In Nigeria, one of the most important things many Nigerians fail to understand about investing is that their strategy should not remain the same throughout their lives. What works for you at 30 should not be the same thing you are doing at 60.
Your age, responsibilities, and how much time you have before you need your money should all shape your investment strategy. This is often called the life cycle approach to investing.
When you are younger, you have time on your side, so you can afford to take more risks, because even if things go wrong, you still have many years to recover, as your investments have more compounding periods. This is the ‘Accumulation stage’, which many people in their 20s and 30s are in. At this point, the focus should be on aggressively building wealth.
For example, a 30-year-old banker in Abuja earning around ₦350,000 per month can afford to allocate a large portion of his savings to the stock market or real estate. With inflation currently hovering around 15.8 percent, keeping too much money in savings accounts or low-yielding fixed deposits will only make him lose purchasing power over time. The accumulation stage is the time to focus on growth and reap the benefits of compounding.
