Tobex4realTobex234:
A common man obviously does not need to run capital projects.
A common man isn't saving for his kids future as him sef never chop.

A common man obviously needs to first look for ways to be an high income earner by upskilling himself in current work, entering a new career line, starting a scalable business, or even moving to new locations with better opportunities.

Most of the advise here are not targeted to the common man. You need to have tangible discretionary income before considering these kinds of investments.

The common man is the average Nigerian. The point I’m making is that the average Nigerian cannot just wake up and leave the country and certainly cannot open an offshore account.

To be honest, those that I know that keep screaming ‘save your money in USD in offshore accounts’ are usually people living outside of Nigeria or have remote jobs outside the country that pays them in USD and helps them open offshore accounts.

The average Nigerian living in Nigeria and earning in Naira that wants to save in USD has to play by the CBN’s rules with respect to dom accounts or use mallam and then keep his life savings at home. I pity them when Omila pays them a visit. That’s if they don’t die of HBP b4 Omila even show

Lazyyouth4u:


40 years

k

What is really interesting about this naira quagmire is how folks who benefit from it were able to convince those who bear the brunt that they're the ones who are the cause of the falling naira.....

Look at those who could access the naira at the cbn rate... Those travelling abroad or going for pilgrimage, those going for medical treatment, those schooling abroad and certain connected 'manufacturers'.... These are not everyday folks... How does the average Nigerian benefit from that list that he's been forced to pay double for everyday items..

Yet, the government was able to convince the masses that its the akara lady who buys okrika clothes for her child (simply because she cannot afford boutique prices) that's the cause... Or that its those buying foriegn rice or importing phones e.t.c.. but then our

It's a sad tale of how the rich takes from the poor and makes the poor blame other poor folks for their problems

Fuhrerfran6:


Please, what can the CBN possibly do to domiciliary accounts? I want to know please so I can take caution.

They can freeze all outgoing transfers dom accounts and only pay out the naira equivalent based on tge CBN rate... That's similar to what CBN did

Tobex4realTobex234:


I may be wrong but I don't think an investor that has lesser years to live will be more concerned about devaluation because of their kids future than a young person whose present is obviously more affected.

And i don't know what we mean by risks in investing in USD. Especially at a time when the safest naira investments aren't even offering any interest close to inflation rate.

You have one million Naira and convert to USD to get c.2,000 USD which you invest in US equities. You invest in an S&P index fund and a major correction happens after, you can actually lose 30% to 50% (USD600 to 1000) of your investment leaving you with only 500k to 700k in Naira.

The thing is you never know how long it will take the market to recover. Check out what happened in 2008.

However, if you kept that 1m in T bills at 9%, you will have 90k Naira guaranteed on top of your 1m Naira

Lazyyouth4u:


The common man is the average Nigerian. The point I’m making is that the average Nigerian cannot just wake up and leave the country and certainly cannot open an offshore account.

To be honest, those that I know that keep screaming ‘save your money in USD in offshore accounts’ are usually people living outside of Nigeria or have remote jobs outside the country that pays them in USD and helps them open offshore accounts.

The average Nigerian living in Nigeria and earning in Naira that wants to save in USD has to play by the CBN’s rules with respect to dom accounts or use mallam and then keep his life savings at home. I pity them when Omila pays them a visit. That’s if they don’t die of HBP b4 Omila even show

It's not that way... It's about survival...
Look at countries who had galloping inflation and see how it went.... Just like the Titanic wreck, it's those last at the door that suffer... Far back it became known that Osibanjo had a good chunk of his savings in hard currency... A while back, Dangote did thesame... If nothing sensible is done by the CBN, soon enough most average folks would start looking for an exit... It's always at that point that failed currencies start spiralling down...

I remember asking someone here who felt devaluation didn't affect him.... The question was to point one one item in the market devaluation hasn't affected?
I'm involved in a building project over the last 24 months, I'm now paying double for some items that I bought initially... I don't even know who's trying to fleece me and who's being genuine....
Most of the populace are losing their purchasing power without knowing.

jedisco:
What is really interesting about this naira quagmire is how folks who benefit from it were able to convince those who bear the brunt that they're the ones who are the cause of the falling naira.....

Look at those who could access the naira at the cbn rate... Those travelling abroad or going for pilgrimage, those going for medical treatment, those schooling abroad and certain connected 'manufacturers'.... These are not everyday folks... How does the average Nigerian benefit from that list that he's been forced to pay double for everyday items..

Yet, the government was able to convince the masses that its the akara lady who buys okrika clothes for her child (simply because she cannot afford boutiques) that's the cause... Or that its those buying foriegn rice or importing phones e.t.c.. but then our

It's a sad tale of how the rich takes from the poor and makes the poor blame other poor folks for their problems

Animal farm (by George Orwell) comes to mind.

Power intoxicates.
The bourgeoisie are having a field day in this economic crisis.

The northern political heavyweights control 90% BDC operations in Nigeria. They source dollar at sweet rates then resell at cut-throat rates (parallel market).

A one time CBN governor (Sanusi Lamido) once brought this to limelight but trust Nigerians not to take it as something to worry about.

Religion has blinded us as a nation.

We need to push it aside and start asking questions. We deserve a good life here on earth 1st.

My only concern now is how to successfully convert 80% of my naira to USD by monday.

Lazyyouth4u:


You have one million Naira and convert to USD to get c.2,000 USD which you invest in US equities. You invest in an S&P index fund and a major correction happens after, you can actually lose 30% to 50% (USD600 to 1000) of your investment leaving you with only 500k to 700k in Naira.

The thing is you never know how long it will take the market to recover. Check out what happened in 2008.

However, if you kept that 1m in T bills at 9%, you will have 90k Naira guaranteed on top of your 1m Naira

Don't be surprised that even after your 50% loss in USD investment, what you have left in $ might still have more purchasing power than your ₦1m 90k you cashed out from tbills - No thanks to Naira devaluation. Money is all about purchasing power, not numbers.

wwwtortoise:


Animal farm (by George Orwell) comes to mind.

Power intoxicates.
The bourgeoisie are having a field day in this economic crisis.

The northern political heavyweights control 90% BDC operations in Nigeria. They source dollar at sweet rates then resell at cut-throat rates (parallel market).

A one time CBN governor (Sanusi Lamido) once brought this to limelight but trust Nigerians not to take it as something to worry about.

Religion has blinded us as a nation.

We need to push it aside and start asking questions. We deserve a good life here on earth 1st.

My only concern now is how to successfully convert 80% of my naira to USD by monday.

The annoying thing is that the two main issues affecting our economy today (fuel and dollar subsidy) are based on same pattern.

About 5-6 years back, Sanusi said he could manufacture millions of naira just by making a phone call and getting cheap dollars... Of course, alot of people have been doing that hence the persistent pressure on the naira....

I'd say with good confidence that over 50% of dollars got at the official rate is round-triped back to sell at over 20% instant profit and that cycle keeps repeating.... Folks are wondering why the Naira continues to slide.......

Folks at CBN are fully perpetuating this but yet they keep coming to convince us that dangote refinery will solve this...
These same folks would come and preach patriotism to the masses they impoverished after stashing stashing sums in foriegn currencies and tell us that it's rice causing the naira to slide

Lazyyouth4u:


You have one million Naira and convert to USD to get c.2,000 USD which you invest in US equities. You invest in an S&P index fund and a major correction happens after, you can actually lose 30% to 50% (USD600 to 1000) of your investment leaving you with only 500k to 700k in Naira.

The thing is you never know how long it will take the market to recover. Check out what happened in 2008.

However, if you kept that 1m in T bills at 9%, you will have 90k Naira guaranteed on top of your 1m Naira

You aren't comparing foreign stocks with local Tbills right now, are you?

You need to compare investments at similar levels of risk. Either you compare Nigeria Tbills with Eurobonds or you compare NSE with S&P.

Secondly, why are you looking at investment horizon of just one year lol? I can pick several one year periods of S&P that will flaw your arguments right now.

Lastly ain't no 30-50% correction happening on S&P. Do you understand what it means for 500 top U.S companies to go down 50%? What indicators are you looking at to predict this kind of occurrence?

You should know more than this brother.

OgogoroFreak:
Don't be surprised that even after your 50% loss in USD investment, what you have left in $ might still have more purchasing power than your ₦1m 90k you cashed out from tbills - No thanks to Naira devaluation. Money is all about purchasing power, not numbers.

Not even loss.... What naira denominated investment has been able to keep up with the rate of devaluation over the past 4 and 10 years.

By simply holding the dollar, you're very likely to come out better off than folks investing in the naira if this trend continues...

OgogoroFreak:
Don't be surprised that even after your 50% loss in USD investment, what you have left might still have more purchasing power than your ₦1m 90k you cashed out from tbills. No thanks to Naira devaluation - Money is all about purchasing power, not numbers.

What has purchasing power got to do with this?

We are talking about a Nigerian that converts his Naira to USD to invest in the US stock market. At the end of the day, he will have to convert back to Naira to spend in Naija. Is it not the same purchasing power he will have with the guy that invests in T bills?

In any case, I was not saying one was better. Just responding to Tobex’s comment about risk in investing in the US market, especially right now that the US market securities are overvalued and a major correction expected anytime from now.

Tobex4realTobex234:


You aren't comparing foreign stocks with local Tbills right now, are you?

You need to compare investments at similar levels of risk. Either you compare Nigeria Tbills with Eurobonds or you compare NSE with S&P.

Secondly, why are you looking at investment horizon of just one year lol? I can pick several one year periods of S&P that will flaw your arguments right now.

Lastly ain't no 30-50% correction happening on S&P. Do you understand what it means for 500 top U.S companies to go down 50%? What indicators are you looking at to predict this kind of occurrence?

You should know more than this brother.

I was responding to this comment that you made:

And i don't know what we mean by risks in investing in USD. Especially at a time when the safest naira investments aren't even offering any interest close to inflation rate.

As per S&P market correction, I encourage you to go and look at what happened to the US market in 2008. When a market crash happens, the whole market hears it. It took years for the market to rebound to the level in which it was before the crash.

Now here is the catch.

June 2020, 1 dollar was 387.

So follow the same calculation you did up there and tell me what would have happened if you invested 1million naira.

S&P June 2020: 1million naira = $2583
June 2021 = $3565 = 1.8million

Tbills June 2020: 1 million
June 2021: 1.09 million

Do you see why you cannot just pick any one year horizon of your choice and use it as yardstick? And bad enough, determine random market correction rates of your choice to prove a point.

Lazyyouth4u:


What has purchasing power got to do with this?

We are talking about a Nigerian that converts his Naira to USD to invest in the US stock market. At the end of the day, he will have to convert back to Naira to spend in Naija. Is it not the same purchasing power he will have with the guy that invests in T bills?

In any case, I was not saying one was better. Just responding to Tobex’s comment about risk in investing in the US market, especially right now that the US market securities are overvalued and a major correction expected anytime from now.

For one, you are assuming the investor is silly. Why would he convert back to Naira when he's at a loss?

Also, you assumed Naira to USD rate would remain fixed throughout the period of investment. Which is the major reason we are considering USD investment in the first place.

jedisco:

I'm involved in a building project over the last 24 months, I'm now paying double for some items that I bought initially... I

I almost wanted to doubt my mum when she said sand of 38k is now 70k.

OgogoroFreak:
For one, you are assuming the investor is silly. Why would he convert back to Naira when he's at a loss?

Also, you assumed Naira to USD rate would remain fixed throughout the period of investment.

What if the person needs the money, he should starve or go borrowing when he has money somewhere? Don’t forget that person converted all his money as advised by people that don’t trust Naira.

Okay let’s assume Naira falls to 600 in one year. After loosing, 30%, that person will have 600 * 1400 which is 840k. At a 50% loss, he’s at 600 * 1000 which is just 600k. Even at 1 USD to 700, the guy in T bills is still doing better.

My point is that investing your money in US stocks isn’t necessarily a guarantee that you will do better than the guy that keeps his Naira in T bills.

Note that I understand that generally US equities have performed well but anyone going in must also understand that it is a volatile market. And if you do not plan to keep your money for up to 20 or even 30 years, then you must thread carefully.

Lazyyouth4u:


What if the person needs the money, he should starve or go borrowing when he has money somewhere? Don’t forget that person converted all his money as advised by people that don’t trust Naira.

Okay let’s assume Naira falls to 600 in one year. After loosing, 30%, that person will have 600 * 1400 which is 840k. At a 50% loss, he’s at 600 * 1000 which is just 600k. Even at 1 USD to 700, the guy in T bills is still doing better.

My point is that investing your money in US stocks isn’t necessarily a guarantee that you will do better than the guy that keeps his Naira in T bills.

Note that I understand that generally US equities have performed well but anyone going in must also understand that it is a volatile market.

There is something called "common sense" it is highly needed in investment.

Anyone looking into USD investment should consider nothing but long term. You MUST still have a % of your investment in Naira. Especially one that gives you access to your money at any time you need it.

When you put money into USD investments, you are looking forward to making money in two ways which are, the actual profit/interest in the USD investment and the devaluation of Naira.

jedisco:


Not even loss.... What naira denominated investment has been able to keep up with the rate of devaluation over the past 4 and 10 years.

By simply holding the dollar, you're very likely to come out better off than folks investing in the naira if this trend continues...

I agree with the bolded. With the way Naira continues to devalue, you can only beat the Naira for sure and not lose money by keeping funds in USD and then converting when needed.

But the question I keep asking is if you go to mallam and change the money, will you just keep it at home and be changing to Naira when you need Naira? What about Omila? You go just dey see omila for dream until HBP strikes

You can’t use dom accounts if you are a guy with millions in Naira because of limits as per CBN regulations.

You can’t open offshore accounts if you are not a resident of the country where the bank is. There are ways around this but most people can’t do this.

So how should people do na? Nobody is answering this question.

Fuhrerfran6:


Please, what can the CBN possibly do to domiciliary accounts? I want to know please so I can take caution.

CBN can’t do anything to dorm accounts. I’ve said this repeatedly, people are just trying to cause panic. The elites of Nigeria all run dorm accounts and cbn can never go against them by making any policy against dorm accounts. If possible buy inflows instead of cash deposit to be on the safer side

OgogoroFreak:
There is something called "common sense" it is highly needed in investment.

Anyone looking into USD investment should consider nothing but long term. You MUST still have a % of your investment in Naira. Especially one that gives you access to your money at any time you need it.

When you put money into USD investments, you are looking forward to making money in two ways which are, the actual profit in the USD investment and the devaluation of Naira.

But people are advising Nigerians to change all their money and keep in USD na. And they say invest the converted money in US stocks as it will always do better than investing in Naira

Lazyyouth4u:


But people are advising Nigerians to change all their money and keep in USD na. And they say invest the converted money in US stocks as it will always do better than investing in Naira

Yes, it will always do better in the long run but how would you be paying your bills in that long run? That is why I mentioned common sense.

Even while you invest, it's a good idea to still have cash ready or access to cash to grab certain opportunities when they come.

I recently bought a really cheap property at distress sale. Two plots of land with uncompleted building on it. I almost lost out on the deal even with my ready cash. Imagine if I didn't have cash or waiting to liquidate an investment?

I will be building an olosho/ashawo joint there(heard the girls pay as high as 5k per day for a room) where people can come relax, drink and carry olosho. This is why I have been spending more time reading posts in the bear palour olosho thread. Just to understand my would be customers.

jedisco:


The annoying thing is that the two main issues affecting our economy today (fuel and dollar subsidy) are based on same pattern.

About 5-6 years back, Sanusi said he could manufacture millions of naira just by making a ohone call and getting cheap dollars... Of course, alot of people have been doing that hence the persistent pressure on the naira....

I'd say with good confidence that over 50% of dollars got at the official rate is round-triped back to sell at over 20% instant profit and that cycle keeps repeating.... Folks are wondering why the Naira continues to slide.......

Folks at CBN are fully perpetuating this but yet they keep coming to convince us that dangote refinery will solve this...
These same folks would come and preach patriotism to the masses they impoverished after stashing stashing sums in foriegn currencies and tell us that it's rice causing the naira to slide

It is pathetic.

Many schemes and policies that see daylights are in favor (monetarily or politically) of the “sacred cows”.

Sharia is blinding the northern youths from their atrocities.

If they succeed with gagging SW & SE with bans (crypt0, twitter . . . ), border closure and other detrimental policies. Then it’s going to be a long wait to 2023.

When I come here and read somethings,I just shake my head.The naira is useless, inflation is at 18 percent.. leave naija and run to country you earn dollars.The dollars is devalued 4 times and I will be laughing.No Wonder a moniker is always saying audio billionaires.Go see that guy at aba,onitsha,lag doing serious business and making good money.He will tell you is long he has been buying dollars btw 480-500 and making good profit in business.
My stay in the Villa for over a week gave me the opportunity to really go round not like the festive period that is always crowded with people so you limit exploring the Villa.When you see most inherited land fenced and abandoned and you enquire of it present condition.The answer is always the same,is so person living abroad and Since the past yrs he came back and fenced it or layed foundation to build the next Aso rock and gone back it has been silence.To even send 1000 dollars back is a problem
Then you see a nice structure and you enquire .The answer, is so person in aba,pH ,lag etc who built it and just did marriage things.
My bro is telling me is now he is really making good money in his wine trade.Infact he started his personal house in asaba middle last year and finished in december.This year he upgraded his car ,plus a three story building in onitsha going on.He is presently towards the second floor with all the cost in building materials.When I asked how he is managing cement and rods at present price.He tells me he is equally making the money in his business as prices have equally changed
My iniaw started 4 buildings Last year and all has been roofed presently.One in lekki,one in owerri and two in the Villa for him and his bro as they are into partnership .The four are all story buildings Thr goods are coming steady from Turkey and they are selling and making good money.
Then someone comes here every day to be shouting doomsday.I hate this government like mad but opportunities are out thr plenty in naija to make money and people are making money.I have always said I am street and I say what I see in the streets.If it likes let dollars get to 1000 or inflation enter 40percent.People are making money and the guys abroad or having dollars are not doing better than the locals and those putting thr naira in good opportunity .I never see people way be audio like this abroad guys
They come home after years,buy car,flex with girls from one hotel to the next,manage buy 5million - 10 million land and then disappeared for another 5yrs or above.They will tell you Julius barger is coming to erect a structure.They marry or impregnat one girl and leave her here after performing film trick for the two weeks or a month they stay in naija.Then sell the car to book ticket back and you hear nothing again.

In my opinion it is a wise decision to save in dollars.

There are people that are putting money away in investments for their children school fees, so that they will not have much pressure when it is time to pay the fees especially university education. Those set of people it is wise for them to hedge against devaluation by converting their funds to dollars.

These set of people are not investing to make money but to preserve their capital.

chigo4u:

CBN can’t do anything to dorm accounts. I’ve said this repeatedly, people are just trying to cause panic. The elites of Nigeria all run dorm accounts and cbn can never go against them by making any policy against dorm accounts. If possible buy inflows instead of cash deposit to be on the safer side

I wouldn't say never on that.... If that happens just like in Lebanon, banks will connive with the very rich to move their forex out before it takes effect... It's the not so very connected that'd be trapped.

All the policies CBN brought out to tackle devaluation has so far failed.... There are little tricks left... These tricks are not new... they've been used in other climes...

Looking back, First thing CBN did was to blame rice and certain imports, then FG locked the border.
Next desperation started to set in and they blocked all parallel forex tranfer into the country insisting it must go via a specific route (thst failed),
then they banned crypt0 (as they thought incoming transfers were now through that route),
next was to start giving folks sending in forex extra naira to appease them to use the CBN medium- this was the height of desperation which of course has failed....

Now, that folks are no more buying the rice card and are asking questions, Theres are 3 possibilities I'm seeing.. First is a proper rise in oil price to bring some succour and allow them continue their rigmarole, next is to ban dom accounts under the patriotism narrative, last would be for the cbn to set up their portal to handle incoming diaspora remittance and pay out at the market rate...

Biafran4life:
When I come here and read somethings,I just shake my head.The naira is useless, inflation is at 18 percent.. leave naija and run to country you earn dollars.The dollars is devalued 4 times and I will be laughing.No Wonder a moniker is always saying audio billionaires.Go see that guy at aba,onitsha,lag doing serious business and making good money.He will tell you is long he has been buying dollars btw 480-500 and making good profit in business.
My stay in the........

The devaluation issue is not really about folks in diaspora... Frankly speaking, they're the ones that may even benefit with the way CBN is gifting naira for sending in dollars.

It's easy to look at one aspect of the economy and forget the rest... It's worth remembering that over 90% of Nigerians have less than 500k in their account.... 90% is a significant majority

Even if war breaks out in Nigeria today, some people will still feed fat off it and acquire properties.... Afterall, some people have made billions from the fight against boko haram and kidnapping. That doesn't mean large parts of Borno have been left economically desolate. Same way folks who are round-tripping cbn dollars are making millions weekly... The thing is the economy has to bear the brunt of those millions made out of thin air.... Simply put, inflation will persist and the poor will get poorer


For folks running certain businesses, they can easily transfer the cost back to their customers and even speculate to make more profit... But what happens to the remaining 90% of Nigerians, the salaried folks, those earning less than 100k e.t.c how are they coping with the increased prices... It is these folks that determine where the country is headed not the few rich.

Dum20:
In my opinion it is a wise decision to save in dollars.

There are people that are putting money away in investments for their children school fees, so that they will not have much pressure when it is time to pay the fees especially university education. Those set of people it is wise for them to hedge against devaluation by converting their funds to dollars.

These set of people are not investing to make money but to preserve their capital.

I agree that it is a wise decision to invest in US securities as part of one’s overall investment strategy. But if one is investing in the US equities market, one has to be sure that it is for the long term as the market is volatile and you need to be in it long term to ride out the volatility.

It may be sensible to convert ones Naira life savings into USD to guard against devaluation risk that the Naira continues to be exposed to. But how easy is this for someone with millions of Naira that has to play by CBN’s rules wrt to dom accounts? If you go the black market way, where will you keep the money and still sleep well at night?

Some are saying go offshore. Question is how easy is it to open offshore accounts for the average Nigerian? What about fees and charges that you incur every time you convert from currency to currency and transfer from account to account? Won’t they eat into your savings? Nobody is answering these questions...

Tobex4realTobex234:


You aren't comparing foreign stocks with local Tbills right now, are you?

You need to compare investments at similar levels of risk. Either you compare Nigeria Tbills with Eurobonds or you compare NSE with S&P.

Secondly, why are you looking at investment horizon of just one year lol? I can pick several one year periods of S&P that will flaw your arguments right now.

Lastly ain't no 30-50% correction happening on S&P. Do you understand what it means for 500 top U.S companies to go down 50%? What indicators are you looking at to predict this kind of occurrence?

You should know more than this brother.

Eurobond is not same as TB and as such should not be compared too going by your logic. It is only foreign TB that should be compare to NTB.

In a debate arena which is what you guys have turn this place to, everybody pick points that will make them win.

Lazyyouth4u:


I agree with the bolded. You can only beat the Naira for sure and not lose money by keeping the money in USD and then convert when needed.

But the question I keep asking is if you go to mallam and change the money, will you just keep it at home and be changing to Naira when you need Naira? What about Omila? You go just dey see omila for dream until HBP strikes

You can’t use dom accounts if you are a guy with millions in Naira because of CBN regulations.

You can’t open offshore accounts if you are not a resident of the country where the bank is. There are ways around this but most people can’t do this.

So how should people do na? Nobody is answering this question.

Tobex has explained how to do it via certain banks with local branches...

For me months back, I converted most of my savings to stable coins which are based on market rates. Then rate was below 400... Now, its over 500.. And afterwards, didn't keep unnecessary sums of naira in the bank... Always looked for something to put it into...

Understandably, this pattern may not suit everyone... But if say I'm saving to buy a car or land that'd take a while to build up the sum, keeping a chunk of such savings in usd would make sense as that'd guarantee almost 20% interest per annum over the naira using current market trend.... Worse case scenario, it remains stable

For someone who needs such capital to run their business or who has a non-depreciable asset they could put it into, then arguing against saving in usd will make sense....

Of course, all this excludes funds required for daily living

If one should advise you to convert "some" of your naira to dollar. It's a possible investment choice which one could explore due to the current situation of things.

I ask this question, what happens if Naira goes back to N380 in December?

I still don't see why someone earning in naira needs to convert to Dollar. What are you trying to achieve especially if you still need to convert the money back to naira to use.