Globally, economic situations have been on a steady decline with many countries recording worsening financial conditions. As currencies all over the world take devastating blow after blow, cost of living continues to hit an all-time high.
In Nigeria, a darker cloud looms over the nation’s economic outlook as the country has consistently recorded a downward slope with the negative impact evident on multiple fronts. Most of these issues stem from the aftereffects of the Covid-19 pandemic, inflation, decline in oil prices and a steady devaluation of the naira. This negative impact continues to be felt across all sectors, which makes for challenging conditions to manage or grow wealth.
Given these stringent conditions, the big question remains: is financial freedom a myth? How can individuals looking to achieve long-term financial security make it work? The simple answer to this question is one word – Investment.
Investing is the key that unlocks the door to financial security. It allows you to grow your wealth and generate inflation-beating returns. While it is good to save, a savings account leaves you prone to inflation and decreased returns. To build and retain real wealth, you need a defined investment strategy tailored to your income level and overall financial goals.
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How then can you get started on this journey to financial freedom? Here are five tips to help you:
1. Have a financial goal/plan: The age-old maxim goes “if you fail to plan, then you plan to fail” and this is true even with investments. The first strategy for attaining financial freedom is to set a defined financial goal. There is no “one-size-fits-all” approach as wealth building is personal. Figure out your goal and draw up a realistic plan to help you achieve that goal.
2. Know your options: After you have drawn up a plan, it is time to know what options are available for you. There are four main investment types you can choose from, and each has distinct benefits and risks. They include – growth investments, shares, property investments and fixed-interest investments.
3. Understand your risk tolerance – While researching your options, you also need to understand your risk appetite and risk tolerance level because an investment comes with a certain level of risk, some inherently riskier than others. A key consideration, therefore, is to understand your risk tolerance and how to manage your risk to achieve your financial goals, be it short-term or long-term.
4. Build a portfolio: The next step is to start building your portfolio. Choose an investment plan that works for you based on your risk tolerance level, income and overall financial plan.
5. Have a trusted financial partner: Finally, to be successful on this journey, you need a trusted financial partner. Financial service firms offer investment options tailored to your needs with both individual and corporate solutions to help you get one step closer to securing the financial future you desire.
Adesuwa is the managing partner at Seolahm Consulting, writes from Lagos
