Investment and Retirement: The Nigerian Story (A conversational Series)

Editor At Oriental News

Anchoria Asset Management had its second edition of the Financial Fitness Chat on LinkedIn yesterday 14th of October, 2020. The topic of the chat session- Investment and Retirement: The Nigerian Story, provided participators with a one-on-one assessment and answers to questions pertaining to retirement and long term investment plats.

The Financial Fitness Chat session helped participants understand the principle of planning for retirement which revolves around knowing what short term goals are vis-a-vis retirement goals.

In a conversational chat tone, Ms Ete Ogun, MD of Anchoria Asset Management Limited was able to engage participants on the group and provided bespoke responses during the session:

Typically investment plans for retirement should be low risk, I am curious about what your Investment management strategies are?

The strategies are client dependent as we are in all in different life stages. Whilst investment plans for retirement are low risk, one can create a portfolio with mixed risk pre-retirement.

Might not be a popular opinion, one would have thought investing in real estate will secure a peaceful retirement? But with new land charges, tariffs and unplanned governmental charges (at lease in Nigeria), is real estate viable as a retirement plan?

Real estate may not qualify as a standalone because of its illiquid nature hence diversification of assets is advisable.

What investment can a Nigeria in diaspora invest in towards long term plan like retirement and business investment?

The investment plan for retirement is a wholistic one that considers personal circumstance ie age, number of dependents, current income earn, projected income growth to determine how best to position investment portfolio. Thing to remember is the younger one is the more risk aggressive one can be and the older one is the more risk averse one should be.

See Questions And Responses At The Event

1.   I have a Pension scheme I am running now, is it possible for me to switch?

2.   How often will I be receiving interest on the pension fund?

3.   When can I have access to the fund?

On the first question, National Pension Commission had earlier announced an opening of the transfer window for June 2020. However at the moment the window for transfer is not yet open

Secondly, your pension contribution is handled like a unitized scheme ie you get in at a certain price and determine your return based on current day price

With regards to the final question, the instances are 4 months without a job subject to a maximum 25%, attaining the age of 50 with proof you are no longer in service and relocation.

Thank you. Now these are, as you said, individual related. How about external factors that an individual has no influence over? Regulatory factors, etc.

You can only plan around external factors but there is no accurate predicator of what the external factor can be. I mean no one predicted Corona Virus and its effects on investment.

What an investor needs to do is to diversify your portfolio in a way that allows for flexibility when the need arises hence reevaluation of portfolio is done at least annually.

Will my Pension be enough to see me through?

This depends on how much you have put away. Like farming, the more seeds you plant the better or plenteous your harvest should be.

General knowledge session

This engagement is really around saving for retirement. When does anyone need to start saving for retirement – NOW!!! There is no time like the present to start working towards the sort of retirement you envisage. Everyone who gets any flow of fund either as a student, a Youth Corp member or a young worker can begin their plan for retirement immediately. You do not require loads of cash to begin only a zeal and discipline to constantly put money aside.

Things to consider for retirement planning are circumstances peculiar to an individual such as:

·         Age

·         Number of dependents

·         Stage in career

·         Business ownership

·         Living with disability

How long before retirement?

Typically, investors with more than 15-20 years should have more risky portfolios than clients with less than 10 years.

It is good to employ the services of an expert especially if you do not have the required knowledge. However, you must always make it a point of duty to get your portfolio statement at least every quarter to keep abreast of happenings. Also, I know that many people are fixated on returns but please do not gamble with your retirement benefits.

This advice is for retirees or those close to retirement in less than one year – Do not invest in a business that you do not understand the full cycle of the business. You are better off sticking to what you know of otherwise let a financial advisor guide you through investing in financial instruments.

Make it a habit to put away money in registered schemes and really this is just to safeguard your funds Like the old saying – Little drops of water make a mighty ocean in due time. Financial Planning is very important for retirement planning. Your wealth creation partner is also very important Discipline to stick to the investment plan is perhaps most important Prudent Living.

You can also invest in startup companies of family and friend but always ensure that your engagements are legalized and where necessary appropriate collaterals are provided.

Also remember that your retirement doesn’t begin and end in one day. It means from retirement to the rest of your life, so you want to plan for the sort of lifestyle that you want. It’s always to reduce spending to purely basic needs for self and possibly partner.

You may also get insurance to enhance your return position.

At Anchoria Asset Management Limited, we are committed to partnering with you along your wealth creation journey. Our access to various investment options makes us a viable partner to handle your investment solutions.

As we countdown to the end of another session, I will like to note the following:

·         You can invest from your monies as long as they come periodically ie weekly, monthly , quarterly

·         Everyone should work on financial fitness as long as you can afford a phone and data; it’s like exercise, difficult at the beginning but beneficial into the future. More importantly, it gives you freedom.

Thank you for the time spent. I do not take it take it for granted. Please be safe (Health and otherwise) You can drop your question still. Have a beautiful day and nice rest of the week.

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