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African CEOs - June 15, 2023

Tony Elumelu: 5 Tips for Investing

Tony Elumelu in one of his interviews stated that “Africa is a land of opportunity. Challenges exist in Africa, but we also have a huge return on investment. There’s no better time to make that bet than the time we live in.” This belief is evident in the numerous investments sponsored by him on the continent. 

Elumelu who has repeatedly called on the government to invest in the private sector, has a broad portfolio of investments. From rescuing a Nigerian bank that was on the verge of collapse to turning what had been a family office into an African proprietary investment company, Elumelu is an investment guru. Let’s take a look at some tips that can guard your investment journey.

Prepare and gain exposure

Speaking about his early days in the banking industry, Elumelu said, “When we, a small group of hungry, determined, young outsiders, took over struggling Crystal Bank, it was as a direct result of the preparedness and exposure that we received early from our superiors and mentors.” This shows the importance of proper preparation and exposure before investment.

Young entrepreneurs must focus on understanding what they want to invest in and seek counsel from experienced persons. Elumelu further added that “Without the intervention and goodwill of these people in my career, I would not have been prepared as I was to take on far greater roles.” Investment should not be something you jump into, it should be a path to explore after you have garnered enough knowledge.

Set measurable goals

Setting measurable goals before investing provides clarity and helps you focus on what you want to achieve. When your goals are clearly stated, you will work with a specific target in mind and stay disciplined till your goal is achieved. Addressing young professionals, Elumelu said, “Have a clear picture of the destination you desire but instead of letting frustration set in, let those desires become the fuel that drives you to attain your goals.”

Building an investment portfolio in Africa involves a lot. Sometimes you may have to cross paths with friends and respected colleagues in the industry but having a goal will keep you focused on the journey.

Invest in a financial adviser

The Nigerian Investor once said, “The best-spent money is that which is spent on your self-improvement.” According to him, learning is a long-term investment that never stops rewarding. Young entrepreneurs who desire to build a strong investment portfolio must invest in a financial advisor. 

This will give them access to tailored advice that aligns with their specific financial goals and circumstances. Financial advisers can also help them create a comprehensive financial plan that considers their short-term and long-term goals, cash flow, tax implications, etc. 

Diversify your portfolio

Elumelu’s diversified investments have helped him to minimize risk and maximize returns. The Nigerian business mogul who chairs Heirs Holdings has a controlling interest in Transcorp, a publicly traded Nigerian conglomerate with interests in hospitality, agriculture, oil production and power generation.

Diversifying your portfolio can lead to more stable and consistent returns over time. It also gives you the opportunity to participate in the growth potential of different sectors and industries.

Keep your costs low

Keeping your costs low can significantly impact your investment journey. It helps you maximize the amount of money working for you and potentially increase your overall returns. It also enhances the long-term growth potential of your portfolio. Rather than spend much, sow much. 

Counselling young people, Elumelu stated, “As a young professional, this is your season to sow. This is the time to toil to build the right foundation. This is the hour to learn voraciously, work hard and gain all the experience that you can. This is the time to put in the work! Reaping and harvesting will come at a later time.” So cut down the cost and maximise your sowing season!

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