Students must understand how to begin investing in Nigeria. You must be aware that the job market is saturated, with millions of graduates scouring the streets daily for rare job possibilities.
Nigerian students have the best chance to start their journey to financial freedom and prosperity, especially if they have limited resources.
According to research, most Nigerians in the working class have a fixed salary for a long time, even as their expenses and bills rise, all due to the economic state of inflation, which affects the overall price of all commodities.
What Does Investing Entail?
Investing simply involves setting money aside for future growth in real terms, with the capital invested constantly increasing faster than inflation. Some people regard investing as a get-rich-quick scam that, in most cases, ends in disaster. An investment can be dangerous in general, but with a financial strategy, the risk is lessened. Investing early has numerous benefits, including a higher quality of life as you get older.
Why Should a Student Begin Investing?
Though typically, most people think of investing as something that should be done after school, there are numerous reasons why it is beneficial to begin investing while still a student. Among them are the following:
- After graduation, the experience gained would be beneficial.
Investing would allow the student to mature quickly and get exposure. Many students would waste money, but an investor understands that all money should be managed wisely and invested for profit.
- It would be possible to gather experiences that cannot be gained within the four walls of a school. Reading books is very useful, but having practical investment experience is even better.
- Starting happens to be the most difficult part of any undertaking, and investing is no exception. You gain an advantage in life by starting as a student.
- Saving and Investing as a student demonstrates potential and production despite a tight budget. A student who obtains any level of investment experience has an advantage over others.
What Are the Things I Can Invest in as a Nigerian Student?
In Nigeria, there are several opportunities for students looking to start off investments. Let’s walk through some of these opportunities:
Start with a high-yield account (savings) or deposit certificates
Opening a high-yield financial account (savings) is one of the simplest ways to enhance your finances.
These accounts provide significantly higher interest rates on your deposits than standard checking or saving accounts while still allowing you to make withdrawals at any time. Bank products aren’t frequently thought of as investments by savers, although they are.
They’re also among the safest options available. In exchange for committing cash to the bank for a set period, CDs will pay you a predetermined interest rate. These investments can be a smart location to put money that you won’t need for a while.
For example, if you have money set aside for next year’s tuition, you should save it in a safe account. For just this type of need, a certificate of deposit will suffice.
Use a low-cost or a no-cost broker
Are you looking to get into making an investment? There is no better time than this period. Many impressive low-cost brokers online, including Charles Schwab and Fidelity Investments, offer ETF trading, free stock, and excellent research and educational tools to assist you in getting started.
Fidelity and Schwab, for example, both received high grades in these categories and are well-known for their overall client care and investor friendliness.
However, if you want to go completely free – ideal for Nigerian college students trying to save money — you can use Robinhood.
The key selling feature of Robinhood is that it is completely free to trade on the platform, including options and cryptocurrency. Morningstar research is also available through Robinhood Gold for a monthly fee of N2500.
Robinhood is a good solution for individuals trying to decrease costs to the absolute minimum, thanks to its simple trade-anywhere mobile app.
For the budget-conscious investor, Webull is another alternative. Webull, like Robinhood, offers commission-free trading, but it also offers extra customer assistance options and retirement plans, which Robinhood does not.
Make investments monthly starting with a small amount.
Using a commission-free type of broker will enable you to invest sums of cash every month without having your money reduced by fees. Given this, more cash is fully invested in your mutual or stock funds. You can start investing as low as N 5000 or N 10 000 per month and witness your money increase in the market. Several brokers now permit investors to buy fractions of shares as well.
Notwithstanding the state of the economy, it is critical to get started. Even if you only invest a small amount, you’ll be more likely to follow the market. Furthermore, you can begin to think of yourself as an investor. Having money invested in your portfolio also motivates you to do research and assess your holdings. As a result, even a small start can be extremely useful.
Run index fund investment
Purchasing an index fund happens to be one of the most basic methods for primary investors to get started, and many famous index funds are majorly based on the Standard & Poor’s 500 index of significant Nigerian corporations.
A typical index fund has full ownership of the index’s stocks, which can easily number in hundreds in cases of P 500. Index funds are diversified and most times provides less volatility in returns than buying equities since it stores so many stocks across many industries.
An investment application is an approach that makes investing a lot easier. Stash is a smartphone application that allows you to purchase individual stocks or exchange-traded funds.
The basic account is N500 a month and costs only N2500 to get started. Stash can assist you if you don’t know where to start investing but desire to learn and run it yourself.
As a Nigerian student who is aware of the country’s economic and job challenges, the best option is to begin investing early. Get a head start on the competition, and you’ll have a constant stream of cash and wealth in no time.