Three Common Mistakes Nigerians Make in Savings - Three Ways to Save Profitably In Dollar, Others

Three Common Mistakes Nigerians Make in Savings - Three Ways to Save Profitably In Dollar, Others

  • Nigerians make mistakes when saving to have money for a longterm, and this usually end up with them having nothing to show for it
  • Three mistakes made by Nigerians is that they put their money in a savings account, patronised false prophets, and engage in crowdfunding
  • There are also three ways to ensure your savings doesn't cost you more, but the focus has always been on savings account in Nigeria

Adebayo Kayode is a land surveyor, with salary alert of N70,000 monthly, but there's one thing he can't quantify, and that's, how his account turns red almost immediately after receiving his wage.

This is one headache that Kayode has struggled to cure. He has seek for advise on how to manage his money, as the gentleman is looking to propose to start a family next year.

Kayode lament to;

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"I don't know what next to do. I want to propose to my girl next year, and get married same year, but I don't understand how money is disappearing as it comes."
Three mistakes Nigerians make when saving. Three ways to save profitably
Dollars in a jar and someone counting naira to exchange dollars. Photo: PIUS UTOMI EKPEI/AFP (R) and undefined (L)
Source: Getty Images

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With his current financial state, he might not tie the knot as Kayode tremble over his inability to save rightly for a family he so wish to start.

While the Surveyor's reason for saving is different from others, there are many Kayodes who are saving, but have nothing to show for it, or unable to fund their goals because of a common mistake.

Three common savings mistake Nigerians make

Savings account

Like Kayode, many Nigerians make the mistake of keeping their money in a savings account, when they shouldn't - savings account is not what most people think it is in Nigeria, especially when it comes to commercial banks.

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Saving your money in a Nigerian bank is like paying the lender to keep your money for you considering the interest rate on bank savings is 1.25% per annum, and inflation rate is now 17.01% as of August 2021.

So your money loses value when you put it in a savings account, as the CBN has made savings unattractive to compel Nigerians to spend or invest their funds.

Corporate savings

Corporate savings is also a no-no for longterm savers. This is known as a thrift saving, crowdfunding or alajo in local parlance, which involves many contributors and a middleman that holds the contributed funds, and pays to each member every month.

It is the traditional version of savings account, only difference is that you don't lose money, neither do you gain, it is only good for a short-term plan, not a long term - this is what empty Kayode's account every month.

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Patronising false prophets

They are businesses like MMM or Loom, that promises quick return on investment, and many have fallen into this trap that offers you 30% to 50% ROI - that is, N150,000 for every N100,000 invested.

Yes, investment is also a form of saving, but that's not an intelligent way to save, as only ponzi scheme offers such, and many have fallen victim - reason why the Securities and Exchange Commission (SEC) warns against such.

Three ways to save profitably in Nigeria

Save in dollar, not naira

You wondering how that is possible? Some Nigerians now convert their naira notes into dollar in order to hedge inflation or devaluation of the Nigerian currency, and sell later at a higher rate when naira is weak.

That is the new saving culture in Nigeria - well, not too new par se. Although, this new trendy system is now difficult to join due to dollar scarcity and CBN policy that limits forex access to only legitimate businesses.

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But before the forex scarcity, Piggyvest and Crowdyvest, two Fintech startups, allows its users to save with 'Flex Dollar' saving option. So you can put this on your to-do list when scarcity ends.

Save your money on digital space

As naira loses value in commercial banks, Nigerians are keeping their money under lock in the digital space, thanks to Financial Technology (Fintech) startups.

A good example is Piggyvest, which offers savers 15.5% interest per annum, while Crowdyvest also offers 15% interest, while also using your savings to help you invest, but not without your permission, and you earn from the investment as well.

Save in foreign securities

You can save your money in U.S securities - which are shares of companies on the capital market - and earn dividends (ROI) quarterly; depending on your chosen company's decision.

As of 2020, Nigerian bourse was one of the best in the world, but this year, investors are losing money, so you could switch your interest to U.S stocks like Google, Apple, Microsoft, Amazon amongst others.

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You can buy these stocks through, or, and own assets in dollars and naira, then earn dividends.

Three Extravagant Billion-naira Youths: Pascal Okechukwu, Obinna Iyiegbu, and Emeka Okonkwo

Meanwhile, in case you don't want to save, but plan to splash your money on luxurious lifestyle, you will be competing with Pascal Okechukwu, Obinna Iyiegbu, and Emeka Okonkwo

These individuals are popularly known as Cubana Chief Priest, Obi Cubana, and E-Money. They are popular for living loud through their luxurious cars and houses.

However, they have businesses they are into, including nightclub, hotel and import businesses.


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