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Home Economy Personal Finance

Means of Growing Your Income in Nigeria

by Latifat Fashina
May 14, 2025
in Personal Finance
0
Here’s how you can grow your income in Nigeria today
Personal finance

Personal finance

UBA
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With the rising cost of living in Nigeria and employment opportunities becoming more competitive, many Nigerians are seeking innovative ways to grow their wealth. 

As the nation grapples with economic hardship and the shrinking of the middle-class, it has become imperative to explore untapped opportunities.

Whether it is leveraging the booming real estate sector, or investing in emerging technologies through innovative companies, there are practical ways to build wealth and achieve financial independence amidst these challenges.

Here’s how you can grow your income in Nigeria today:

1.   Treasury Bills (T-Bills):

Risk level: Low

Potential returns: 2 – 15%

Treasury bills are short-term debt instruments issued by the Federal Government of Nigeria through the Central Bank of Nigeria (CBN).

T-bill is typically lending money to the government for a short period of time, it could be 91 days, 182 days or 364 days, and earning profit on it through the discount issued.

For instance, you buy a treasury bills of N1,000,000 with a maturity period of 91 days at a discount rate, you will pay less than N1,000,000 (e.g, N975,000). At the end of the 91 days, you will receive the full N1,000,000, earning a profit of N25,000.

Why invest in treasury bills?

Short-term investment: The maturities range from 91 days, to 364 days.

Low risk: T-bills are backed by the Nigerian government, making them risk-free.

Discounted Purchase: T-bills are issued at a discount, and the difference between the purchase price and the face value is the profit.

Fixed returns: The returns are already determined during purchase and not affected by market fluctuations.

How to invest in treasury bills

Open a CSCS account: You need to open a Central Securities Clearing System (CSCS) account and bank account to trade treasury bills.

Choose a stockbroker: Research and select a licensed broker. Most commercial banks and brokers facilitate T-bill purchase.

Participate in the Auction: Select T-bills according to your financial goals from the available investment options

2. Bonds:

Risk level: Low to medium

Potential returns: 10 – 15% annually

Bonds are fixed-income securities that involve lending money to a borrower (government or company), in exchange for periodic interest payments and repayment of the principal amount at the end of the bond’s term.

Why invest in bonds:

Steady income: Bonds pay regular interest, providing a predictable and steady income flow.

Low risk: Government bonds are one of the safest investments as it is backed by the government.

Capital preservation: Your capital is returned at the end of the bond term, without default.

How to invest in bonds

Choose a bond type: The Federal government of Nigeria bonds are known for safety, while corporate bonds could provide higher returns, choose base on your goal and risk level.

Open a CSCS account: The Central Securities Clearing System (CSCS) account can be opened through a broker or financial institution.

Find a broker: Research and select a licensed broker.

Invest in bonds: You can invest in FGN bonds through participation in monthly auctions via the Debt Management Office, or buy from the secondary market.

3. Mutual Funds:

Risk Level: Low to medium

Potential returns : 5% to 25% annually depending on fund type

Mutual fund is a group investment where professionals gather a pool of funds from many investors and invest it in different financial assets like stocks, bonds, treasury bills, or bonds, depending on the fund’s goal and it is managed by a professional fund manager.

It is just like teaming up with others to invest, with an expert guiding where the money goes.

Why invest in mutual funds?

Affordability: Investment in mutual funds does not necessarily require large sum as some mutual funds allow investments as low as N5,000

Liquidity: It is relatively easy to withdraw funds when needed.

Professional Management and Diversification: It is managed by a professional and the funds are spread across different assets, reducing the risk of losing all.

How to Invest in Mutual Funds?

Understand your goals: Are you saving for school fees, retirement or a short-term project choose mutual funds that align with your goal.

Select funds according to your risk level: Compare funds based on performance, fees, and risk levels.

Register with trusted asset managers.

Monitor your investments: Keep track of funds performance, though it may grow slowly over time.

4. Dollar-Denominated Investment:

Risk level: Low to medium

Potential returns: 7 – 20% annually

Investing in dollar-denominated investment provides a hedge against naira depreciation, as its value is tied to the dollar.

Examples of dollar-denominated investments are eurobonds ( these are bonds issued in foreign currencies, especially the U.S dollar), dollar mutual funds, U.S stocks and assets.

These investments allow Nigerians to earn returns in U.S dollars, offering a reliable way to grow wealth in a volatile economy.

Why invest in dollar-denominated investments:

Hedge against naira depreciation: It protects your investment against naira depreciation.

High returns: Some dollar investments offer higher returns than naira-based investments.

Access to the global market: It provides access to international markets and opportunities.

How to invest in dollar-denominated asset

Open a dollar account: You can use a domiciliary account or licensed fintech apps.

Choose investment type: Decide between eurobonds, stocks, mutual funds, or real estate based on your goals and risk intolerance.

Fund your account in dollars: Change naira to dollars through your bank or Bureau De Change (BDC).

Invest: Buy assets of your choice.

5. Stocks:

Risk Level: Medium to high

Potential returns: 10 – 50% annually

Investing in stocks, also called shares or equities, means buying a portion of ownership in a company. For instance, a company has 100,000 shares and you own 1,000 shares, that means you have 1% ownership in the company.

As the company you invest in grows, your investment appreciates. It is important to note that the stock market can be highly volatile, therefore, if the shares of the company falls, your investment shrinks.

Why invest in stocks?

Aside from capital appreciation, you can also make money from the stocks you own through dividends and bonus shares, without selling the shares.

Some companies pay part of their profits to shareholders at the end of the financial year or interim dividend.

While some companies could decide to reinvest part of their profit to create new shares and then reward shareholders with these extra shares as bonus.

Also, stocks have higher growth potential compared to savings or fixed deposits.

How to invest in stocks

Choose a stockbroker: Research and select a licensed broker

Open a CSCS account: This is a Central Securities Clearing System account.  Investors have to be registered on the CSCS to participate in the Nigeria Stock Exchange.

Research and Invest in companies: Understand the financial performance and prospects of companies you want to invest in.

Monitor your investment: The Nigerian Exchange Group and stockbrokers on companies provide information valuable for tracking a stock’s performance.

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Latifat Fashina

Latifat Fashina

LATIFAT FASHINA is the Business/Finance Reporter at Techeconomy. She can be reached via: latifat.fashina@techeconomy.ng

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