House Rent in Lagos Is Killing!

Good morning and how are you doing?

Friday letters are usually dedicated to taking questions from our community. Do you have a question for us? Please feel free to?

• send an e-mail to [email protected]; or
• send a DM to any of our social media channels, or
• simply fill out this form. Don’t worry, your responses are kept anonymous.

***

Question?

I stay in Lagos and rent around here is not a joke. At what point would you consider yourself financially ready to get a place of your own as someone who is just starting out in the job market?

Answer

***

I would advise you to consider the following factors mentioned before buying a home.

• What is your current income??
• Do you have emergency savings??
• Do you have enough savings to cover the down payment of a home??
• Is your job stable?
• What are your current expenses?
• What are your future plans in terms of career growth?

Like you said, rent in Lagos is not a joke and so is buying a home. Property prices can be quite high, so you should evaluate your financial situation carefully before making a purchase.?

Here is a detailed explanation of the factors to consider before getting a home of your own

• Your current income: Before buying a home, you should have a stable income that can comfortably cover your mortgage payments, property taxes, insurance, and maintenance costs. Generally, it's recommended that your housing costs should not exceed 30% of your income.
• Expenses: Consider all the expenses that come with renting a place of your own, such as rent, utilities, groceries, transportation, and other bills. Make a budget and ensure that you can afford all these expenses before taking the plunge.
• Job stability: If you have just started in the job market, it's a good idea to consider your job stability before getting a place of your own. If your job is unstable or if you are not sure about the longevity of your job, it may be better to wait a bit longer and build up some savings.
• Your savings: You should have enough savings to cover the down payment and closing costs, which can range from 3% to 20% of the home's purchase price, depending on the type of mortgage you choose.
• Your future plans: Consider your future plans, such as career growth, family, and location preferences. If you're unsure about your future plans, it may be better to rent for a while until you have more clarity.

As a general rule of thumb, you should consider buying a home when you have stable employment, and enough savings to cover a down payment, closing costs, and ongoing expenses such as mortgage payments, property taxes, and maintenance.

You may also want to consult with a financial advisor at MoneyAfrica to give you more personalised advice on this.

***

Question?

How do I earn passive income??

Answer

***

Passive income is income that is generated with little to no effort on your part. It is the earnings that you generate from an asset or investment without requiring active involvement or effort on your part.

Passive income is one of the best ways to make money in your sleep as it can provide you with financial security, flexibility, and the potential for long-term growth.

To earn passive income, you could consider:

1. Investing in stocks, bonds, and other securities: This is a traditional way of earning passive income. You can invest in stocks, bonds, mutual funds, or exchange-traded funds (ETFs) that pay dividends or interest.

2. Real estate investments: You can earn passive income through rental income or investing in Real Estate Investment Trusts (REITs).

3. Rental income: If you own property like a car, you can earn rental income from it. You can also earn passive income by renting out a room in your home.

4. Affiliate marketing: If you have a website or are active on social media, you can earn passive income by promoting products and earning a commission on any sales made through your unique affiliate link.

***

Would you like to know the state of your finances?

Take this test to see how you are doing financially?

***

Did you find this newsletter useful? Please feel free to share it. You can read previous newsletters here

Join our community today and learn everything you need to know about money. This also gives you access to our monthly webinar series on different topics around personal finance.?

The MoneyAfrica community has so much to offer you in your personal finance journey. Watch this video to find out.?