university fees, travel/shopping, relocation, retirement abroad etc). This is not an investment advice o b4 anybody come insult me. Na wetin my lazy brain think o.
I'm sure your best buddies here from Ahib to Biafra, Brainbox to Xiaoli are all learning from your posts..they just like taunting you from time to time and you, them.
I'm sure your best buddies here from Ahib to Biafra, Brainbox to Xiaoli are all learning from your posts..they just like taunting you from time to time and you, them.
Okay. I was talking about doing offshore. For example, If I have money in HSBC London and need to transfer to my FBN account, first HSBC will cheat me to convert at poorer than market rates and then still charge me for the transfer of which FBN go still collect their own. It adds up especially if you do it a lot.
I agree with you as per the USD investment versus keeping it in a savings account. That’s what I was saying in an earlier comment. Invest some money in a mutual fund offshore or if you are brave do an index fund. If you can buy directly. But how many people can?
That's where knowledge comes in. Seriously it's difficult to invest without having knowledge.
To get a job, you need to be skilled. To start a business, you need to be sharp. How come people expect magic in investments?
You can't just convert your money to USD and go to sleep. Yes it will appreciate in naira but the USD will grow at a snail speed.
So the easier step is the conversion, the real question is what next after you convert? Learn about US stock markets, index funds, US real estates, and stable coins.
Because even if the money were to be in naira, you go sha invest am before.
It is the same knowledge it takes to study First Bank balance sheet, that it takes to study Apple balance sheet.
It is the same way you follow up VGIF that you can follow up VOO, or even Cathy's ARK funds.
So let us stop asking can i convert my naira to USD? The answer will always be Yes. Any money you don't need for naira expenses in the short term, always convert.
Now, stopping at the conversion isn't good enough. Have a strategy to invest in dollar denominated instruments. For stocks - do VOO, VTI for a start.
I think he will ask his Investment advisers to issue a GDR for his shares in Dangote cement, Dangote Sugar, Dangote Refinery etc. These GDRs are denominated in dollars and can be traded in London Stock Exchange or anywhere.
Some Nigeria Shareholders who bought the GDR of GTB are earning their dividends in dollars.
The underlying asset of each GDR is equivalent to 10 shares.
The value of the GDRs will then be used to calculate his networth.
Do you know Taooma the comedian? Do you know Mr Macroni, Don Jazzy, Iheanocho, Chimamanda Adichie, Akinwumi Adesina, Yemi Alade, Ashishat Oshola, Olu Jacobs ..........
You know all these people i mentioned and you say Nigerians are wicked and corrupt.
YOU ARE WRONG
In a place that has a good legal system Mr Maduka will recover all he lost and the culprits punished. The people that did what he described are not up to 0.05 of the Nigerian population why should you use them to paint the whole Nigerians as bad?
What he described happens everywhere in the world.
I was just listening to a Forbes interview of Cosmos Maduka, the founder of Coscharis Group. He was asked what his worst day in business was. He said he had two worst days in business, as follows.
The first, he was in Lagos and received a phone call that there was commotion at his branch office in the eastern part of the country. He rushed there and found out that all his staff there had disappeared with money they had collected in advance from customers for supplies. He was sued by 53 traders and had to repay all the stolen money.
The second, a friend needed financial assistance to bring a shipment to Nigeria. He then stood as guarantor for the bank loan collected by this friend. Till today, the shipment never arrived. The friend sold off the shipment on the sea and disappeared with the money, leaving Mr Maduka with N21 billion in debt, producing interest of N300 million monthly. He had to sell of his entire majority shareholding in one the major banks in order to pay it off.
Devaluation affects everything in Nigeria. It is because of devaluation that the government wants to sell petrol at above N300, importers buy dollar at N500, they will transfer the difference to the buying public. Prices of almost everything has gone up.
N1000 of today cannot buy what N1000 in december 2019 can buy.
The people bringing in money from outside will have more naira at their disposal.
The only good thing about devalaution is that most Nigerian goods and produce will be cheaper for someone coming with dollars
I understand ma. What I’m trying to say is that if you convert all your money and move offshore, you will have to deal with stress to open the account, move money around and then pay fees and charges every time you move money.
It may work to transfer all your money to USD (and keep in a dom account in Naija ) and then only change when you need it but this usually only works for people with small amounts because of CBN regulations.
You see the problem with this devaluation of a thing is that we are in it. There is nothing we can do about it and[b] I can tell you that those that feel it more are people bringing money from abroad. If you are earning and spending mainly Naira, trust me you don’t feel that devaluation is killing you that much until people start talking about it and then you start doing the maths. It happens to all of us. [/b] What I think is a smart thing to do is convert some (up to CBN maximum) and keep in a dom account, then find the best investment to put a percentage of the NGN, and then find an offshore mutual fund (and/or other alternative asset classes if you are brave and like to take risks) to invest (not save) for long term offshore uses (like buying cars from US, children US university fees, travel/shopping, relocation, retirement abroad etc). This is not an investment advice o b4 anybody come insult me. Na wetin my lazy brain think o.
I was just listening to a Forbes interview of Cosmos Maduka, the founder of Coscharis Group. He was asked what his worst day in business was. He said he had two worst days in business, as follows.
The first, he was in Lagos and received a phone call that there was commotion at his branch office in the eastern part of the country. He rushed there and found out that all his staff there had disappeared with money they had collected in advance from customers for supplies. He was sued by 53 traders and had to repay all the stolen money.
The second, a friend needed financial assistance to bring a shipment to Nigeria. He then stood as guarantor for the bank loan collected by this friend. Till today, the shipment never arrived. The friend sold off the shipment on the sea and disappeared with the money, leaving Mr Maduka with N21 billion in debt, producing interest of N300 million monthly. He had to sell of his entire majority shareholding in one the major banks in order to pay it off.
emmanuelewumi: Dangote converting 60% of his wealth to dollars.
I think he will ask his Investment advisers to issue a GDR for his shares in Dangote cement, Dangote Sugar, Dangote Refinery etc. These GDRs are denominated in dollars and can be traded in London Stock Exchange or anywhere.
Some Nigeria Shareholders who bought the GDR of GTB are earning their dividends in dollars.
The underlying asset of each GDR is equivalent to 10 shares.
The value of the GDRs will then be used to calculate his networth.
But he has been working on an IPO for some time. If i may ask do you think this a better alternative considering the fact that it wont be open like a public listing?
Your points are valid, but it's not stress as you think. If i need 50k naira right now, all i have to do is sell 100 USD. This was something I bought at 420 or so. Besides my USD is also not lying idle. Of course I may be biased with my advice because i earn 90% of my income in USD, but trust me even I earned naira, this is still what I would do.
And about the 0.001%, na savings account be that na. Even naira savings account won't give you more than 5% per annum, which is crap considering devaluation.
Now there are a lot of good USD instruments, but even if all you do is dump your money in VOO. You will make around 8% averagely asides dividends. With this knowledge, except naira will give you 35%, pull out your money asap.
Luckily I've done 38% on VOO this year, far above my projection of 8%.
Dont u think 38% is high, consodering the fact that the tarhet for S&P 500 is 4500 basis points?
But he has been working on an IPO for some time. If i may ask do you think this a better alternative considering the fact that it wont be open like a public listing?
GDR of GTB was open, the limiting factor was ability to have access to forex for the Investment
Dangote will get permission from SEC, restructure the shareholding of the company then the professional advisers will do some financial engineering and convert his holdings to a GDR.
My opinion, could be wrong.
He got a dividend of about N260 billion from Dangote Cement this week part of the income can be used to purchase some forex assets.
