This is a wise word for millennials or let me say young people in their 20s who have the privilege of working in this economy where getting a job is hard. Enjoy the piece.
If you are not yet in your twenties, you should look forward to that that period of your life because during those years, you will be as free as you ever will be in life. And for many of us, it is in our twenties that we start earning a living. If you are a part of the significant population of people in this group who do not have people they take care of, then you should maximise the saving window you have as a twenty something year old person.
How much should you save?
I advise that you save 40 percent of your monthly salary which is 4 times what is recommended by experts. However if it is 10 percent of your monthly salary that you can conveniently set aside then do so. This money should not be used for any other purpose other than for building your asset base. So if you need to save for a vacation or a new phone, you should set aside another purse for that purpose.
Building your asset base:
You could buy treasury bills with as low as a hundred thousand naira. Make enquiries about buying treasury bills at your bank.
Buy a piece of Land. Of course you will not be able to afford a land in a well-established part of any city. But over time, most lands (especially in Lagos, Nigeria) will gain value. Buying a piece of Land is not something you take lightly. So I advise that you do a lot of research and you talk to relatives before going ahead.
Invest in long term bonds. Or at least gear yourself to invest in long term bonds. In simple terms, it is like fixing your monies for longer periods of time, say 5 to 10 years.
Deciding how you spend your monthly income.
Make a budget and try as much as possible to stick to it. There are certain elements that are rudimentary in a budget such as feeding, grooming or transportation. Some others, like the following may not be as rudimentary:
Clothing: if you shop for clothes every month, please note that clothing items, in my own opinion, should only occupy about 1-2 percent of your monthly income. That is, if you earn a hundred thousand naira per month, what that means is that you will have to save for several months to buy yourself a designer shirt. What that also means is that you can plan to buy anything you desire. It is all about delayed gratification.
Gadgets: If you are a blogger, computer expert, social media entrepreneur or anyone else who spends a large part of their day using gadgets to earn their living, then you need an efficient mobile device or computer to save your time. If otherwise, then don’t spend a lot of your income on a phone. The mobile phone industry is moving so fast that it is almost impossible to use your mobile device for longer than 8 months. So why not buy a phone based on what you think is essential to you?
Health: If paying for gym membership isn’t paramount to you, at least you should have a budget for attending one or two classes at the gym every month. Even though I also haven’t gotten around to doing it, it is good to have a medical emergency account, especially if you have aging parents.
Education: books are cheap, buy them. You should also pay for internet access because the worldwide web is the best teacher.
Splurge: don’t be too frugal. Take care of yourself, you work so hard. Go out and have some fun with not more than 10perecent of your monthly income.
Finally, don’t spend money because you think you are going to die tomorrow. Even if that were the case, ask that your money be given to the most productive member of your family. Don’t spend everything you earn.
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