yomi007k:


Valid points. Diversify into shares and MF right?

arena07:
If the rate is higher that TB interest rate,does it means the person will lose the entire money which is the principal invested in it?because current Nigeria inflation rate has increased from 11.14% to 11.23% this year.I need more clarification Thanks

zamirikpo:


Run for ur life, they want to harvest ur lifetime savings.

GonFreecss1:


Perspective my man.

Being rich is relative. This is something Nigerians as a whole have to understand.

Remember the country you are in, we mostly depend on imported goods hence our goods and services are sold in dollars. It's a fair estimation to agree that in the future (Let's say 10 years), 1000 naira could make a dollar. If you agree with this analysis, then all you have to do is divide the current naira rate by the estimated one in 10 years and figure out the % increase. Do an average for Tbills being compounded from now till 10 years time, ask yourself do you think this Tbills compounding will beat the drop in naira over this period? Do you think the naira will get stronger relative to the dollar?

I can imagine the look on the faces of those compounding Tbills for a while when Naira dropped from 160 naira to a dollar to 500 naira to a dollar, almost made all their gains insignificant. Yes, it corrected back to 362... but know what happened to their buying power? It was destroyed.

Like I said in the beginning, being rich is relative. Of course people who did Tbills were far better off than people who don't invest in anything at all (many Nigerians), but they too were affected and their wealth affected too. Wealth is all about buying power, there is a favorite saying, if you can't buy something 5 times you can't afford it. So that means someone who had a million before could buy a laptop worth 200K 5 times. He can afford it, but the moment that laptop increases by just 10% (220k), he can't afford it again.

That's why I advise people to diversify. Tbills is good but it's not enough. Especially in the type of country we are in...

eagleeye2:

Your last sentence, diversify to what exactly? How many investments are out there with low risk.
I believe people considering Tbills have low risk appetite.

GonFreecss1:


The Equities are the best forms of investments in my opinion, but a lot of people think they are too high risk, lol.

You can also consider cryptocurrencies, they are your best bet against inflation and if you feel the systems in place are not to be trusted.

eagleeye2:

The equities, yes if you are investing for the long term and equities in strong and dependable company. And still it is still riskier than T.bills
Cryptocurrencies is a very volatile form of investment to be advising someone who is looking forward to a low risk investment like T.bills which is the major reason for this thread.

GonFreecss1:


Yeah. If you can have access to foreign accounts or foreign bonds. Do too.

Do not underestimate owning some cryptocurrencies as some of them are your best bet against inflation of any kind.

SirLaw12:

please guide me on how to operate foreign accounts or foreign bonds. I invest my money in TB just to keep it for future investment i have in mind.

Nettuno:
Please anyone with information on whether there will be primary auction next week?

dotcomnamename:



I ask someone today and they said it should be next week.

GonFreecss1:


Not all Cryptocurrencies are an investment per say. Most of them like Bitcoin serve as a hedge against inflation.

Are you willing to bet the naira will not keep depreciating with respect towards the dollar? Or other goods and services? Sine you are not, then it's a good idea to hedge.

Because something pays me back x% in naira with a 99.999% guaranty doesn't make it low risk or safe. If 500 naira becomes a dollar tomorrow, your buying power will be affected and your Treasury bill interest and capital will be too. I don't know why people don't always think about this or forget to.

If land was traded on a computer like stocks, many people will call it high risk. The reason many people are at rest owning land is just because there is no structure or framework in place to see the amount of lands sold per day (volume) and how many people are willing to buy or sell (liquidity). Trust me, if they were traded on a computer people will have a heart attack.

Is Treasury bills low risk with respect to getting your naira back? Yes.

But it can also be high risk with respect to buying power and wealth preservation or creation.

I just think many people like instant gratification, hence why they stare clear of stocks and call it risky, same as cryptocurrencies. Some cryptocurrencies are securities but ones like Bitcoin to me are not an investment but a hedge against a currency crisis, inflation or systems that require trust.

What many of you think is high or low risk is not what you think with respect to wealth preservation.

There are even cryptocurrencies you can mine via a sort of mechanism and earn % almost the same as Treasury bills, but the % you get back is in that currency, and yes they don't have an iota of risk in that your principal will always be with you and your interest will definitely always come, but I can't shake out the fact that your interest and principal are in that cryptocurrency, so you are at the mercy of it's market value... and this is the same with naira in Treasury bills, the % you get is not a % of buying power or wealth, it's just a return in your naira. That is all. Not a return of your wealth or buying power. A return on your naira. This is a very important point. Your return is not in dollars or pounds it's in naira... hence when the value of naira gets beat down, your Treasury bills principal + interests becomes a loss. Don't get me wrong, you are still far better off and richer than people who don't invest, but when did beating mediocrity slightly become an achievement?

I am not attacking Tbills, I am just letting you all understand what the low risk and high risk you think you understand means.

eagleeye2:

I will rather hedge my funds against inflation by, having a domiciliary account and buying dollars with it. As far as safe investments goes, T.bills is about the safest out there. If I want to diversify, I can do equities and real estate.

ahiboilandgas:
very correct my truck couple with around 11 m 5 years ago still nets around 500 k monthly (net) .....a single trip to kano for 60 ft container is 1m naira that what a 10 investment in tb will give.......if u know u know

eagleeye2:

I will rather hedge my funds against inflation by, having a domiciliary account and buying dollars with it. As far as safe investments goes, T.bills is about the safest out there. If I want to diversify, I can do equities and real estate.

Nnamz:


If a single trip gives you 1mN, how come you make only 500k monthly?

katamo:


Is all a matter of risk tolerance and the risk-reward trade off. If you are looking for higher returns, you typically will need to take on more risk. I agree that in order to preserve the value of your capital while invested in T-Bills, your rate of return needs to exceed the inflation rate if not your overall purchasing power will be reducing even though the amount of naira you have is increasing.

However, I don't think it is appropriate for someone who is looking for a low risk investment, such as T-bills, to invest in cryptocurrencies as a way to hedge against inflation. Granted that you will get protection from inflation mostly because cryptos are priced in foreign currencies which will appreciate against the naira based on relative inflation rates as well as other factors but the additional risk associate with this puts it in a completely different category than T-bills.

I agree with eagleeye2 that equities (in good companies) and real estate (bought at fair prices) are a good hedge against inflation - you can add precious metals such as gold to that list as well. These provide a hedge against inflation at much lower risks levels than cryptos whose prices are still much more volatile relative to other assets. That is not to say that they do not make a good investment under any scenario but investors need to be aware of the risks associated with these types of assets and act accordingly. Ultimately, having a diversified portfolio that contains different assets including equities, bonds, money market instruments (including T-bills), precious metals, real estate, cryptos (if you now how to identify good ones) is the way to go as you will be able to maximize your overall return for the same level of risk. This is the whole premise behind modern portfolio theory.

Freedem:




It depends on your timing.. I converted 238,000 from euro to naira about 3 years ago.. at the rate of 1 euro to 420 naira. Approximately 100 million naira..

In two years of investing 100mill I managed an average return rate of 15% each year, so in two years 100 million has earned me an interest of 30 million naira.

So what I did was to convert 30 million back into euro , thankfully the naira conversation rate has even appreciated.. and I was able to get 74,000 euros .. rate is now 402 euro to one naira..


So I have my 100million working in Nigeria and 74000 Euros.


This is how you edge against inflation..

Remember all my money in euro was not more than 238000 euro.. meaning ive already gotten 31% of my money back in euro within only two years..

At this rate I estimate in another 6 years I'd have recovered my full euro investment in 6 years.. and still have 100mill sitting in my tbill account.


If for some reason the exchange rate appreciates against the naira, remember I now have Euro that is also appreciating similarly...

So it's a win win.

Think about it.

eagleeye2:

This is good. But did you invest all of the 100M in T.bills without diversifying? What if going by GonFreecss1 :..advise, the Naira has depreciated further, that would have actually been a loss of purchasing power even though your Naira remains the same.
But, I must commend you for having the foresight of buying back Euro with the interest you already gained.
Also you can look towards real estate (that is if you are not already into) to diversify your investment portfolio the more.

Freedem:




It depends on your timing.. I converted 238,000 from euro to naira about 3 years ago.. at the rate of 1 euro to 420 naira. Approximately 100 million naira..

In two years of investing 100mill I managed an average return rate of 15% each year, so in two years 100 million has earned me an interest of 30 million naira.

So what I did was to convert 30 million back into euro , thankfully the naira conversation rate has even appreciated.. and I was able to get 74,000 euros .. rate is now 402 euro to one naira..


So I have my 100million working in Nigeria and 74000 Euros.


This is how you edge against inflation..

Remember all my money in euro was not more than 238000 euro.. meaning ive already gotten 31% of my money back in euro within only two years..

At this rate I estimate in another 6 years I'd have recovered my full euro investment in 6 years.. and still have 100mill sitting in my tbill account.


If for some reason the exchange rate appreciates against the naira, remember I now have Euro that is also appreciating similarly...

So it's a win win.

Think about it.

ahiboilandgas:
if u need consultancy? U need to pay for it....am in bussiness to make money which include providing consultancy service...

Nnamz:


Go f*ck yourself.. asshole

ahiboilandgas:
but u lost some money keeping 72000 euro cos naira appreciated to 402 while u bought at 420

eagleeye2:

This is good. But did you invest all of the 100M in T.bills without diversifying? What if going by GonFreecss1 :..advise, the Naira has depreciated further, that would have actually been a loss of purchasing power even though your Naira remains the same.
But, I must commend you for having the foresight of buying back Euro with the interest you already gained.
Also you can look towards real estate (that is if you are not already into) to diversify your investment portfolio the more.

Freedem:




It depends on your timing.. I converted 238,000 from euro to naira about 3 years ago.. at the rate of 1 euro to 420 naira. Approximately 100 million naira..

In two years of investing 100mill I managed an average return rate of 15% each year, so in two years 100 million has earned me an interest of 30 million naira.

So what I did was to convert 30 million back into euro , thankfully the naira conversation rate has even appreciated.. and I was able to get 74,000 euros .. rate is now 402 euro to one naira..


So I have my 100million working in Nigeria and 74000 Euros.


This is how you edge against inflation..

Remember all my money in euro was not more than 238000 euro.. meaning ive already gotten 31% of my money back in euro within only two years..

At this rate I estimate in another 6 years I'd have recovered my full euro investment in 6 years.. and still have 100mill sitting in my tbill account.


If for some reason the exchange rate appreciates against the naira, remember I now have Euro that is also appreciating similarly...

So it's a win win.

Think about it.

lancee:





Same me..Sweetest thing is when u re converting the naira to forex..I call it "Free money "..Till now T bills has been a blessing to me as long as there is stable exchange rate That is why i do not pray / support for further devaluation of naira
For now let us enjoy the stable xchange rate and higher Tbills rates ..As long as u do ur calc very well ..U good

I do not know about tomorrow ..

Naira is actually appreciating..as of today the euro has fallen down to 399..

I think they're trying to unify the rates all round..

The cbn is hell-bent on stability, any further increase now will literally break the entire system..