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Financial Literacy

Employment strategies for startups

Here are a few employment strategies you should adopt as a startup.

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bad, loans, steps, negotiate, Tax Waivers for startups - Emotional intelligence

As a startup company, one of the tasks you should take seriously is recruitment, and this can be a bit difficult, especially when you are just coming to the limelight and don’t have a structure yet. You should be sure of the type of people you want to join your team and to do this; you will need some strategies which we’ve summarised into: knowing your company’s mission, vision, values and the type of personalities you want to recruit.

To elaborate further, here are a few employment strategies you should adopt as a startup.

  1. Put your finances into consideration before hiring
    It would be best if you thought about your costs and benefits before recruiting as a startup. Some of the questions you must ask yourself are; “Do I need to employ other people for this role? Will I get ROI after recruiting for this role? How beneficial is this person’s skill going to be for my organisation, etc.” You don’t need a large number of employees for your company to function well, all you need is the right talents, and you are good to go.
  2. Try outsourcing
    For one-time or short term projects, you can always use freelancers or agencies to get the job done instead of employing new people. For instance, if you need to create content or advertise your company, you can always use advertisement agencies or get freelancers who are good at the job.
  3. Have a good employee benefits policy in place
    To attract the best talent that will be loyal to you, you need to put a good employee benefits policy in place. Some of the attractive benefits that will help you to attract suitable candidates include compensation, bonuses, pension plan, HMO and overtime pay, amongst others. These benefits will make you attract the best people in the field despite being new.
  4. Take time to know your candidates
    As a startup company, you should be sure to employ the right people because your organisation’s growth depends on it. You need to take time with your recruitment process and get to know your candidates by taking them through a series of tests. You should also have an interactive session with them to get to know them better. Having the best team is vital. Many startup companies, when asked what their success stories are, always mention their team or employees.
  5. Make use of recruitment agencies
    As a new company, you might not have the time to do your recruitment yourself, and this is where recruitment agencies come in. Since it is their job, recruitment agencies take their time to look out for candidates and get the exact talents you need to get your company moving. Recruitment agencies such as EjiCareers help startups to recruit the best talents in Nigeria and also offer consulting services.
  6. Don’t rush it!
    We understand that you want to get your business going as fast as possible, but you have to be patient, especially with the recruitment process, to achieve the best result. Give your company enough time to recruit and carefully headhunt the best people to join your team.
    While there have been existing companies doing exactly what you do, you can surpass them as a startup by being strategic about everything you do. One of the aspects you should be strategic about is your recruitment process. Being a startup, you might not have a recruitment team setup, and that’s where recruitment agencies come in. They help remove the stress of getting the right people and help you focus on other areas.

ABOUT US

EjiCareers Recruitment Services is a Recruitment and HR Consulting Agency that prides itself on sourcing the best candidates for organizations in Nigeria. They have a team of recruiters who source for the pool’s best talents and make sure you get exactly what you want in a candidate. Their slogan is, “we choose the right fit for you,” and they do just that. You can contact them on 08097907735/09039926933 or check them out on LinkedIn and Instagram @ejicareers.

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Financial Literacy

How to invest for retirement

Planning for retirement means planning to reduce obligation in the future by investing today.

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How not to worry about money in retirement

“If you plan to retire in five years what should you be doing today?” That’s a question I got last week, and talking with the client, a lot came up which I have decided to share.

First off, What is retirement?

Nigeria’s public service has an official retirement age of 60 or thirty-five years of unbroken active working service, but in financial planning, retirement is a financial, not a chronological event. Retirement can occur when your passive income can meet your non-discretionary expenses.

You start to plan for retirement the day you start to earn an income. Your retirement plan will centre on how to generate passive income and reduce expenses. In Financial Planning, Four distinct stages are usually described in a so-called Lifecycle Chart. These are the Accumulation, Consolidation, Spending, and Gifting stages. Chart 1. Financial LifeCycle seeks to segment investing priorities, recommended asset allocation, and risk profile in a chronological timeline as the person gets older. I will take each of these stages and explain how they are linked to your retirement plan.

READ: How to choose the right Pension Fund Administrator (PFA)

Chart: Financial Life Cycle

Early years: Use Your Time and Make Money, (Accumulate)

The first stage is called the Accumulation stage. Imagine a 22-year-old who has just graduated and is a management trainee. He typically has a low credit score and assets and income are also substantially lower. What he has in abundance is time. So it’s important to deploy his time in the best way to make money. Hence in the accumulate stage, the goal is to generate cash flow either from a job, multiple jobs, working longer hours, saving, cutting unnecessary expenses, etc.

The key measure in the accumulation stage is the Savings Rate which is essentially how much of income earned or generated has not been spent. On average, the participants in the accumulation stage have fewer dependents and maintenance needs which should theoretically make it easier to save.

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READ: This thread exposed everything that’s wrong with Nigeria’s VAT

Mid Years Use Your Money To Buy Assets (Consolidation)

In the consolidation stage the focus shifts from saving to investing. At this stage, the income earned and credit scores have improved. This is when the talk of buying a home or starting a business takes concrete shape because, at this stage, those dreams can be funded. Hence capacity to take on debt is improved, and debt is used to invest in assets like a home. Remember debt is simply front-loaded consumption, which means we are taking our future income to invest today, intending to repay with future income generated from today investment.

The key measure in the consolidation stage is the Rate of Return which is essentially how much has been generated from the investments made.

READ: How to choose the right Pension Fund Administrator (PFA)

Spending & Gifting Phase; Use Your Assets To Generate Cash Flow and Time (Spending and Gifting)

Why is it called the spending phase? Because that’s what the individual is doing, spending down accumulated investments. The spending will include buying annuities or perhaps relocating to another city, your dependant’s college needs, etc. At this stage, typically very few are still earning “new” income but are rather spending from the return of prior investments.

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The key measure in the spending stage is the Withdrawal Rate which is essentially how much of investment can be withdrawn as cash annually to ensure we do not outlive our investments.

READ: How interest rates impact your wallet

Retirement is All About Passive Income

Passive income, which is the income we are making from investing from the accumulation and consolidation stage is now sufficient to generate income and reduce expenses to meet our expenses in the spending/gifting stage.

To give an example, assume we took a mortgage to buy a house in the Consolidation Stage, in the Spending stage, we pay no rent, thus we save cash, which reduces our Non-Discretionary Expenses. In essence, retirement is planning to eliminate your future expenses to the point where you need less income when you retire.

What Should You Invest In Before Retirement Or In Retirement?

Our objective is simple, Income. In retirement, we invest solely to make income to meet our spending needs, Risk profile is also very low because there are fewer recovery options if your investments sink.

The retirement portfolio is an income-generating portfolio that will be overweight in fixed income products. First, determine what the risk-free rate is. In Nigeria, we can take the yield on a ten-year FGN bond as a guide, this means we can have a target of 10% as our huddle rate for the long term. Thus I will recommend an 80/20 portfolio with 80% going to Fixed Income consisting of long term bonds, REITs, and other top-grade commercial paper.

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However what happens if we lock in our funds for 10 years at 10% and rates jump to 20%, meaning a loss to our portfolio.  To avoid this risk we can create a bond ladder, where we break down the bulk sum and duration of our total bond investment outlay. Let us assume we have N10m in cash to invest, instead of one single lot investment of N10m, we split into 5 equal investments of N2m and place for 6, 7, 8, 9, and ten-year maturities. This means by the 5th year the first N2m will mature, if rates are higher, reinvest, if rates have fallen then reevaluate.

READ: 10 Side gigs to venture into while working a full-time job

What about Equities

Yes, equities also pay a dividend. In buying equities, we must ensure we are only buying stocks that pay a dividend above our huddle rate of 10% which is the 10-year FGN bond rate. Which Nigerian stock meet that huddle rate?

  • Lasaco
  • Zenith
  • GT bank
  • United cap

In closing, let us summarize. Retirement is not chronological age. The event occurs when our passive income pays our bills. Planning for retirement means planning to reduce obligation in the future by investing today. Investing in retirement is income-based with a huddle.

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Financial Literacy

Steps to take to bag international scholarships

Here are the steps you should take if interested in pursuing international scholarships.

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United Kingdom opens window of job opportunities for international students

Studying abroad gives you exposure among many other things, and that is precisely why many Nigerians have been looking for ways to study abroad. However, not everybody is privileged with the resources to study overseas and this is where the international scholarship option comes in.

If you are interested in studying abroad and don’t have enough funds, you should consider applying for international scholarships. This article lists the steps you can take to bag international scholarships but before delving into that, here are some types of scholarships available to you as an international student:

  • Location-based scholarships
  • Course or program-based scholarships
  • Sports-related scholarships
  • Research-based scholarships
  • University-funded scholarships
  • Organization-funded scholarships
  • Government-funded scholarships

Having discovered the types of international scholarships available to you, here are the steps you should take to bag any of these international scholarships.

Research: Research is vital if you don’t want to miss out on good opportunities or make mistakes during your application. Research scholarship opportunities available in your prospective college or location and be on the lookout for hidden scholarships.

Check your eligibility: Having done thorough research and discovered the available scholarship opportunities, check to see if you are eligible for them. Many international scholarships have their criteria and requirement, so you should confirm that you are the right fit first.

Get the required documents: After confirming your eligibility, you should get the necessary documents. If the scholarship requires you to write an exam, prepare for the exam, write a good statement of purpose and prepare all other documents.

Start your admission process: Some international scholarships require that you start your admission process and probably get the admission before starting your scholarship application.

Contact past scholarship winners: You might want to contact the previous scholarship winners to know what they did right and how you can learn from them.

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Apply for the available scholarships: The last step is to apply to every available scholarship.

The best way to get funds for your undergraduate, postgraduate, or PhD pursuits abroad is by applying for international scholarships. If you do thorough research, you can find fully funded scholarships that won’t require you to pay any amount. One of the essential steps to getting an international scholarship as a Nigerian is staying abreast of current information and this will require you to network with others.

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