₦airaland Forum

ositadima1:
Some interesting observations about wealth and personal finance.

1. Based on my calculations it appears inflation is not 2 digits as portrayed in d media, it is closer to 8%. Prices of goods and services appear to have been doubling every 10years on average (this view is empirical and based on my limited observations only).

2. To maintain an equivalent 6mil a year life style ten years from now will require about 12mil(doubling effect caused by inflation) cos of point 1 above. Well some services like rent have not been moving at that pace though, thank God.

3. If u amassed 100m Naira in ur earlier years and decide to retire confidently with a 10% return annually from ur investments. (Assuming u can find a passive investment that maintains 10% return on average for d next couple of decades)

4. U will go broke 20 years after, that is if u maintain an equivalent life style of 6m(500k a month) today with no new sources of cash inflows.

5. I made a small excel calculation which I attached below. U can see that initially ur interest can catter for ur lifestyle with decent change and overall balance stays above d original 100m. But, down the line u start spending more money to maintain equivalent level of living and ur capital start eroding.

6. I believe that is d reason why some high earning people(mostly employees and salary earners) end up poorer a couple of years after retirement.

7. This is scary sha.

Please redo the projections with these assumptions.

1. Most people retire around 60 to 65 and are assumed to live for another 25 years. So assume that the money is expected to last for 25 years. So at retirement, he starts with 4m for the year. This should be sufficient for a healthy couple na.

2. From year two, assume that 4m annual cash withdrawal will be increasing with inflation. So for example, year two withdrawal will be 4m * 1.08 and so on. This assumes your 8% inflation is correct.

3. The man no get any serious health issues and no dependents.

4. The man has his own house.

If the balance after withdrawal of annual spending money is being compounded and growing at 10% minimum rate of return, the money suppose last the man until he die na.

If by mistake he and wife lives longer than 25 years, then they are on their own o . Or maybe the kids will step in to assist

But wait o, wetin old man and him wife wey no get any other responsibilities apart from feeding go need all that money for?

ositadima1:
Some interesting observations about wealth and personal finance.

1. Based on my calculations it appears inflation is not 2 digits as portrayed in d media, it is closer to 8%. Prices of goods and services appear to have been doubling every 10years on average (this view is empirical and based on my limited observations only).

2. To maintain an equivalent 6mil a year life style ten years from now will require about 12mil(doubling effect caused by inflation) cos of point 1 above. Well some services like rent have not been moving at that pace though, thank God.

3. If u amassed 100m Naira in ur earlier years and decide to retire confidently with a 10% return annually from ur investments. (Assuming u can find a passive investment that maintains 10% return on average for d next couple of decades)

4. U will go broke 20 years after, that is if u maintain an equivalent life style of 6m(500k a month) today with no new sources of cash inflows.

5. I made a small excel calculation which I attached below. U can see that initially ur interest can catter for ur lifestyle with decent change and overall balance stays above d original 100m. But, down the line u start spending more money to maintain equivalent level of living and ur capital start eroding.

6. I believe that is d reason why some high earning people(mostly employees and salary earners) end up poorer a couple of years after retirement.

7. This is scary sha.

That’s why the best jobs on this planet for person wey no sabi invest (or wey no just like the stress and wahala) na job wey dey pay annual pension to the retiree and spouse until them die.

The pension is adjusted for inflation every year and the longer the person has worked there or the more senior they are at retirement, the higher the pension. Unfortunately, these kind jobs are very hard to come by. Only a lucky few dey get these kain jabs

I’m not talking about those Yeye national pension schemes with our pension funds o

Wow now clap for yourself, you want to generate likes by sounding like a m.oron.

The company I talked about is listed in the US SEC. Do you have any constructive criticism? My guess is no.
Desist from quoting me then.

QuinModah:
Send this to your church announcement department so they can announce it in church tomorrow.

Lazyyouth4u:
Please redo the projections with these assumptions.

1. Most people retire around 60 to 65 and are assumed to live for another 25 years. So assume that the money is expected to last for 25 years. So at retirement, he starts with 4m for the year. This should be sufficient for a healthy couple na.

2. From year two, assume that 4m annual cash withdrawal will be increasing with inflation. So for example, year two withdrawal will be 4m * 1.08 and so on. This assumes your 8% inflation is correct.

3. The man no get any serious health issues and no dependents.

4. The man has his own house.

If the balance after withdrawal of annual spending money is being compounded and growing at 10% minimum rate of return, the money suppose last the man until he die na.

If by mistake he and wife lives longer than 25 years, then they are on their own o . Or maybe the kids will step in to assist

But wait o, wetin old man and him wife wey no get any other responsibilities apart from feeding go need all that money for?

He go need all that money to dey sponsor trouble makers for him village and carry small small girls.

QuinModah:
How do I go about the bolded? No area boys o!!! Boys within the vicinity that knows him

Open a stockbroking account with investment one and you can buy as many units as possple from the NSE. You can either send a mandate for purchase or buy it yourself on the online trading platform which you have access to once your account is opened.

To open stockbroking account, click the link on my signature and complete the online form.

N. B: Investment one will never ask for cash to open any product account.

Lazyyouth4u:
That’s why the best jobs on this planet for person wey no sabi invest (or wey no just like the stress and wahala) na job wey dey pay annual pension to the retiree and spouse until them die.

The pension is adjusted for inflation every year and the longer the person has worked there or the more senior they are at retirement, the higher the pension. Unfortunately, these kind jobs are very hard to come by. Only a lucky few dey get these kain jabs

I’m not talking about those Yeye national pension schemes with our pension funds o

If you want that type of pension in Nigeria, get a job as a police man, military officer magistrate or judge and retire when you are 60 years or have spent 30 years in service

NL1960:
He go need all that money to dey sponsor trouble makers for him village and carry small small girls.

That one sef dey

emmanuelewumi:
If you want that type of pension in Nigeria, get a job as a police man, military officer magistrate or judge and retire when you are 60 years or have spent 30 years in service

Don’t forget politicians . President, VP, Senators, Reps, Governors, Deputy Governors, State Assembly members all get very generous and mouth watering pensions with cars and house sef

Lazyyouth4u:
Be careful with this and do some deep research. I don’t think they have generally performed well in Naija o

REITs have performed well in terms of dividend income, just that they have a small market capitalisation of less than N30 billion.

emmanuelewumi:
REITs have performed well in terms of dividend income, just that they have a small market capitalisation of less than N30 billion.

SFS REIT paid a total dividend of N146 million in 2020.

Union Home REIT paid a total dividend of N450 million in 2020.

UPDC REIT paid a total dividend of N1.7 billion in 2020.

In fact an Architect got a dividend of almost N20 million from UPDC REIT in 2020 and has been getting in that range for the past 4 years

Lazyyouth4u:
Please redo the projections with these assumptions.

1. Most people retire around 60 to 65 and are assumed to live for another 25 years. So assume that the money is expected to last for 25 years. So at retirement, he starts with 4m for the year. This should be sufficient for a healthy couple na.

2. From year two, assume that 4m annual cash withdrawal will be increasing with inflation. So for example, year two withdrawal will be 4m * 1.08 and so on. This assumes your 8% inflation is correct.

3. The man no get any serious health issues and no dependents.

4. The man has his own house.

If the balance after withdrawal of annual spending money is being compounded and growing at 10% minimum rate of return, the money suppose last the man until he die na.

If by mistake he and wife lives longer than 25 years, then they are on their own o . Or maybe the kids will step in to assist

But wait o, wetin old man and him wife wey no get any other responsibilities apart from feeding go need all that money for?

I actually used 8.5% in my computation, if u want to reproduce it sha.

At 4m in d first year, 8.5%(for consistancy) inflation and 100m starting seed with compounding 10% interest. The couple will get broke 34 years after.

For 25 years with same factors as above, the couple would need to set aside 78m. Like u said after d 25 years they are on their own.

Regarding what dey need d money for, u know that some people have expensive hobbies right? Also, some people may like to use this time of their lives traveling around the world (At 60 some people are still pretty good physically).

Know that oyigbo mans life style and ours will start converging as time goes on. Senior citizens will not just simply eat and wither away like they used to.

Nigeria may start having old peoples homes and it will not come cheap. I dont think our government will subsidize such houses like it is done in oyigbo countries.

emmanuelewumi:
SFS REIT paid a total dividend of N146 million in 2020.

Union Home REIT paid a total dividend of N450 million in 2020.

UPDC REIT paid a total dividend of N1.7 billion in 2020.

In fact an Architect got a dividend of almost N20 million from UPDC REIT in 2020 and has been getting in that range for the past 4 years

@QiunModah. Need I say more?

ositadima1:
I actually used 8.5% in my computation, if u want to reproduce it sha.

At 4m in d first year, 8.5%(for consistancy) inflation and 100m starting seed with compounding 10% interest. The couple will get broke 34 years after.

For 25 years with same factors as above, the couple would need to set aside 78m. Like u said after d 25 years they are on their own.

Regarding what dey need d money for, u know that some people have expensive hobbies right? Also, some people may like to use this time of their lives traveling around the world (At 60 some people are still pretty good physically).

Know that oyigbo mans life style and ours will start converging as time goes on. Senior citizens will not just simply eat and wither away like they used to.

Nigeria may start having old peoples homes and it will not come cheap. I dont think our government will subsidize such houses like it is done in oyigbo countries.

Lol, that one is a given. The Nigerian government's offering to its citizens in terms of social provision is very unlikely to go beyond the current variable quality education and healthcare.

emmanuelewumi:
REITs have performed well in terms of dividend income, just that they have a small market capitalisation of less than N30 billion.

Ah. Okay. That’s good to know. I know one of them was really struggling to sell houses a couple of years ago sha...

ositadima1:
I actually used 8.5% in my computation, if u want to reproduce it sha.

I already did . Make I use am to plan ahead na

Thanks for sharing!

Whilst we are on the subject of retirement, some may opt to retire to Sea. Its a big and fascinating world out there more of which I wish to explore at retirement. Frankly I am considering it...

https://www.youtube.com/watch?v=edoVZgro9Go

ositadima1:
I actually used 8.5% in my computation, if u want to reproduce it sha.

At 4m in d first year, 8.5%(for consistancy) inflation and 100m starting seed with compounding 10% interest. The couple will get broke 34 years after.

For 25 years with same factors as above, the couple would need to set aside 78m. Like u said after d 25 years they are on their own.

Regarding what dey need d money for, u know that some people have expensive hobbies right? Also, some people may like to use this time of their lives traveling around the world (At 60 some people are still pretty good physically).

Know that oyigbo mans life style and ours will start converging as time goes on. Senior citizens will not just simply eat and wither away like they used to.

Nigeria may start having old peoples homes and it will not come cheap. I dont think our government will subsidize such houses like it is done in oyigbo countries.

CNB's two Month Naira for Dollar Initiative announced today/yesterday is below.

Lazyyouth4u:
Ah. Okay. That’s good to know. I know one of them was really struggling to sell houses a couple of years ago sha...

They are not into buying and selling of houses, they invest in real estate for rental income, mortgage for interest income and about 30% of their income in FG bonds, Treasury Bills for interest income

emmanuelewumi:
They are not into buying and selling of houses, they invest in real estate for rental income, mortgage for interest income and about 30% of their income in FG bonds, Treasury Bills for interest income

The bolded is not true. REITs also make money by selling their properties.

Look at their financials. You will find a line item ‘proceeds from disposal of properties’.

QuinModah:
Send this to your church announcement department so they can announce it in church tomorrow.

Why this sort of caustic response? Binance is bigger than every single financial institution in Nigeria and offers a guaranteed 7% per annum on stable coins. Don't allow your lack of knowledge get in the way of other people who may need to know about this investment option

Lazyyouth4u:
The bolded is not true. REITs also make money by selling their properties.

Look at their financials. You will find line items ‘proceeds from disposal of properties’ and ‘trading real estate portfolio assets’.

They are not in the business of buying and selling of real estate.

UPDC REIT sold their warehouse at Aba for N800 million and used the proceeds to build hostel for students of Lagos Business School. They liquidated part of their bonds in 2019 and bought Kingsway building from UPDC for N3 billion

emmanuelewumi:
They are not in the business of buying and selling of real estate.

UPDC REIT sold their warehouse at Aba for N800 million and used the proceeds to build hostel for students of Lagos Business School. They liquidated part of their bonds in 2019 and bought Kingsway building from UPDC for N3 billion

Yes they buy/build and sell properties. It is one of the ways they make money. Not just from rentals.

When you see proceeds from disposal of properties in their financials, that is exactly what it is.

Let me give you a hint. Do you think they rent out all the apartment units in their buildings?

Haba, a few weeks ago, you were telling us about how UPDC were selling apartments in one of their buildings in the FESTAC area na

Lazyyouth4u:
I think they are supposed to be a platform for small investors to invest their money indirectly in stocks and funds managed by SEC approved fund managers.

So if small investors buy stocks or invest their money using these platforms, the platform takes the money to invest through brokers and fund managers and charges a fee (to the small investors) which it shares with brokers and fund managers. This makes sense.

My only concern is when they ‘safelock’ money and guarantee returns. In this case, they will be investing the money themselves. That is risky.

I saw a video where one of them said they invested earlier in long term bonds and that this allows them to continue to pay out higher interest rates in a low interest market. The question is where did a start up with no money get the funds to buy up so many bonds? What happens if interest rates go up in the future and they are still holding these old long term bonds?

Also, how is the same AICO that is ‘managing’ their funds not able to offer the same 13%? One of AICO’s marketers posted a very pitiful 3% offer here a few days ago.

Exactly. What cant AIICO pounce on this seeming biz opportunity. Also, do they publish quarterly report to inform investors of their decisions? How can investors ascertain that the bonds were bought?

QuinModah:
Send this to your church announcement department so they can announce it in church tomorrow.

This is harsh. There are actually pooled investments in crypto. Lol

Hedge?

QuinModah:
Nothing just buy the shares of Dangote to hedge.

Lazyyouth4u:
Yes they buy/build and sell properties. It is one of the ways they make money. Not just from rentals.

When you see trading of real estate portfolio assets in their financials, that is exactly what it is.

Let me give you a hint. Do you think they rent out all the apartment units in their buildings?

Haba, a few weeks ago, you were telling us about how UPDC were selling apartments in one of their buildings in the FESTAC area na

You need a little bit of education.

UPDC is a property development company that builds, buys and sells real estate, the company has not been able to pay dividends for about 6 years now. They are highly leveraged. The core investor of UPDC ie UACN just sold 51% shares of the company to Custodian Investment.

UPDC REIT is a SEC regulated ventures that invests in income generating real estate. UPDC used to own 63% of UPDC REIT shares and have been getting dividends of between N900 million to N1 billion every year from UPDC REIT for the past 7 years. They just sold their shares in UPDC REIT to Custodian Investment for some billions few weeks ago


UPDC is different from UPDC REIT

REIT are very conservative.

Because of SEC strict regulations the following REITs have outlived their promoters or parent companies.

SFS REIT was promoted by Skye Bank. Skye Bank is no more but the REIT is waxing stronger. An investor who got dividend of N5 million and 10 years ago, got N7.3 million last year.


Union Home REIT was promoted by Union Home Savings and Loans. The parent company is no more, but the REIT is still growing.

UPDC REIT was promoted by UPDC. UPDC could not pay dividends for about 6 years, but UPDC REIT has been consistent with dividend payments for the past 9 years. The parent company earns an annual dividend of roughly N1 billion from the REIT

emmanuelewumi:
You need a little bit of education.

UPDC is a property development company that builds, buys and sells real estate, the company has not been able to pay dividends for about 6 years now. They are highly leveraged. The core investor of UPDC ie UACN just sold 51% shares of the company to Custodian Investment.

UPDC REIT is a SEC regulated ventures that invests in income generating real estate. UPDC used to own 63% of UPDC REIT shares and have been getting dividends of between N900 million to N1 billion every year from UPDC REIT for the past 7 years. They just sold their shares in UPDC REIT to Custodian Investment for some billions few weeks ago


UPDC is different from UPDC REIT

Thanks for the education on the difference between UPDC and UPDC REIT

In any case, I maintain that REITs also make money from selling properties. Apart from rentals, they also raise cash from selling units in their properties.

You don’t have to agree with a lazy youth on this

Lazyyouth4u:
Thanks for the education on the difference between UPDC and UPDC REIT

In any case, I maintain that REITs also make money from selling properties. When you see trading of real estate portfolio assets in their financials or disposal of properties, that is what it is. Apart from rentals, they also make money/raise cash from selling units in their properties.

You don’t have to agree with a lazy youth on this

When a REIT sells a property, which happens once in 5 years or 10 years. The proceeds are invested in fixed income pending when they get another property to buy.

The proceeds are not profits to be distributed to shareholders.

What a REIT distributes to shareholders as dividends is 70% to 80% of the rental income from the property and interest income from fixed income Investments and money market Investments.

The remaining 20% to 30% are continually used to buy more properties or fixed income securities

Trading portfolio asset is the value of their fixed income and money market portfolio Investments.


Trading portfolio assets is different from trading real estate portfolio or Investments.