This article about money mistakes was inspired by a discussion I had with a friend recently. He had bought a motorcycle for someone on a hire purchase agreement. Well, I’m not surprised that the transaction went south; the guy did not remit up to 30 per cent of my friend’s capital and made away with the motorcycle.
Hire Purchase Agreements
Transportation Investments that involve hire-purchase agreements in Nigeria are obviously high risk because It is difficult to find drivers or riders with integrity.
My dad did this business full-time for 20 years so I’m familiar with the difficulties of managing drivers.
So, this is not the sort of investment for anyone who is fully engaged at a tasking 9-5. You need time to monitor the riders closely and you need to be very street smart.
2. Investing in Things You Don’t Understand:
As of today, you wouldn’t catch me doing forex or bitcoin trading because I don’t understand the process. So, I believe that the first rule of investing is investing in businesses you understand.
3. Putting All Your Eggs In One Basket.
Diversifying your investments is the smart thing to do. No matter how hot things are at the moment, nothing lasts forever; Real estate, Agriculture, equities. Nothing is really ever secure. So spread your risk instead of dumping all your monies in one type of asset.
4. Lending Money To People
This is the only money lesson I got from my old man, but if it’s the only lesson you ever learn too, you are good. It’s risky to give out loans to people because human beings are unpredictable. I know someone who almost got killed because the borrower didn’t want to pay back the money he owed; and frankly, this kind of news is not far fetched. Whatever money you can’t give away, don’t lend it out to people.
5. Buying stuff. All. the. time.
I was telling a friend that the fact that the owner of an e-commerce website is the richest man in the world, tells us something about our buying behaviour. Of course, Jeff Bezos’ income is from diversified sources but Amazon.com is one of them. The reality is that we actually don’t need a lot of the things we buy. Don’t buy things because you have the money to buy them. Be deliberate about how you shop.
