Tunde, a 24-year-old man, has made repeated attempts to win big in one of the popular online sports betting platforms, but his efforts were fruitless as none of his guesses was correct enough to secure him that big win he desired.
But while he was busy gathering information and relevant statistics to make informed decisions on likely outcomes of football matches, he failed to plan for what he would do with a million naira he hoped to garner should his predictions become right someday.
Just like every other day with futile attempts, the young man, who has been unemployed for more than two years after completing the one-year mandatory national youth service programme, approached a nearby online betting shop to make bookings for an upcoming football match.
As a reward for persistence and determination, the outcome of the matches came as he predicted, implying a one million naira win for Tunde. “Yes! I did it,” the 24-year-old graduate said with a happy expression to show his delight for the sum. “While I was rejoicing, I was at the same time confused on what I would do with the money.”
Tunde’s case is one of many cases where people earn their first one million naira from betting big, sale of assets, rewards for loyalty, or willed benefits from deceased loved ones but have no idea on how to effectively use the money to make it work for them.
To help those in this category grow their money, BusinessDay sampled peoples’ opinions on the street to know their take and also spoke with three experts who revealed promising investment options for substantial sums.
What are Nigerians saying?
Tobiloba Adefala, a Lagos-based banker, said she would divide the sum into four parts comprising N250,000 each. Tobiloba prefers to save the first N250,000 in a fixed-deposit account and use the second N250,000 to set up a mini “mama put” shop.
“I know a bit about cooking and its returns,” she said. “The business would return an average of N5,000 profit a day, that’s not bad for a starter.”
The young lady explained that since everyone needs money and the available Automated Teller Machines could disappoint, she would invest another N250,000 in point-of-sales (POS) business and reserve the remainder to mitigate the effect of possible shocks.
Alani Adesina, an entrepreneur, prefers to invest the one million naira into importation of mobile phones and accessories, as he believes starting a business with it would generate more income, while Ity Cyril, a telecoms engineer, who had long heard about the opportunities in mutual fund investment, went for mutual funds which he believes has a favourable projection and would provide more returns..
What are the experts saying?
Ayodele Ebo, Managing Director, Afrinvest Securities Ltd.
It depends on the person’s age, if the person is young, he can make 60 percent investment in equities and 40 percent in fixed income.
If the person is between 50 or 60 years old, it is advisable to invest probably 70 percent into fixed income and 30 percent into equities. This is because fixed income will provide consistent cash flow and guarantee capital.
Ayo Akinwunmi, Head of Research FSDH Merchant Bank
If the person is a novice in the investment space, it is advisable to invest in mutual funds that will be managed by an expert which will provide higher returns.
The federal government savings bond is also a good idea as it will give the person interest coupons every six (6) months and depending on individual’s preference, the person can embark on the 2, 3 or 4-year tenure.
This is a good option for a novice in the investment space who would not want to make losses.
Johnson Chukwu, Chief Executive Officer, Cowry Asset Management Ltd.
If the person falls under the category of the unemployed, it is advisable to divide it into different areas, as a single form of investment is not feasible enough. 20 percent could be used to set up an enterprise that would keep the person busy while providing returns, another 20 percent could be used for liquid assets and 60 percent should be invested in a secure FG Bond.
Basically, the person should invest half of the money in securing federal government savings bond. The other half should be further divided into two, the person can invest N300, 000 in fixed deposits which will bring in additional income and N 200,000 can be used to set up a business venture.