Question
Tags: Nigerian Economy, Nigeria, Nigerian Writing, Nigerian Politics, Invest

Question

How can one buy stocks before the IPO?

Babs

Answer

Hi Babs,

IPO stands for Initial Public Offering. It means the very first time a company’s shares are sold to members of the public on a stock exchange.

However, you can buy stocks before the IPO. If you are interested in a business, you can write to them to find out if they would be interested in selling shares. Also, you can reach out to the staff of existing investors. They may be willing to sell part of their holdings.

Besides, you can reach out to your stockbroking firm. Even though the shares may not yet be listed, there are usually transactions that take place in a private market. This is known as the unlisted securities market. A stockbroker may be able to help with that.

If you are interested in companies working in a particular sector, you can take part in industry events and webinars. Many of them include pitching sessions where you can decide to invest directly or have a chat with the founder/management of a firm.

You can also sign up for industry newsletters and follow them on social media.

Question

How can I invest N20,000 wisely?

Bassey

Answer

Hi Bassey,

I would suggest you split the money into two. You can invest N10,000 in either local or foreign shares, or in any reputable crowdfunding opportunity.

The other half should be spent on your personal development. Personal development will yield you the biggest return on every investment you make. Since you are young and just starting your working life, this is something you should double down on. You can sign up for a course in an area you are interested in or buy books and read.

Question

What can I do to make extra money during the festive season?

Mrs A

Answer

Hi Mrs A,

Do you have a few vacant rooms? Or perhaps a whole house? If you do, you can place it on Airbnb. Airbnb is an online platform that connects people who want to rent their homes with those looking for short term accommodation.

For people who prefer a somewhat homely feel, Airbnbs are the first choice. We may not have as much traffic in terms of movement due to the social distancing requirements of COVID 19. If you stay in a fairly busy location, this could be an option you might consider.

It could be for a few days or weeks or months. That could earn you anything from $20 a day.

(By the way, Airbnb is listed on the NASDAQ exchange this week.)

Besides, you can venture into the hamper business. Hampers, although seasonal, can be quite lucrative. You can have profit margins as high as 30% to 50% on a hamper. There are hampers going for as low as N15,000 and as high as N100,000, depending on the content.

However, if you do decide to do this, please make sure you have a ready market. Else, you will end up tying down inventory. Whatever you decide to do, focus on areas where you have the experience. Do not dabble into a business because everyone is doing it.

Also, you can organise online lessons for children. In a few weeks, primary and secondary schools will be closed for the holidays. I am sure kids have had their fill of online classes, and boot camps this year.

If you operate in a niche area such as language or arts and craft, then could be sizzling opportunities in those areas. You can hold online lessons for children and I am sure parents would be willing to pay. Charges can range from N10,000 to N20,000 per child.

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Question

Should I farm in Nigeria or buy a house in the UK? I have been saving to buy a house in the UK, but it has not come through yet. I then decided to use part of the money to buy a hectare of land to farm. Is this a good decision?

FA

Answer

Hello FA,

Do you have any experience with farming? Will you be running the farm by yourself? Or will you be running it with partners that will take an active role?

Agriculture is a high-risk investment. There would be years when you’ll either have zero harvest or experience a sharp dip in prices. Do you have the patience for this?

Investing, oftentimes, is like a jigsaw puzzle; every piece has to fit. Do you have any other real assets in Nigeria? Or is this your first investment? Do you have any assets in the UK? If you don’t own any assets in the UK, then diversifying would not be a bad idea