Adegoke suggests diversification to hedge against bad investments

Lead Financial Consultant, MTWI Services, Ifeoluwa Adegoke, is a wealth management professional with over a decade worth of experience. In this interview, she explains how one can build and protect wealth, diversify investment and leverage on technology.

How would you say technology has given people opportunities to diversify their investment portfolio?
In the past, investing in the stock market was a time-consuming and costly process, as it required going through a broker and paying high fees for each transaction. However, with the rise of online trading platforms, individuals can now invest in a wider range of assets, including stocks, bonds, exchange-traded funds (ETFs), mutual funds, and more. Thanks to technology Nigerians can now access investment opportunities that were once exclusive to a few. We can now invest in local and global stocks with a few taps on our phones and we can access the foreign real estate market easily now with lower capital entry. Technology has given us options when it comes to investing and has played a key role in our ability to diversify.

How can people build and protect wealth?
Well, this involves a combination of strategies, that includes creating a plan, investing wisely, and managing risks. It all starts with managing your expenses.

Create a budget that outlines your income and expenses, and identify areas where you can cut back on unnecessary spending. Irrespective of your income bracket, living below your means will free up money to invest, which is the ultimate wealth building strategy.

Learn to diversify. Investing in a diverse range of assets, such as stocks, bonds, real estate, and commodities, will not only help you maximize returns, it will also help you manage risk and protect your wealth.

Consider purchasing insurance policies to protect against unexpected events, such as disability, illness, or death.

Additionally, developing an estate plan can help ensure that your assets are distributed according to your wishes when the inevitable happens.

Finally, I strongly advise you to speak with a financial planner to help you develop a long-term investment strategy that aligns with your goals and risk tolerance.

What are the measures to take to hedge against bad investments?
Diversification is one of the most effective ways to hedge against bad investments. By investing in a diverse range of assets, such as stocks, bonds, real estate, and commodities, you can minimize the impact of losses in any one particular asset class. Knowledge is also a good way to prevent yourself from entering into bad investments. Ensure you have a good understanding of any investment you make, know the risks associated and factors that can impact them.

Consult with a financial advisor to help you develop a comprehensive investment strategy that takes into account your risk tolerance, investment goals, and market conditions. They can also help you monitor your investments and make adjustments as needed.

What are the lifestyle hacks to help one gain financial freedom?
One of the most important lifestyle hacks for achieving financial freedom is to live below your means. This translates to avoiding unnecessary expenses and only spending money on what you truly need. By reducing your expenses, you can accumulate enough capital to invest for the future.

Consistently increasing your income is also a proven hack to financial freedom. You can consistently up-skill yourself to be able to charge more for your services. Taking on a side job or starting a business to generate additional income is also a good strategy. Look for ways to leverage your skills and expertise to earn more money.

Achieving financial freedom requires self-discipline and a willingness to delay gratification. Avoid impulse purchases, stick to your budget, and stay focused on your long-term goals.

What are the major money mistakes you think youths make?
The first mistake is a mindset problem. A lot of young people have a get-rich-quick mentality and true wealth is never built that way. The desire for fast wealth has led many to waste their limited financial resources on “too good to be true” opportunities.

Young people are more likely to focus on short-term gratification, such as buying the latest gadget or fashion item, seeing as we are in an era of online shopping and fast deliveries, rather than investing for the future. This can limit their ability to build wealth over time.

How can Nigeria come out of this season of inflation?
Inflation is a complex economic phenomenon that can have significant impacts on an economy, including reducing purchasing power, increasing the cost of living, and hindering economic growth. It is one of the major challenges our economy is facing right now. To come out of this, our government can strengthen our fiscal and monetary policies such as increasing interest rates on borrowing and lending.

We can promote local production of goods and services to reduce reliance on imports and foreign currencies which is a major issue in our country. This can help reduce the demand for foreign currency and limit the impact of fluctuations in global prices.

We can also work towards encouraging foreign investments that can help boost economic growth and increase access to foreign currency. This could involve creating a more business-friendly environment, improving infrastructure, and reducing corruption. To limit the impact of inflation on basic necessities, we can improve agricultural productivity to reduce food prices. This could involve investing in irrigation systems, improving access to credit and technology for smallholder farmers, providing functional storage systems and promoting value addition in the agriculture sector.

How can Nigeria grow the value of Naira?
Growing the value of Naira is a complex process that I believe requires a combination of short-term and long-term strategies. We can start by Increasing exports. It can help increase demand for the Naira and bring in foreign exchange, which can help to strengthen the currency.

Nigeria can promote the development of export-oriented industries, such as manufacturing and agriculture, and improve the ease of doing business to encourage foreign investment.

Inflation can undermine the value of a currency, so addressing inflation is an important step in growing the value of Naira. We can achieve this by strengthening fiscal and monetary policies, promoting local production, and investing in key sectors like agriculture and infrastructure.

We need to promote economic diversification as we are too dependent on oil exports for our revenue. This diversification can involve investing in sectors like technology, natural resources mining, which can help to create jobs and boost economic growth.

What has been your major challenge coaching people?
I love what I do. I love seeing how solutions I proffer transform lives. However, financial coaching/planning is not a one man’s job, it involves a partnership between the coach and the client. If the client is not committed to improving their financial situation, it can be difficult for me to help them achieve meaningful results. So, I will say lack of client commitment can be a major challenge.

How can one come out of a low income situation?
Coming out of a low income situation can be challenging, but it’s not impossible. One of the best ways to increase your income is to develop new skills and knowledge that are in demand in the job market. Taking courses, attending workshops or conferences, or pursuing a degree or certification that can help you qualify for higher-paying jobs is an approach I recommend. Think about starting a part-time business or side hustle to supplement your income. Your options may include selling goods or services online, driving for a ride-sharing service, or freelancing in your area of expertise. Lastly, ensure you live frugally. When you are living on a low income, it is important to manage your expenses carefully.

Remember, coming out of a low income situation takes time and effort. Don’t get discouraged if progress is slow. Stay focused on your goals and keep taking steps toward a better financial future.

What is your advice to an older person trying to build wealth?
“The best time to plant a tree was 20years ago. The second best time is now”. Every older person that desires to start building wealth must understand that it is a lifelong process, and it’s never too late to start. Start Now! Start by assessing your current financial situation. Take a close look at your income, expenses, assets (if you have any), and liabilities, it will help your set actionable financial goals. I will recommend creating an investment portfolio that minimizes risk as much as possible and still leave room for growth.

It is highly advisable that you work with a financial planner or advisor as you probably have less time and financial resources to “gamble” with.

How can a Nigerian build wealth considering the currency devaluation?
Building wealth in Nigeria has become unpredictable, particularly in the current economic climate with currency devaluation and high inflation rates. One way to protect your wealth from currency devaluation is to invest in foreign currency, particularly in stable currencies like the US dollar, British pound or Euro.

This can help you preserve your wealth and minimize your exposure to inflation. You can also consider investing in tangible assets.

Real estate is a tangible asset that tends to appreciate in value over time and beat short-term inflation. Investing in rental properties or buying land that can appreciate in value over time can be a good way for you to build wealth.

What is your advice for entrepreneurs?
In the current economic climate, entrepreneurs face many challenges, including inflation, currency devaluation, cash scarcity and uncertainty in the market.

To combat these challenges, my advice to all entrepreneurs is to be innovative and manage cash flow. In a challenging economic climate, it is important to be innovative and creative in your approach to business. Look for new ways to reach customers, reduce costs, and improve efficiency. Cash flow is critical to the success of any business, particularly in an uncertain economic climate such as this. Make sure you have a solid plan for managing your cash flow, including a detailed budget and cash flow forecast. Stay strong, stay resilient.