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INVESTMENT OPPORTUNITIES:

INVESTMENT OPPORTUNITIES:. Making Your Money Work For You Presented By: OGWEZI NWACHUKU , ACA,B.SC,MBA,MIMC 0802-318-0772, 0805-731-1968 oliwe53@yahoo.com. 1. Turn to the next person to you, tell yourselves “our lives shall never remain the same again” and shake hands with one another.

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INVESTMENT OPPORTUNITIES:

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  1. INVESTMENT OPPORTUNITIES: Making Your Money Work For You Presented By: OGWEZI NWACHUKU,ACA,B.SC,MBA,MIMC 0802-318-0772, 0805-731-1968 oliwe53@yahoo.com Ogwezi Nwachuku 1

  2. Turn to the next person to you, tell yourselves “our lives shall never remain the same again” and shake hands with one another Before we proceed: Ogwezi Nwachuku 2

  3. Introduction The money making skills Investment skills Financial market Money Market Capital Market Choosing Investment Vehicle- the guiding principles Coverage….. Ogwezi Nwachuku 3

  4. Coverage….. • Investment Vehicles • Money Market • Capital Market • Others • Trading with share certificate • Investment Register Ogwezi Nwachuku

  5. Other investment opportunities Imbibe the spirit Case Study/Experience Sharing Coverage…….. Ogwezi Nwachuku 5

  6. Introduction…… • Warren Buffet two important rules: (1) Never loss money, (2) Never forget rule 1. • “a $1 loss today represents the loss of millions of future dollars”. • you may be losing money without knowing. • The crux of this presentation is therefore to change your consciousness towards money. Ogwezi Nwachuku 6

  7. 7 essential money skills

  8. The money making skills… If you don’t value money, you won’t make the effort to control it. If you can’t control it, you won’t be able to save it. And if you can’t save it, there won’t be any surplus to invest. If you don’t understand investing, you’ll be a less effective entrepreneur. Therefore, you won’t have any money to shield. And if you don’t have any to shield, you won’t have any to share. Ogwezi Nwachuku

  9. Investment skills • Investment • commitment of current funds in anticipation of receiving a larger future flow of funds. • setting aside consumable income by channeling them into productive areas/assets in anticipation of earning returns in compensation for the decision to defer consumption e.g. buying shares etc. Ogwezi Nwachuku 9

  10. Investment skills • Using your money to produce more money? • Are you thinking that you need a lot of money to invest? You don’t. Ogwezi Nwachuku

  11. Financial Market • Market where long term and short term funds can be bought and sold. • Money Market • Short term funds market • Capital Market • Long term funds market (two sections) • primary market • for new or fresh securities • secondary market • for sale and purchase of existing securities Ogwezi Nwachuku 11

  12. Choosing Investment Vehicle- The Guiding Principles • Safety/security • Yield/Return • Liquidity/Investor’s Horizon • when the investor needs his money back for other use • Marketability • the ease with which an investment in the portfolio can be disposed off. Ogwezi Nwachuku

  13. Choosing Investment Vehicle- The Guiding Principles • Growth • Diversification • Allows investments to well spread in as many sectors as possible. “Do not put your eggs in one basket” • Tax Implications • Legality Ogwezi Nwachuku 13

  14. Financial Adviser Invest. Register Insurance Firewalls The Fin. Market Investment Vehicle S D MasterCard Payment Systems Investment Cloud Investor Tap where necessary Ogwezi Nwachuku

  15. Developing Entrepreneurial Skills • Modeling • Entrepreneurs have modeled themselves on other successful entrepreneurs. • Close identification with such entrepreneurs as role model will lead to the acquisition of new behaviour and skills. • E.g. Warren Buffet, Aliko Dangote, Bill Gate etc Ogwezi Nwachuku

  16. Developing Entrepreneurial Skills…. • Learning from experience • You must be willing to learn from the experience • Change with time • Set definite goals and expectations. • To achieve this, you must constantly be aware of- • new ways of doing things • new opportunities. • You accept change and use it to motivate yourself to high level goals. Ogwezi Nwachuku

  17. Developing Entrepreneurial Skills…. • Pattern your activities with Entrepreneur in the same Business • Pattern your activities after successful entrepreneurs who are in the same kind of business or related business. • Once you understand their techniques for achieving success then use them to develop and improve upon specific aspects of your enterprise. Ogwezi Nwachuku

  18. Developing Entrepreneurial Skills… • Be action oriented • Take advantage of investment opportunities created as a result of change in • Government policies, • Increases in demand, • New technology, • Unsatisfied preference and desires which will lead to business success. Ogwezi Nwachuku

  19. Developing Entrepreneurial Skills….. • SWOT • Have a good understanding of your personal strengths and weaknesses and the requirements of the prospective enterprise. • Highlight and use your strengths. • Recognize your weaknesses, and use other resources to compensate for identified inefficiencies. • Know the opportunities around you which you can tap from • Beware of your competitors (threats) Ogwezi Nwachuku

  20. Investment Vehicles Money Market • Treasury Bills • Issued by the Central Bank of Nigeria on behalf of the Federal Government of Nigeria • It is usually issued for a tender of 91 days • It carries a fixed rate of interest or discount rate • Under current CBN policy, investors in TBs are paid their interest income on maturity • It is issued in multiples o N1000.00 by auction system • The CBN underwriters the issue as well as rediscount facilities for them • Application to investment in TBs must be routed through an authorized dealer i.e. Banks. Ogwezi Nwachuku 20

  21. Investment Vehicles…. Money Market • Treasury Certificate: • issued by the CBN on behalf of the Federal Government of Nigeria • It has tenors of between 1 to 2 years • It is a medium term government security • It can be rediscounted at the CBN if holder cannot wait till maturity • It carries fixed interest rate or discount Ogwezi Nwachuku

  22. Investment Vehicles…. • Bankers Acceptances (BAs) • issued by reputable companies and accepted by their banker. • the Banker guarantees repayment of the amount invested at maturity. • have maturities o between 30 and 180 days. Ogwezi Nwachuku

  23. Investment Vehicles Money Market • Commercial Papers • Issued by blue chip companies. • Banks only serve as intermediaries. • No guarantee of repayment Banks. • Maturity period ranges from 180 to 270 days. Ogwezi Nwachuku

  24. Investment Vehicles... • Fixed Deposit/Placement • Tenured deposit for an agreed time period. • Negotiable • Depositor suffers interest reduction if deposit is terminated before maturity period. Ogwezi Nwachuku

  25. Investment Vehicles... • Capital Market • Development Loan Stocks • Long term debt instrument issued by the CBN on behalf o the Federal Government. • Prices are quoted in units and at a given percentage. • CBN underwrites all issues • CBN ensures its marketability (providing discount window facilities). Ogwezi Nwachuku 25

  26. Investment Vehicles • Capital Market • Bonds • Fixed income security. • Issued in denominations of say N1000 and multiples thereof. • Long term promissory note. • The interest or coupon rate is paid to bond holders at a regular intervals or semi-annually. Ogwezi Nwachuku

  27. Investment Vehicles • Capital Market • Debenture (Loan) Stock *Long term debt finance raised by a company for which interest is payable at fixed rate and at specific time (s) in a year. *The issuing company is liable to pay the specified fixed interest whether it makes profit or not.  *holders are creditors to the company. Ogwezi Nwachuku 27

  28. Investment Vehicles Capital Market • Preference Shares *a hybrid security *holders entitled to a fixed rate of dividend • Ordinary Shares *holders are real owners of the company. *they exercise control over the company through their voting rights *not entitled to fixed rate of dividend Ogwezi Nwachuku

  29. Starting a business • Calculate your costs • Write your business plan • Identify sources of financing the business • Choose a business structure and name your new business • Develop the business start up book keeping and documentations Ogwezi Nwachuku

  30. Starting a business…. • Develop your marketing and customer services plans • Court your first customer • Develop and hire your support team • Open up to more opportunities (diversification) Ogwezi Nwachuku

  31. Investment in Real Property * It’s a hedge against inflation * Rent receivable is more certain than dividend * It’s a secure form of investment Ogwezi Nwachuku 31

  32. Investment In Insurance It is the conversion of indeterminate risks into fixed costs by way of consolidation or an economic device whereby risks of living and of economic enterprises are transferred. (a) Life insurance including pension schemes management (b) Non-life insurance business Ogwezi Nwachuku

  33. Trading with share certificate ·Buying of shares -Initial Public Offering (IPO) -Secondary Market -Bonus -Right Issue ·  Ogwezi Nwachuku 33

  34. Trading with share certificate Registration with CSCS ·  Subscribing to Trade Alert ·  Time to trade -sell -buy -hold Ogwezi Nwachuku

  35. Investment Register The following information is shown: 1. The description of the item – share 2.The name of invested company 3.Mode of acquisition -IPO, bonus issue, right issue, stock market 4.Accounting year end of the company 5 Date of acquisition 6 Units acquired 7 Price per unit Ogwezi Nwachuku 35

  36. Investment Register…. 8 Total amount paid 9. Commission paid (if applicable) 10. Date and amount of dividend received 11. Current stock market price 12   Number of shares disposed 13  Amount received on disposal 14. Date of disposal 15. Profit or loss on disposal 16. Number of shares remaining etc. Ogwezi Nwachuku

  37. Basic Accounting Books • Cash book • to be opened for each bank account opened. • only the transaction involving the business should be entered • General Ledger • accounts should be opened for item of - • expense; • income; • assets; liabilities; • capital etc. Ogwezi Nwachuku

  38. Basic rules to be observed • Issue receipt for all cash/cheques received regardless of amount involved • Raise invoice for all credit sales • Raise voucher for payments to be made regardless of the amount involved • Do not take any money/goods from the business without recording it. • Do not pay for personal expenses out the business funds Ogwezi Nwachuku

  39. Bank Reconciliation Statement • Preparing Bank Reconciliation Statement • The process of bringing the cashbook and bank statement balances to agreement. • An Investor should know this because most of the transactions with respect to investment are carried out through banks. Ogwezi Nwachuku

  40. Bank Reconciliation Statement... • Why bank and cashbook balances may not agree • Unpresented Cheques • Uncredited Cheque • Direct payment or Credit transfer • Dividends • Standing Order • Bank Charges • Dishonoured Cheque • Error by either Bank or Customer Ogwezi Nwachuku

  41. Bank Reconciliation Statement... • Documents involved in the Reconciliation • Cheque booklet (stub) • Cheque register • Bank account • Bank statement • CBN Guide to bank charges Ogwezi Nwachuku

  42. Bank Reconciliation Statement... • Follow up action The bank should be taken up on any of the following: • Wrong debit • Transfer out and re-transferred-in without authorization • Deposit staying too long before being credited Ogwezi Nwachuku

  43. Other Investment Outlets: • Whichever other areas an investor wants to go into, the determinants of investment decisions, which were discussed earlier, are not to be left out in the investment decision process. Ogwezi Nwachuku

  44. Other Investment Outlets…… Some of the small-scale businesses or areas where investments can be made are; (a thorough feasibility study and investment appraisal is important). • Honey making • Soap making • Poultry farming • Trading • Cash crops farming Ogwezi Nwachuku

  45. Other Investment Outlets….. • Pastries • Fish Farming • Livestock Production • Plantain & Potato Chips Production • Tooth Pick • Garri Processing Ogwezi Nwachuku

  46. Other Investment Outlets….. • Laundry & Dry Cleaning • Snail Farming • Photography & Video Coverage • Car Wash • Hair Dressing & Barbing Salon • Catering Ogwezi Nwachuku

  47. Other Investment Outlets…. • Pure Water • Gas Vending • Meat Shop • Vulcanizing Ogwezi Nwachuku

  48. Other Investment Outlets….. • Child (Crèche) &Elderly Care Services • Janitorial • Recharge Cards & Phone Accessories • Newspaper Vending • Business Centre, etc. Ogwezi Nwachuku

  49. Imbibe The Spirit • Open a separate bank account to keep track of your investment as distinct from your salary account. • Imbibe the principle of financial discipline • Do not go beyond your budget Ogwezi Nwachuku 49

  50. Imbibe The Spirit • An individual/ a family should have a ‘Personal Financial Adviser’ in order to reap the full benefits of the opportunities in the financial market (money and capital markets). • The slogan from now on is “Do not make investment out of sentiments”. Ogwezi Nwachuku

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