We live in a time where the purchasing power of the Naira keeps sinking. While
some may argue that the policy of the Nigerian government is affecting the
economy adversely or whether or not there is inflation in the country. The
citizens of this Nation are taking the biggest blow. It will be wise to
acknowledge that the events of the past months will continue into the future.
Prices will continue to soar as exchange rates continue to fall. We are in a difficult
time and here are four advice on how to survive these periods.
1- ACCEPT AND PREPARE
For you to recognize that there is inflation is a step in the right direction. Living with the hope that things will return to normal will only result to disappointments. The earlier you prepare yourself physically and mentally, the better your chances of survival. When you wake in the morning knowing that what was worth N100 yesterday is now N150. You begin the day with a better spirit and vigor than those who lack this knowledge.
2- EVOLVE AND ADAPT
During inflation, your money loses value. You become
at risk of starvation, subsequently it affects your standard of living negatively.
It is time for you to adapt. Anytime you want to spend, ask yourself if you
really need what you are spending on. You must forego the necessary things for
the important ones. For instance, buy non perishable goods, use public
transport, and buy for long-term gain items like cereals, powders, packaged
goods and even bread. There are a lot of things you can buy to save money. The
idea is not to live cheap, but to live smartly.
3- GET RID OF CASH (INVEST)
When money keeps losing its value everyday, then why keep it? Since there is no foreseeable end to this financial crisis, the best option is to turn your money (cash) into commodity or asset. Everything will increase in price, therefore the logic behind this is that if you have a Hundred Thousand Naira. You should use it to buy assets or commodities, this will give you control over your wealth and probably make profits. Cash is a dangerous thing to hold in times like this. It is ideal to invest in something that generates cash flow or something that will at the very least bring back your money when sold.
4- REDUCE YOUR DEBTS
It is easier to get into debt than to get out. The problem of being in debt is that you become a slave to your creditors. Your financial health becomes at risk. You must understand that debt is the first step to financial collapse whether as an individual or organization. When there is economic hard times like this, people who are in debt are the first to go down. So, if you can pay off any debt you may have, it will go a long way towards improving your financial situation. By reducing the amount of expenses you have to cover you will be better prepared to handle a financial loss. And if you are lucky, you won’t have to worry about people knocking on your door. You only have to concentrate on improving your living standard.
This article was originally posted on my blog: www.thenortherner.com.ng
Well, if the rates continue to fall e.i the dollar continue to appreciate, you will reap a goldmine. But if as we hope, things get better, the dollar will come crashing down, thus you lose your money. Just buy assets or commodities.
Which in turn invalidates your claim that “Cash is a dangerous thing to hold in times like this”. Technically, the dollar isn’t the one going to crash. Something has to make the naira appreciate in value and tbh, that’s clearly not in sight right now; hope or not. Unless oil miraculously gains in value on the global market, we are still in for a number of bad decisions that will further deteriorate the our currency.
Bro, now is de time to load yourself with loans in hundreds of millions of naira for foreign valued investments.
Investing in anything in Nigeria is a waste of time.
I haven’t stopped regretting my paced investment plan.
However I don’t understand how this post is relevant for the Technology or Startup community.
It would have made sense to focus on your new blog OR
Some info on optimizing the rising cost of business execution due to the crashing naira.
It’s very relevant if you live or own a business in Nigeria.
Tech startup is a business, so its relevant.
I think it’s best to find a way to earn in dollars (developers and co can seek contracts online)
I also believe saving is dollars is the way forward, as dollars will continue to get stronger (even against pounds and others) over the next few months.
Good points raised so far on investments in this recession. Another area to look into is real estate investment. If your savings can afford delving into real estate I would advise any one to go for it. One of the best investment decisions during a recession. It’s been proven over and over again. The data and stats are all right there.
Its true that cash is a dangerous thing hold, but the question is what currency? The Naira. It keeps depreciating and you said the dollar isn’t going to crash, it will make more sense to convert your Naira. Its still the same thing either to assets or commodities.
Buy Bitcoin or Ether and wait out the asset devaluation in Nigeria. As long as the naira continues to slide I would hold off on any asset purchases.
Real estate values generally lag a recession in Nigeria due to advanced payments terms. Specifically I still think most of Lagos is still overvalued, especially the Island.
On other other hand well located farm land is probably a good investment today, especially if you can start monetizing asap.