NaijaMama's WordsOfWisdom Podcast's Debut Episode Seven Quick Steps To Financial Independence

This podcast is called Niger Mama's Word of Wisdom and it is hosted by Gloria, who shares her personal experiences and insights. She talks about her education, career, and how she ended up in Europe. Gloria hopes that her podcast will be a space for curious and open-minded people, especially Nigerians, to learn and discuss various topics. She aims to challenge societal norms, explore new ways of thinking, and encourage listeners to share their thoughts. The first episode is about financial independence and retirement planning. Gloria provides tips on building an emergency fund, hedging against risk, seeking advice from experts, and diversifying assets. She emphasizes the importance of starting early and being disciplined with saving. The podcast is available on most platforms and can be accessed anytime. Hello, hello and hello there, you're welcome to my podcast called Niger Mama's Word of Wisdom. I know the first question on your mind would be, who is this and why this podcast? Never mind, I'm more than happy to introduce myself to you. My name is Gloria and I was born and brought up in Lagos. In the early 70s, I attended a primary school called Marywood Primary School in Ebutimeta, Lagos. And thereafter, I went to a state where I attended the Federal Government College Ikotepene, SGCIK for short. After five years at the school, I went back to Lagos where I went straight to the University of Lagos. I studied microbiology and graduated in 1991. So after that, I went to Oyo State for my youth service. I served at the International School University of Ibadan as a biology teacher. After Ibadan, I went back to Lagos to start a career. So my first purpose call in Lagos was at a company called Pyramid Savings and Loans. And why Pyramid Savings and Loans? In the early 90s, most of you who are my age may recall that the then dictator, Babangida, made policies that allowed companies to act as middlemen between consumers and banks. So I happened to have worked in one of those companies called Pyramid Savings and Loans as a treasury officer. My job description back then was to go out, source for funds from private individuals and companies, and sometimes other banks, and bring them to my bank to place them in long-term fixed deposit accounts for a bigger interest rate. So the same way this financial sector kicked off, or the same way it crashed about two or three years later. And after that, I changed jobs to other companies where I did marketing and sales. And in 1995, I joined a company called Ibadan Chemicals, Ibakim. And Ibakim was owned partly by Ibrus and a big corporation in Switzerland called Dow Chemicals. It was at this company that I was sent to Europe, specifically Switzerland and France for a one-month training. Then I met my husband and I went back to Nigeria. In 1998, I relocated completely then to Europe. So now that you know a bit about me, I will tell you what this podcast, what I hope it would be. So I hope the space will be for folks, especially Nigerians, who are curious, open-minded, dynamic, ready to learn, and offer constructive criticisms to any topics discussed on my podcast. Straight-talking will be my niche, with zero sugar-coating. At times, exploring topics that will question a lot of stuff we've been raised with, or at least to be the truth. Oftentimes, I will touch on topics that will challenge most things our societies have inculcated into our subconscious to be the norm. Hearts will be broken and may be mended. Values will be questioned and may be rewritten. Mentalities will be affected and hopefully positively affected. Of course, new ways of doing the same things or new discoveries using previous approaches will be deliberated upon together, and you and I will be encouraged to share our thoughts on topics that move us to think. I would love for you, my listeners, to see this podcast as a hub to visit while driving, cooking, or just winding down after you've had this wahala. So if you're looking to expand your horizon and life lessons, you're most welcome to visit my podcast, this hobby psychologist, every Friday at 10 a.m. Berlin time zone. Okay, this podcast can be accessed anytime, anywhere in most podcast forums for at least 90 days. So now that you've heard a bit about what I hope to achieve from this podcast, I would like to introduce you to the first episode that I've chosen. I've chosen a name that I believe resonates with almost everyone anywhere in the world. So I've named it 2024 New Year's Resolutions. 2024 New Year's Resolutions with a subtopic which I call several quick steps to financial independence, seven quick steps to financial freedom. So are you financially prepared for old age or for the rainy day like we say in Niger? If not, it's never too late to start. I have just advised my own teenage kids to start doing the same thing because the three of them have just started high school and part-time jobs this past summer. In Germany, the system is designed to allow secondary school or high school students to work part-time while studying and German financial experts advise to follow these tips to build up capital for your old age in seven steps and this helpful hint could also serve as a guide in the situation we Africans called saving for the rainy day. The average African does not invest in insurance coverages or when we do, it is investments with a wink in the supernatural. Be it in the Christian God, the Muslim Allah or whatever deity your choice of religion is but having lived through the early 70s till date, I've yet to see any of those deities pay anyone's health bills when they come down for example with a serious health condition like cancer etc. Neither am I yet to experience any religious affiliation by any faithful worshippers, a new house or car when a dreadful flood comes or your house is cut down by a fierce inferno. Many people put this off and believe that there will always be enough time for it later but experience shows that the earlier women and men start planning for their retirements, the more economic leeway they have in later years. It's not about setting aside a sum as large as possible because even small amounts can grow into a small fortune over years and decades if you are disciplined enough. In this article, I'll show you in several quick steps how to proceed with retirement planning or how to save for the rainy day. So step number one, establish what experts call an emergency fund. I say it again, establish an emergency fund. Before you start building up a financial capital base for older age, you should set aside an emergency fund account for unforeseen cases. Now in African context, I'll consider my health as very important on that list because the majority of Africans do not have health insurance cover but if I resided for example in Germany, that emergency fund could be reserved to my car, the washing machine or smartphone replacement etc. What difference anyone would ask? In Germany for instance, everyone has a health insurance coverage. In Nigeria on the other hand, only those who work for big corporations like I did for Ibakim enjoy that privilege of a health care insurance via their employers. So the emergency fund of such people who work for big corporations should be channeled towards other emergencies based on their specific family needs. But if you don't work for a big corporation, then I would advise that you place your health as number one on that list. Okay, so an employee should save two to three monthly net salaries in a daily savings account for such and other emergencies. But a self-employed family should ideally have three to four months net salaries set aside in advance of a slowdown in business. What can happen to everyone of us? Because sometimes you know, business is slow or contracts are not forthcoming. When they are forthcoming, they are slow in paying and all that. So it's always advisable to have an emergency fund where if you run into problems, then you can always turn to this emergency fund. So step two on the list is what experts call hedging against risk. Hedging against risk, I'll spell it. H-E-D-G-I-N-G against risk. Okay, so what is hedging risk? Hedging is comparable to taking an insurance policy. For example, it doesn't make sense to save so much retirement when you are exposed to a lot of risk that will make sure that you may end up not enjoying what you have saved for. So let's say for example that you have bought a land of property in a part of Lagos called Leki. And this area of Lagos most know is prone to flooding. You might want to protect your property, which is your assets, from the risk of flooding, meaning you are trying to hedge this property. In other words, to take out flooding insurance as you cannot prevent a flood in any way, but can plan ahead of time to mitigate the dangers and a flood occurs. Let's take a second scenario for example. Although no one can imagine it, but it can happen that one suddenly loses one's job due to an illness or an accident. So most people in Germany take out an insurance policy called occupational disability pension, because Germans generally do not like the idea of being dependent on anyone, not even on the government, if they can avoid it. So in the event of such an unfortunate situation, the insurance company will continue to pay your net salary based on the terms of the agreement, and if you never recover or if it takes time to recover, the insurance company will work out an arrangement with the government and they will continue to pay your salaries indefinitely. So, but experts also warn that for such insurance policies, you should separate them strictly from capital accumulation before retirement. So number three on that list is seek advice from independent and experienced financial or insurance experts, especially when it comes to complex issues such as retirement planning. It is important or important to take enough time. This means getting advice and above all comparing different offers before making a decision. For example, if I want to take out insurance policy with a company called Allianz, I would make sure to look for a second company or third one, because this financial advisor from Allianz, I'm not sure, is advising me only based on my own interests. Because one, whatever it makes, I mean, whatever deal it contracts with me, it will be getting the provision from its employers. So I can never be sure that whatever advice I get is totally only for my own interest. So I would critically question every information I receive and then after doing that, you can then decide to either take out the policy with this advisor or go elsewhere. So number four on that list is spread your assets widely. Spread your assets widely. Okay. It is advisable to spread your assets across different investment product classes. In addition to the emergency fund in the current account, it is also conceivable to have fixed-term deposits or saving bonds or investment funds and or tangible assets like gold or silver. But if I returned in Nigeria, where I put my investment in landed property, such diversification of assets means you are reducing the risk of loss. So if anyone is interested in this topic, in this particular aspect number four, you can reach out privately and I can give you a few people in Nigeria who are quite conversant in this field. Okay. So for this various product classes, it is also advisable to rely on broadly diversified and globally invested ATFs. So I say it again, broadly diversified and globally invested ATFs. So ATF is Exchange Traded Index Funds. Exchange Traded Index Funds. So the following applies to ATFs. So I will explain what ATFs are. For instance, if I want to pick out, if I want to invest like a hundred thousand dollars and I intend to, maybe I say I want to like invest in Microsoft and it's advisable not to. This ATF is like you put the money in this fund and your financial company or insurance or investment company would spread that hundred thousand dollars into different other companies like Microsoft, like Tesla or Apple or any other company that you might be interested in, but not in one company. That is why it's called ATF. And the ATF is so because it is classified as a special fund, meaning that if the company, if the financial company that is working for you goes insolvent, your own funds are protected. Your funds that you put in the ATF fund would not be touched. It is protected from insolvency from the middleman's company. Okay. So even my kids, since they're working in summer last year, what they do is that they save 25 euros every month in an ATF fund. And with this fund, they will do that for about 20 years or they can extend it later. And the investment company would invest this 25 euros into different shares, Microsoft, Apple, Tesla, maybe some renewable energy companies, anything that interests you at all, but it won't be in anyone's share. It will just be spread across globally. Now I have also some, you know, shares in companies across the world. I mean, that is safer because if one region of the world has problems in, you know, it may not affect other parts of the world. So it's always advisable to spread your assets as wide as you can. So number five on this list is avoid products that you do not understand. That is common sense, right? Okay. So always get a detailed explanation of how a financial product works and ask questions if you don't understand something. And if you don't understand, after you've been given, you know, brochures or whatever to go read, you know, Germans will say, finger wet, meaning take your fingers off. Don't you do business with something that you do not understand. But of course, some people like me always like to take risks. The more risks you take, the higher the dividends, but it's also, it's a risk, which means that your chance of losing it is also bigger than if you invested in something conventional. So, but if you still want to invest after knowing that whatever it is that you want to do is classified as high risk, experts will say, only do that with money that you can do without, which means if you know that, if you lose like $100,000, it's not a big problem to your financial, you know, status, then it's okay. But never ever put all your money, you know, in any high risk object or investments. I mean, that is common sense. And step number six, check your investments regularly. In Germany, everyone is encouraged to DIY, do with yourself. Okay, so this step is especially important if your private or professional life circumstances change. But it doesn't mean that you lose your nerves due to temporary events such as stock market turbulence. Of course, you know when you're flying and there's a turbulence, what happens? The turbulence only lasts for as long as the plane is flying on a large body of water. You know, the minute the plane goes past this Pacific or Atlantic portion or whatever, it stabilizes again. It's the same way with stock market investments. I would not take my money out when stock market is, or when there's turbulence or when it's, you know, dropping, you know, because if you do that, you're going to lose. So what you do is to have strong nerves and wait until it stabilizes again. If you must, then you can sell them. But when it is, you know, fluctuating, it's never advisable to pull out. But most people do that out of, you know, panic and say, oh, it's crashing. But when you do, definitely you are going to lose money. So always, always, you know, as you say, make sure that you wait, if you can, for the markets to stabilize again. I will take that again. Okay. The consumer advocate in my city of Wiesbaden, Germany cannot emphasize enough that a sense of proportion and prudence are two very important factors to consider when you are investing in stock markets. Okay. So never, ever, you know, out of panic, pull out your money, because if you do, you are going to lose. But if you can, you know, if you can have strong nerves and wait till the waves settle down, yeah, then you could sell or you can leave your investment there to continue running. And now to the last but not least, number seven, it is what the Germans say, discipline. Okay. Now for all those points, one through to six about the function, you would need a lot of what? Discipline, discipline and more discipline. Okay. So before I say goodbye till next week, I will throw this in on a lighter note. If you are a religious person and you belong to the Christian faith, for example, and you have been paying a cent of your earnings every month, your church without the shorty of receiving a thousand fold in return here on planet earth, it should not be hard for you, my dear, to put aside one to two months salary per annum towards your retirement or towards an emergency fund, which you will surely receive back with a shorty on this planet earth. Even when your planet is short time, your family takes over what you have put down. So in any way you can never ever lose because if you, you know, if you don't make it till retirement, whatever you've done goes automatically, especially, I mean, I don't know about Nigeria, but automatically here in Germany to your family. So dear listeners, be wise so you won't be destroyed for lack of knowledge, or you won't be foolish like the five or was it ten virgins that forgot to put, what is it though? Okay, was it Indian lambs? And when the bridegroom showed up, they were left behind. So even though I don't believe in the Bible anymore or in any religion whatsoever, but I leave you with this wise Biblical thing because I believe the Bible is a guide, a book of guide, a book of guidance to guide you. If you read it, take what is good for you and what you don't, what is not good, you throw it away. So I leave you with this thing, be wise so you are not destroyed for lack of knowledge. So my dears, if you like anything in this podcast, I will think you know anyone that might benefit from anything I've said in the last 20 minutes. It's 20 minutes because it's my debut episode, but for the future ones, I'll make it as short as maybe 10 minutes. Okay, so if you had anything at all today that you feel may help you, please take it. If it's not whatever I said was BS, bullshit, then throw it away. But if you know anyone that may benefit from anything I've said today, if it's just one thing, just one point, please don't forget to forward or pass on my link to people that may need it. I will make sure to post updates once a week Fridays on Facebook and I intend to upgrade my Instagram presence as well so that at least you, my dears, would know when new episodes have been uploaded on the internet. And I tell you, there are very, very many topics to come on. I'll be speaking on marriage, I'll be speaking on love, I'll be speaking on side-chickenism, I'll be speaking on philandering husband, I'll be speaking on a lot of topics and other topics, things that happen in Nigeria, group of the moment, I will touch on them as well. And you can access this podcast whenever, wherever, at least for 90 days. Okay, thank you so much for being my guest. And please, please, please, I'm going to play a complete of this music that I started my podcast with because this lady, lady that I love so much while growing up, she shaped my childhood, Smith Christy Eseye Ibokwe. Please listen to the music if you like and don't forget to gyrate and love yourself, take care, be good, don't be silly, do good things and I'll see you next week. Thank you. Thank you so much for being my guest. Thank you. Thank you very, very much. Thank you and make sure to tune in every Friday for a new episode. Bye-bye. Bye now. Love you guys.