• Making extra money in 2018 should be the priority of everyone, regardless of whether you are an entrepreneur or you want to engage in a side hustle.
  • As is often the case, the types of investments you can invest in, the risk and likely return you can earn, are pertinent questions everyone wants answered.
  • As part of our New Year money tips, Nairametrics presents our top investment options for 2018.
  • These investment options are for anyone – whether you have a job already or a business that you already make money from.
  • See them as opportunities to make even more money in 2018.

Equities

This means investing in the Nigerian stock market or as most will like to say, “Buying and selling shares”.

Investment Case: In case you did not know, the Nigerian Stock Exchange returned 42% in 2017 and was one of the best performing stock markets in the world. Stocks have been rallying mainly because foreign investors have resumed investing in Nigeria. This has created an appetite for investing in stocks, resulting in an exponential increase in market their values. This trend is likely to continue in 2018.

2017 Performance: The top 5 stocks this year made between 186 and 227% return in 2017 alone. So, if you had invested in those stocks early in the year and held on till the end, that is how much you would have made. Also, 73 stocks posted positive returns in 2017 as against 38 that reported losses, while 63 stocks posted zero returns. Out of the 73 stocks that posted positive returns, 66 of them posted double digit returns.

Likely risk: Investing in equities is still considered risky by some people, which is understandable. The risk is that you might invest in a stock and lose all your money. However, you could mitigate this risk by careful stock picking and tracking every bit of information about the stock that you buy to ensure that you know when to sell or even buy more.

Likely returns: You can make between 5 and 200% per annum from investing in stocks.

Period: 6 to 12 months

Who is it for: Anyone looking for high returns on their investment but with controlled risk


Cryptocurrencies

This means investing in digital currencies such as Bitcoins, Ether, Litecoin, etc.

Investment Case: Cryptocurrencies are considered to be the future currency of choice for the digital world. Apart from speculators looking to cash in on the rise in values, others see this as the future of money or facilitating transactions, thus they believe that the value will only continue to appreciate.

2017 Performance: Cryptocurrencies posted the best “returns by an asset class” in the world in 2017. Its flagship currency, Bitcoins, returned about 1000% in 2017 as demand surged all over the world. Interesting to note that at 1000% return, Bitcoin did not make the top 10 list of Cryptos around the world with best return in 2017. It was a distant 14th

Likely risk: Cryptocurrencies are also the riskiest investments out there. They are highly volatile and often incur huge price swings on a daily basis. There are also many of them out there, some of which are likely scams or may never appreciate in value.

Likely returns: You can make between 50 and 300% per annum investing in cryptocurrencies.

Period:  3 months to one year.

Minimum amount: We recommend starting with $500.

Who is it for? Anyone with a huge appetite for volatility induced risk and return


Treasury Bills

This is a government short dated fixed income security that is offered for 91 days, 182 days and 364 days tenors.

Investment Case: Treasury bills are one of the safest investments for anyone with loose cash who is looking to save towards the future. The returns are steady with interests paid up front.

2017 Performance: It was one of the most popular investments in 2017 due to the high interest rates it attracted in the early part of the year. Interest rates were as high as 20% for one-year treasury bills. It dropped to about 15% by the end of 2017.

Likely risk: Treasury bills have zero risk as the government is not expected to default.

Likely returns: You can make between 10 and 15% per annum in 2018.

Period: 91 days, 182 days and 362 days.

Minimum amount: N1 million and above; anything less is not worth it.

Who is this for: I have idle cash for the short term, want to invest myself but hate risk


FGN Bonds

This is a government fixed income security that is offered for 2 years, 5 years, 10 years and 15 years tenors.

Investment Case: FGN Bonds are one of the safest investments in the country as they are guaranteed by the government. They are recommended for anyone with loose cash who is looking to save towards the future, and earn a fixed income over a long period of time. Interest is paid biannually and annually.

2017 Performance: FGN Bonds yields were high in 2017 as government increased their level of borrowings to fund the budget. The more government wants to borrow, the more it is willing to pay as interest. The 2018 budget is also expected to be financed mostly with debt, some of which will be naira debts.

Likely risk: FGN Bonds have zero risk as the government is not expected to default.

Likely returns: You can make between 13 and 18% per annum in 2018.

Period: Minimum of 2 years though you can sell whenever you want.

Minimum amount: Anything less than N1 million would not yield meaningful profit.

Who is this for: I have idle cash for the long term, want to invest myself but hate risk


Corporate Bonds

These are company offered fixed income security that is offered for 2 years, 5 years, 10 years and 15 years tenors.

Investment Case: Corporate Bonds are offered by large corporations looking to borrow money from the public in exchange for periodic interest payments. They are recommended for anyone with loose cash who is looking to save towards the future, and earn a fixed income over a long period of time. Interest is paid biannually and annually.

2017 Performance: There were a number of corporate bonds issued in 2017. Notable ones include Dufil, Forte Oil and Lafarge and they have all issued corporate bonds in 2017 at rates between 17% and 19%. None of these companies have defaulted in meeting their repayment obligations.

Likely risk: Unlike FGN Bonds, Corporate Bonds do not have zero risk. However, the companies issuing the bonds are assigned credit ratings by rating agencies. The ratings are reviewed periodically.

Likely returns: You can make between 15 and 18% per annum in 2018.

Period: Between 3 months and 10 years. You can also sell whenever you want.

Minimum amount: Anything less than N1 million would not yield meaningful profit.

Who is this for: I have idle cash for the long term, want to invest myself but can take on moderate risk.


Mutual Funds

This is basically giving your money to experienced fund managers to invest on your behalf in exchange for high returns. You also get to pay them fees for this.

Investment Case: Mutual funds and other types of funds such as Exchange-Traded Funds (ETFs), Real Estate Investment Trusts (REITs) are viable investment options for anyone who has the cash to invest but no time to manage and monitor their investments.

2017 Performance: Data from the Security and Exchange Commission reveals that most mutual funds performed relatively well in 2017. Net Asset Value rose from about N215 billion at the end of 2016 to about N401 billion by December 2017.  Returns ranged from between 17 to 49% per annum in 2017.

Likely risk: The risk of investing in mutual funds, or any funds for that matter, is that your investments may not be managed well. This can result in very little or no returns. It can also lead to loss of capital, even though this is highly unlikely. You also get to pay the fund managers fees whether or not they make money for you or not.

Likely returns: You can make between 9 and 14% per annum in 2018.

Period: 3months to 12 months. Though you can sell whenever you want

Minimum amount: At least N50,000 monthly.


Real Estate

This means buying and selling real estate, or owning one in exchange for rental income.

Investment Case: Investors in real estate point to the fact that real estate investment has always been a perfect hedge against inflation. They also suggest that it inherently has very strong capital appreciation over time. Some people prefer to purchase land in choice areas, hoping that in a few years’ time, property values in these locations will more than quadruple.

2017 Performance: There is no official data on performance of real estate in the country.

Likely risk: The risk of investing in real estate, relates mainly to fraud and falling property values. Due to the difficulty often encountered in verifying who owns properties, most investors end up buying real estate that are non-existent or owned by someone else who is not the seller.

Likely returns: If you are buying a property to rent, then expect rental yields to be anything between 2 and 6% per annum. This means a property worth N100m will likely fetch you rent of N2 million per annum. It is interesting to note that property yields are often inversely proportionate to property values.

Period: Long term

Minimum amount: You should have at least N5 million. Your initial capital is also dependent on the location of the property.


Collective Investment Schemes

This is basically pooling funds together with your friends and family and giving same to a professional to manage on your behalf or you manage yourselves. For example, Investment Clubs, Cooperatives etc.

Investment Case: Collective investment schemes are very attractive to investors who are looking for higher returns on their investments from a diverse portfolio. CIS schemes can invest in real estate, equities, bonds, cryptocurrencies, farming or any business they deem fit.

2017 Performance: There is no official data on performance of real estate in the country.

Likely risk: The risk of investing in CIS is that the fund managers could mismanage it and rather than get the higher returns that you expected, erode the value of your original investment

Likely returns: Returns are typically set by the owners of the CIS. We have seen some gun for returns as high as 25% annually. Some CIS also have lock-up periods for paying dividends, preferring to reinvest their profits compounded over a period of time.

Period: Long term

Minimum amount: Most CIS make monthly contributions of about N50k monthly.

Making any of these investment choices is dependent mainly on your choices and the capital you have available to you. But no matter your decision, ensure that you earn more in 2018.


You will observe that there are no network marketing or multi-layer marketing schemes. We do not believe in such schemes and as such can’t list any here. We also omitted forex trading because we do not believe it’s a viable form of investments, especially in Nigeria.


Before you make that investing decision, make sure that whatever option you choose meet these criteria/rules;

  • I can check the value of my investment whenever I like, real time, online
  • The value of my portfolio is determined by the market and not by anyone or group of influencers
  • You can also check the value or price of the assets in your portfolio online, 24/7
  • You can liquidate your investment whenever you want and without restrictions
  • There are no middle men, except broker facilitated trading engines.
  • The market is regulated by government or self regulated by the internet community