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Smart Money with Arese: A Chanel Bag Versus Stock Portfolio

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There is a huge debate surrounding the fact that this generation lives above their means. We have a spending culture that surpasses the realization that we need to invest some of our earnings. We’ve all heard the stories; the girl with a Chanel bag collection to rival Winonah  De Jong’s, but squats in her cousin’s house because she has nowhere to live; or the guy that drives a GL 550 but can’t afford the petrol to put in it. These stories may sound absurd but they are a reflection of the misplaced priorities in our society.

Most of us were raised to work hard, be frugal with our spending and save for a rainy day but I’ll just say what we are all thinking in the back of our minds…what if the rainy day never comes? The reality is, this is the ‘YOLO’ generation; we live for instant gratification. So how do we bridge the gap between our parents’ philosophy and our love for the finer things? Simple answer: moderation and planning.

I LOVE Chanel bags and trips to Europe, as much as the next person but I also have financial goals that demand that I invest today if I want to ‘Ball’ tomorrow. I am a proud advocate of living the good life and I don’t believe in shaming people for liking the things that make them happy but there’s also no point in accumulating designer bags with no assets to match my spending. It’s not about living like a hermit but about striking a balance, knowing the difference between what you want versus what you can afford over a period of time.

What if you could have it all?

An effective way to live within your means and still live remarkably is by dividing your income into three parts, Long- term financial goal, short- term financial goal and living expenses. (See illustration below)

ALERO
MONTHLY SALARY N500, 000.00
LFG (20%) N100, 000.00
SFG (10%) N50, 000.00
LIVING EXPENSES (70%) N350, 000.00

Long-term financial goal 20%: A long-term financial fund represents the proportion of your income you put aside to grow your assets in the long run. i.e. purchasing land or building a stock portfolio.

Here are some tips that ensure you maximize your earnings.
• Put aside this 20% BEFORE you spend even a Kobo of your Salary.

• To ensure your money works harder for you, instead of a low interest savings account, invest in a blend of fixed income and equity products (Typically a 7-15% p.a return on your investment) .In Alero’s case 20% of her monthly income is N100, 000. Using a 70:30 fixed income to equity ratio. She would invest N70, 000 in a fixed income product that guarantees her principal and gives a decent return, that’s significantly higher than the interest on her savings account. The balance of N30, 000 could be used to buy stock on the Nigerian Stock Exchange.

• Many people are skeptical of the stock market maybe because they’ve been burnt before or have heard of people who have been negatively affected. However, the term ‘high risk high return ‘ comes to mind.

• The key is to have a long-term view, invest in stocks that are undervalued, have high liquidity and may give regular returns in terms of dividends and bonuses. Key things to remember, DO NOT borrow to invest in stock and IT is NOT a money-doubling scheme. (Speak to a broker or investment manager for advice).

Short-term ‘frivolous’ goal 10%: This would represent the proportion of your income you set aside towards that seemingly frivolous purchase, that makes life much more interesting, be it a Rolex watch or a BMW. Ultimately what determines how quickly you are able to buy this item will depend on how much you earn. So if it takes you 10 years that’s probably a good indication that it’s not something you can afford right now.

Living expenses 70%:

Are you spending more than you earn? Without borrowing or begging, how comfortably can you pay your monthly bills?

I have a philosophy, the way you spend N10 is the way you’ll spend 10million. For instance, ‘ Ikenna knows his rent is due in September 2015 but every month when he gets his salary he’s living a ‘champagne lifestyle’ (‘YOLO’ abi?) Come September 2015 he tells his wife and landlord that he doesn’t get paid enough and times are hard. This is just irresponsible. You knew rent was due the following year. It was not a surprise; it was an obligation you had 12 months to prepare for. Rent is not a surprise, people! You can’t spend all of your salary and expect manna to fall from heaven when rent is due. If you are guilty of living like this, even if you got a 10million Naira payday you would be broke in a year.

Ultimately, we must dispel the myth that we are too young or too poor to invest; I hear people say this all the time. ‘I will invest when I hit’! ‘You can’t save what you don’t have!’ These are all excuses. Investing should be a part of your lifestyle, just as you ARE what you eat; your future is what you invest in. You can’t expect to live a luxury life style in the future if you are making poor financial choices today.

We all deserve nice things but planning towards your obligations and tracking your spending are two important factors when it comes to finding the right balance, living comfortably and ensuring your financial future.

Photo Credit: creativefan.com
______________________________________________________________________
Arese is the Head of Wealth Management at Partnership Investment Plc, and is responsible for building the company’s wealth management division, through business development and growing existing client relationships. Arese holds an M.S.C in Urban Economic Development from University College London (UCL) and a B.S.C in Business and Management from Aston Business School.Her other interests include, world travel, reading, playing tennis and squash.

Arese is the author of the bestselling financial chick lit The Smart Money Woman. She is also the founder of smartmoneyafrica.org a personal finance blog tailored to the African millennial. Arese serves on the boards of House of Tara International Ltd and The Nigeria Higher Education Foundation as a non-executive director and is an associate member of WIMBIZ (Women in Management Business & Public Service). Arese Ugwu has an M.Sc. in Economic Development from University College London (UCL) and a B.Sc. in Business and Management from Aston Business School, Birmingham. She is also an alumna of the of the Lagos Business School, INSEAD Abu Dhabi and The London School of Business executive education programs. www.smartmoneyafrica.org . Follow on Twitter: @smartmoneyarese and Instagram - @smartmoneyarese

54 Comments

  1. Its a very pratical approach, but its hard to not buy Chanel, its just too hard. (˘̩̩̩.˘̩̩̩ƪ)

    • fluffycutething

      March 6, 2014 at 3:59 pm

      Hmmmm na wa oh!

    • i no go die.

      March 6, 2014 at 11:04 pm

      its not hard.. its very simple… you just don’t buy it. if its not going to yield you a better return than just looks only, then that a problem. looks does fade, but your bank account will speak fir it self.. get it..

  2. amina sanni

    March 6, 2014 at 9:29 am

    what if your monthly salary is about 70000 how dou moderate and save at the same time?

    • Que

      March 6, 2014 at 10:28 am

      I am not a financial expert, but I want to share an advice I once got bout a similar question, and has helped tremendously…. think of saving as a compulsory bill, like ur tax, you go to jail if you dont pay afterall without savings/investments, your future might be looking like a jail too. Calculate what you can live on modestly in a month (so u dont have to fall into d trap of borrowing), once that is out, save in two batches, for investing- wch is like d longterm goals Arese said, and for emergencies…. if u have to ball them into one, try comitting to at least 20% monthly for reinvestment in alternative income streams… but its important to track what u’re spending on n alternative ways of pinching d pennies too. Also if debt is an issue, say u owe someone 70k, rather than carry all d 70k u make to pay it off once, be upfront with the person n try to get them to agree with you on an acceptable payment plan which you must stick to, this will prevent you from goin into further debt as a result of more borrowing. Dont worry too much about the size 4 now, once you’ve mastered the principle, its only a matter of time b4 that will change.

    • hibee

      March 7, 2014 at 2:19 am

      LFG: 14,000
      SFG: 7,000
      Living Expenses: 49,000

    • JDI

      May 5, 2014 at 4:10 pm

      I make only 5000 naira more than that monthly working 8-6 daily and have over 500,000 in a savings account. 100% personal earnings. I have only been working for 5 months now. Its simple. Leave way below your means, Have a goal that needs to be financial backed, don’t spend money on things you do not need, eat healthy, work out naturally, have fun with the little things in life. I don’t pop bottles, i don’t buy designer, or work as a hooker.I have a 2004 toyota camry (gifted) given none of my mates are working or have cars , their eyes are geared towards financing a G-wagon. That is not important to me, my toyota take me where my lexus would take me. I am still 19 so I cannot spend like an idiot. If I am not sure of what to do with my money I leave it , donate it or invest it. Obviously you would not be rich earning this little but you can save more than people that earn 4X more.

  3. kash

    March 6, 2014 at 9:31 am

    U are right Bella. We all wanna live large and expensive but we don’t want to work hard. We don’t have to wait for the rainy day when we can call for the rainy day with our hard work. I will always say I’m proud of the way I’m been brought up and proud of the family I came from. Best family ever

  4. kash

    March 6, 2014 at 9:33 am

    Don’t wait for the rainy day when you can call for the rainy day

  5. Love

    March 6, 2014 at 9:50 am

    Very well written! I do hope people read and actually put it into practice.

    Another angle given the Naija or should I say African factor are those other miscellaneous expenses that come in the image of needy relatives (who seem to know ur pay day better than you sef), asoebi, tithes, friend in need here and there, naija officials who need to be settled here and there, blackmarket fuel in times of fuel scarcity….. The list is pretty endless… All these are outside living expenses or long or short term goals… Not an excuse though as ur message is so apt for frivolous spenders who still manage to carry designer bags and are sorely broke.

    • Bird's Eye

      March 22, 2014 at 3:23 am

      Let’s keep in mind that most of the designer bags are not bought by the girls themselves so because a girl has designer bags doesn’t mean she automatically has a steady source of income and is spending frivolously instead of saving. Same goes for very young guys wearing Rolexes and Cartiers, carrying BB Porsche and driving ok cars with tanks they can’t fill on a regular basis.

      That said no matter how these things are got, saving should be a habit.

      I actually hit reply on this comment cos of the Naija angle that Love talked about. It’s not easy at all. So many things struggling for somebody’s money. Especially in Lagos.

  6. Big Fan

    March 6, 2014 at 9:57 am

    Thank you soooo much for this advice. I will try to stick to the principle. Coincidentally, my income is about N500,000 lol.

  7. Organics by MelVee

    March 6, 2014 at 10:01 am

    God bless you Arese for this succinct yet apt article.

    Our generation needs to hear this loud and clear. You see our ‘so-called’ celebrities showing off their new Bentley and RR Sport yet they live in rented apartments and have no solid investments. Ladies would rather spend on bags, shoes and hair than invest in meaningful assets or even in their brains.

    As a banker, I once had an high net-worth man as customer who owns at least 13 houses in choice neighborhoods here in Lagos, maintains 200million and above in his checking account in my branch alone. Then he drove a Peugeot 307 and lived in lovely mansion in Egbeda with his family. When i enquired why he is not living in one of his houses in Ikoyi or Lekki his answer still rings in my ear till today;

    “I rented those houses out to people who want to pretend to be rich. I know i am rich and my neighborhood does not change the amount in my bank account.”

    Are you really rich or just pretending to be rich?

  8. word

    March 6, 2014 at 10:01 am

    Good write up. But pray, wot has the thigh-showing picture got to do with financial advice.

  9. BubblyBliss

    March 6, 2014 at 10:05 am

    I love this! Great advice. My income is usually split as: Savings and Investment 30%, tithe 10%, living expenses 60%. I’m thinking I should definitely allocate money to my ‘short-term frivolous goals’ because I get broke before I know it. Thankfully savings and investments are usually tied up in something as soon as I receive my salary. Thanks very much Arese

  10. Que

    March 6, 2014 at 10:08 am

    This line right here…very important…. ‘…So if it takes you 10 years that’s probably a good indication that it’s not something you can afford right now…’ this keeps long throat in check! Somethings need to be released from your consciousness for a future date when you may not even have to think twice b4 signing the bill…

    Personally some of them frivolous and not-so-frivolous things sef can also be gifted too, you never know…. thats what wishlists are for, keep one from the most to least important things u want…cos dose ‘what can I get you’ conversations are almost always random.., so that when mama/dad/ brother/friend/someone who wont demand ya ass in return, asks what to get you, you have options and they can pick which they r comfy wit, u strike it of d list, and ur savings will be thankful for it.. you’ll be surprised what some pple r willing to part with for ur sake, especially if they understand the importance too…

    The worst thing to do to yourself is to compete with someone who gets mostly freebies on your managable income…. In all, great advice….Thx Arese.

  11. Moi

    March 6, 2014 at 10:16 am

    Very practical approach but using the e.g of a N500k salary makes this seems easy. Let’s replicate this advice for a base salary of say N50k – FIFTY THOUSAND which is alot of people’s reality, you see how that fancy math looks now?
    Yes I get the idea and you gave sound advice here but to the poor/average man on the street, this is just english language. If someone is earning N500k monthly,methinks they can afford a chanel bag a year and the good life easily, they aint gat no worries.

    • Kimmy

      March 6, 2014 at 10:55 am

      Thx. my thoughts cos thats what i earn

    • Fountain of Paper

      March 6, 2014 at 5:07 pm

      Hi Sweetie,
      The principle applies whether you earn 500k or 50k or 5k. It’s a question of percentages. If you earn 5k. Take a dedicated 20% off it and save. So you have 4k to play around with. The idea is that at the end of the year you have 12k set aside. You should not spend everything you earn, irrespective of the income bracket you fall in.

      It’s sheer stupidity to do so. If there are things you wanna buy… take it out of the 4k or 40k… as may be appropriate.
      If you prefer, have a separate account where you don’t have an ATM card or access. I used to store my ‘Don’t Touch’ money in my UBA account. I didn’t have an ATM card and when you think about the queues in the UBA banking hall… you sef will think twice before wanting to go and touch the money.

      It’s really about wisdom and planning for the future.

  12. olufunke

    March 6, 2014 at 10:19 am

    i like to say the first money you remove is your tithe. when you pay your tithe (10 percent of your income which belongs to GOD. it is GODS OWN) you will ni=ot be in a tight corner and you will be amazed how enough the remaining 90 percent will be wisely spent and invested.

    • Blessmyheart

      March 7, 2014 at 11:37 am

      Yep, I’m strong advocate for tithe-paying. I don’t default in paying my tithe. But you should be aware that you can’t spend money anyhow because you have paid your tithe. You need to take conscious effort to plan, save and invest. The difference is that God will bless your efforts.

  13. Madame Solange

    March 6, 2014 at 10:37 am

    Very good article and Arese is absolutely right. However with the media splashing celebrity news and their luxury lifestyles in our face daily, only God can help us remain true to ourselves. There are youngsters who have role models in the industry and want to live the kind of lives these people live.
    What would you say of a girl that owns all the luxury designer bags and is a 200 Level student in the university? Or a young “yahoo boy” that drives a luxury car, Is it practical? Where did he/she get the money from? Ok, sometimes rich parents splurge gifts on their kids. But then again as they grow older their yearnings become increased then and sometimes they cannot sustain the lifestyle.
    I think the thing is to teach a lesson to these young people that owning these luxury items is not a must, besides it is for those who can genuinely afford them. I have worked most of my life and do not own a designer bag even though I think I can afford it, however I should be true to myself and not live a lie all because if I buy that luxury good, Omo! I may starve o! I need to impress someone out there who cares less about me.
    I like what Arese said in her article “I am a proud advocate of living the good life and I don’t believe in shaming people for liking the things that make them happy but there’s also no point in accumulating designer bags with no assets to match my spending. It’s not about living like a hermit but about striking a balance, knowing the difference between what you want versus what you can afford over a period of time”.
    Hence sustaining a lifestyle that matches ones income is best way to go about living right. Bottom-line is that we should learn to be truthful to ourselves and not be involved in the frivolities of life. In the case of a rich kid or those who can afford to buy, they are exempted. But others should know that all fingers are not equal and you are your own best teacher.

  14. Babe

    March 6, 2014 at 10:46 am

    True talk oh! Very true talk…Although I plan to splurge this year but its coming from my short term investment shikena. This generation needs to stop keeping up with the jonses…Anyway na IG cause am. There’s such a hard need to belong, my question is belong to what? and who? I pray for this generation and I hope God helps us to get our priorities right.

  15. pynk

    March 6, 2014 at 11:08 am

    Lmao. Too many people want to be seen and heard for no reason. That’s the obsession with Chanel to begin with. Simple w holistic truth is know yourself and understand your bottom line. Till then preaching about budgets won’t work. I know of someone who was a heavy earner and it took some very stupid purchases to realise the things she bought didn’t make her feel any better. So she practiced restraint and would wait out the purchase only to realise she didn’t even remember the item in question. So its simply a case of being honest with yourself and it becomes apparent that the material things you are in pursuit of have little or no bearing at all on your life.

  16. @chuchuanochie

    March 6, 2014 at 12:00 pm

    Very sound advice and practical guidelines to organic wealth generation. Age old advice but laced with tenets of modern socio-financial culture.

  17. Wonzie

    March 6, 2014 at 12:54 pm

    Lol @ YOLO abi???!!! This article is both profound and eye opening!!! Very well said Arese!! The exact kick up the butt that I needed!! XOXO

  18. ldyem1

    March 6, 2014 at 1:11 pm

    Hey, so i’m 21 and I get a monthly allowance from my dad. My mum has always encouraged me to save but I’ve never really seen the need. It wasn’t until an unfortunate incident involving a friend that i’ve become more serious about it. This seems like a lovely and straightforward plan but my only issue is the investment part. Although I know investing is important i’m not sure how I can go about it since my parents tend to baby me and want to do everything for me. But I would really like to do this on my own so does any one have any tips? I already have a savings account in which I put aside part of my allowance but I only do it randomly – as in if I have some spare change at the end of the month. But I think I will definitely try to be more diligent about it. Also please no comments telling me i’m too young. Im sure there isn’t an age limit on buying stocks, although I know I can definitely not buy land lol. are there other ways of investing?

    • Shuga

      March 6, 2014 at 4:13 pm

      Invest in a mutual fund. Opening balance for some is about 20, 000 with subsequent sums of 10, 000. You can also do a standing order either monthly, bimonthly or quarterly from your bank account. With mutual funds, your risks are reduced and you get the benefits of having a seasoned investment manager without actually having to pay for one. Google and find the mutual fund that appeals most to you. And you are never too young. I am 24 and started at 22 having made sure I read up thoroughly on the available mutual fund managers and picking the product I was most comfortable with.

      Good luck.

    • nwanyi na aga aga

      March 6, 2014 at 6:06 pm

      My dear just like Shuga has rightly told you invest in mutual funds, you are not too young to invest in shares,bonds or stocks. I bought my first set of shares at 19 with the little trust I had that was relinquished to me after my 18 birthday. If you are in naija I will advise you to go for treasury bills as it requires very little effort for you invest in it. The rate is about 10.8-11.5%pa depending on the bank. It will also be good as you can invest as small as 10k and u can also keep increasing the amount as it gets to maturity. For eg u can start with 10k for 90days its usually based on discount value, after the 90days, you can request for more funds that you saved within that 90days to be added to your original capital and rolled over. My dear before you know it, you will be able to buy land. Buying land is not as hard as it seems, its achievable if you make up your mind. Don’t think things are going to be rosy forever cos of your parents. I am telling you cos things can change in a twinkle of an eye. Always be prepared.

    • John de Beloved

      March 7, 2014 at 7:01 am

      Hi, i am 22 and just like a previous commenter said, Mutual funds is a really dope idea, try it out. I also suggest you invst in Treasury bill and commercial papers. you get your interests upfront and can get rates of up to 11% at access bank( make i market small) and like a commenter said, you are never too young to svae or too young to get rich… Cheers.

    • Pretty

      March 12, 2014 at 9:52 am

      Nice one girl.

  19. Berry Dakara

    March 6, 2014 at 1:57 pm

    “I have a philosophy, the way you spend N10 is the way you’ll spend 10million. For instance, ‘ Ikenna knows his rent is due in September 2015 but every month when he gets his salary he’s living a ‘champagne lifestyle’ (‘YOLO’ abi?) Come September 2015 he tells his wife and landlord that he doesn’t get paid enough and times are hard. This is just irresponsible. You knew rent was due the following year. It was not a surprise; it was an obligation you had 12 months to prepare for. Rent is not a surprise, people! You can’t spend all of your salary and expect manna to fall from heaven when rent is due. If you are guilty of living like this, even if you got a 10million Naira payday you would be broke in a year.”

    TELL THEM O!!! I don’t understand why anyone would start panicking 3 months before rent is due, and complaining that they need to save. Erm, what have you been doing for the past 9 months????

  20. The Original Beebee

    March 6, 2014 at 1:58 pm

    To think Arese (the writer) is Toke Makinwa’s best friend…..hmmmm!!!

    Thanks for the write up girl….well thought out!! Kudos to you…

    • Diddy

      March 11, 2014 at 4:42 am

      What the f- has that got to do with the write-up? Nonsense

  21. Dr. N

    March 6, 2014 at 2:18 pm

    Great tips, which I will apply. Thanks. For those who do not earn N500k, have u heard of “vintage”? How about sales and discounts? You can look great on a budget. Social media should not inspire you to steal but to be creative. You have long hair, why are u buying human hair? A great way to set yourself free from relatives and aso ebi is to make a budget. Tell them u overshot last month and can’t indulge this month. I used to work with ladies who always had stuff to sell. When I kept announcing that I would not buy on credit on pain of death, they stopped harrassing me. Let us keep our blood pressure low by maintaining a frugal lifestyle. drnsmusings.wordpress.com

  22. ....

    March 6, 2014 at 3:57 pm

    runs is easier

  23. Narnia

    March 6, 2014 at 4:58 pm

    Lovely right up!
    I wish I can say I spend my money on Chanel bag
    My own Chanel bag is FOOD!
    Such a bad habit! Will defo try this out

  24. bee

    March 6, 2014 at 6:03 pm

    lols @my own Chanel bag is food,i think i belong to that category too,eheheh, May God indeed help our generation,if our parents were heavy spenders like us,i wonder how they will be able to afford sending us to school abroad and all,that one alone is something that gets me thinking. Another way out is do not keep frivolous spenders as friends,they will ruin you.

  25. TS

    March 6, 2014 at 8:26 pm

    Awesome article Arese. What I really like about this article is that it recognizes that we humans have desires so although we need to save, we also want the things that gives us pleasure in life – travel, fashion, etc.

    For those in the US, CNN actually has a good tool to figure out what you will need in retirement. It is worthwhile spending a few minutes to know where your future lies. It could be a wakening call if you are not saving well.

    CNN Calculator – money.cnn.com/calculator/retirement/retirement-need/

    titisule.com

  26. Ade

    March 6, 2014 at 8:29 pm

    God bless you Olufunke.

  27. Graziella

    March 6, 2014 at 10:51 pm

    Very on-point article. I would like to share my thoughts on hangers-on and all such bugs who imagine your salary must have a fixed portion allocated to them. Here’s what I do: I have a fixed percentage of my earnings I earmark for “charity”. I will NOT for any reason give more than that out to people who have GENUINE issues or needs. And if, God be praised, I have no charity case on my hands for the month, it goes straight into my savings.
    Now savings…I learnt in university to save something, no matter how small, from all you earn in a month. Now I have a job and a business, I practice same in a dedicated account that I have no ATM card for. I know I can head to the bank oh, but my brain has come to accept that I cannot touch a kobo from that account. If I want a designer item, I save up for it. I won’t deny myself things I like just because I am trying to save, but I also know hell will not freeze over if I don’t get those things I want like right now. Fine thing no dey finish for market.
    And for those friends, family/church members and sundry other random beings who will not save anything come hell or high water because they imagine that my life calling is to deny myself extra pleasures and save up money only for them to come up with one sob story or the other with a view to collecting the one me I have been saving…all I can say is “VOICEMAIL”!!! 🙂

  28. John de Beloved

    March 7, 2014 at 7:02 am

    So people really earn up to 500k in Nigeria. I hope i get there someday oh! wow!!! nice article though.. Making brain…

  29. yostic

    March 7, 2014 at 9:52 am

    Lol @John de Beloved…u need exposure….that’s standard for upper class Nigerian.

    Thats like starting salary for your 23 year old Nigerian graduate with a good graduate job overseas….nothing major

    • Bird's Eye

      March 22, 2014 at 3:27 am

      So which one is he needs exposure? Mscheeeew.

  30. Youhearditherefirst

    March 7, 2014 at 6:51 pm

    You gonna tell me to stay in school so I can make money and be self-sufficient. Now I make the money, you gonna tell me not to spend it ? Ko jor rara…it doesn’t resemble it

  31. kilipot

    March 8, 2014 at 1:16 pm

    Where do ppl get this 500k per month job. What do they know that I dont. Somebidy shld educate me seriously.

  32. kilipot

    March 8, 2014 at 1:18 pm

    Where do ppl get this 500k per month job. What do they know that I dont. Somebody shld educate me seriously.

  33. chi-e-z

    March 9, 2014 at 9:43 pm

    Very informative.forwarding to the parents now.hope I can live up to this.

  34. jaybee

    March 11, 2014 at 5:16 pm

    hmmmm,there are high paying jobs like that my sis,and i will definitely get there one day,i try to save by doing this ‘ajo’ thing,it helps cover a lot of bills at the end of the day.

  35. ChySparkz

    April 2, 2014 at 9:59 am

    Great article…

  36. Iyabo alli

    April 2, 2014 at 8:42 pm

    Hey that’s my picture in the blue. Great article. Love it!!!

    • B!

      April 11, 2014 at 1:42 am

      Wow ! Really?!! You’re gorgeous girl!!!

  37. Mina

    February 16, 2015 at 4:37 pm

    It would be very difficult for a 50k earner to apply this principle in the same manner as a 500k earner. After tithing (christian principle which i believe in) and you are left with 45k.. If you save 4k, you would still go back to your savings and clear it cos the cost of living is darn so high. No matter how cheap you feed and clothe, then your weekly transportation! A 100k earner basically saves for his landlord.

  38. Jael

    November 8, 2015 at 9:28 am

    Arese has some good ideas, unfortunately they only asy to less than 3% of the total working population in Nigeria.

    Her advice would be better appreciated if she used more realistic examples, perhaps the N18,000 minimum wage/NYSC chappie (68% of working population), the N55,000 bank teller (19% of working population) or, to be generous, the N130,000 (7% of working population).

    Picking on the 19% being the mid-range percentile and Alero’s bank salary:
    Rent: 200,000 p.a = 16,000 p.m
    Transport: 650/day = 15,000 p.m
    Feed &sundry living expenses = 13,000
    I would love her to invest in land or other assets (and I refer not to a Chanel bag) @ 3,000 p.m savings.

    On to the 7% percentile. If Alero gets a new job or a raise to earn this much we assume she would have more disposable income if her expenditures remain unchanged. This , of course, would never be, so let’s determine her monthly savings:
    Rent : 400,000 p.a = 33,000 p.m
    Transport : 22,000 p.m
    Feed & sundry living expenses = 50,000
    Savings = 25,000 p.m. Not enough to buy land but enough to invest in term deposits and some low level bonds.

    In conclusion, Arese should either adjust her projections to reflect the true status of our work force otherwise she should restrict her advice to Smart Money (Not For Earners Below N300,000 p.m)

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