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Investing wisely for retirement
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Over the last few years the Nigerian economy has been growing steadily. And the attendant features of a growing economy are conspicuous. More people are exceeding the N120, 000 salary mark to become middle class citizens, at least by Nigerian standards.
As would be expected, more and more goods and services are accordingly springing up, creating spending outlets. Consumers would be reminded, however, that the Nigerian economy is largely an oil-driven one, and the current verve can be attributed to that. They would be reminded also, that oil prices on the international market are very volatile, which could have commensurate impact on the economy. As the economy is booming now, it is pertinent to think about the age-old and time-tested wisdom of saving for the future. Here are a few impelling tips to imbibe the wisdom of saving:
Save as much as you can as early as you can. Though it’s never too late to start, the sooner you begin saving, the more time your money has to grow. Gains each year build on the prior year’s - that’s the power of compounding, and the best way to accumulate wealth. The acts of spending and saving are not only personal, but also psychological and social. There is no doubt about that. The time and place one spends money in his lifetime constitute the spice of life; this gives you value for your money as it determines how much you enjoy it. But in doing so, consumers ought to remember that each stage in life comes and goes with its own responsibilities. That is why it is good to:
2. Set realistic goals. In setting realistic goals for the future, retirement is the most prominent in mind. Thus we set realistic goals projecting retirement expenses based on needs, not rules of thumb. Be honest about how you want to live in retirement and how much it will cost. Then calculate how much you must save to supplement Social Security and other sources of retirement income. Another angle of being realistic, though, is the consideration that the rate of inflation in Nigeria can become unbearably volatile, to the point where savings for the future can lose value in no time. That is why analysts advice Nigerians to invest their financial resources in businesses that keep pace with the fluidity of the time value of money.
Doing so means that besides investing in commodities, it is good to trade in stocks and bonds in lieu of trading allowing one’s shares to lie fallow in abeyance of dividend payments. It makes the same sense about the disincentive of investing in bonds in an economy where inflation rates have the tendency to rise and fall over time, as stocks and bonds are both long-term instruments.
Monitoring your shares on the stock market can constitute a real job to keep you busy and fight boredom during old age. Being mentally alert and busy in old age is another veritable means of health enhancement. Also, working keeps you socially engaged and reduce the amount of your nest egg you must withdraw from annually once you retire.
As would be expected, more and more goods and services are accordingly springing up, creating spending outlets. Consumers would be reminded, however, that the Nigerian economy is largely an oil-driven one, and the current verve can be attributed to that. They would be reminded also, that oil prices on the international market are very volatile, which could have commensurate impact on the economy. As the economy is booming now, it is pertinent to think about the age-old and time-tested wisdom of saving for the future. Here are a few impelling tips to imbibe the wisdom of saving:
Save as much as you can as early as you can. Though it’s never too late to start, the sooner you begin saving, the more time your money has to grow. Gains each year build on the prior year’s - that’s the power of compounding, and the best way to accumulate wealth. The acts of spending and saving are not only personal, but also psychological and social. There is no doubt about that. The time and place one spends money in his lifetime constitute the spice of life; this gives you value for your money as it determines how much you enjoy it. But in doing so, consumers ought to remember that each stage in life comes and goes with its own responsibilities. That is why it is good to:
2. Set realistic goals. In setting realistic goals for the future, retirement is the most prominent in mind. Thus we set realistic goals projecting retirement expenses based on needs, not rules of thumb. Be honest about how you want to live in retirement and how much it will cost. Then calculate how much you must save to supplement Social Security and other sources of retirement income. Another angle of being realistic, though, is the consideration that the rate of inflation in Nigeria can become unbearably volatile, to the point where savings for the future can lose value in no time. That is why analysts advice Nigerians to invest their financial resources in businesses that keep pace with the fluidity of the time value of money.
Doing so means that besides investing in commodities, it is good to trade in stocks and bonds in lieu of trading allowing one’s shares to lie fallow in abeyance of dividend payments. It makes the same sense about the disincentive of investing in bonds in an economy where inflation rates have the tendency to rise and fall over time, as stocks and bonds are both long-term instruments.
Monitoring your shares on the stock market can constitute a real job to keep you busy and fight boredom during old age. Being mentally alert and busy in old age is another veritable means of health enhancement. Also, working keeps you socially engaged and reduce the amount of your nest egg you must withdraw from annually once you retire.
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