Oh my!!!!! I actually thought I was investing 

It’s her 15th month of employment, and Janet has been really impressive with her finances. She hasn’t spent more than 20% of her monthly take home in any given month and she has avoided any frivolous spendings. Janet judiciously saves about 75% of her monthly pay. Her colleagues think this attitude is worthy of imitation and everyone wants to be like Janet, especially when they get wind of how much money she has accumulated in her savings account over the period. Dear Investor, are you thinking that a Janet-like approach is a disciplined and smart way to treat your hard earned-funds?


Truthfully, Janet is disciplined but sadly she won’t pass for “smart” with her finances. You might not agree with me, but here’s a brief hypothetical illustration to help us get a verdict. Imagine Janet earns N60,000.00 on a monthly basis (that will mean she gets to save N45,000.00 every month), she will have saved about N2,700,000.00 after 5 years. Wow!, impressive. But wait a minute, do you think the value of N2,700,000.00 will remain same over a 5-year period? In simple English, a piece of land or a brand new car worth N2,700,000.00 will most likely worth more in 5 years time and cannot afford that piece of land or brand new car then.


That’s what basic savings does to you, it increases the amount of money you have. It doesn’t increase the value of your money. In approximation, it works like a piggy bank.


Savings is usually misconstrued with Investing, however they are different concepts. Janet has been disciplined but she hasn’t been clever by just keeping her money. So, Janet has been investing in her savings account but she has not been investing. Unlike savings, Investing your money in a secured instrument such as bonds guarantees that you earn returns and grow your wealth, thereby increasing the value of your money over time.


Dear investor, the moral of the story is that it is not financially wise to hold too much of your money in your savings account, especially when you know you won’t be needing that money anytime soon. Invest that money now and grow your wealth over time.


At Meristem, we pride ourselves as a one stop financial services “supermarket”, offering you different products that meets your need, class, and preference, soothing your plan and budget in your drive towards building your personal wealth, through collective wealth building strategies and offering maximum return on investment. Some of our retail products include Meristem Savings Investment Scheme (Meri-SIS), Fixed Term Investment Portfolio (Fix-tip), Meristem Wealth Management Limited Mutual Funds, and so much more, offering you flexible investment opportunities with as low as N10,000 to as much as you can afford.


For professional guidance on how to invest wisely, speak with our financial experts.

Please visit https://www.meristemng.com/services/ for a list of all our services. You can reach us on  01-2717350-5.

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