Idle 500k: Land or Treasury Bill?
I have 500k idle fund – should I go for Land or Treasury bill? I have tried getting a seller of land at that amount in Lagos but seem impossible.
Question answered by Jarushub investment columnist, Mr. Emmanuel Ewumi:
(Over 20 years investing experience in Nigeria’s financial markets)
I will advise you invest the 500k in treasury bill, that will give you a return of about 55k in a year. I do not know your risk appetite and knowledge about investment in the capital market, I would have advised you to invest in shares or mutual funds. You can also invest in FGN or Lagos State Government bonds, either of these should give a risk free return of about 14%.
As per investment in land in Lagos, you must also have money or the cash-flow to start building immediately after buying the land. You also have omo-onile issues, building plan from government, survey, tax clearance etc to contend with. If you search well you should be able to get land for 500k in Ikorodu, Epe, Badagry in Lagos or Igbesa, Agbara etc in Ogun State.
If I may ask, how did you get the 500k, focus on what you did that made you to get or save the sum. This may be a business or your job try and be very good at it so that by the next time you come to Jarushub for advice by God’s grace, you will be asking for advice on how to invest your N5 million or more.
See also: My N7m – To spend on MBA or invest?
The expert has spoken. Very good advice.
I am sorry, I do not see myself as an expert. We are all learning on this blog.
Mr Emma, please do you mean the ROI in treasury bill is constant and not dependent on the financial prospect of the the issuer? Is there is not any case of govt is broke, and your investment is in vague? Please, I need more information in this regards.
I was in the same confused mood of this questioners about 2 months ago. I called a friend -because I am not in the country at present- but he told me N500k is too small for treasury bill, and it is not even reliable nowadays.
I opted for land, and I got an acre in a remote place in Ibadan.
Once your bid for TB is successful, the return for the period of investment ie 91days, 182 days etc is constants, As a matter of fact you get your interest upfront.
TB is one of the safest investment.
Your investment in land is very good, but I do not advice people to buy land and leave it fallow. I have lost plots of land because, I did not build but wanted t6o speculate.
In places like Lagos and Ogun, I will advice you to buy land if you know you can struggle to build something on the land.
Buying land from government is safer buy more expensive than buying from Omo-onile. But government also revokes land, from land owner who did not develop their plots of land.
How do I get the contact to invest in the Lagos state bond or the FGN bond with the risk free return of 14% ? Thanks
Chapelhill Denham is the lead issuing house to the bond.
[…] See also: Idle 500k: Land or Treasury Bill? […]
Pls if i want to apply for treasury bills how do i go about it? Pls what is the minimum amount one can start with if i want to apply for treasury bills?
Good post
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