Without any doubt, you can become very wealthy from the Nigerian stock exchange. But that is only when you’ve the right information on how to make money from the Nigeria stock exchange.
In this post I am going to expose to you all I know about making money from the stock exchange. It will interest you to know that the only money I inherited from my late hero (My Father) was from the Nigerian stock exchange. I learnt everything you’ll read here when I was trying to convert the shares my father bought for me when I was still a little boy into cash.
Let’s get to work. Wealth is a product of many years of planning and working. Therefore, if you’re reading this post with the intention of being wealthy in few days or years from Nigerian stock exchange then stop reading now.
But if you’re really interested in being wealthy from Nigerian stock exchange as Warren Buffet did please read on.
In case you don’t know who Warren Buffet is, he is the third richest man in the world. He made his money or wealth from America stock exchange. So, any stock exchange is a home of wealth if you know how to go about it.
Why Learning Everything About Nigerian Stock Exchange.
Do you believe that your network determines your net worth? If yes then you should do everything within your power to network with Nigerian stock exchange by learning it today.
Do you know Nigeria stock exchange share capital is over N13 trillion? Do you know that Nigerians spend over 3 billion Naira daily trading on Nigeria stock exchange? Are you aware that Alhaji Dangote was once the chairman of the Nigerian stock exchange? If this volume of money exchanges hand daily, why won’t you learn how to get your own share of it?
Nigerian Stock Exchange – How to make money
There are basically two ways to make money and even create wealth from the Nigerian stock exchange. The first way is by trading on the companies share and the second one is by investing in the company shares.
Before we go deep on how to make money from the stock exchange, what really is buying of shares? To buy a share means investing your money in an existing business and that automatically makes you part owner of the business. Companies like UBA Bank, Julius Berger and many more are types of companies you can buy their shares.
To make sure your investment is protected, Nigeria stock exchange creates the platform through which you can buy and sell company shares. Therefore, the major role or responsibility of Nigerian stock exchange is to create a trading platform and regulates the companies from defrauding investors.
Let’s look deep in each ways of making money from the stock exchange
Nigerian Stock Exchange – Trading on Shares
Trading on shares means buying company share on a low price and selling it on high price. It means buy low and sell high. To be a successful trader or investor you must have an in-depth knowledge on how to trade or invest in company share, which you will learn as you read on.
Trading successfully on shares on the floor of Nigerian stock exchange means you have the capital and knowledge of trading.
But this post is to educate you on how to create wealth from the Nigeria stock exchange, which lead us on the second way of making money on stock exchange.
Nigeria Stock Exchange – Investing in Company Shares
Investors are those that buy shares or bond and hold them over a long period of time. Their target is to accumulate shares by way of dividend and bonuses. They don’t buy to resell. They only hope on dividend and bonuses and that is the only way to create wealth from Nigeria stock exchange.
Dividend is the money the investors make at the end of every financial year from the company they invested. If a company made profit at the end of the financial year, they share they profit among investors. Whatever money is due to any investor is called dividend, the higher your share or investment the higher your dividend.
This is the increase in the number of shares of investors by the company. Let’s assume you have 200 shares in a company and after some time the company record significant growth in the business. The board of directors may decide to increase investors share accordingly. They may say, let every 10 from investors share attract 1, that is 1 is to 10.
Therefore, your 200 shares will become 220 shares. In fact, most cases, investors’ shares are doubled in this kind of arrangement. As investors shares increase so the dividend will equally increase.
Imagine accumulating such shares over 10 years, it will really run into multi- million Naira easily.
Who Can Invest Through The Nigerian Stock Exchange?
Civil servants that want to retire richer than their counterparts can invest on shares. But you need to know how. The simplest secret of accumulating wealth from the Nigeria stock exchange as a civil servant is to allocate some percentage of your salaries into buying shares.
Another person that can invest in shares through the Nigeria stock exchange is a business man or woman who has a regular income.
To do it right, just pick one or two companies that have come to stay and be buying their shares little by little. For instance, you may decide to buy GTbank or UBA shares monthly.
Let’s assume you invest N10, 000 Monthly from your salaries on GTbank shares. That means at the end of the year you have invested about N120, 000 in GTBank share. If you do this in 10 years it will amount to N1, 200,000. This is just the face value of your investment.
By principle of compound interest, investment of N1, 200,000 will amount to over N6, 000,000 in 10 years. I bet you, some civil servant will spend 35 years in service without getting half of that as gratuity.
How to Start Investing Through Nigeria Stock Exchange
To be a successful investor you must have an in-depth knowledge in the area you want to invest. In other words, you must be educated in the area of investment you are planning to go in.
Therefore, to invest in shares you must be educated in 4 things, which are:
- What is shares and why companies sell their shares to the public
- The roles and functions of Nigerian stock exchange. In fact, you must know everything about Nigeria stock exchange. Click Here to learn.
- You must know the fundamentals and technical analysis of each company you want to invest in.
- Who a broker is and what he does for investor
Let’s take a look into each of the things you must know before investing in company shares.
What is Shares and Why do Companies sell Share?
As I explained above shares are portion of company financial asset, which a company is ready to relinquish to investor or investors. In other words, buying shares means investing in a company with the hope of making profit over time.
Companies sell share to raise money for expansion. Instead of approaching banks for loan, companies approach the public to sell their shares and get money for business.
Roles and Functions of Nigerian Stock Exchange
They play a vital role of protecting investors’ money. And providing a platform through which the company shares are traded. Click Here to Learn Everything about Nigerian Stock Exchange.
Fundamental and Technical Analysis
Fundamental and technical analyses are factors you must consider before investing in a company. Long term investors consider fundamental analysis before investing. While short term investors consider technical analysis.
Since my aim is to teach you how to accumulate wealth from the Nigeria stock exchange then I am interested in fundamental analysis. The fundamental factors to consider before investing in a company are:
- How long has the company being in existence
- How often do the pay dividend and bonuses. To know this, you should as a broker
- What is their line of business? Is it a business that runs throughout the year or is it seasonal?
- How does government policies affect them
- How many branches or how widely spread is the companies branches or business
- Who are the directors of the company
Most companies that have high score of the factors listed above are called “Blue Chip Companies”. So, if you really want to accumulate wealth over time then go for blue chip companies.
Technical analysis is for short term investors or share traders. So, don’t bother about it.
Who is a Broker?
A broker is the person that is authorized or licensed by Nigerian stock exchange to buy and sell share on the floor of Nigerian stock exchange. Usually, brokers have brokerage firms. To the best of my knowledge, there are virtually stock brokerage firm in all the 36 states of Nigeria.
With this in mind, you should never deal with an individual as a broker. Instead deal with a broker from his brokerage firm. Example of brokerage firms we have in Nigeria are Cashcraft, Tiddo Securities, First Bank Securites, Zenith Bank securities and many more.
Roles of a Broker
- It is the duty of a broker to educate you on how to trade or invest in shares. So, if you want to learn more on shares today visit a broker
- To open a CSCS account for you. CSCS stands for Central Securities Clearing System. In fact, if a broker does not open a CSCS account for you then do not give him your money. The CSCS is like your bank account because whenever your broker buy’s or sell’s your share, you’ll receive an alert from you CSCS account.
- To buy and sell shares
Creating Wealth From Nigerian Stock Exchange – Wrap UP
Obviously, you can create the amount of wealth you want through the stock exchange as long as you know how. It is simple and straightforward, all you need is the basic knowledge, which you must have acquired today.
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