How to make money investing in 2022 if your income is low


How to make money investing in 2022 if your income is low


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The fact that a significant number of Nigerians earn relatively low income is no longer news as Nigeria’s Economic Summit Group, NESG, has disclosed that 91 million Nigerians now live below the poverty line.

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Nevertheless, many Nigerians assume investment is for the wealthy and accomplished. The popular belief, especially among young people, is that investing is considered for people who have made millions of Naira. Others think investments should be considered after a person has earned a decent income.


Consequently, Victor Ofili, Head of Research and Strategy at Cowry Asset Management, spoke exclusively about the importance of such earners in having exposure to quality penny stocks at good prices.

“When was the last time you bought an item in Nigeria for N0.20? Yes, twenty kobos. Or where in Nigeria can you find such a market?

“If in doubt, I suggest you look at the Nigerian Exchange. Yes, the stock market can accommodate low-income savers depending on their time horizon and level of patient capital at their disposal and I will recommend penny stocks for this income group.”

“This is because, with a little amount of savings, you can accumulate a significant quantity of shares of quality, fundamentally sound companies at near rock-bottom prices. This principle of buying low and selling high applies to other assets such as commodities and real estate. In 2021, a number of good penny stocks gave excellent returns in excess of 100 percent in less than 12 months,” Ofili said.

Adding to this, the investment banker mentioned stocks that fall in such category thus have good fundamentals:

“Good examples include Regency Alliance Insurance and University Press Limited which gave returns of 132% and 130% respectively. “

“This year, I recommend both of those stocks in addition to shares of Transnational Corporation of Nigeria. In the banking space, you can go for shares of Fidelity Bank. To enjoy astonishing returns, it makes sense to buy stocks when prices have crashed so that you can attract attractive dividend yields in addition to high potential for capital appreciation,” he added.

Ofili concluded by explaining why investors should consider mutual funds because they can reduce unsystematic risks by investing in a diversified portfolio of stocks across sectors.

“If you don’t have time to manage your investments, you can subscribe to mutual funds which are professionally managed and can accommodate investors with low savings. Contact your investment adviser for more investment ideas in the financial markets,” he added.

Solomon Ogene, Multi-Asset Portfolio Manager at Paragon Partners, explains that investing is not a sprint, but a marathon, regardless of your earnings. “You must be consistent and persistent,” he says.

He further buttressed the need for such investors to gauge their appetite for risk before taking such route, as this is particularly important as different investment options have varying levels of risk and as such, matching risk profile with actual investment undertaken is key,

“An honest answer to this question will determine the investment options that would be best for you.

“For individuals with high-risk tolerance, it means they can undertake investments in the Equities markets (stock market) where the risks are higher and potentially, the rewards.”

He advised such earners via their investment bank can have exposure to debt instruments of either a sovereign (country) or corporate that pay periodic interests to the holder throughout the life of the instrument.

Bottom line
The need to invest increases as your income decreases, contrary to popular belief. The reason is that investing can provide a second source of income.
The process of investing involves committing resources to something in order to reap rewards of greater value. You can commit your resources and earn returns no matter who you are or how much you earn. Your money works for you when you invest.
You should invest based on your willingness to work hard, rather than how much money you earn. The amount of money you earn should not dictate how you invest, instead, it should serve as a motivation to invest.
Assessing your financial strengths and weaknesses will help you set goals and determine the most appropriate investment vehicle for you if you are a low-income earner


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