A Fixed Income Expert shares thoughts on how to grow one's net worth

A Fixed Income Manager, identified as Igho Alonge on Twitter, recently shared some insights on how to grow one’s net worth. The information contained in Mr Alonge’s Twitter thread is very valuable and should be read by all. So, we are sharing here for your learning pleasure. Enjoy.

Some thoughts on growing your Net Worth:
Starting out, a high income is the one ingredient that will get you moving the fastest. Keeping expenses low is important, but even a low annual spending of N2m won't get you anywhere with a N2.4m annual salary [N200k per month].
— Igho Alonge 💼 (@Ighodaro1) April 12, 2019

Some thoughts on growing your Net Worth: Starting out, a high income is the one ingredient that will get you moving the fastest. Keeping expenses low is important, but even a low annual spending of N2m won’t get you anywhere with a N2.4m annual salary [N200k per month].

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Some thoughts on growing your Net Worth:

Starting out, a high income is the one ingredient that will get you moving the fastest. Keeping expenses low is important, but even a low annual spending of N2m won’t get you anywhere with a N2.4m annual salary [N200k per month].

Investment returns won’t do much either. A 12% return on N400k is only N48k for the whole year. A lucky stock investment of N40k that triples in value will only be worth N120k. Keep investments simple by investing in Mutual funds & focus most of your energy on increasing income.

Side hustles can be helpful in boosting income if you’re low on the career ladder. Look for niches where you can solve people’s problems. Tutoring, freelancing, consulting in narrow fields can be lucrative. Focus aggressively on growing your income. A new skill could help a lot.

Patience and hustle are required to stack the first N30m. After that point, a simple 12% return on your N30m would be N3.6m. At that point you can diversify your investment portfolio and earn noticeable returns that will pull your net worth higher at a considerable rate.

In general a high income will boost your net worth in the short term (<10 yrs) and investments will grow net worth to crazy amounts in the long term (30+ years) due to compound interest. Wealth building is a flywheel. Annoyingly slow at first then shockingly fast in later years.

Thank me later!