emmanuelewumi:



It actually took me a very long time, before I could understand the rationale behind some core fixed income investors who buy 30 years bonds.

They are so liquid, that they deploys their cash to buying real estates when are are sure of a minimum rental income yield of 10%

Are real estate investors not also reinvesting their rental income?

skydiver01:
Confirmed below (compounded) but 15% is a tall ask to then be the average return on the N9m annually received for the next 29 years though one has stopped at 20 years in the table below.

Compound interest is a 2 edged sword, good for the lender but disastrous to the borrower.

Lazyyouth4u:


Are real estate investors not also reinvesting their rental income?

At 5% annual yield, you will get your capital back through rent in 14 years, the bond investors would have gone on the 3 trip of getting back his capital through coupons

emmanuelewumi:



I am very sorry, I apologise on his behalf.

Lmao! Why apologize for the truth?

A deep thinking person won't say it's difficult to pick a winner between both options.

OgogoroFreak:
Lmao! Why apologize for the truth?

Truth is relative, you love parasites that is your truth and reality but I can't stand it. My truth is not your truth


Both options are wonderful, it depends on the investor.

Reason why I support diversification

I am a fan of bonds and do have some though I have not bought a 30 year one yet. Nevertheless, yes the coupons over the years have been reinvested in other asset classes (fx, real estate, listed company shares e.g. MTN etc etc). When your principal has been recouped with the bond coupons the remaining years is jara... if held to maturity!

emmanuelewumi:



It actually took me a very long time, before I could understand the rationale behind some core fixed income investors who buy 30 years bonds.

They are so liquid, that they deploys their cash to buying real estates when are are sure of a minimum rental income yield of 10%

skydiver01:
I am a fan of bonds and do have some though I have not bought a 30 year one yet. Nevertheless, yes the coupons over the years have been reinvested in other asset classes (fx, real estate, listed company shares e.g. MTN etc etc). When your principal has been recouped with the bond coupons the remaining years is jara... if held to maturity!

What is your longest tenor

Well, in this case, I am the lender thus I am not complaining... More happy days ahead

emmanuelewumi:



Compound interest is a 2 edged sword, good for the lender but disastrous to the borrower.

emmanuelewumi:



Truth is relative, you love parasites that is your truth and reality but I can't stand it. My truth is not your truth


Both options are wonderful, it depends on the investor.

Reason why I support diversification

Surely but I don't love parasite. You see it as parasite, I see it as Symbiosis.

Currently 15 years. But I am looking to buy a 20 to 25 year one from the secondary market sometime next year. Most probably July next year.

emmanuelewumi:



What is your longest tenor

Is it possible for you to do a case study with say 1 million and maybe 20 years so some of us can better understand?

skydiver01:
I am a fan of bonds and do have some though I have not bought a 30 year one yet. Nevertheless, yes the coupons over the years have been reinvested in other asset classes (fx, real estate, listed company shares e.g. MTN etc etc). When your principal has been recouped with the bond coupons the remaining years is jara... if held to maturity!

emmanuelewumi:


At 5% annual yield, you will get your capital back through rent in 14 years, the bond investors would have gone on the 3 trip of getting back his capital through coupons

And then at the end of the 30 year tenor, the bond investor gets his 100m while the real estate investor sells his house/land for 1 billion

Lazyyouth4u:


And then at the end of the 30 year tenor, the bond investor gets his 100m while the real estate investor sells his house/land for 1 billion

You need serious luck to sell that house at 1 billion after 30years.

OgogoroFreak:
Lmao! Why apologize for the truth?

A deep thinking person won't say it's difficult to pick a winner between both options.

Only an idiot will not take into account the effects of inflation when comparing long term asset classes...

Lazyyouth4u:


And then at the end of the 30 year tenor, the bond investor gets his 100m while the real estate investor sells his house/land for 1 billion

What if government collects the land

OgogoroFreak:
You need serious luck to sell that house at 1 billion after 30years.

People that bought houses 30 years ago in decent locations are selling them for much more than 10x purchase price today. The house doesn’t even have to be in good condition.

Go and learn about inflation and do your damn homework before trying to get into discussions that are way above what your brain can take.

afroxyz:
Don't you think we may have an asset bubble in this country given rising inflation and poverty rates?

I have been reading for long.

The response to your question should be affirmative.

When I see new buildings popping up, I hiss, because the poverty rate in the country is abysmal. Current landlords know 90% of their tenants cannot afford bills and therefore expect everything to be done for them free. The housing agents who are not in the landlord's shoes will even side with the tenants.

One landlord actually referring to his tenants called them parasites.

Lazyyouth4u:


People that bought houses 30 years ago in decent locations are selling them for much more than 10x purchase price today. The house doesn’t even have to be in good condition.

Go and learn about inflation and do your damn homework before trying to get into discussions that are way above what your brain can take.

My problem with you is that, YOU DON'T THINK DEEP ENOUGH.

How many of those people were 100% sure that it would be a decent location in 30years time? You see why I said you need serious luck?

I'm surprised you are talking about putting inflation into consideration yet you made the silly statement below

afroxyz:


What if government collects the land

What if war happens? What if a military government comes in and refuses to honour the bonds? What if hyperinflation happens like what happened in Zim?

Sure. Kindly find below two lots. One using 12% which is about the rate available today for a 30 yrs FGN bond and the other using 15% to enable an easier comparison to the 15% used previously.

ojesymsym:
Is it possible for you to do a case study with say 1 million and maybe 20 years so some of us can better understand?

Lazyyouth4u:


Are real estate investors not also reinvesting their rental income?

This girl sef.

Didn't you see where he deducted the 5m Rental income from the 14M before showing you what can be achieved from the excess 9m?

OgogoroFreak:
My problem with you is that, YOU DON'T THINK DEEP ENOUGH.

How many of those people were 100% sure that it would be a decent location in 30years time? You see why I said you need serious luck?

I'm surprised you are talking about putting inflation into consideration yet you made the silly statement below

You are trying to sound intelligent but you are clearly not very bright. What has my comment in what you posted got to do with the topic at hand? In that comment, we are talking about investing in US equities and converting to spend in Nigeria. Here, we are talking about inflation over thirty years.

If you were smart, you would know that devaluation and inflation are not the same. But can I expect better from someone that claimed he made a million dollars from bitc0ins but doesn’t know how bitc0ins work?

Lazyyouth4u:


You are trying to sound intelligent but you are clearly not very bright. What has my comment in what you posted got to do with the topic at hand? In that comment, we are talking about investing in US equities and converting to spend in Nigeria. Here, we are talking about inflation over thirty years.

If you were smart, you would know that devaluation and inflation are not the same. But can I expect better from someone that claimed he made a million dollars from bitc0ins but doesn’t know how bitc0ins work?

So after investing in the us equities, you assumed for the period invested, there would be no inflation?

OgogoroFreak:


How many of those people were 100% sure that it would be a decent location in 30years time? You see why I said you need serious luck?

This is a very dumb statement that shows your level of intelligence and/or exposure. I shall not be responding to it.

Oh I see what you mean. On the bond side using the 15% lot, at the end of the 20th year, the 1M will have yielded 1M + 12.2993M.
Then the coupons or interest themselves would yield another 1.8M if it is invested in other instruments that are able to also provide same investment interest rate.

skydiver01:
Sure. Kindly find below two lots. One using 12% which is about the rate available today for a 30 yrs FGN bond and the other using 15% to enable an easier comparison to the 15% used previously.

Lazyyouth4u:


This is a very dumb statement that shows your level of intelligence and/or exposure. I shall not be responding to it.

The only reason you are not responding to it is because you have nothing reasonable to say.

400billionman:


I have been reading for long.

The response to your question should be affirmative.

When I see new buildings popping up, I hiss, because the poverty rate in the country is abysmal. Current landlords know 90% of their tenants cannot afford bills and therefore expect everything to be done for them free. The housing agents who are not in the landlord's shoes will even side with the tenants.

One landlord actually referring to his tenants called them parasites.

Yeah i asked because default on rentals is on the increase. Cost of maintenance is also in the increase. Also developers are concentrating on building for high income earners, (a section which i feel is saturated) rather than low or middle income earners where there is a housing deficit

OgogoroFreak:
So after investing in the us equities, you assumed for the period invested, there would be no inflation?

You keep exhibiting how dumb you are.

Two investors A and B start out with 1m Naira. A invests in Naira t bills while B converts and invests in US equities. At the end of the year, B converts his money to Naira to spend. Is it not the same Naira inflation that affects them both? You are too slow.

Go back to ashawo thread go continue your study on ashawo business as Na wetin your brain fit carry be that.

OgogoroFreak:
The only reason you are not responding to it is because you have nothing reasonable to say.

Go and ask people that built or bought in Yaba, Ikeja, Surulere, Ikoyi, VI in the 90s if they were gambling when they were making these investments. You are not bright and you no get exposure. Na only ashawo matter your brain fit carry.

Lazyyouth4u:


You keep exhibiting how dumb you are.

Two investors A and B start out with 1m Naira. A invests in Naira t bills while B converts and invests in US equities. At the end of the year, B converts his money to Naira to spend. Is it not the same Naira inflation that affects them both? You are too slow.

Go back to ashawo thread go continue your study on ashawo business as Na wetin your brain fit carry be that.

How are you certain it would be the same Naira inflation? You are assuming after the one year, the USD to Naira rate would be the same?

I got dollar last year at the rate of ₦360, This year it is ₦495

OgogoroFreak:
How are you certain it would be the same Naira inflation? You are assuming after the one year, the USD to Naira rate would be the same?

Oga go back and read the analysis I did on this same matter as it relates to a drop in the prices of US securities. Stop exhibiting your stupidity please.

Lazyyouth4u:


Oga go back and read the analysis I did on this same matter as it relates to a drop in the prices of US securities. Stop exhibiting your stupidity please.

I know this is difficult for you to understand which is the exact reason I said, YOU DON'T THINK DEEP ENOUGH.