Top Investment Opportunities to Take Advantage of in Your 20s
Top Investment Opportunities to Take Advantage of in Your 20s |
Investing at an early age is becoming an imminent necessity. A person who invests earlier would definitely end up with a more secure financial future than their peers. In fact, current economic challenges, especially in third world countries like Nigeria, necessitate the need to put proactive measures for meeting your needs in place to avoid ‘stories that touch the heart.’ (sob stories). Crises that could affect your financial future include (but is not limited to) an increase in the unemployment rate, weak national currency, unprecedented loss of life or property, and many other factors. On that note, I’m going to share with you things to invest in when you’re in your 20’s in this article.
Note: This article is peculiar to a Nigerian audience and includes instances derived from the Nigerian investment space.
1. Invest in Yourself
In case you didn’t know, human resources are unrivaled. You are your first industry, so it’s only reasonable that you work on investing in yourself first. Why should you invest in yourself? Investing in yourself is the best thing you can do to yourself because it improves your own talent. Investing in yourself increases your productivity, i.e., it increases your knowledge base. It makes you more employable and a valuable contributor to your nation’s wealth. How do you invest in yourself?
What you don’t know is that by just reading this article, you’re already taking a much-needed step in making a worthwhile investment. Wherever you think your strengths are, invest in it. If you believe you are a great writer, investing in yourself would mean you taking writing courses and reading books on how to write better. It is basically taking well-informed intentional decisions that would launch you into the next phase of your career or business.
If you already work at a job, invest in seminars and learning materials that will teach you how to be a better employee by increasing your productivity. You can learn graphics design, take some programming courses, register for a cooking class, find a mentee position, or whatnot. The final point here is that an increase in your knowledge base equals an increase in your income. When you have more money, it makes investment in other lucrative ideas easier and achievable.
2. Treasury Bills
The second is investing in Treasury bills. What is a Treasury bill? Treasury bills are basically securities through which the government raises money to fund their expenditure and it is also used by the central bank as a tool to manage money supply in the economy. In situations where the money in circulation is in excess, the central bank exchanges the money with Treasury bills to control the money in circulation. The central banking authority issues the bill to banks and financial institutions at a primary market which is done fortnightly or every two weeks. Another Treasury bill trading takes place at the secondary market where investors/institutions trade with other investors/institutions. Treasury bills come with a specified maturity date, which is when you receive your investment back.
A Treasury bill is a liquid investment option because you can easily sell it even before its maturity term. There is a 91 day Treasury bill, 182 day Treasury bill, and a 364 day Treasury bill. Each tenure attracts different rates. The higher the tenure, the higher the interest rate on money invested. Prior to 2017, individuals could buy Treasury bills directly from the central bank but nowadays, individuals will have to buy through the commercial banks or financial institutions because the required amount for individuals to buy directly from the central bank is 50 million naira.
Investing in treasury bills is a great option because they are very liquid (i.e., if you need cash urgently, you can sell them instantly even if it’s not up to its maturity date). It is also a great investment because they are very safe since you are lending to the government which is the safest institution to lend money to. This option also offers you returns that are fairly stable. For information about the current Treasury bill rate, you can contact your bank or financial institution.
3. Mutual Funds
The third financial investment you could make is investing in mutual funds. What are mutual funds? It is an open-ended investment that involves the pool of funds derived from many investors with the sole goal of investing this fund in securities like bonds, money market instruments, and other valuable assets. In simple terms, it is a situation whereby people gather money together and give the money to a fund administrator to invest in a lucrative business. This type of fund is managed by a professional fund administrator with a vast investment knowledge base. Their operation is guided by a document called fund prospectus (a document that clearly states the corporate goal and objective of a particular fund with detailed past performance, management, and all other relevant information about the fund). The funds are invested in diversified holdings.
With mutual funds, you are relieved of doing research on which idea or business you should invest in. The fund manager takes up the responsibility of determining which business would yield greater returns or profit. The likelihood of your investment reducing in a mutual fund is low, thus making it a safe and reliable investment option. Some trusted mutual fund companies in Nigeria are Stanbic IBTC Asset Management Limited, FBNQuest Merchant Bank, ARM, and many more. The annual return or percentage rate will determine how much you will get in return but the average is 12 to 14% with a minimum investment of 5,000 Naira.
Mutual funds is a great investment option because it is affordable, it is professionally managed, and it can be easily liquidated (it provides day-to-day contribution and retrieval of investment, thus providing easy access to your funds).
4. Agricultural Tech Investment
The fourth is investing in Agricultural Tech Investment. What is Agricultural Tech Investment? It involves the investment in Agricultural products with the sole aim of getting a return on money invested and also contributing to the increase in food production in Nigeria. Agricultural tech investment is a partnership deal between an investor and a farmer with a high investment return rate of 20% upward. With Agricultural tech investment, you are guaranteed of earning a higher investment return on your capital immediately the farmer harvests and sells the agricultural product. Agricultural tech investment is one of the great investment options because of its high investment return rate with a short term investment tenure. There are many Agricultural tech investment companies in Nigeria today. Some of them are Farmcrowdy, Thrive Agric, Groupfarma, Farmsponsor are among the top Agricultural tech companies in Nigeria today.
5. Cryptocurrency and Blockchain Investments
The fifth investment opportunity is investing in cryptocurrency and blockchain.
A cryptocurrency is a digital currency secured by cryptography which makes it impossible to counterfeit. Unlike other physical financial institutions, operations in cryptocurrencies are in decentralized networks secured by blockchain technology. A very popular example of cryptocurrency is Bitcoin. One bitcoin is now valued at over $9,000, 11 years after its launch. Financial analysts have estimated the value of one bitcoin to rise to a whopping $397,727 in 2030.
The Return of Investment (ROI) of cryptocurrencies is staggering. For only Bitcoin, the first and most successful cryptocurrency, the return of investment is 4,698% for 2020. As great as this sounds, investing in cryptocurrency is also very risky. This is why new investors are advised to consult a professional before making a move.
Investing in cryptocurrency is a great option because the return on investment is very high. They also have very high liquidity. This means you can buy and sell them easily. Because of the blockchain technology that controls this investment, theft, and hacking are near impossible unless you give out your wallet details (which is a very bad idea, in any case!). One thing you must note is that price fluctuations are the norm with cryptocurrencies. So, the prices are hardly stable. Still, if you decide to have a long-term investment, you are guaranteed ‘explosive growth.’
6. Real Estate Investments
The sixth investment opportunity is real estate investments. This is one of the most lucrative investments that guarantee an attractive return on investment.
Investing in real estate is so diverse. You can make a profit from real estate investments through the purchase, sale, management, or rental of real estate properties. Regardless of economic downturns, investing in real estate always has an impressive return on investment.
The only problem with investing in real estate is that you will require huge capital. As a young person, you might not have access to a large sum of money to invest, but there are systems put in place that could still help you. One of those systems is joining an investment club. An investment club is a group of like-minded individuals pooling their money together to invest in something. You could gather as many friends, colleagues, or even family members that you know are interested in investing in real estate but lack the funds. Come together as a self-managed group, and invest in real estate. By the time the returns start coming in, you could share it according to each person’s investment. The club could then decide to continue re-investing.
There are many investment opportunities in the real estate sphere. Some of them include; property development, Real Estate Investment Trusts (REITs), land flipping, and managing a rental property.
These are the top investment opportunities you must take advantage of in your 20s. And even if you are already in your 40s, it’s never too late to invest. Securing your financial future is so important. Set aside a certain percentage of your income or even allowance to invest. Knowing that you have some money tucked away somewhere that keeps growing will help you sleep better at night. Do you have other investment opportunities you would like to share with us? Please, do so in the comments section.
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