Investing mistakes to Avoid (II)
(Over 20 years investing experience in Nigeria’s financial markets)
Continued from: Mistakes to avoid in 2014 (I)
Feeding the monster: You are feeding the monster when your garage is not big enough to hold your cars and other toys, when you are paying for multiple phone lines, multiple cable channels or computer hook-ups for your family, when you are finding it difficult to pay the fees of that expensive private schools that children attend, always paying for Aso-ebi, you are a member of multiply country clubs, when you feel you are not controlling your finances, but your finances are controlling you. For how long shall we continue to do these? Do not be like Will Rogers, who said we will show the world we are prosperous, even if we have to go broke to do it.
Wrong networks: Your network determines your net-worth. Where we will be in ten years will be determined by the types of books we read and the types of friends we keep. When we build the right network, it will have positive effects on our careers, family and economic status. We must avoid relationships and networks that do not add value to us. Jarushub is a very good platform for young people to cultivate friendship and the right networks that will have positive effects on them in no distant future.
Do not be reactive: In order to succeed in 2014 and beyond we need to be proactive. Proactive people are forward looking and forward thinking, they pray for the best but also plan for the worst. The economic reality of the day is that job security no longer exists in any sector of the economy. It makes a whole lot of sense for every worker to map out strategies that will make them survive a job loss whenever it occurs. Investing and saving for the rainy day is one of the strategies of coping when the unexpected happens to us.
A proactive person should not totally rely on the severance package or retirement benefits that will be paid by his or her employer, for sustenance when retirement or job loss occurs. We all need to have a personal retirement plan.
Linear stream of income: You can never be financially independent through linear stream of income. Our primary source of income should always be diversified into other asset classes such as money market instruments, bonds, stocks, mutual funds, real estates, and small businesses.
We should not wait until we retire and get our severance packages before we start investing and creating other streams of income, those who waited till they retired lost most of their money to phony investment schemes.
Learning is life-long: It too bad that we are intellectually lazy in this part of world. We only read to pass examinations and to acquire certificates. Young people who have reading as their hobby are in a minority. We must be ready to learn, relearn and unlearn, that is the only way we can become successful professional and great leaders. We must not limit our readings to our professions or academic fields, but to all spheres of human endeavours and interests.
You are an economist: A lot of us are well versed in sports and entertainment matters, but we make the mistake of not having an interest in the economy. We will deny ourselves of business and investment opportunities if we are economic illiterates. I am not asking everyone to become an economic expert but I am of the opinion that every truly educated person must be conversant with happenings in the economy.
Information about inflation, consumer price index, exchange rate, foreign reserve, energy consumption, unemployment rate, GDP, per capita income, foreign direct investment, growth sectors of the economy, economic policies of the government etc should be at the finger tips of every professional. It does not matter if you are a doctor, engineer, accountant, businessman, lawyer, architect, student, teacher etc, every educated and informed person should strive to have at least a rudimentary grasp of economy.
