For a first-time investor, deciphering all the nitty-gritty of investing can be challenging and overwhelming. For example, with the power of the internet, one can barely go for a few days without seeing financial ads like high savings accounts, gold or other commodities, cryptocurrencies, shares of companies and more. As a teenager, I remember watching the NTA channel (Nigeria National TV) on my black-white Sanyo brand television with a deep brown wooden finish and a lock for the front screen. The business news came up, and I heard a gain of .50 kobo per share. My next question was, “Why would the market celebrate a gain of that small?” at the time, I did not know what that meant. I promise to keep this post simple with less investment jargon. Investing is a critical part needed to achieve your financial goal sooner.

Why Invest?

Investing is putting money into anything that will increase the value of your first amount over a set period, commonly long-term. The primary Motivations for investing are

• High returns
• Retirement plans
• Financial security.

Where to invest

Many options are available to invest your money, depending on the country of residence.  Below are some investment options to consider:

• Bonds
• Commodities (agricultural products like wheat,coffee; energy products like oil, natural gas; metals like Gold, silver, copper)
• Collectibles (fine arts, sports memorabilia, physical vintage materials)
• Cryptocurrencies
• Forex
• Index Funds
• Mutual Funds
• Private Corporations (local/international businesses, companies)
• Real Estate (rental properties, single/multi-dwelling units, commercial)
• Equities (Stocks, options)

Other investment vehicles which are offered by banks or services through banks include

• Bank public offerings (Shares)
• Certificate of deposits
• Guaranteed Investment Certificates (GICs)
• Government bonds
• High yields Savings Account
• Treasury Bills

How to Invest

Most financial advisors I have researched recommend saving up your emergency funds to cover any sudden loss of income or other unforeseen circumstances before investing, which is an excellent idea. Yours truly sees investing as a personalized financial journey that be embarked on at any take-home amount after taxes, depending on your financial situation, with a low risk that can easily be converted to cash for use when the need arises and gradually size up as more income is available this time emergency funds have been saved up.

Here are a few steps on how to start:

• Decide a fixed or variable amount based on your financial situation
• What country to invest in (A country with a strong currency that hold against short/long term economic fluctuations)
• Select an asset Vehicle
• Thoroughly research the assets you wish to invest your money on

The downside of investing is the risk of losing your entire investment; the higher the returns on investment, the higher the probability of losing your entire investment. It’s important to understand that all investments carry some level of risk. Low-risk investments, like government bonds, offer a lower potential return but lower loss risk. On the other hand, high-risk investments, like stocks, offer a higher potential return but also carry a higher risk of loss. The takeaway is to start with low risk, test the waters, and move to medium—or high-risk assets, depending on your comfort level.

Whether you’ve already made your first investment or plan to start at once, I encourage you to share your experiences. Happy investing!

Sources
CFI Team. (2024). Personal Finance. Corporate Finance Institute. https://corporatefinanceinstitute.com/resources/wealth-management/personal-finance/
CIRO. (n.d.). Types of Investments and Types of Accounts. https://www.ciro.ca/office-investor/investing-basics/types-investments-and-types-accounts#3925188384-1457521375
Hayes, A. (2023). Investment basics are explained with types to invest in. Investopedia. https://www.investopedia.com/terms/i/investment.asp
Lynch, P., & Rothchild, J. (2000). One up on Wall Street. Simon & Schuster.
Singh Panwar, M., & Aggarwal, K. (2018). International Journal of Advance Research, Ideas and Innovations in Technology. http://www.ijariit.com

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