Q&A: How Can I Begin to Invest: I Have N100,000 to Start?


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Now to the main issue: your investment inquiry. To start with, N100,000 is a lot of money to start with, so, don't play down on the amount. We encourage even those that don't have a tenth of that. Just N1,000 enough to start off somebody who is not lucky to have much more. Yes, say that to your friends too, because it's in their interest to start doing something about tomorrow.

With N100,000, you are already poised to be a big and (I expect) growing stockowner. Five things I think you can immediately do:

  1. Don't look back about learning to how invest and about stocks and other investment instruments in the financial market. You need knowledge to do well and it's a continuous process. If you desire to earn good returns, you must continue to improve on what you know and shouldn't be lazy about that process. So, keep reading up. On our website and some others, you will find valuable resources to help you. There are also important investment books, some of which we offer for sale on this website. Learn as much as you can. If there is an avenue you want to make good money from, it shouldn't be too much to expect you to learn about it, should it?
  2. Stay informed. In addition to reading about the principles and techniques that work, you need to follow the market to know what is happening to companies: what products they are launching, what factories they are building or commissioning, what disasters affect them, what profits they are declaring etc. As you will learn, the value and market price of stocks is very much affected by what happens to the companies. Just by listening to financial news, reading from newspapers or online information sources and by following what is happening, you will get to know companies that make for potentially profitable investment or the reverse. That's important for your investment success.
  3. It will be helpful if you draw a plan for your investment project. It is a big project and I'm sure you know that projects usually have a masterplan, to succeed well. If you have access to a financial planner, he will help you. Otherwise, your stockbroker can guide you. At the worst, sit down and try to work things out. Investment planning will help you map out your goals and how to work to achieve them. It is best if you have a clear idea of what you aim to achieve. That will help to give the focus you need and also provide drive. Such plan should have timeframes for achieving certain milestones. That's the most assured way to propel aggressive growth: if you are starting off with N100,000, as stated, what would you be aiming to have, say by this time next year? And in five years? Do your homework, to help you realize the full potentials of the process.
  4. You need a stockbroker to work with. It's stockbrokers that buy or sell stocks for you. Your stockbroker may also be willing to teach you some things. Knowledge is power, you know. Now, be sure to select a good broker. Firstly, be sure to choose one that is licensed. Check the list at the official website of the Securities and Exchange Commission (SEC) which issues the licenses. You can also check on the prospectus of any of the on-going share offers. Usually, stockbrokers that are authorised to receive shareholders' applications are listed on the back page as authorised receiving agents. It will be reasonable to believe that any stockbroker allowed to receive subscription money on behalf of the company will be a licensed stockbroker. Your best bet is however to check with the SEC.
  5. All said, you most need to get started. Having identified a reliable stockbroker to use, go open and fund an account with them. Then agree some stocks they should buy for you and give them the mandate to do so. Begin to watch the market just by following developments that affect the companies you have invested in and others that you may be targeting. As time goes, you are likely to take decisions to buy into new companies or more of the old ones, or to sell and switch. All these will become part of the process you will grow into and which will become a habit with time.

Wishing you successful investing.

brian tracy
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