I Earn ?150,000. How Can I Save and Invest More?

I Earn ?150,000. How Can I Save and Invest More?

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Question

I am 26 and earn about ?150,000, with no black tax. I live alone and fend for myself in Lagos. I find that I hardly have up to ?50,000 to save each month.?

I am looking to build up my savings and investments because I feel like I don't have so much saved up currently. I bought a few MTN shares last year, and I plan to buy some more every month going forward so that it adds up. Asides from that, I put a really small amount into GetEquity. I want to build up little by little but I don't know where to channel my small change in terms of investment. I am considering dollar-based investments so I can get a tangible return in the long run.? I have also managed to save up ?100,000 and will leave that as a sort of emergency stash. I will add to it as often as I can.?

Any tips you have for me in this regard will be appreciated. Thank you.

Answer

From your narration, we can deduce that you have two questions:

• How can you save and invest more?
• How can you get tangible returns from investing?

How can you save and invest more?

Saving and investing more can mean one of two things (or both):

1. Increasing your income: If you have an ”income problem” whereby your inability to save/invest enough is because your income does not cover your financial responsibilities well enough, then you might need to seek additional income that you can devote to saving and investing.

2. Reducing your expenses: There’s a popular saying that goes thus: “Cut your coat according to your cloth.” The same applies to expenses. It is recommended that you review your expenses from time to time. What are you spending your money on? Can you cut down on certain expenses, for example, eating out? Or can you completely delete certain expenses from your budget like a Netflix subscription that you never have time to use? From doing this, you can then divert the funds that you have cut out from your expenses to your savings and investments.

Also, a useful tip to stay committed to saving and investing regularly is to save and invest first before spending. This way, you are spending what’s left after saving and investing, rather than saving and investing what’s left after spending.

How can you get tangible returns from investing?

Here are a few investing tips that will help you maximise returns from your investment journey:

• Diversify your investment across low-risk assets, medium-risk assets, and high-risk assets.
• Invest in higher-valued currencies like the dollar. This will help provide a safety net from currency depreciation due to exchange rate fluctuation and inflation.
• Set your mind to invest for the long term. This will help you stay focused on your investment goal, and you won't? be distracted/discouraged by frequent fluctuations in the market.

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Question

I am in debt that I can't get myself out of. I only have one source of income, and I can't seem to figure out a side hustle. How do l get out of debt? Is it advisable to collect loans to repay debts?

I also know that I need to increase my income and I am trying to work towards that by applying for new roles. I am also open to part-time remote roles in customer service, bookkeeping, typing, etc. I have signed up on Upwork and some other places but nothing yet.??

Answer

Taking up a new loan to pay up existing loans is referred to as “debt refinancing.” Debt refinancing is only advisable if the new loan has a lower interest rate and/or a longer repayment term.

A better way to approach loans is to have a repayment plan in place before taking any loan. Unfortunately, this advice seems like “medicine after death” for you. However, it is important to bear this in mind moving forward.?

To solve your current situation, you would definitely need to seek additional income through a side hustle or a better paying job. You can also maintain a stringent lifestyle so you can cut down on expenses as much as possible. In the event that you’re unable to do any of these, you can discuss a repayment plan with your creditor.

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