Thank God it’s Friday, I love weekends not just because I get to rest and spend quality time with my family, but also because I can have time to work for myself and develop my ideas without the guilt feeling that I am using my employers time for my personal runs.
So last 2 weeks, I started a series on strategic options for turbulent times. If you missed the first post, you can read it HERE. Due to the current economic situation in Nigeria, we need to face reality and think optimally. This is the time for everyone to re-strategize.
Today I want to write on diversification as a strategic option. Diversification is about spreading your investments, portfolio, assets and income.
1.) Diversify your Investments: Do not put all your eggs in one basket is a very common saying. But how many practice this? If your investments are in one form of asset, this is the time to diversify as it will leave you unexposed to a singular economic event. Diversify your investment across properties, shares, bond and treasury bills.
- If you have money, this is a good time to bargain hunt for properties as a number of people are in need of cash and want to sell. The real estate industry is slowing down due to scarcity of resources and property prices are beginning to drop. Real estate is a good store of value.
- Say no to 1 digit interest rate. Inflation rate is currently at a 2 digit number, so if you have money in fixed deposit with a single digit interest rate, I will say Liquidate it and invest in fixed income security such as treasury bills. Interest rates for treasury bills are currently above the inflation rate. Also income earned from treasury bills are tax free.
- Don’t have all your stocks within an industry, e.g many people have stock investments only within the banking industry, this is too risky. Diversify into healthcare, FMCG’s. etc.
2.) Diversify your income: It is always best to have multiple streams of income. There are a lot of uncertainty in Nigeria now, if you are in paid employment, having a day job as your only source of income is too risky. Invest in yourself, retool yourself, think deep, get innovative and have a side hustle.
- Never look at an income as too small. Even if your side hustle is generating only N5,000 monthly, that can take care of some expenses. So keep at it, keep working on your side hustles and don’t give up because it will grow one day. God blesses the labour of our hands. If you are doubting if having a side hustle is for you or thinking about how to start a side hustle, you can read my previous post HERE on why you should have a side hustle.
- Our Naira currency is very unstable. At an economic period like this, it is good to diversify one’s income and have foreign currency earnings. This is will be a different post for another day.
Remember, try not to join the crowd and bemoan the economy. Chose to be different and operate by a different set of rules and never say never.
God bless you.