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Investments: Why do you need them?

An introduction to investments

Nigerians have witnessed two global pandemics (the Ebola scare of 2014 and the Coronavirus), three economic recessions, and rising inflation rates in two decades. Phew!

As a result, we have two generations who have witnessed bad economic conditions in their formative years. Many of us are in our 30s and have no idea what it feels like to enjoy a booming financial economy. This is not good.

With the economic landscape, it has become apparent that one cannot merely save their way to wealth. Increasing earnings and making worthwhile investments are two life-changing choices you should consider.

As a financial institution dedicated to helping you build and sustain wealth (by providing you with the tools needed and financial literacy), we must make you see why having investments is a significant step towards financial security.

What is an investment?

A broad definition by the Cambridge dictionary has investment as putting money, effort, time, etc., into something to make a profit. A more suitable definition by Investopedia has it as an asset or item acquired to generate income or appreciation. 

Investments often are serious commitments and therefore require you to be willing to play the long game.


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Investment strategies

No wise person goes into anything without counting the cost and checking the risks involved; you need to be strategic.

There are two types of investment strategies: Growth Investments and Income Investments.

The bedrock of an Income Investment is stability, which means low risks are involved. People who choose this kind of investment do it to generate a constant income stream at low risk. Examples of income investments are savings, bonds, real estate (properties on lease), etc.

Growth investments involve higher risk. The investor must be able to cope with the market (market value often fluctuates). Growth investments involve capital appreciation; they are long term investments. It’s advisable not to make hasty decisions based on emotions when market values drop. Examples are growth stocks, shares, real estate such as land (it appreciates with time), etc. 

Why should I invest?

  • As we mentioned earlier, saving is not nearly enough if your goal is to accumulate wealth eventually. It is a great way to start, though. You could own a high yield savings account where you earn as much as 7% interest per annum. A deal as good as this is only available to you when you register on the Halo Invest app. You can download it here on the App Store and here on the Google Play Store!
  • Investing money kickstarts your journey to financial security. When you invest, you put your money to work; it builds wealth by compounding interests. Compounding your interests is advantageous for you in the long run. We have an old newsletter that explains how this works.
  • Investing gives you opportunities to be a part of innovation and cutting-edge ventures. New ideas that solve problems require money to materialise; investing helps you become part of something potentially great. You should make your research before putting your money into these ventures.

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Do you have comments, questions, contributions or anything you would like to see us talk about? We’ll be waiting for you in the comment section.

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