For most of us, having a million naira or more liquid — that is, available for our use at any time, and easily convertible into cash — is the stuff of big dreams. But after talking to a few of my friends about decisions they were making, I was able to easily articulate one way we can all have N1 million minimum — liquid, available cash — in our lifetimes.
No, this isn’t some “get rich quick” scheme, and it doesn’t require anything illegal or immoral. It’s actually quite simple. The one catch is that it’s easier to do earlier in your life. But it’s something anyone can do, and is easily within the range of most Nigerians. You have to follow some rules to make this work. But once you do, you’ll be a MILLIONAIRE.
What is the decision?
Buy a cheaper car, and invest the difference.
Yep, that’s it. Let me break this down: how does buying a cheaper car make you into a millionaire?
For this exercise, I am going to assume you are 25 years old, and you want a million naira by the time you are 40. Let’s also assume for the sake of argument that you are interested in a car that costs N3, 200,000 and you have little or no down payment.
If you take a mortgage option from the company selling the car and you have to pay around N70,000 to N90,000 per month, you would se that this is quite a lot of money. Having this in mind, you might ask: Where does the million Naira com from? Spend N700,000 instead of N1, 200, 000 which you can easily do by getting a used car or a slightly cheaper car. Your car payment over the same term comes to about N30,000 to N40,000 which gives you a savings of N60,000 per month. Put this amount per month into a mutual fund earning 10% per year. Here’s the catch: You have to invest the extra N60, 000. You can’t blow it on food, TV, music, etc. I strongly recommend you find an investment service that will take the money directly out of your paycheck so you won’t be tempted to spend it.
Once you’ve done that, find a mutual fund that will give you high returns on your money. This shouldn’t be too hard because we have strong companies in Nigeria and Abroad, put N60,000 in it every month, and leave it alone!!! for the next 20 years. Let the compound interest magic work for you.
Invest N60, 000 a month at 10% for 20 years, and you will have a cool N17, 840,000 saved up for retirement. If you are still having trouble deciding what you want to do, I recommend you visualize a pile of the money in cash and a used car on one side, and a brand-new car on the other.
Which would you rather have?
