Retirees and Investment Windows
By Enitar Ugwu
Retirement can be a nightmare. Especially an unplanned one. Unplanned in the sense that the retiree has no kept fund for investment or setting up of another business venture to keep body and soul together.
In tackling this, Brigadier Jo Onu, during the pre-industrial and investment seminar in a paper titled, After your last pay cheque, what next? raised a lot of issues.
He started by pointed stating that "one does not need any professional guide to know that the country has a problem of unemployment, noting that retirees will be deciving themselves to hope that they will be re-circled for a fresh employment after retirement when their children (young graduates) are not yet employed.
The only opportunity open to pensioners, he stressed, is self-employment, adding," you can only be self employed if you invest.
He faulted the reasons usually bandied about by retirees that their income was not enough to have surplus for such savings.
He argued that no income is enough at any level but what one does with one's income is a matter of priorities.
Quoting Mike Itegboje, he said, "Financial planning is a key to planning for retirement pointing out that, an employee is expected to set his goals and arrange them in order of priories.
and that the number one on the list of his priorities should be "pay yourself (the employee), not less 10 per cent and keep it in a purse (save in a bank) and invest it towards retirement.
However, he explained that even presently without a savings account, one can still do something reasonable towards saving for the rainy days.
One is the ways of doing this, is by differentiating between the "necessaries" and "avoiding expenses", he said.
According to him, the aim here is to discover the wrong routes through which all the income the retiree has been receiving since he started working has been escaping.
This will enable him (retiree) to block the routes to prevent his gratuities and pensions or other capital that he may acquire from going through the same route.
He also pointed out that poor accountability had been a major hindrance to the survival of retirees, adding that failure to invest and unplanned family size are some other causes of failure.
He explained that it is a common feature to see the wives of some retiring Nigerian workers at ages above 50 holding new babies, stressing that this is inimical to a successful preparation for retirement.
Yet, it must be pointed out here that some people who want to invest, fail in the process.
Citing probable reasons for this anomaly, Onu noted that the majority of the pensioners that attempt to invest usually fail mostly as a result of poor feasibility study of the business they intend to start.
Some people invest so small an amount of capital that will not result in turnover that could take care of their own income while some engage in the production of goods and services that are not demanded for in their geographical area, he said
Apart from that, he pointed out that another major cause of failure is to invest in a Business they do not have the necessary skill to manage and also, not ready to employ the services of the required professionals and where they do, they fail to motivate the professional towards high productivity.
Another important question is, why must one invest? Onu explained that investment is necessary because among other reasons, uncertainty are inherent in the human environment and it is wise to invest in time of plenty against lean times.
Apart form that, he pointed out that increasing cost of living and inflation affect retirement income.
Another point is, having known why one should invest, where is best to invest in?
Some of the areas one can invest in include, by direct investment such as setting up a business, buying and selling, service provider and manufacturing etc.
Other areas include, real estate, in the financial market and in partnership.
Speaking on the financial market specifically, he advised that, "if you are too old or have physical disability preventing you from going to active business, you may invest in a financial market such as the Central Bank of Nigeria (CBN), Treasury Bill and/or, Commercial Bank's fixed deposit and/or, acquisition of shares in reputable/progressive companies.
He also advised that one must be very close to the banks with the following caution;
monitor the progress or otherwise of your chosen bank so that you can evacuate your deposit if it is going distress.
Keep the bulk of your money in interest-yielding deposits with only the amount you require for the day to day running of your business in the Current Accounts.
Do not issue cheques to doubtful characters as they may study your signature to defraud the account.
Always secure your bank cheque booklets.
Do not rely too much on bank loans except where it is unavoidably necessary because if not properly managed it could be counter-productive. Especially where it is less than the capital required.
You should not keep any raw cash at home for both economic and security reasons. Even when you keep some cash at home for emergencies it should not be discussed with any person.
Apart form loss to theft, cash is a very liquid asset that if kept at home, there will always be something to expend them on.
You should not settle any debt from your capital, as that could be likened to a farmer who sold his hoes and cutlasses to settle debt.
On the other hand, Onu advised that if still active, one can go into entreprenuership after the necessary education, proper feasibility studies and consultations with relevant experts.
The following guidelines, he said, are important for this venture;
You must have either have extensive experience in the type of business you wish to start or know individuals who have talents and expertise you lack in your chosen business.
You must learn the mechanics and forms of running a business (tax record, pay roll records, inventories, insurance records, journals, ledger, receipts, income statements, and balance sheets).
You must learn to like meeting and dealing with people and also have the ability to communicate effectively and persuade them to go along with your dream.
You must ensure that there is demand for the product or service you are intending to market in your geographical area and also acquire skills in marketing.
You must ascertain that other firms in your industrial classification are doing well in your geographical area before starting your own business.
You must also ensure and know the suppliers of the materials necessary for your business, and also ensure the presence of the necessary infrastructure in your intended business location.
As a last word, he noted that business is a very dynamic process and its world is ever changing. Based on that, he advised;
"Do not be discouraged by any sign of failure, as failure in business is not a destination but a part of the journey. If properly managed, failure could even be a spring board towards success".
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