5 Investment You Can Make With 5000 Naira In Nigeria

Investment You Can Make With 5000 Naira
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If you are reading this piece, you are probably wondering what you can do  with 5,000 Naira.  It’s small and to some people, it’s a change they can easily spend at the bar.

But 5,000 Naira can get you started if you are serious about investing. Of course, you should not expect to become a millionaire investor overnight with that amount of money.

What is important is that you have to be consistent, patient and have a long term view of wealth accumulation.

In this post, I highlight some of the assets you can start investing in even if all you have to spare is 5,000 Naira.

5 Investment You Can Make With 5000 Naira

#1. Stocks

The stock market has been and will always be a place for long term accumulation of wealth. With as little as 5,000 Naira, you can start buying stocks right now.

I usually advice small income earners to set aside some amount of money every month for saving. However, rather than put that little amount of money in a regular bank savings account, use it to buy one company stock and do so consistently

Do this every month over a period of time and you will be amazed at the benefit.

Over time, you would have acquired some good quantity of that company shares. You will also be earning dividend income while the price of the stock appreciates.

For this strategy to be meaningful, you have to select a quality stock. Quality stock will be that of a stable company with long history of profitability and dividend payment. And one whose price is also stable and not drastically affected by over all market fluctuation.

#2. Crypto currency

You can start investing in crypto currency with 5,000. Note, I did say trading. Many people mix it up.

Trading in an asset is simply speculation on price movement. Speculation is not only risky, it may also require staking a reasonable amount of money for you to make any reasonable income.

Many of the crypto currencies available are sold in fractions. On the Luno Exchange app, for example; you can actually invest in bitcoin with as little as 1k.  I know of a young school leaver who started buying bitcoin on the App with 1k.  He was doing this every month over a period of time and you can say he is rich in bitcoin.

So the idea is to identify any of the popular coins such as bitcoin, Ethereum, etc; register on one of the credible exchanges and start buying that particularly coin bit by bit. Budget that to save your monthly 5k in the purchase of that coin and see what happens over time.

Before you start, gain some knowledge by reading and understanding few essential things about crypto currency.

#3. Mutual Funds

For a beginner, one of the easiest ways to start investing, is Mutual Funds.  These are collective investment schemes under which a fund manager pools monies from a group of investors and invest that pool of funds in carefully selected portfolio of stocks or other instruments.

Periodically the fund manager evaluates the performance of the fund and share dividend income amongst the pool of investors in proportion of the investment held by individual investors.

The benefit of investing in mutual funds is many.  Prominent amongst these benefits is that the fund manager has the responsibility for researching, analyzing and selecting investment.  So, if you are a novice investor or you are experienced but don’t have the time to analyze assets, mutual funds may well be what you need.

There are very good fund managers with profitable and well performing mutual funds in the Nigeria market. Check them out.  Some of the online investment platforms in Nigeria, also offer products in mutual funds. As a matter of fact, on one of these platforms, you can start investing in mutual funds with less than 5,000 Naira.

#4. FGN Savings Bond

FGN Savings Bond is an investment you can make with 5000 Naira in Nigeria.

The Debt Management Office issues this savings bond on behalf of the Federal Government of Nigeria.  Currently the 2-year bond is issued at a coupon rate of 7.22% per annum and the 3-year bond is issued at 8.22% per annum.  This is far higher what you earn from your regular savings account in a commercial bank.

Minimum investment in FGN Savings Bond is 5,000 Naira.

It makes much sense to invest in FGN Savings Bond.  Apart from the attractive coupon rate or interest which is payable quarterly, the investment is secured because it is backed by the full faith and credit of the federal government.  No stories. In addition, you can get some tax benefits as it qualifies for tax exemptions under the relevant tax laws.

#5. Investing Apps

Technology disruptions in financial services have helped to democratize investing.  Thus, very low income earners who were hitherto unable to invest, now can access an array of investment products via a number of investing apps available in the market.  With these investing apps, you can start investing with as small as 5,000 Naira and build your wealth over time.

Some of the products you can invest using investing apps include: stocks, mutual funds, bonds, treasury bills, etc.  AS a matter of fact some of the apps give you access to even invest in foreign markets such as the US stock market.

Bamboo invest, Chaka and Trove are some of the apps that you can use to start investing in a variety of assets including US stocks.


Final Words:

Now you have it: 5 Investment You Can Make With 5000 Naira.

Making money is a function of many factors.  But one thing very central is that it requires patience and careful planning.  Many people have a get rich quick mentality and that is why they are attracted to ponzi schemes.  I’ve often said on this platform that no true investment product has the capacity to double your money in few hours.

We see many offers that promises to double your investment in two hours, or few days and unfortunately people fall for it.  You cannot have five thousand Naira and want to make one million over night.  Of course, you can grow your 5k to one million Naira but it can’t be over night.

You will have to multiply it by about 200%.  Doing so will take some time and your major asset here will be patient and consistency.  Investing pays much when it is done for the long term.

Buchi creates content and leads the Team at Kobotalk Management Services; a business development and investment consultancy firm. He provides strategic advisory to help SME's, small business owners and HNI's grow profitable business and make informed investing decisions.

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