Expert charges students on financial discipline, building investment portfolios

Students have been charged to embrace personal finance management and effective budgeting, become more entrepreneurial-minded and do away with unsustainable lifestyles, as failure to do so could lead to living a life of penury.

This was the thrust of a presentation made by the Group Head, Asset Management, Growth and Development Asset Management Limited (GDL), Mr. Henry Ogbuaku, at the Town and Gown seminar of the Department of Banking and Finance, Covenant University.

Speaking on the topic, ‘Personal Finance Notes for Millennials’, Mr. Ogbuaku advised the students that when income increases it is not a period to embark on unnecessary travels, shopping, and indebtedness, but extra income should be channeled towards savings and investments.

Mr. Ogbuaku posited that to see dreams become reality, there is need to plan in advance and make your money work for you. According to him, “Wealth is not built by making more money, but by spending less. If you cannot fund your current lifestyle, you need to change your lifestyle”. He said that the development of the Asian Tiger countries was as a result of the entrepreneurial spirit of the people.

While encouraging the students to develop a savings culture to secure the future they desire, the Guest Speaker noted that poverty, to the current generation, is due to their tendencies to spend and not save. “Failure to save at least 10% of your income or allowance every month so you never have to be cash strapped during rainy days,” he emphasized.

The renowned risk and asset manager averred that debt easily leads to financial ruin and to avoid it, millennials must avoid borrowing to fund lavish lifestyle, clear off existing debt especially those with high interest rates, and ensure that indebtedness should only be entertained when the risk adjusted investment return is significantly higher than the cost of borrowing.

On starting a virile investment portfolio, Mr. Ogbuaku said that students must become conscious that investing is not about predicting, but securing the future, investing in only assets that they understand, researching well before investing and getting help from reliable investment advisers.

He concluded by stating that risk in all forms should be managed, not avoided, adding that the fear of risk should not impede anyone from investing, rather it should increase one’s cautiousness when choosing investments. He stressed that investing is risky and the stock market is volatile, yet the Nigerian stock market has grown at an average of 40% in the last 20 years, with Treasury Bills offering 19% yield today and 10-year bonds offering 16.5% returns.

In his welcome remarks, the Head, Department of Banking and Finance, Dr. Kehinde Adetiloye, said that the essence of the Town and Gown initiative is being in constant touch with the reality of industry expectations and what it will take graduates of the programme to succeed in the larger society. He said that the importance of the topic in Nigeria today cannot be quantified, taking into consideration that with improved financial discipline, there would be more startups to jump-start economic revolutions.