How Much of Your Income Should Go Toward Investing
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posted on Nov 26, 2024
Investing is one of the smartest moves you can make to secure your financial future. In Nigeria, where the economy can be unpredictable and inflation is constantly lurking, investing isn't just a luxury, it's a necessity. But the big question is: how much of your income should you actually put into investments?
How Much of Your Income Should Go Toward Investing?
Investing is one of the smartest moves you can make to secure your financial future. In Nigeria, where the economy can be unpredictable and inflation is constantly lurking, investing isn't just a luxury, it's a necessity. But the big question is: how much of your income should you actually put into investments?
Before we get into the nitty-gritty, let’s break it down in a way that even your neighborhood Alhaji Musa at the corner store will understand.
The 50/30/20 Rule: Does It Work in Nigeria?
Globally, financial experts often recommend the 50/30/20 rule. That’s 50% of your income going to needs (housing, food, bills), 30% to wants (Netflix, dining out, Jollof parties), and 20% towards savings and investments.
But let’s be honest, this is Nigeria. Between fuel scarcity, NEPA wahala, and the rising cost of living, you might feel like 50% of your income just vanishes into thin air before you can say "Asoebi."
So how do we adapt this rule to fit our Nigerian Self.
Low-Income Earners: Start Small, Think Big
If you’re on a lower income earning between N100,000 to N300,000, saving 20% might seem like a lot. However, you can aim to start by investing as little as 5% to 10% of your income. The key here is consistency. Think of it like starting small with your pepper in the market, but with discipline, you can become the Alhaja who buys in bulk later.
Page Financials offers a range of investment opportunities that allow you to start small and grow big. With as little as N500,000, you can begin your investment journey and watch your money grow.
Middle-Income Earners: Steady Growth is Key
For middle-income earners (earning between N300,000 to N800,000), aiming for 15% to 20% of your monthly income toward investments is ideal. This percentage allows you to balance immediate needs and long-term financial growth.
At this stage, it’s important to diversify your investments. Don’t just stick with one option. With Page Financials, you can explore multiple investment opportunities whether it’s a high-interest savings plan or low-risk investment options that suit your financial goals.
High-Income Earners: Maximize Wealth
If you're earning upwards of N800,000 per month, congratulations! You have more room to play around with your investment strategy. Aim for at least 25% to 30% of your income going toward investments. This might seem like a lot, but the more you invest, the faster you’ll reach financial freedom.
This is also where you can afford to take some calculated risks. Page Financials offers personalized investment plans that allow high-income earners to maximize returns while keeping risk at bay.
Emergency Fund: Don’t Forget It
Before you get too excited about investing, remember the golden rule: have an emergency fund! In Nigeria, where unexpected expenses hospital bills, car repairs, or even surprise family events can arise at any time, having an emergency fund is key to ensuring you don't touch your investments when things go sideways. Aim for 3 to 6 months of living expenses in a liquid account before you start investing heavily.
What About Debt?
You’re probably thinking, “But what if I’m paying off loans?” That’s a valid point. Balancing loan repayments and investments can be tricky. The key is to prioritize paying off high-interest loans first. Once you’ve handled those, you can increase your investment percentage. Page Financials provides loans with competitive rates that won’t throw off your financial balance, so you can still save and invest while managing debt responsibly.
Start Early, Grow Big
The earlier you start investing, the better. Compound interest is your friend, and the more time you give your investments to grow, the larger the payoff down the line. Whether you're in your 20s, 30s, or 40s, it’s never too early or too late to start multiplying your money.
At Page Financials, we offer flexible investment plans tailored to your financial stage, so you can start small and scale up as your income grows.
Conclusion: What’s Your Investment Strategy?
How much of your income should go toward investing? The answer depends on your current financial situation and future goals. Whether you’re starting with 5% or pushing it up to 30%, the key is to start and stay consistent. Your future self will thank you for it.
With Page Financials, you don’t need to worry about where to start we’ve got a variety of investment opportunities that cater to all income levels. Whether you’re a low-income earner or living large, we’ll help you secure your financial future.
So, what are you waiting for? Get started on your investment journey today! Click Here to get started.