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Ray Dalio, one of the prominent names in finance, is a big mentor of mine. He is the founder of Bridgewater Associates, the largest hedge fund in the world, managing $160 billion in assets.

I regularly watch videos of his interviews. I follow his social media pages and recently read his book ‘Principles’. When listening to him, I always look out for words of wisdom I can replicate in my personal life, or investment advice that can be useful even in a country like Nigeria.

He was asked what advice he would give to young investors of our generation and below is a summary of the three major points he made. This advice can be used in any country.

Money Market Investment

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Prioritize Savings

Saving is a very important habit to develop as it can be the difference between becoming financially secure and living in penury. We all know why it is important to save, however practising it, in reality, is a different ball game.

There are critical questions you will have to ask yourself to ensure you save properly and put yourself onto the right path of financial freedom:

  • How much do I spend each month?
  • How much do I have saved?
  • How many months will I be okay with the savings if I stop earning?

The important thing is for you to observe your spending patterns, calculate it, cut down on unnecessary expenses and be very meticulous about the whole process because savings is freedom and security.

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In addition, we have to be cautious about debt. Debt for consumption is bad; however, debt being put into productive use is better, because it produces forced savings which is good.

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Learn to save well

Savings is the first part of the game. The next step is to determine how to save well.

What should I put my savings in?

You should understand that cash is the worst investment over a period of time, so you judge that by looking at the rate of inflation in relation to the after-tax income you will earn.


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If the inflation rate in the country grows at an average of 11% and you are earning 4 or 5% on your savings in a bank or somewhere else, then your money will be worthless and less, as you are shortchanging yourself.

To overcome the impact of inflation on the value of your money, you have to move into assets that will do better than inflation over a long time. You will have to do this by diversifying your savings and investing in different countries and asset classes.

Picking the right country to invest in is a big deal and may require expert advice so you don’t become susceptible to a total loss of funds because some countries carry political risks. There are various types of asset classes and you will have to choose the right balance between variable income instruments and fixed income instruments.


Don’t follow the crowd.

Herd mentality is real, and no matter how knowledgeable you are, it is always difficult to go against the crowd. However, in investing, the crowd is seldom right so you have to buy some assets when no one is buying or sell when no one is selling.

Finally, you should be aware that you will encounter losses along the way, as the value of your investments will fluctuate over time; however, the key is to have the emotional stability to be prepared to be in the game for the long haul, as the best returns in investing come from compounding.

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