Where to invest N4, 000,000 right now

Nigerians have always been fascinated by thoughts of being millionaires. Who can forget the famous Basi and Company T.V series of the 1980s/1990s with the catch phrase “If you want to be a millionaire, think like a Millionaire.”

However while one million naira (NGN) today is not worth as much as it was 30 years ago, due to inflation and effects of naira devaluation, a million naira is still a huge sum of money for majority of Nigerians.

So if one had N4 million (roughly $4,000), to invest right now which assets class or portfolio should one put his/her money into.

Diversified basket of NSE blue-chips

It’s always best to buy at the bottom and sell at the top. If you believe that Nigeria’s economic slump has hit a trough following reforms to the foreign exchange markets, it means company profits should begin to rebound as soon as this year and show up in higher stock prices.

One of the best places to invest some of your N4m now would then be a diversified portfolio consisting of oil, Consumer goods, Industrials, Financials and Agriculture stocks.

Nigerian assets are cheap right now and stocks are already attracting inflow of capital from foreign investors.

Dangote Cement recently sold a 2.3 percent stake to foreign investors in a stock market deal valued at N86.1 billion ($236 million).

The firm sold 416 million shares of Dangote Cement at N210 naira per share.

More importantly equities are a natural hedge against inflation.

With CPI reading at around 16 percent, there are very few asset classes in Nigeria right now where one can get positive inflation adjusted returns.

With blue chip stocks sporting dividend yields in the 3 – 12 percent range it is an additional incentive to own them.

Caveat: For these investments to score big it will depend on timing of entry and how long the investor holds. For example while the NSE all share index is up 39 percent this year, a blue chip stock like UBA is already up over 113 percent this year.

Fixed Income

With Federal Government Securities yielding 18% for one year Treasury Bills, it’s a no-brainer that fixed income should be a part of your portfolio.

The major drawback used to be the cumbersome nature of filing out T-Bill paperwork and some banks that have large minimum requirements.

Nevertheless you can still buy treasury bills (from the secondary market) from your bank today and most investment firms, since the minimum requirement for primary market participation is now N50 million.

However the Federal Government also recently introduced the FGN Savings Bond for retail investors, where investors can get exposure to 2 and 3 year FGN bonds with coupons of up to 14.5 percent.

The minimum subscription for this is N5, 000.

Interest is paid quarterly into the bond holder’s account and the principal is repaid in full at the end of the tenor of the bond (2 or 3 years).

Investors can subscribe through stockbroking firms trading on the floor of The Nigerian Stock Exchange (NSE).

Caveat: While fixed income investments are considered risk free, inflation is still a threat to bond investments. The FGN Savings bond while offering much better yields than a typical savings account which pays 2% or a fixed deposit that pays 7% will still give negative real returns with inflation at 16%. Investors may therefore want to largely play in the Treasury bills space until inflation dips.


Investors should always have a space for other asset classes such as Real Estate or even Bitcoins in their portfolio.

This is because you can’t be too diversified and should always give yourself a chance to be a part of an emerging technology like crypto- currencies.

Bitcoin recently crossed the $3,000 per coin mark up from $800 some 12 months ago.

Real Estate is a big gauge against inflation, provided the property being bought has the right paper work and approved government plans.


Rule of 72

The ‘Rule of 72‘ is a simplified way to determine how long an investment will take to double, given a fixed annual rate of interest.

By dividing 72 by the annual rate of return, investors can get a rough estimate of how many years it will take for the initial investment to duplicate itself.

Being fully invested at interest rates near 18 % per annum and reinvesting your interest/dividends can help you double your N4m in about 4 to 5 years.

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