What is the big deal about making good investment decisions?
The importance of investing early, staying informed, and seeking professional guidance cannot be overstated. Wealth management is a thrilling journey that promises financial security, and the realisation of dreams.
CASE STUDY: BUILDING WEALTH FOR A MILLENIAL
Jennifer is a 28-year-old Nigerian Millennial with a master’s degree in Digital Cosulting and transformation.
Jennifer has been working as a digital transformation consultant, earning an average of £3,000 per month. She aspires to buy a house and start her own consultancy firm in the next ten years. Here’s how a tailored wealth management strategy can benefit her:
Emergency fund:
To ensure financial stability, Jennifer should aim to build an emergency fund equivalent to at least six months’ worth of living expenses. She can start by saving 10% of her monthly income in a high-yield savings account.
Debt management:
Jennifer needs to manage and have a payment plan for any existing debts. If she has loans or other obligations, she should prioritise paying them off while ensuring she maintains her emergency fund.
Investment diversification:
Given Jennifer’s long-term goals, she should consider diversifying her investments. She could allocate a portion of her income to high-growth investment options, such as equities and tech startups. While also allocating a portion of her income to low/medium risk investments such as mutual funds and bonds.
Retirement planning:
While retirement may seem distant, saving early is crucial. Jennifer can contribute to a retirement account and enjoy the benefits of compound interest over the years.
Insurance:
To protect her financial future, She should consider health and life insurance policies. These can provide financial security in case of unexpected events.
Historical data reveals the potential of the global stock market. Despite fluctuations, it has displayed a consistent upward trend. For instance, the All-Share Index has shown an average annual return of approximately 11% over the past ten years in Nigeria while the S&P 500 has a return of 15% YTD as at November 2023.
Tech startup ecosystem:
The global tech startup ecosystem is booming. Reports indicate that Nigerian tech startups raised a combined US$2,068,709,445 between 2015 and 2022. The number of startups securing funding has been increasing, with 161 startups raising funds in 2021. Jennifer, with her background in technology, can explore investment opportunities in this thriving sector.
Wealth management tailored to the needs of Millennials and Gen Zs in Nigeria is a strategic and achievable goal. It is a necessity for any one looking to build wealth.
