Let's Talk About Wealth Preservation
Making money is one thing, but keeping it? That's a whole different ball game—worms like inflation, currency depreciation, policies and a few other, always feel entitled to bite into your fortune.
It's a good time to breakdown how to deal with these vices.
We can start with 3 common challenges to wealth preservation in Nigeria
- The Naira Is on a Rollercoaster Ride: Nigeria's inflation consistently hovering above 20%—meaning the value of your funds depreciates simply because they exist.
- Government Policies Can Change Overnight: One day, the government allows easy forex transactions; the next, there are restrictions. Sudden changes in taxation, fuel subsidies, or capital controls. Just different forms of jabs at your financial plans.
- The Stock Market Is a Wild Ride: While Nigeria's stock market offers potential for growth laced with unpredictability. Also, beyond diversifying, factor in no 1 & 2 above, so your growth isn't academic
Smart Ways to Protect Your Wealth
- Multiple baskets
A diversified portfolio helps reduce risks. Here's how:
- When a currency weakens, it means another gains. So holding assets in different currencies always gives you a foot in the one that gains as well. Think offshore accounts, foreign real estate, or global funds – Foreign Currency Investments
- You still need naira to cover expenses within, so we fit in treasury bills, government and corporate bonds provide stable returns – Fixed-Income Investments
- Sometimes you invest at beating the challenges at its game by investing in high-growth sectors like fintech, healthcare, and renewable energy. Raise the bar higher than inflation and its colleagues – Private Equity & Venture Capital
- Safe Haven
Real estate remains one of the best ways to store and grow wealth, but....
- Not every location grows at the pace of the economy, while some have also plateaued over time. Find that sweet spot – locations with good potential
- Land banking is good, but investments that can provide steady cash flow (commercial buildings, luxury rentals, Airbnb, etc) will do you one better – Income-Generating Properties
- Absolutely nothing stops you from buying property in the UK, UAE, or Portugal (Golden Visa program) can give you added security and residency options – Offshore Real Estate:
- The bell
From when the bell rings to when it tolls, ensure the following...
- You are eating from the stable pies – Recession-Proof Stocks
- You are not banking on tunnel vision and losing out on foreign markets that reduces your exposure – Global Investments
- Real Estate Investment Trusts (REITs) and Exchange-Traded Funds (ETFs) provide diversification with less risk – REITs & ETFs
- Pass the baton properly
What is the point if it all goes away and your kids lose the advantage you gained
- Ensure your assets are managed and passed down the right way. – Family Trusts
- Help with your taxes, but not at the detriment of your legacy – Tax Planning
- If there is ever a need to go down, cub the domino effect – Legal Protections
- Win – win
There is a world where your wealth grows while satisfying your lifestyle
- First currency ever and a time-tested hedge against inflation – Gold & Precious Metals
- collectibles with resale value – Luxury Assets:
Reality; doing this right requires highly skilled professionals providing expert guidance. You are always welcome to reach out to Nigeria's first Private Client focused firm – Acuity Partners – for guidance
Final Thoughts
Wealth in Nigeria isn't just about making smart investments—it's about thinking ahead and factoring present realities and future pitfalls
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
