Should I Invest My School Fees?

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School Fees
Should I Invest My School Fees?

Good morning and how are you doing?

Friday letters are usually dedicated to taking questions from our community. Do you have a question for us? Please feel free to send an e-mail to [email protected] or a DM to any of our social media channels.

Question 

I am yet to get admission into university, but I have put aside money for my school fees. Do you think it is advisable to invest the money pending the time I get admission?

Answer

Since the money in question is for your school fees, it is best you keep it in a low-risk investment where you know that is easily accessible when you’ll need it, and will leave the money safer

Once you start getting an allowance, you can invest across four groups of assets.

You can save your money in a high interest yielding savings, which is a low-risk investment.

We have low-, medium-, high-  and very high-risk assets

Cash, fixed deposit, sovereign treasuries (i.e. bonds or treasury bills) have low-risk.

Real estate and corporate debt have moderate-risk.

Equities (stocks), commodities and currencies are high-risk investments.

Agritech and cryptocurrencies are very high-risk assets.

Risk is basically the chance or the probability of something bad happening.

Note that the higher the risk, the higher the returns and vice versa.

Question 

I am currently living in Canada, and I have a wife and two children. I get frequent requests from my family members in Nigeria to send them money. This is becoming a concern for me as it is causing a dent in my personal finances. What should I do?

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Answer 

The term for this situation is called black tax. Black tax is a situation when someone has to provide for the living expenses of their extended families, usually out of obligation.

To handle black tax, the first thing you would need to do is create a budget.

You would then need to allocate a portion of your budget for black tax. This would then put a limit on how much you are spending on black tax.

You also need to make sure you follow your budget.

A budget is having a plan for your money that would help you make the best of your money. This puts the power of your money in your hands.

Question

What is a meme coin?

Answer

A meme coin is a type of cryptocurrency that is made as a result of a joke derived on the internet. They are coins often originated from an internet meme. They are mainly community-driven and can gain popularity overnight due to online community endorsements.

Meme coins are attractive because they typically cost a few cents or even a fraction of a cent.

Meme coins are also like cryptocurrencies as they also have high risk.

Examples of meme coins are Dogecoin and Shiba Inu. Dogecoin is the largest meme coin by market capitalisation.

Join our community today and get more information and knowledge about your finances. This also gives you access to a monthly webinar series on different topics pertaining to personal finance.

Wittten By: Oluwatosin Olaseinde Co Founder, Money Africa & Ladda