My N7m – To spend on MBA or invest?
I have N7 million in my bank account right now and I need advice on investing this. Which risk free investment do you think I can go for and that will earn me a very good return? I intend to have at least N15 million from my savings by December 2015 and I am thinking of going for MBA in an ivy league school with it or would you advise me to forget about the MBA and invest the money? I believe the MBA would give me an edge into IB or PE but is my age not going to be a hindrance by then? Aside that I have a building project at hand which will cost me about N6 million but this will not in anyway affect the expected N15 million or the N7 million I have presently. I would love the gurus in the forum to please give me an advice if they were to be in my shoes.
Case treated by JarusHub Investment Specialist:
(Over 20 years investing experience in Nigeria’s financial markets)
I must commend you for your discipline and foresight by investing in real estate and saving about N7 million at an early age. But I am sorry I do not know any risk free investment that will turn your N7 million to N15 million in 24 months. Turning N7 million to N15 million in 2 years, can only occur in a business venture that will guarantee 46% annual return.
The investments that can give you this type of returns are not risk free, from the tone of your letter I know you are risk averse and I will not advice you to invest in assets and ventures which I invest in.
I will advise you to seek moderate returns of about 15%, this should grow your N7 million to about N9.25 in 2 years. Or you invest in real estate through government estate schemes, although you may not be able to convert to land to money immediately when you are in need of money.
I love education and knowledge, but I will not advise you to use the accumulated funds from your investment for the MBA programme. If you must use N15 million for your MBA, you should have more than twice of that amount in investments. Why not try Lagos Business School, or any other MBA programme that will cost about N5 million.
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Thanks for the swift reply sir. I really appreciate this so much. Please note that I am not planning to turn the N7 million to N15 million. What I am saying is that by Dec 2015, I will have N15 million in my bank account as savings if I continue with the pace I save now from my income. So what I am asking is instead of leaving all these money idle in the bank account, I would like to invest it in a risk free investment where I can earn minimum 10-15% p.a.
I will also think about using a fraction of the N15 million for my MBA as advised, I really thank you so much for the insight.
If that is the case tell your bank to invest your N7 million in treasury bills, this will give additional 180k every 91 days or about 750k in a year.
This, really is the beauty of savings and investment – Not eating with all of your five fingers and managing money to yield adequate returns
As a someone just starting out on his career path, it’s quite encouraging to read about the discipline, patience and prudence with which experienced people like Messrs Michael and Emmanuel Ewumi have been handling their respective financial resources.
I also think Mr Michael would get more from his investment in risk-free instrument by ‘rolling-over’ (re-investing) the interest with the principal at the end of every investment period. I mean, he would gain more if he were to be rolling-over the interest with the principal, than just rolling over only the principal amount.
He is a smart guy, I am very sure he will roll-over both the principal and the interest.
Good question and good answer…thanks Mr Ewumi for always being there
i work in a mortgage bank . i can help you out in terms of property investment. thank you.
my number is 07056124139, 08120160199.
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