Investing in Business Better Than In Lands

Many Nigerians have been burnt when it comes to starting and growing businesses. They have tried different businesses and the uncertainty in the Nigerian business space has affected them greatly. As a result, most of those people go into the real estate market where the risk is lower or even non-existent.

When it comes to money, you need to understand the law of conversation of money which states that money is neither created nor destroyed but stored or transformed from one form to another. This means that even if you lose money, it wasn’t destroyed, you just transformed it from a paper form to another form.

Law of conversation of money which states

that money is neither created nor destroyed but stored or transformed from one form to another

In most cases, we focus on the paper money that we just lost and never looked at what we gained in exchange. There are different kinds of money. You are either storing your money or you are exchanging it for something you want. In all, the money never gets destroyed. Even the person who burns a dollar note isn’t destroying money but that paper.

In my book, Salary Shift, I wrote about different approaches employees can follow to transform their salaries into a forest of income. One of that storage is real estate (lands). You can store your money as real estate and get it back later on when it appreciates in value. However, to get your money back, you have to do the following:

1. Sell the land to get cash gain

2. Get a loan on the equity of the property

I must say that no one ever becomes rich because they own land. They become rich because of what they do with the land. In the agrarian economy, the person with the largest land is the richest because they use it for agriculture. The bigger the land, the more they produce. Many of them became dukes and lords. You inherit the title from the king based on the vastness of the land your family has. Here the land was the wealth. Only a few people with lands were deemed wealthy.

Then the industrial economy came where people used the land to build factories. The land became a tool for building wealth. The focus was taken away from the land to what the industries produce. That produces the billionaires like Henry Ford, Thomas Edison, John D. Rockefeller, and many more. Their wealth wasn’t connected to the land they built their factories on but to the revenues that comes from selling their products.

Then came the information or knowledge economy where wealth was defined by the value of what technology they leveraged. This economy has nothing to do with real estate. It uses real estate as leverage for an office. Wealth is based on the number of people it has the potential to serve. This produced more billionaires. It produced the likes of Larry Elisson, Steve Jobs, Bill Gates, Mark Zuckerberg, Jeff Bezos, and many more. Technology leveled the playing ground.

No one becomes rich through acquiring lands. It is just a store of money. However, people become rich through business. Donald Trump is into real estate but the real estate didn’t make him rich. Leveraging real estate to do business made him wealthy. Grant Cardone is a billionaire who leverages real estate. They leverage real estate via apartments, rentals, hotels, and golf clubs. The business made them rich not the real estate. In truth, most of them start out in business and just acquire real estate to leverage.

In Nigeria, if your plan is to build an apartment building and just rely on the rent being paid, you will have challenges. Tenants may be able to pay you to enter, but then the economy may happen to them and they become unable to pay rent. That is why you need to have a business that leverages real estate and creates tonnes of value for you.

The land will bring you cash gain, while business will bring you cash flow

When Nigerians in the diaspora invest in lands to store their money, it will only help them alone. I know of a Nigerian in the diaspora who bought land and started farming. He will have to farm it each year to get his return on it. And by the time you factor in a lot of things, it may not look as lucrative at the end of the day.

Now compare some of their effort with companies like Flutterwave and Paystack. These two companies may not own real estate but own what I call mind-estate. They put together the mental power of people and built a business model that works. They are unicorns (valued in billions of dollars). Make a comparative analysis with someone who invested in lands when they started and finds out who is more valuable.

The greatest asset today is not land but a business model that works. When you build a business model that works and can scale, your business gets valued at $15 million even if you can’t pay rent. People with land don’t enjoy that luxury. The value of their land is based on the location, size, and market value. To get cash flow from their land, they would have to build a business.

Here is what a business model defines and clarifies:

1. Market Segment: Who you want to be a hero to

2. Market Size: whether they are large enough to keep you profit

3. Value Creation: what value means to them

4. Value Delivery: the best means to get your value to people

5. Value Capture: how to capture the market so as to remain viable

6. Value extraction: how to get paid for the value you deliver

We understand that most Nigerians in the diaspora want to build a business but don’t have who to trust. We have the capability to deliver on this and make their businesses work. We have experience in using design thinking and lean thinking to develop a business model that works.

Our services include designing and testing the business model, attaining product-market fit, and recruitment and training of staff. We design with our customers so they can have the mindset and capability to build their company. We do the heavy lifting for Nigerians in the diaspora. We reduce the uncertainty and minimize the risks for you to build a business.

We are organizing a Game-Changing Value Creator Coaching program. You can be part and should be part. It is for you. If you want to attain freedom and find fulfillment at work, then become a value creator.

Be part of the Game-Changer Value Creation Coaching program. You will go through the mindset required to create and the tools you need to always create value in the workplace. Are you ready for a fundamental change- a breakthrough in the way you approach your work? If you are, then you are ready for the Value Giver Coach Program. Please call +2348101671745.

?We are still fundraising. This is why we are building a new school model where teachers, parents, and businesses contribute to building a better world. You can be part of making your donation here.