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Michael Olafusi: 3 Money Mistakes Nigerians Make



Money Mistakes Nigerians MakeStraight out of university, a Nigerian youth wants three things: get a high paying job, travel to USA/UK, and buy a classy car. He then sets the foundation for a lifetime of bad financial decisions. Not that anything is wrong with wanting those things, the problem is the timing.

He wants it all in the next four years; so he sacrifices building a strategically focused career and acquiring skills of real value, for getting any job that pays the most today – even if it is not along his field of study or interest.

He consoles himself by saying he is just using the job to acquire enough money to go further his studies in the US/UK, and then makes the second terrible mistake of spending all he earns chasing foreign degree and travel pictures to show off on Facebook.

Finally, in between the job and the travel he buys a car using a flexible payment option or with financial assistance from friends/family. He has no long term strategic plan that doesn’t involve resetting his entire life every few years.

Every major decision resets his life – rather than build up strategically on what he has already. The high paying job is the first reset, cutting him off all his university study and field of knowledge. The car is another reset, emptying his bank account. Then the US/UK travel is the ultimate reset, he abandons all — job, car and career growth.

Not everyone follows that pattern completely, but most of us are guilty of that young man’s main sin: no long-term strategic plan that nicely builds up on all we achieve over time – especially as it relates to finances. Many of us suck at managing our money, and I want to help you break away from the common mistakes we often make in handling our money.

1. Following the Crowd
I see people blindly following the crowd. This is why most Nigerian youths have similar mindsets and unreasonable expectations straight out of school. They are more in touch with the crowd than with reality. It is, also, the main reason a lot of people went into MMM and other bad investment decisions. They hear family and friends talking excitedly about how they are making a killing from them and they hop along. A financially illiterate mind is the fraudster’s workshop.

How do you become immune to the crowd pull?

It starts with proper financial education, the same way we became immune to our grandparents’ superstitions by being educated. Regardless of your field of study and career path, you need to educate yourself on personal finance. You need to be able to distinguish between what makes financial sense and what doesn’t. That is the only way you will resist buying a car too early in life when you are daily inundated with pictures of friends in their new classy cars. That is the only way you will be able to see beyond the immediate returns people are getting from unsustainable pyramid schemes and understand that there are other more enduring ways to grow your money.

So, in a sentence, to avoid the mistake of following the crowd, arm yourself with financial education. If you need guidance on free and reliably ways to become financially educated enough to constantly make expert money decisions, just shoot me an email at [email protected]

2. Saving Wrongly
There are some, who either by nature or nurture, are able to resist spending their money recklessly. They make a regular habit of saving. Just that they commit another blunder: they save wrongly.

Is it possible to save wrongly? Yes, it is.

Mum said they bought the cow for her and my dad’s wedding for N900. That same cow now sells for over N250,000. Imagine she saved N900 that year in her bank account, today it will not even buy her a cow leg pepper-soup as the interest rate on money you put in savings account is negligible when compared to inflation (most banks even cancel any interest once you withdraw from the account more than twice in a month).

Whenever you use your bank account as your primary savings/investment account, you are saving wrongly. You might even be better off spending the money now on stuff you can sell in the future — like silverware, quality leather sofa and any other stuff with a life expectancy greater than that of a cow.

How, then, do you save wisely?

Have a proper investment account. If you are risk averse, do treasury bills and money market investment funds. If you can stomach some risk, then go for stocks and real estate investments. Just make sure you don’t hand that money to your bank, even if they say they’ll give you a good interest rate on fixed deposit account, it will still be way lower than what you’ll get from treasury bills.

3. No financial plan
If you don’t track your expenses, income and savings/investment, you are setting yourself up for financial failure. Any going-to-be-successful financial plan is built on actual historical data and forecast of periodic expenses, income and savings. Once you have put in place a structured approach of monitoring and controlling your expenses, you begin working on growing your income actively and passively. The difference between your income and expense, your savings, serve a dual use. One is to provide you a cushion for shocks that come in life — unexpected expenses and emergencies. The second is that it becomes the seed for growing your income passively via prudent investments, which is the biggest component of all the super-rich people’s wealth.

As a rough guide for you, here is my own financial plan that I have been using for years. I have it broken down into steps below:
A) Emergency Fund” I set up a high yield extremely easy to access bank account funded with my six months living expenses. It is my cushion for handling unplanned expenses and family emergencies. I don’t touch it unless it’s to cater for an emergency. And I replenish it as fast as possible. In a whole year, I might draw from it only two to five times.

B) Pay myself first: For seven years now, I have direct debit set-up on my bank account to transfer a set amount of money to my stocks investment account. And now that my income has grown over the years, I still directly move money monthly from my bank account to my investment accounts before buying any fancy gadget. How do I know how much to move? That is the use of having a historical record of your expenses; it helps you know what your typical monthly expenses are and be able to estimate how much you can save monthly without running out of money.

C) Material assets light, financial assets heavy. The one thing the fancy gadgets you buy do, right from the moment you pay for them, is drop in value. And that is the case with all material assets except land. Even the house on the land drops in value. So, I buy only the material necessities and put the rest of my money to work in the financial markets.

D) Investment portfolio mix. Based on my age, I have a mix of Nigerian stocks, US stocks, fixed income, commodities and speculative assets (forex, cryptocurrencies speculation). I am more aggressive in my investment mix because I am young and can realise the long-term returns that assuredly come with most risky assets.

And those are the money mistakes I see Nigerians make: following the crowd, saving wrongly and having no financial plan. I hope I have been able to help you identify the ones you are making and ways to fix them.

Photo Credit: Kiosea39 | Dreamstime

Michael Olafusi is a Data Analysis and Business Intelligence consultant and founder of UrBizEdge Limited, a leading data analysis company. He writes his inside out daily at


  1. Michy

    August 17, 2017 at 11:40 am

    This couldn’t have come at a better time. I’m currently struggling with managing my finances better so I can plan long-term.

    I will certainly make good use of these tips.

    • tiwo

      August 17, 2017 at 12:34 pm

      Treasury bills is the answer

    • Michael Olafusi

      August 17, 2017 at 6:42 pm

      Hi Michy,

      Glad you found it timely and useful.


  2. meah

    August 17, 2017 at 12:41 pm

    Thank you Micheal! This was so spot on. While I did save in my first few years of joining the work force and getting a decent pay in a field I love, I was saving wrongly as all my savings was ploughed into travelling and whatever was left was kept in my bank account. Now that I have more responsibilities, I realize I could have put my money in better yielding accounts to generate more interest. and oh, I’ve also realized that I dont have to go on ‘vacay’ every year.

    Experience is truly the best (and somewhat late) teacher.

    • ozyy

      August 17, 2017 at 1:30 pm

      same here abt vacay my pastor said recently (paraphrased) don’t be like the people who go to london and come back to start looking at faces. We should be financially intelligent/wise.

    • Michael Olafusi

      August 17, 2017 at 6:47 pm

      Lol @ the going on ‘vacay’ every year.

      The good thing is you can start now, if you haven’t already, and begin to plant the financial trees that will provide you and your children financial shelter. Like it’s been said: “The best time to plant a tree was 20 years ago; the next best time is now.”

  3. Ocean Beauty

    August 17, 2017 at 1:36 pm

    I swear by treasury bill anytime any day. I don’t understand how other kind of investments work and no one to even explain to me. For now, let me stick to the only one I know

    • Michael Olafusi

      August 17, 2017 at 6:53 pm

      Glad you already figured out what works well for you. If you, however, want to start building up your knowledge on the other investment types, you can check out the investment articles section on my blog.

    • Nuna

      August 18, 2017 at 8:24 am

      My dear we are thesame o. Treasury bills for me and fixed deposit for my son. I’m not greedy

  4. LostInSpace

    August 17, 2017 at 1:37 pm

    There are many risk free investments our there but many Nigerians will never take advantage of it. They prefer the MMM

    • Michael Olafusi

      August 17, 2017 at 6:54 pm

      That’s how powerful the crowd pull factor can be. 🙂

  5. HOPE

    August 17, 2017 at 1:49 pm

    This is great! I only became financial savvy after I met my partner. I am glad we met, I would have been lost. I am gradually learning and applying all these tips and hope to do more. Like you said, if you have the age, be more aggressive in investments.

  6. Zaine

    August 17, 2017 at 2:08 pm

    This is a very helpful write-up! My friend sent this article to me (she also got me the Smart Money book, bless her) and they both have me seriously thinking about investing my savings. The only obstacle so far is how. I am risk averse, so I’ll be more interested in treasury bills and money markets, although I can also consider other medium risk types. Any recommendations on investment banks?

    • Michael Olafusi

      August 17, 2017 at 7:02 pm

      Hi Zaine,

      God bless that your friend! Wish all my friends watch out that much for my good!

      Since you are just starting and not accustomed to taking financial risks, I’ll advice you start with money market. I use Stanbic Money Market and ARM Money Market mutual funds. You can visit anyone of them for proper advice just be careful that you don’t let anyone push into investing in something that will make you lose your sleep at night. Me, I am used to losing money in investments and waiting patiently to recoup my losses and make gain, without losing any sleep at night. Not everyone can do that.


  7. MO

    August 17, 2017 at 3:37 pm

    i practically took my pen to paper on this post, i agree it could n’t have come at a better time!
    Thank you Micheal !

    • Michael Olafusi

      August 17, 2017 at 7:02 pm

      Hi MO,

      Glad to hear that! You’re most welcome!


  8. Chynwa

    August 17, 2017 at 3:48 pm

    Pray tell… please how does tbills work in Nigeria. I’d been discouraged since someone told me that the minimum amount is 1m and my salary is far from that at the moment. Thanks again Michael for that tracking expenses stuff. Seem to do it well for everyone else except for myself. Any apps or tips that can help? Thanks

    • HOPE

      August 17, 2017 at 4:48 pm

      Naah, it is as low as 5,000 Naira. But it is not done monthly. I think quarterly, I am not sure. Just did the one for this month.

    • Michael Olafusi

      August 17, 2017 at 7:06 pm

      Hi Chynwa,

      You can go for money market funds. They provide just as much return and less restrictions than buying directly into Tbills. Currently, and for a long time, the best by performance is Stanbic Money Market fund. I use it and ARM money market. And you can open them with minimum of between N50,000 and N100,000.


    • Nwa

      August 18, 2017 at 12:32 pm

      Try Andromoney. That app has been a blessing to me.

  9. Ruhamah

    August 17, 2017 at 4:14 pm

    very insightful. Thank you

    • Michael Olafusi

      August 17, 2017 at 7:06 pm

      Hi Ruhamah,

      You’re most welcome!


  10. Nne Umu Boys!

    August 17, 2017 at 4:50 pm

    Minimum amount varies from bank to bank I think GTbank can do as low as 200k, find out sha.

    So T-bills is simply money you loan to the Government with interest. So say you bid to sell 200k and it goes through, you could get interest of up to 16% depending on the duration you choose. The minimum duration is 3months and maximum is 6months I think. Now the sweet part is that your interest comes immediately i.e. at the time they debit you, they debit less the interest and then pay back the full money upon expiration of the term. It is totally safe but please do it through a proper bank! Just tell your account officer, write a letter and thats it. Hope this helps.

    • Busarni

      August 18, 2017 at 2:50 pm

      Nah, actually maximum is 365 days. It has varying tenors; 91,181,365 days.

  11. gurl_wendy

    August 17, 2017 at 10:51 pm

    Ha, ha, this came in timely, was about to spend my last savings on a dirty 30 coming of age solotrip to Zanzibar, Ghana by road is looking more like it now.

  12. Mrs chidukane

    August 18, 2017 at 1:20 am

    Very insightful article though at some point I was seeing gggggghhhhhhhgggg… I’m very bad with finance articles.

    • Busarni

      August 18, 2017 at 2:52 pm

      Nne nwanyi , where have you been. I missed you ooh, kaa ooh., jo kwa. Have you heard from BUBU? Give us the 411 on him. Lol

  13. Chynwa

    August 18, 2017 at 7:17 am

    Nne, not to burst your bubble but even the Gh trip might be ‘cost’ but depending on your budget sha. You may wanna try all these tour groups eg. Irinajo, wakawithdebbie, unravelling nigeria or social prefect and tour some Nigerian region u’ve never been to. The trips are usually fun unless you enjoy solo trips tho…

  14. Chynwa

    August 18, 2017 at 7:19 am

    @Hope: thanks. Sure you aren’t referring to the FGN savings bond?

    • HOPE

      August 18, 2017 at 10:10 am

      Sorry, my bad. Yes, I meant the FGN Savings Bond which I heard has now replaced the Treasury Bills.

  15. alon

    August 19, 2017 at 2:11 pm

    Liked the article.I think that the most critical part of structuring your finances and optimizing savings is just having a plan. you have to get everything out in front of you so you can make smarter decisions. Once you do that, then implementing your disciplined savings strategy becomes critical.
    I use Geltbox Money- it doesn’t use any third party Aggregation site (the user can aggregate his own data without exposing private data to any third parties /web site).
    Geltbox has the ability to work with any financial institution in the world.

  16. Bade

    August 29, 2017 at 11:03 am

    Michael, how do you get exposure to US stocks?

  17. Bitcoinpromo

    October 6, 2017 at 2:10 pm

    Indeed! Michael is great at what he does! Found your recent piece on ALAT and COWRYWISE most intriguing… I had to backslide on a number of “”wants”” so I could get some good baby steps going and I am surely going to stick to the ‘latter’ plan. Please find a way to keep churning out the WoW in you! Telegram App inclusive.
    You already have my VOTE and SUPPORT if you ever appear on a POSTER!

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