Limited disposal income challenges
I know, many are always in a haste already so when it comes to going long term they find it not very interesting. I was making some compounding calculations and I came to realize that N10 million naira compounding interest in five years will be N10.1 million with some fractions on TOP as profit. So you just made an extra N10.1 million in approximation after five years. Is this a good investment?
It depends on who you are explaining it to, patience seems to be extracted from the word day after day. It can be difficult to establish this to a youth who is out there gambling on how to turn N1K to N50 million overnight in a betting site. This ‘get rich quick mentality’ is making a financial mess of many and I have to consider the future of many youths because there will be a lot to be depressed about without an early U- turn.
Why do people abstain from long term investment? Is it because they fear they will not live long enough to see the results? Surprisingly, this can be a major reason. Looking at other factors we can talk of lack of financial intelligence, unsatisfied profit, greed or market uncertainties assumptions. How about lack itself? In this article we will be delving into the challenge of limited disposal income and how it has been a trap to this generation.
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First of ALL, we can see this creep in behavior also stemming from how the labor market has been groomed over the years; ‘work for money’. In an era of competition and high inflation it can or should I say has become a disaster. Just consider where a government worker who has served for let's say 30 years plus would have been financially if the idea of compounding was prioritized.
A fact that should not be ignored is that long term investment needs substantial capital. I could remember when I left some crumbs in my crypto wallet and abandoned it for years and I saw a later 400% interest when I logged in. The 400% was no interest at all, even a 1000% would do no good, it was crumbs. Just consider 400% interest in a dollar after let's say four years; indeed a wasted effort.
Getting back to limited disposal income, it is like you asking me, would you go for a 15% compounding interest of N100 million for five years?. If you know how I hate work you will accept this to be a triple yes. We are meant to make slaves out of money and not the Vice. We are talking of extra N100 million plus here while I get myself involved in other things.
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I had to look at some national analysis, the population over here that makes below N200K months is above 62%. In short, even if this figure is to be shifted to N300K or N400K monthly it still has some financial flaws. Consider the current high cost of living and you can say spending N6000 daily is an understatement especially for families. If you don't have spending control the matter grows worse.
So how will youths who are surviving from hand to mouth be able to go long on investment. This is why we are seeing a high rise of gambling over here. wealth building is NOW placed on jackpot lucks, something that contradicts its true meaning.
To conclude, let me add, so yes, selected some know what to do but lack the capital to activate their investment dreams. When there are always ready-made bills to pay and some in-between unexpected expenses, it can be difficult to stick to an investment habit. This has caused a disconnection in the future of some potential investors. The best way to invest is having enough capital which can weather rainy day storms. What I am speaking of here is a challenge or societal problem that can be turned into an opportunity. It is about answering the question of how can I be a solution here?
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