Most people view themselves as better than they are, so even if you are a bad investor you may not know it. Of course, your inability to make money investing should clue you in, but at times it is not enough. In this article, I will finally lift the veil from your eyes, so you can finally see yourself for who you are: a bad investor. 

1. You know nothing about investing

There is absolutely no way you would be good at anything without first having in-depth knowledge about it. However, some people invest without first acquiring the basic information about investing. If that describes who you are, then the only thing to do is to stop investing right now and devote your time to learning. 

There are various resources available online that you can learn from. You can read blogs, watch videos, listen to podcasts, and buy books. If learning on your own is hard, you can ask others more knowledgeable about investing to teach you or even employ a financial advisor to coach you. 

2. You only invest because you were advised to do so

An investment is not always good just because an investment consultant suggests it. It might be a warning sign if you seek advice from an investment consultant and they strongly advise you to buy a certain stock. 

Human nature may cause a broker to suggest a more expensive investment over a rival as certain investments pay larger commissions than others. Before investing, always find out how an adviser is compensated. Working with a fee-only financial adviser is thus often the best option, and you should confirm that they are recognized by the government or any authorizing body. 

3. You borrow money to invest

A rule of thumb when investing is to never invest money you can’t afford to lose so it would be very unwise of you to invest money that you don’t have. An investment may not be the greatest choice for you if you are unable to pay for it entirely and want to borrow the funds. 

To make things worse, you may have to pay interest on the loan you collected. Even if you make money from that investment, almost all of it will go to covering the interest you owe. And if the investment falls through, you end up worsening your financial situation with a loan. 

4. You don’t care about the fees

When investing, you will most likely use an investment broker or an investment platform, and they usually charge a fee for their services. The higher the fees, the less returns you will receive from that investment. Investment fees should not exceed 0.5-0.75%.

A fee of more than 1.5% is exorbitant and you should not investment with the platform or broker. 

5. You ignore red flags 

Some stocks are just too good to be true, or the risk involved may be so high, it cancels out any profit you may make. You should always trust your intuition when investing, and seek advice when you are not sure. If you have a bad feeling about a stock don’t buy even if the stock seems to be doing well. 

6. When a stock is rising you feel pressured to buy

When a stock is growing, it may be easy to be sucked into it. It appears to be rising every week, so you may feel pressured to purchase now to keep up with the trend. This hurry, however, is seldom a good thing.

Just as suddenly, high-flying equities might drop in value, leaving you with much less than you started with. If it’s a really good opportunity, you can purchase when you have a greater understanding of the investment since good stocks often move upward for years, if not decades.

Being pressured to purchase an investment right away in order to avoid “missing out” is a serious warning sign. If someone is pressuring you to send money right away, it’s either a fraud or at the very least, an indication of a “hot” investment that’s probably going to drop soon. Stick to long-term, essentially good decisions instead.

7. You don’t do research before investing 

You should not invest because a stock seems to be doing well or because many people are buying it. If you invest, it should be because you are confident that that stock will do well in the months and years to come and you can only know that if you do your research. 

Investigate a stock’s price-to-earnings ratio and look for assets that are reasonably priced or undervalued as opposed to those that are trading at a high ratio. A stock may be on the verge of a decline if its valuation increases steadily but its profits stay the same or decline. Stock prices are usually driven by profits, therefore it’s risky when a company’s stock price increases while its earnings fall behind.

You should steer clear of an investment if it is so complex that you are unable to express it in plain English. An investment isn’t always superior to a straightforward one just because it’s complex. With so many options for earning money, stick to what you know so you know what to anticipate.

8. You only go for risk-free stocks

There is risk associated with any investment. Even comparatively secure assets, such as bonds, include some risk. 

If someone tells you that an investment has no risk or that returns of a certain percentage are assured, then that person is either dishonest or lacks sufficient knowledge about the investment, both of which are concerning. It would be wise to steer clear of this kind of offer completely since it often indicates an investment fraud.

9. You make purchases that are not in line with your objectives

Having and following an investment strategy is crucial, and generally speaking, you should only invest if it fits with your objectives. If it doesn’t fit your financial objectives, it’s probably not the appropriate choice for you, regardless of how high the prospective returns are. 

You should determine your investing goals before making any investments. Do you need income or do you want your capital to grow? What about combining the two?

For instance, pensioners, who often need a steady stream of income, may not be the best candidates for a diversified stock portfolio, even if it has been a wonderful long-term investment despite occasional large failures.

Perhaps you will soon be retiring and cannot withstand this kind of volatility, or perhaps you just cannot bear to see your money plummet overnight. Your requirements must be met by the investment.

10. You follow the trend

You shouldn’t purchase an investment just because someone else is, especially if that someone is a well-known investor.

Investors have varying time horizons and objectives, and other people’s motivations for stock ownership may be entirely at odds with your financial requirements. Look for investments that suit your needs, not those of others.

When promoters are praising a stock, it is often best to steer clear of it. Either do your own research or follow the recommendations of reliable investment experts.

Conclusion

The world of investing is very challenging; there is often no place for bad investors. To do well, you must be knowledgeable, smart, and lucky. 

If you fall into the category of a bad investor, there is still hope for you. The first step is recognizing where you fall short and then making a conscious effort to change. In no time, you will become a good investor, or even a great one, and eventually start reaping the rewards of investing.

Consequences of financial mistakes

Making money mistakes can greatly affect your financial stability. It can lead to debt, stress, and missed opportunities. Bad financial choices can damage your credit score, which can make it harder to get loans or mortgages. Poor money management habits can also affect your health.

Financial stress can cause anxiety and depression. Long-term mistakes can mess up your retirement plans at old age. It’s important to recognize and avoid these financial mistakes. It’s never too late to change your money habits.

10 Biggest financial mistakes that you should avoid

1. Not Having a Budget

Many people don’t make a budget. This is a big mistake as budget helps with accountability to yourself. Without a budget, it’s easy to spend too much. You might not know where your money is going. A budget helps you keep track of your income and expenses. It allows you to plan for the future.

Start by listing your monthly income and expenses. Find areas where you can cut back. Stick to your budget to reach your financial goals. For example, if you earn N200,000 monthly and spend N50,000 on entertainment without realizing it, a budget will help you allocate funds properly and save more.

Also Read: 6 Habits that can change your finances

2. Living beyond your means

It’s tempting to spend more than you earn. Many people fall into this trap. Once the salary or business earnings come in, they go on a spending spree. Some may even take up loans from instant loan apps to show off. This leads to debt. Living within your means is key. Adjust your lifestyle to match your income.

Make sure that you avoid unnecessary expenses. Try to save for big purchases instead of taking a loan. This habit will keep you financially stable. For instance, if you earn N300,000 and consistently spend N350,000 by borrowing, you’ll soon find yourself drowning in debt.

3. Ignoring emergency savings

Emergencies happen. Without savings, you might struggle to cover unexpected costs. This can lead to debt. Try to save at least three to six months of living expenses. This fund will be your safety net. Start small and slowly increase your savings.

Automate your savings to make it easier. An emergency fund gives you peace of mind. Imagine your car breaks down and you need N100,000 for repairs. Without savings, you might have to borrow, but with an emergency fund, you’re covered.

Also Read: Job vs business: Which is better for you?

4. Failing to Invest

Saving is important, but investing helps your money grow. Many people avoid investing because they’re scared. They miss out on potential returns. Start by learning the basics of investing. Spread your investments to reduce risk.

Consider stocks, bonds, and real estate. Even small investments can grow over time. Investing helps you reach long-term financial goals. For example, investing N50,000 in stocks over ten years could yield significant returns compared to just saving it.

5. Neglecting retirement planning

Retirement might seem far away. But neglecting it can be costly. Many people don’t save enough for retirement. Start planning early. Use employer-sponsored retirement plans.

Contribute to an IRA or 401(k). The earlier you start, the more your money can grow. Make sure you have a comfortable retirement by planning today. If you start saving N20,000 a month at 30, you’ll have a substantial nest egg by the time you retire.

Also Read: How to save money in dollars as a Nigerian

6. Not managing debt

Debt can get out of control. Many people only make minimum payments. This increases interest costs. Make a plan to manage and reduce your debt. Focus on high-interest debts first. Look into debt consolidation or refinancing options.

Avoid taking on new debt. Managing debt well improves your financial health. For instance, if you have a loan of N100,000 at 20% interest, paying only the minimum will keep you in debt for years.

7. Overlooking insurance

Insurance is crucial for financial security. Many people skip insurance to save money. This can be a big mistake. Make sure you have enough health, life, and property insurance. Insurance protects you from big financial losses.

Review your policies regularly. Make sure they still meet your needs. Imagine having to pay N1 million in hospital bills without health insurance. That could wipe out your savings.

8. Impulse buying

Impulse buying can wreck your finances. Many people make spur-of-the-moment purchases. These add up over time. Avoid impulse buying by planning your purchases. Make a shopping list and stick to it. Wait 24 hours before making a big purchase. This helps you make better decisions.

Controlling impulse buys saves money. For example, instead of buying that N100,000 shoe just like that, wait a day to see if you still feel it’s necessary.

Also Read: Financial compatibility: Why it is important in relationships

9. Not seeking professional advice

Financial planning can be complicated. Many people don’t seek professional advice. This can lead to costly mistakes. A financial advisor can give you personalized guidance. They help you create a solid financial plan.

They offer insights on investments, retirement, and taxes. Paying for professional advice is worth it in the long run. Imagine getting advice on a N5 million investment; it could save you from costly mistakes. If you have build up reasonable wealth, try to seek professional advice.

10. Ignoring financial education

Financial knowledge is essential. Many people lack basic financial understanding. This leads to poor decisions. Learn about personal finance. Read books, attend workshops, and follow financial news.

Knowing about money helps you make better choices. Continuous learning improves your financial well-being. For instance, understanding compound interest can help you make smarter savings decisions.

Also Read: 6 Financial literacy lessons you won’t learn in school

Conclusion

Avoiding financial mistakes is key to securing your financial future. Recognize the common pitfalls and take proactive steps. Make a budget, live within your means, and save for emergencies. Invest wisely, plan for retirement, and manage your debt. Get enough insurance, control impulse buying, and seek professional advice. Invest in your financial education. These habits will lead to a stable and prosperous financial future. Take charge of your finances today. Your future self will thank you.

By avoiding these ten financial mistakes, you set yourself up for success. Financial health requires discipline and knowledge. Make smart decisions and focus on your financial well-being. The effort you put in today will pay off in the long run.

It all boils down to financial literacy, the scientific knowledge and rules about how money works.

Personal finance is usually not taught in most schools. This often results in financial illiteracy and young people picking up bad spending and saving habits. And you know what they say about bad habits – they’re usually difficult to break.

There are money laws, like the law of cause and effect and if you habitually break these laws, it begins to work against you, whether you know it or not. Unfortunately, many people form habits that are counterproductive to their financial well-being and are most time oblivious to the fact it could be the reason for their financial woes.

So what are the core habits requisite for a healthy financial and prosperous life? What are the laws of money, and how can you incorporate these laws into a routine until they form your habits?

This article seeks to change your view of money and show you how you can build financial habits that will change the financial trajectory of your life.

Some finance tips to know 

Knowing how money works is one thing. Knowing the red flags that hinder wealth creation is another thing. Money has rules, but these rules are based on the knowledge of facts about money. Let’s explore some of them 

Also Read: Job vs business: Which is better for you?

1. Know the difference between asset and liability 

Though most adults in their lifetime have heard something called asset and liability, many do not factor that into their spending habits. Knowing the difference will help you make an informed decision when it comes to spending. When you spend your money on things that will lose their value right from the moment of purchase, such items are called liabilities. They don’t only lose their values, they take more money from you in the name of maintenance. On the other hand, assets are things that are appreciated with time. They increase their worth and value as the day goes by. With this knowledge, you will prioritize assets before any luxury that is a liability, unless it’s a necessity 

2. Bad debts and good debts.

Another very important fact in finance is the knowledge of bad debts and good debts.

The former is a loan or debt incurred for the purchase of liabilities. While the latter is the loan you secured for the purchase of assets. 

It becomes financially defeating to borrow money on something that loses its value with time. Also with this knowledge, borrowing money to service an asset like a landed property is a good debt. Of course, there’s a school of thought that says a personal residential building is a liability. Well, I don’t outrightly agree. What’s your take on that?

Also Read: How to save money in dollars as a Nigerian

3. The myth of long-term savings as opposed to long-term investments 

While those without financial education save for the Long term, those with a robust knowledge of how inflation impacts any money saved over time, causing it to lose its value, will rather invest for the long term. Saving for the long term must be discouraged. And for a country like Nigeria that has experienced unprecedented inflation and depreciation of the naira, those who have saved their hard earned Money in the bank or elsewhere have become victims and have shot themselves in the leg, because the money will have lost its value as a result of the inflation.

6 Financial habits that can change your finances 

1. Practice a positive mental attitude 

Your mindset more than anything is the key factor for living a prosperous life. Everything comes from the mind.

 A positive mental attitude is one thing that is always optimistic, grateful and willing to take on challenges. This alone is one of the rare qualities of every successful man in the world.

2. Set life goals

What is financial freedom to you? Everyone has a general desire for it, but that’s too vague a goal. You need to get specific about amounts and deadlines. The more specific your goals, the higher the likelihood of achieving them.

To do this you will need to write down what your lifestyle requires, how much you should have in your bank account to make that possible, and at what age is the deadline to save that amount.

Next, count backwards from your deadline age to your current age and establish financial mileposts at regular intervals between the two dates. Write all amounts and deadlines down carefully and put the goal sheet at the front of your financial binder.

Also Read: 6 Financial literacy lessons you won’t learn in school

3. Create automatic short-term savings

Pay yourself first. Enrol in your employer’s retirement plan and make full use of any matching contribution benefit, which is essentially free money. It’s also wise to have an automatic withdrawal into an emergency fund, which can be tapped for unexpected expenses, as well as an automatic contribution to a brokerage account or something similar.

Ideally, the money for the emergency fund and the retirement fund should be pulled out of your account the same day you receive your paycheck, so it never even touches your hands.

Keep in mind that the recommended amount to save in an emergency fund depends on your circumstances. Also, tax-advantaged retirement accounts come with rules that make it difficult to get your hands on your cash should you suddenly need it, so that account should not be your only emergency fund.

4. Make a monthly budget

Making a monthly household budget and sticking to it is the best way to guarantee that all bills are paid and savings are on track. It’s also a routine that reinforces your goals and bolsters your resolve against the temptation to splurge.

Also Read: 10 websites that pay you to browse the net

5. Track all your inflows and outflows

Tracking your income, and the outflows is vital to know how you spend your money. With it, you will know what takes more of the money. 

6. Practice delayed gratification and luxury 

One of the key factors for financial woes is the tendency to always satisfy your immediate cravings and wants. That also applies to those who are guilty of impulsive buying.

Delayed gratification means putting your money where it should multiply or investing in assets rather than spending it on luxury and other liabilities.

Conclusion 

Making money and having a prosperous life is not just a wish. It must be a strong desire, backed by concerted efforts and consistency. Habits are not formed overnight. You must endeavour to begin and deliberately monitor your progress as you employ these time-tested principles.

This article offers all there is to know on the management of cash flow by small businesses. 

Understanding cash flows

Cash flows are the general movement of money from the company, which in turn affects the business’s liquidity. The term is referred to the total amount of money and money equivalent taken in and out of the business. When cash comes into the business, such is referred to as an inflow, when cash goes out of the business, then it is an outflow. 

Generally, investors look at how a business can maintain its cash flows before putting their money into it. The possibility of a business maintaining its cash flow is the value the shareholders and the general business community see in it. The cash flow also shows the general health and strength of the business and is often an indicator of the capacity at which the business is growing. 

Small businesses must manage their cash flow to remain stable and grow. Good cash flow management helps organizations meet their financial obligations, engage in potential development opportunities, and deal with unexpected challenges. 

How small businesses can manage cash flows

A small business would always want its cash flow to be effective. To know a successful business, the cash inflow should ordinarily surpass the cash outflow. Here are some key techniques to follow to manage cash flows as a small business.

1. Understand the cash flow cycle of the business

This is perhaps the most vital of the list when seeking to manage cash flows as a business. The step begins with business owners figuring out methods to establish the cash flow and inflow timing of their business.

For instance, if the business’ cash inflow comes from sales, investments or loans, the business can categorize and monitor their development by placing them side-by-side with cash outflows, which include operational expenses, inventory purchases, salaries, and loan repayments. Getting a grip on the activities that influence the cash flow of a small business assists the owners to foresee and plan for potential shortfalls or surpluses in the business. 

Also Read: Benefits and challenges of working in the tech industry

2. Track and predict financial flows

Having a grip on the cash flow structure of a small business demands that the business owners take control of how and when the cash flow increases or has a significant change. This can be achieved in varying ways, which include having accurate cash flow forecasting for effective management of a small business’ cash flows. Business owners can establish a monthly or quarterly forecast of predictable cash inflows and outflows that can offer them leverage in the cash flow development of the business.

The historical data, industry trends, and current market circumstances are effective methods that have proven to offer trustworthy projections on the cash flow predictability of a business. Business owners must compare, regularly, the business’ actual cash flow with their projected outcomes to figure out the level of discrepancies. Closely monitoring the business cash flows allows business owners to take remedial steps as soon as possible and make educated decisions regarding investments or cost savings.

3. Accelerate cash inflows

Accelerating cash inflows in a business is sure to maintain a stable cash flow system. This is because, the higher the cash inflow, the better it is for the success of the business.

To maintain cash inflow, businesses must employ a certain strategy that ensures an effective strategy that can provide a certain increase in revenue collection over time. These are:

• Invoice promptly: often send invoices for services done at the appropriate time possible. This lets cash inflow engage continuous and steady growth. Offer specific payment conditions, due dates and relevant contact information for billings to clients and customers to make prompt payment for the services rendered. With this culture in place, the business’s cash inflow is bound to be on a steady rise.
• Offer incentives for timely payments: everyone loves giveaways, so why not leverage them by offering incentives to clients and customers that make timely payments for the products or services delivered? This strategy increases both cash flows and consumer relationships in small businesses.
• Employ electronic payments: electronic payments offer timely and easy payment solutions to small businesses. The acceptable digital payment methods that small businesses can follow include credit card payments, mobile payment, internet banking and other payment solutions. These unique electronic payment solutions improve the overall experience of clients and can cause increased cash flows to the business while accelerating financial inflows.

Also Read: Amazon KDP: How to publish and make money

4. Set up an emergency fund

Maintaining an emergency fund as a small business is vital to maintaining a stable cash flow. Small businesses can adopt this method to avoid or deal with unexplained or unforeseen events that are bound to affect the activities of the business.

Business owners can adopt this strategy by setting aside a part of the business savings as a safety plug for emergency situations, this emergency fund can be used to reverse unanticipated expenses that can affect the overall success of the business. 

Conclusion

Small businesses must successfully manage their money flows if they are to succeed. Understanding the business cash flow cycle, forecasting and monitoring cash flows, accelerating cash inflows, controlling cash outflows, establishing an emergency fund, maintaining strong lender relationships, and engaging in cash flow forecasting and scenario planning are all ways to effectively manage your small business’s cash flows.

Employ these strategies to maintain stability, promote growth projects, and deal with any unexpected financial challenges that may arise.

Also Read: 10 Benefits of being self-employed

Frequently Asked Questions

Should I create a relationship with lenders to maintain cash flows?

Most likely, as a small business maintaining a strong relationship with lenders can offer additional liquidity to the business through loans. 

Is the management of cash outflows essential to cash flow management?

Yes, establishing a defined cash outflow mechanism is essential to cash flow management for small businesses. 

In this new growth phase, you will encounter completely different challenges than in the early start-up phase of your business. 

In this article, I, therefore, give you the ten best tips to successfully grow your small business.

1. Set ambitious goals

Growing your small business starts with the right attitude. Set ambitious goals and don’t think too small. 

Because growth is virtually impossible without taking risks. So don’t be satisfied with just a stable turnover. While that may bring you success for a short period of time, it will not lead to further growth. 

To achieve business growth, it is important that you clearly know what you want to achieve and why. In addition, you must have a concrete step-by-step plan to achieve these goals. Drawing up a business plan is a good starting point for this. As long as your goals are clear, you will be able to face many challenges.

Also Read: How do you decide when to save and when to spend?

2. Look for financing

You will most likely always need additional financial resources to grow your small business, especially if your company is not yet profitable enough to generate the necessary investments. It can then be necessary to attract external investors. 

Get more financing as soon as possible. Don’t wait until you really need the money. There are various ways to obtain financing: think of a loan or selling shares to an investor, for example. The latter has the advantage that you have no interest and repayment obligations and only have to pay dividends when your company is profitable. Make sure you are well informed, so that you can agree on good terms and conditions.

3. Study the competition

Analyzing what your competition is doing is not about copying their style. When you study the competition, you can more easily understand some of their strengths and weaknesses in the sales tactics they use, so that you can make the right decisions and take advantage of their weak points to strengthen your strategies; and thus grow your small business.

Additionally, it will give you some ideas that allow you to face the difficulties or challenges that arise in your business, especially in the area of ​​marketing and when meeting the needs of the public.

Also Read: How To Calculate Your Net Worth

4. Pay attention to your customers

Taking on the task of listening to your customers may sound like group therapy, but it’s really about understanding what they want so you can better position your brand. In this way you can make your offer more and more relevant and attractive to them.

If you want to grow your small business like a professional, your clients must be your priority. As a seller, you must be able to start a pleasant conversation with them to make them feel well cared for and really know what they want or need.

If you have salespeople, try to train them to connect with people. Never forget that strengthening customer service is extremely important so that there is trust and, therefore, loyalty towards your brand.

5. Invest in digital marketing

Did you know that you can sell much more if you use social networks, electronic commerce and web pages? These digital marketing strategies allow you to make it easy for people to learn about and fall in love with your products. Remember that growing your small business involves attracting more people to your business!

It is no longer enough to have an eye-catching product or great service, you also need to find the most efficient way to make interested people aware of your brand and reach you.

You must therefore carefully evaluate which digital marketing strategies are best suited to the characteristics of your business. If you apply the right strategy you will make your business take off, but if not, it is likely that you will not get the expected results.

Also Read: How to create a business name from scratch

6. Take care of your social networks

Social networks currently represent a direct communication channel with your customers and future customers. These platforms have various uses for your business:

• Promote your products or services
• Sell ​​through posts on Facebook and Instagram Business
• Interact with the public
• Measure their responses to your posts
• Get data to adjust your tactics

Social media strategies do not require a large investment of money or time to obtain good results. So, they are effective both for people who are starting a business and for SMEs.

Perhaps the most important thing about social networks is that they allow you to get to know your audience better and keep in touch with them constantly as a way of ensuring that customers fall in love with your brand.

7. Make your customers loyal

Customer loyalty is one of the best tips to grow your small business. It’s said that one happy customer is worth more than two sales from two people who are indifferent about your business. That’s because a happy customer will more likely be willing to buy again and also recommend your brand.

The loyalty process must start from the first contact you have with the public and be constant until the moment of selling. It is a big mistake to think that the only way to get loyal customers is to contact them after the sale.

Certainly, post-sale interaction is important, we all like to feel that they care about us! However, the best way to build trust and satisfaction in your customers is to offer them the best shopping experience possible.

Also Read: 10 Must-have skills for Entrepreneurs

8. Keep goals aligned

In a boat, everyone must row to the same side or else it won’t move anywhere. Same way, in your small business, everything you do should respond to the core objectives of your company, for example:

Before making an Instagram post with the photo of your products, you should ask yourself: what do I want to achieve with this post? What message am I transmitting? What audience do I want to reach? Similarly, with everything you do in your business.

Doing anything without considering your strategies can backfire on you. It is vital that you, as well as your assistants and employees, always keep in mind why you perform each action.

9. Reduce operating costs

You may be wondering, why is this point relevant to me, if my business is not in charge of producing? The truth is that operating costs are not exclusive to manufacturers, but also to distributors.

There are several ways in which you can reduce these costs, starting by adapting your product portfolio to the most common needs of your clientele. In this way, you will have a greater cash flow and thus you will be able to optimize your investment.

Similarly, you can reduce your costs by hiring a reliable provider. Suppose you have a fragrance business, you need a good company that deals with the wholesale of original perfumes, because that way you can get volume discounts and even reduce shipping costs.

Also Read: Top 10 most in-demand Freelance Skills

10. Keep Innovating

As the size of your company increases, you will notice that it becomes increasingly difficult to stay innovative and flexible. 

More staff also creates more red tape, which can slow things down. But innovation is necessary to continue to grow in the future. So make sure that innovation really becomes part of your company. 

You can do this by consciously scheduling time to work on innovative ideas and make it part of your company culture. Give your employees the space to innovate and encourage them to try new things. Don’t be afraid of failure, because that’s how you learn.

Conclusion

Here are the best 10 ways I think you can grow your business based on the growth process of top brands. While implementing these strategies, don’t expect everything to come easy. Keep pushing regardless of all challenges and you’ll definitely see your business flourishing. Cheers!

Am I saving as I should? Am I spending on the right things? Where can I invest my money? How do I become financially ready for retirement? Answering questions like this is sometimes a bit complicated.

This is where a personal financial advisor comes in. To help you resolve all your doubts about your personal finances. 

Your financial advisor will analyze your financial situation to give you recommendations that will help you establish objectives adapted to your needs and that you can achieve.

If you are still not sure if you need the service of a financial advisor, I give you several reasons in this article.

Why you need a personal financial advisor 

For your Personal Finance

1. To help you plan your financial future

You must have seen people who were wealthy some years ago now in the average or low financial class today because of a lack of adequate financial planning. This may make you want to start worrying about your finances and plan your financial future.

Indeed, it’s good to plan for your financial future now so that you don’t get into a financial crisis in the future. But, most likely in planning for the future, you’ll find yourself in a dilemma of choices, such as: saving for retirement, for an emergency fund, buying a house, for vacations, getting married, and even going out to dinner with your friends. 

Only an objective look can help you plan for your future by creating a savings and investment plan tailored to your present circumstances. Of course, in this case, you’ll need the help of a personal financial advisor to do the right thing now so that you’ll have a better financial future.

Also Read: Finance explained for non-financial people

2. To help you to manage your finances

Many people do not like having to manage their finances, they find it boring or complicated. It may even be the case that you like it but do not have time to do it. And I understand you, it is something very normal. Once again, the solution is to seek the help of a personal financial advisor.

Your advisor helps you create a savings and investment plan that will allow you to have control of your finances. In this way, you will only have to follow the steps marked by the advisor without worrying about anything else.

3. To educate you on the operation and characteristics of financial products

Each individual is different. Our economic situation, academic background, and financial goals are never the same. 

That is why financial institutions offer various financial products to suit the needs of individuals. For example, there are many types of investment funds and even various types of pension plans.

Trying to understand all the characteristics to choose the one that gives you the best results can become quite a complicated process. And new financial products are being launched now and then. So, even if you have some financial knowledge, knowing everything will be cumbersome.

Hence, delegating to a professional is undoubtedly the best alternative.

Also Read: The Do’s and Don’ts of Investing for everyone

4. To help you make the right investment decision

Because we live in a world(not only in Nigeria) where there is inflation, all the money you keep in cash or a non-interest-bearing account loses value every year. 

Investing is the only way to grow your money, and unless you have an exceptionally high income, investing is the only way you can raise enough capital to achieve your financial goals. 

Therefore, if you have no idea about how to invest, leave this task to a professional. Your financial advisor will take a critical look into all investment options and help you choose the safest and the most profitable investments.

Also, your advisor will give you an objective opinion about your investments because all of us are susceptible to making irrational decisions, especially when it comes to investing. 

5. To help you gain peace of mind and time

Having the recommendations of a professional will help you to be much safer and therefore, gain peace of mind in your life. 

The fewer doubts you have, the more confident you will be and the more certain you will be that your money is in the right place. 

Also, you’ll have more time to put into other profitable ventures.

For your Business:

6. You don’t have to worry about everything 

Whether you plan to start the sale of some goods, the provision of intellectual services, or any other activity, you will very quickly find yourself in a situation where you have to perform many tasks that you did not even plan to do before starting the business, from product packaging, material procurement, marketing, up to communication with customers and suppliers.

In such a situation, when you’re alone, or possibly have only one or two other employees, focusing on other jobs, which may seem more important at that moment, can lead to finances falling. So for this reason, the help of a financial advisor is essential.

An experienced person in the field of finance can ask the right questions and help you jointly find answers that can significantly improve your business’s financial stability and profitability.

7. To help with adequate financial management

Bad money management, inadequately planned cash flows, overpaid suppliers, and contracts with customers who do not pay their obligations on time lead many businesses to ruin.

But with the help of a personal financial advisor, you could timely identify all the potential risks that you could encounter in business. So that when you encounter them, you keep them under control, and therefore avoid bad results in business and general problems that would damage the activities of your business.

8. To inform you about tax regulations and potential penalties

In a large number of cases, when entering the world of business, entrepreneurs do not know what kind of tax regulations they are facing, which taxes need to be paid, and how much such mistakes can actually cost them. And for this reason, they sometimes neglect taxes and thereby harm themselves.

With adequate tax planning, a financial advisor can help you not to worry about possible fines that may follow due to unpaid tax obligations.

Also, your advisor can help you achieve tax savings because it often happens that due to insufficient knowledge of tax regulations, companies pay significantly higher amounts of tax than they needed without even being aware of it.

Also Read: Finance explained for non-financial people

9. To help provide additional funds

The initial period of business has been successfully completed and the company has successfully overcome the first years of business? Now it is necessary to take new steps and raise the business to an even higher level through investments, but this requires money that your business most likely may not have, and needs to be obtained from financial institutions.

When it comes down to it, cooperation with an experienced financial advisor brings a lot of benefits. First, consistent management of your company’s operations and results ensures that the financial indications are satisfactory for the financial institutions and that they are disposed to establish cooperation with your company.

Second, your advisor will present the investment idea in a high-quality way, by making precise calculations and predicting the results that can be expected from the investment, and also by constant communication with the employees of those institutions and answering their many questions.

Thirdly, the financial advisor can use his experience and knowledge of the functioning of financial institutions and their requirements by providing you with funds on more favorable terms and thereby further reducing costs.

Conclusion

All the reasons listed in this article show that a personal financial advisor can help you put your financial life and business in order and solve many of the financial problems that may arise throughout your life. Join a financial advisor and stop worrying about your finances.

This blog post will aid you in making the right decision if you’re contemplating whether to buy a car or a house first. So read on.

Buying a car or a house first: what to consider 

In determining which to spend on first between the two, you must put some factors into consideration:

1. Appreciation and Depreciation rate of both assets.

This consideration is the most tangible point of people who choose a House first. Also, this point is why the majority of personal finance experts prefer to choose a house purchase as the first option.

Like most other real estate properties, the value of a house increases rapidly.  Even though the market fluctuates from time to time, it doesn’t very much affect houses as their value usually appreciates with the passing of each year.

The reverse is the case for a car, the rate of car depreciation is quite alarming. A fact is that a car starts depreciating the moment you drive it out of the showroom. After some time, the same car will be worth roughly 30 percent of its original price.

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2. The Maintenance costs

The maintenance cost of these two assets differs from each other. The cost of maintaining a house is cheaper than car maintenance.

Unlike cars, houses do not require every day repairs. Moreover, most damage can be mended by the homeowner without professional help.

In addition, the maintenance costs spent on your house will be money well spent because any improvement you do to your home, such as increasing the kitchen size is for your advantage as it will help increase the value of your house.

Most experts estimated the annual maintenance cost of a house to be between 1 to 4 percent.

However, the maintenance cost of Cars is high because cars need to be fueled and serviced regularly.

In addition, the older the car gets, the more of a liability it becomes. At some point, you’ll find yourself spending a lot of money on servicing, repairs, and replacement of spoiled parts due to wear and tear.

Worse still, some improvements on the car may even make it harder to sell when you want to dispose of it.

Check this out: How do you decide when to save and when to spend?

3. Income generation potential

There are many profitable ways to generate income with houses, such as sharing your parking space, turning your home into a set, renting a roommate, selling goods, and rendering services. With the income earned, you can even buy a car. Thus your house is a long-term wealth creation avenue.

While it’s also possible to generate income from cars, being a depreciating asset makes the income generation potential lower than that of a house. For example, you can engage in ride-sharing and cab services like Uber. However, this will only generate short-term income for you because as the car ages, you might be spending more on maintenance.

4. The Essentiality of assets

Three are the basic needs of human beings: Food, Shelter, and Clothing. It’s important to fulfill these basic needs. Living in a rental home does eat up a huge amount of money that a year’s rental fee adds up and may require adding a little amount to it to get land. 

A house can never be termed as a luxury because it’s an important need.

But Car to some people is a luxury and to some is a necessity. If you’re in a relatively urban area with the availability of adequate public transport, a car can be considered a luxury. However, if you live in a small town where the distances are too much with inadequate public transit, it may be considered a necessity.

So which should you buy first: a car or a house?

After putting the above factors into consideration, you also have to ask yourself some questions which go thus:

Are there better options?

You can look for better alternatives before buying a car or a house first. For example, is it easier to rent apartments or live with your family instead of buying your House? Or, will getting your place and starting the payment of your mortgage be a better option than paying rent on someone else’s property?

Convenience and easy movement are two advantages of having a car. These are important for a business person or any other person but the emergence of cab-hailing services like Uber created cheaper and more convenient options. They can be used for deliveries and getting supplies also.

Which one is more prudent to get?

You have to ascertain the impact of any financial commitment on your business before you engage in it. For example, a house requires a lot of deposit compared to a car. Also, buying a home may mean immersing yourself in a long-term financial commitment that may take many years to attain. Will you be able to do that?

Conversely, purchasing a car is a shorter financial commitment and you do not need lots of down payment to get a car. You can even pay off everything at once in some cases, but the question is will it add value to your business?

Is my credit score healthy?

This is a final question for someone that wants to acquire a house or a car on loans as most people do.

It is essential to consider your credit score before choosing which to get first. For example, for a mortgage loan to be approved,  you need to have a good credit score.

However, getting a car loan is much easier, so if your credit score isn’t good enough to get a house loan, you may start with getting a car loan to boost your credit stand, and then you can get a house later.

Recommended: How To Calculate Your Net Worth

Final Thought

As I stated earlier, most people, financial experts included, assume that getting a house first is the best choice. However, while it could be true, it isn’t necessarily the best option for everyone. It all depends on the individual situation.

Yes, it’s a selfish world, and that’s one of the importance of writing a will if you have some assets. You don’t have to be in your old age before you write a will – this is a common misconception among many people. Writing a will doesn’t mean death is imminent.

A will is a legal document that reveals a person’s wishes about how his/her properties should be shared after their demise. With a will, a person can manage, control, and distribute his properties when they are no more. 

And you don’t necessarily need an attorney to help you draft your will. You can write a will by yourself, provided it meets all the legal requirements. This article covers essential information about will writing and why you need to write one now. 

Also Read: The Do’s and Don’ts of Investing for everyone

What is covered in a will?

All your properties can be covered in a will, however, there are exceptions. Some properties such as insurance policies and retirement accounts are not covered by a will. The reason is that when opening this account or taking out the insurance policies, part of the process requires you to list the beneficiary of the account. 

Simply put, any property which has its beneficiary listed in the process is not covered by a will. What needs to be provided in a will is the name of the executor, the beneficiaries of the property, a backup executor in some cases, and a guardian in case there are minors.

How to make a valid will

For a will to be valid under Nigerian law, it must meet some requirement which includes:

1. Written: The testator must put the will into writing. However, it must be typed and printed to avoid any error from the one written by hand or changed without the consent of the testator.

2. Under section 7 of the Wills Act, the testator must be above 18 and show no sign of infirmity or mental impairment.

3. The will must be made voluntarily without any undue influence or pressure.

4. The testator must append his/her signature in the presence of two witnesses who must be present at the same time.

5. The witnesses too must sign the will in the presence of the testator to avoid loopholes. Note that according to section 15 of the Wills Act, a witness can not be a beneficiary to a will, and any property bequeathed to a witness will be a nullity.

6. The will must state clearly the name of the beneficiary and property bestowed.

Also Read: 5 Ways To Invest When You Have Money

Step-by-step process of writing a will

Here are the steps to writing a will:

1. Understand the Wills Act or law

The very first step is to read and understand the Wills Act or law. The will act has already been stated above.

2. Place a title

Place a clear title to describe the will as your last wish and testament with the date. You can also add a sentence to disregard any previous will you have drafted.

3. Name an executor

This is very important in the process of writing a will, the person must be honest and trustworthy. An executor is someone you trust to fulfill your last wishes after your demise.

He/she is saddled with the responsibility of collating and distributing your properties to the beneficiaries. It is advisable to have more than one executor. So that one will serve as a backup in case of unavailability of the other.

4. Name a guardian

In case you have a minor- name a guardian to manage and take physical custody of the underaged children after your demise.

5. List out your property

This is a vital stage, list out all your properties i.e both personal and real property and state the beneficiary of each asset including the locations. Also, make a description of each property.

6. Name your beneficiary

Make a clear description of the beneficiary of each asset.

7. Insert a residual clause

A residual clause is a phrase that can be used to explain your property that you did not leave a named beneficiary. You can insert a residual clause if need be.

8. Attach a letter as a goodbye message

You can also attach a letter as a goodbye message if you have more to say, or want to encourage your family to move on.

9. Execute your will

Once you are done, execute your will by signing it in front of 2 adult witnesses who must be present at the same time.

10. Safe keep your will

Keep your will in a confidential place where only your executors can find it easily.

11. Update your will regularly

Revisit and update your will regularly, in case there are disputes, divorce, the birth of children, etc.

Important information to add when drafting a will

1. Your full name and addresses

2. The full name and address of your executors.

3. Full name and address of beneficiaries.

4. The name and address of the guardian, if there are minors among the beneficiaries.

5. The full list and particulars of the properties.

6. Full name and address of witnesses to the will.

Also Read: Investing in Real Estate: The Pros and Cons

Special cases when you should not write a Will by yourself

1. When you have property overseas.

2. When you desire to leave a business to someone in the will.

3. When you have a complex wish that might not be easily understood.

4. When you have people that rely on you financially but are not part of your family and you intend to let them have a share of your property.

5. When you have a foreign investment or bank account.

Why should you write your Will?

1. Death is inevitable and comes unannounced, therefore it is very important to write a will to prevent your property from being frittered away by those not deserving.

2. To prevent disputes among family members after your demise.

3. To manage and control your property even after death.

4. To protect the children and buy a glorious future for them.

5. To reduce litigation and inheritance taxation.

Conclusion

If you have desired to write your will but don’t know how to get started, follow the step-by-step procedure highlighted in this article to begin writing your will. It doesn’t mean that you are going to die soon. That’s superstitious! If you need to ask any questions, you can send us a mail.

Loan sharks are online or offline lenders(a digital platform or a loan app) that provide loans to people with very high-interest rates and use unprofessional and illegal means to get defaulters to pay back.

They offer quick and instant cash loan credits to people with no collateral in Nigeria, which seems like a good bet for an average Nigerian because of the economic downturn.

Since most people’s personal finance is not going so well, despite the rigorous daily hustle, they think getting a loan from these disguising devils is their Godsent help. So, a majority of people don’t even bother to make their findings about these loan sharks before accepting the loan offer. And at the end, they become a Shark’s prey. 

If you are yet to get a loan from those illegal apps, you are lucky, as you’ll be finding out the top 10 loan sharks in Nigeria in this article. Not only that – you’ll also find out how to identify and avoid them.  

Loan sharks in Nigeria

There has been a rapid rise in loan apps that offer collateral-free loans to their people in recent years. While this ought to be an excellent and incredible idea because of the hindrance and limitation most people have in accessing loans from commercial banks, it’s not so in reality because of the after-effect of borrowing the funds.

These loan sharks disguise themselves by offering loan credit to people to be able to settle or cater for emergencies and swindle poor Nigerians of their hard-earned cash.

A lot of borrowers online have shared the horrors of borrowing loans on these platforms. You’ll feel sorry for them reading most of the experiences. 

Some people find it difficult to meet up with the payment deadline due to their excessive interest rates. And when there is a default in payment, the company staff will send defamatory and derogatory messages and threats to them and their contact list.

These loan sharks operate outside the boundaries of the law; hence their operations can be termed illegal.

Also Read: How to create a business name from scratch

10 Popular Loan sharks in Nigeria

Here is a list of 10 commonly known loan sharks in Nigeria. Note that there are more than these still functioning at the time of writing this list. Watch out and avoid borrowing from any one of them.

1. 9credit
2. LCredit
3. Nkash
4. iCredit
5. Okash
6. EasyCredit
7. Sokoloan
8. KashKash
9. GoCash
10. Ease Cash.

How to identify and avoid Loan sharks in Nigeria.

Are you confused about how to recognize these loan sharks amidst the legal moneylenders? Here are a few things to watch out for

• Most of them lack communication ethics; they just speak in an unethical and rude manner to their customers.
• Access to your contact list and pictures on your mobile phone
• They invade customers’ data privacy and send them threats through messages and calls.
• Exceptionally high-interest rates with minimal time to pay back.
• Most of these platforms deduct their interest before providing the loan.
• They harass their customers who fail to pay them back.
• They use unethical means to recover their funds.

A major way to avoid these loan sharks is to go to Google Play Store or Apple App Store and check the reviews of people who have used the loan app previously. People who have had a terrible experience with them would have shared their experience with them. 

Also Read: How to start a POS business in Nigeria

Why you should avoid taking loans from Loan sharks

These are reasons you should not consider taking loans from these loan apps.

1. High-Interest rates

These platforms charge incredibly high-interest rates on their loans. Commercial banks in Nigeria charge an interest rate of 9% to 11.13% per annum. However, these loan apps charge close to 20% to 35% weekly or monthly, depending on the plan you apply for.

They also make their customers pay extra charges as each day passes as a fine when you default in paying back.

2. Access to your BVN

Many people don’t even feel bothered to release their BVN details because they are desperate just to borrow the funds they need; they get carried away with the hype of a “collateral-free loan.”

Financial institutions have always emphasized that you should not share your BVN details with unauthorized sources as they can be used for illegal and fraudulent activities.

Because of your default in payment, these loan sharks can give your BVN details to the credit bureau to get it blocklisted, which can significantly harm you in accessing loans for huge business transactions later.

Also Read: Top 10 most in-demand Freelance Skills

3. Harassment faced by customers

In the bid to recover their debts from their customers, loan sharks employ various means that are unethical and illegal, such as humiliation, harassment, and intimidation, regardless of the reason for the default.

A first-hand victim shared her experience with me. She borrowed from one of these platforms but unfortunately got so sick and admitted to the hospital that she could not make the payment at the time given. 

She was humiliated despite her legitimate reason, and each day, more charges were added to her loan because she was yet to pay.

They send defamatory messages to her contacts and ruined her integrity with many people. This same issue has brought shame to many borrowers and has pushed some to suicide because of the much pressure.

4. Addiction

They offer their customers credit loans with high-interest rates with limited time to pay, and most customers have to depend on other loan platforms to pay back.

Because of that, there is a high tendency to get addicted to borrowing from various platforms, which can devastate a person’s finances and personal life.

Also Read: How to become a politician in Nigeria

Conclusion

The government and financial institutions have strongly advised against getting loans from these unauthorized loan apps.

I understand you might have legitimate reasons for getting the loan. However, it is advisable to get the loans maybe from a friend or a close relative instead of giving out personal and sensitive details to the Loan sharks who offer loans that can get you into more distress than you are before getting the loan.

When to start planning for retirement

Ideally, you should start retirement planning from the day you start working in a firm or organization. You don’t wait till it’s close to retirement, as it’s often said proper preparation prevents poor performance.

If you plan earlier, you can attain your financial goal easily, and get to live the purposeful life you desire.

Planning your retirement life involves the process of setting goals for your income and creating a strategy and taking informed steps to achieve your financial goals. It begins with identifying a sure means of income, setting up a spending and saving plan, estimating a budget, and planning toward emergencies in the future.

If you still have at least three months before your retirement, the information in this short guide will work very well for you. In the following, I’ll be taking you through the top 10 tips to start planning a successful retirement life now. Here we go…

Also Read: How to create a business name from scratch

How to plan for a successful retirement

Now that you know the importance of planning earlier for retirement, here are the top tips on how to plan for a successful retirement.

1. Know your retirements need

The key to a secure retirement is to plan ahead, however, In planning, many things have to be put in place. First is by knowing your retirement needs, such as food, accommodation, healthcare, travel options, etc, and write them down.

Identifying all the things you will need after retirement will help you understand the amount you need to retire successfully.

2. Estimate the cost of your retirement needs

After you have outlined your retirement needs, the next step is to estimate the total cost. This will help you make a reasonable plan on how to get everything you need to live a comfortable retirement life. 

While estimating, take note of inflation and other miscellaneous expenses so that there won’t be a flop in your plan.

3. Create a feasible plan

Make a feasible plan to cover these retirement needs: You now have a definite idea of how much you may need weekly, monthly, and yearly during retirement.

Begin to plan how you can save and invest so that you can enjoy the benefits. Let your plans be clear and straightforward and not just mere assumptions.

Also Read: Top 10 most in-demand Freelance Skills

4. Open a pension account for your retirement funds

This is very crucial in your retirement plan. A pension account is where you save some part of your income during your active working years, and only have access to it when you are retired or stopped working. 

In Nigeria, most government parastatals and some organizations pay pensions when their staff retires. This fund is usually deducted from their salary. However, this is not the case with most private institutions. 

If you are working in a private firm, you have to inquire from your employer if they offer a pension contract that will be deducted from your salary. If they do not, then you should consider opening a pension account with a trusted pension fund administrator.

5. Save and invest

The next thing you should do is to start saving and investing. Set some money aside for your retirement needs to be met in time.

According to financial advisors, 15% of annual gross salary should be saved for retirement. Also, you should invest in a safe and low-risk profitable venture such as Real estate, treasury bills, stock and shares, money market funds, etc.

You may also like: Investing in Real Estate: The Pros and Cons

6. Downsize your debt

This is pivotal, especially when you are moving close to retirement. Pay off all debts and avoid burying your heads into another one to put your minds at rest and stabilize your saving plan.

It will enable you to save more since you don’t have any debt hanging on your necks.

7. Be financially disciplined

Financial discipline is key to planning a successful retirement. I will be telling you three things you must be disciplined about while planning. They are

• Avoid spending from your retirement savings account. 

As the money is growing in the account, you might get tempted to spend it on buying fancy things. Doing this will hinder you from meeting your target goal. It takes only a disciplined person to look away from spending a designated fund.

• Avoid being a money lender

It might sound harsh, but this is what I mean. People tend to meet retirees or old people for help because they seem vulnerable. They tend to take advantage of them and this is why you need to be wise. Be kind enough to help people but not to the detriment of your own. Only lend out money you can afford to lose.

• Avoid the get-rich-quick scheme

You might come across Ponzi schemes or high-risk investments, but you shouldn’t fall for them. Avoid any scheme that promises high ROI within a short period. Grow your egg nest slowly without the fear of losing your hard-earned money.

8. Start a profitable business before retiring

Think of a good and profitable business and start before retiring. Some people think it is best to start a business after retirement, however, this is not so because most startups face various difficulties, and some even go down the hill. 

If you start the business doing your active work service, it will give you an edge of getting back on your feet earlier if the business crumbles. It will also enable you to master the trade and reap the fruit of your labor before and during retirement.

Also read: Most lucrative businesses

Conclusion

Retirement is a critical phase of life for every worker that should be planned for as soon as possible. Because you’re retired does not mean you should be overly dependent on your children and relatives. If you plan well before that time, you can lead a successful retirement life while not being a burden to anyone. 

I trust that with the tips above, you already know how to go about planning a successful retirement. If you still have some questions, you can ask in the comment section or send us a mail.