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Top 18 Online Investment Opportunities in Nigeria
Investments are creative ways to let your money work for you as it grows. For example, instead of just storing up your money somewhere, you can invest it in a business opportunity and make more money. So, most times, the best way to save money is to invest it.
Gone are the days when you always have to invest your money in the bank and wait all year for annual returns. Now, many online investment opportunities can help you grow your cash with better and quicker return rates.
While some of these online investments may require your consistent efforts over time, some of them do not necessarily need your attention. So, whether you’re very busy or have enough time, you can always find one that suits your schedule. Let us show you why you need online investments in Nigeria and the top 20 online investment opportunities you can explore.
Why Do You Need Online Investments in Nigeria
Nigeria is a country that has been faced with high economic instability in recent times. According to the National Bureau of Statistics (NBI), the country’s inflation rate as of April 2021 was 18.12%. Although there are speculations of a decrease in inflation, there’s no guarantee as the country’s economy keeps swindling.
Hence, it is essential to establish means of income that do not depend directly on the country’s economy. Maximizing online investment opportunities is a great way to achieve this. Other significant benefits of online investments include:
- Multiple streams of income
- Low starting capital
- Better and faster return rates due to higher volatility
- Prevent devaluation of the currency.
#1. Trading Nigerian Stocks
The stock market allows investors to invest in the assets and earnings of different companies. You can do this by purchasing a company’s shares. As a result, you own a fraction of a company’s worth when investing in its stock.
The official market for stock trading in Nigeria is the Nigerian Stock Exchange (NSE). The NSE lists only publicly traded companies. Nevertheless, if you want to buy and sell the stocks of private companies, then you have to go through the National Association of Security Dealers Over-The-Counter (NASD OTC).
So, how do you make money trading stocks? Stock trading involves buying stocks with the idea of selling them at higher prices to make a profit. Stock trading is primarily aimed at short-term gains instead of stock investing, where you target long-term profits.
How Nigerian Stock Trading Works
As a short-term stock trader, you capitalize on price fluctuations of stocks in the market to make a profit. In essence, your success depends on your ability to correctly predict the stock price movement in the market.
To trade Nigerian stocks, you can follow these simple guidelines:
- Open a brokerage account. A broker helps you execute your trading activities such as Buy, Sell, etc. You can register with any of the trusted online Nigerian stock brokers. Some well-to-do brokers include Meristem Registrars Limited, Sigma Securities Limited, etc.
- Determine your trading budget. It is an excellent practice to trade only with funds you can easily forget – your spare money. This is because it is all possible for you to lose in the stock market.
- Learn how your broker’s trading platform works. Get acquainted with trading terms and actions like Buy or Sell Order.
- Many brokers let you create a demo account and do paper trading. You can try out your trading strategy to ascertain it’s working before investing your real money.
- When you’re confident, you have learned enough, invest your money. You must accept the fact that stock trading is risky, so you lose sometimes and win sometimes.
Your success in Nigerian stocks trading depends on how informed you are, so you can join an excellent Nigerian stocks community for proper updates and guidelines.
#2. Trading US Stocks
The U.S. stock market is the largest in the world. As a result, it provides you with different opportunities to make money at different levels as a stock trader.
In the U.S., the activities of companies in the stock market are regulated by U.S. law. However, the law does not forbid non-American citizens from investing in the American stock market. This means you can trade or invest in the U.S. stock market, even from Nigeria.
However, it was difficult to invest in U.S. stocks from Nigeria due to their strict requirements. You will have to at least have a valid U.S. visa or green card. The minimum investment amount was also running in thousands of dollars, restricting the foreign market to high-income earning Nigerians.
But things are quite a lot easier today. Recently, you can get on board foreign stock markets via apps such as Trove, Bamboo, Chaka, etc. Most of these apps are available for both Android and iOS users.
These platforms have brokers that manage the traders’ accounts; for instance, Trove partners with DriveWealth LLC. They may also have different trading regulations. For instance, Trove pegged its minimum stock investment at $10 while Bamboo pegged theirs at $20.
To begin trading U.S. stocks, you need to download any of these foreign-stock-enabled apps and follow their rules and procedures. The market operations are also similar to stock trading in the Nigerian stock market. Then, you can join our U.S. stock traders community to learn more and get timely information for your trading exploits.
#3. Treasury Bills and Bonds
Treasury bills are also known as T-bills. The Central Bank of Nigeria (CBN) issues treasury bills on behalf of the government as guaranteed debt instruments. It is used for financing government expenses and serves to control the supply of money in the economy.
In times past, the minimum amount for treasury bills investment was as low as N10,000. But in 2017, the bar was raised to ₦50 million, making the market practically unreachable to retail investors.
However, the government introduced the FGN Savings bonds as a replacement for treasury bills. Unlike treasury bills, bonds are more affordable and have a longer tenor of 2 to 3 years.
How To Make Money With Treasury Bills
Every treasury bill has a maturity date. On the day of sale, the treasury is sold for a price lesser than its value, and on the maturity date, it is sold at its actual worth. This means that the investor gets the interest on the investment upfront.
Your profit in treasury bills investment is the difference between your purchase price and your sale price. In the example above, the sale price is ₦10,000, while you paid ₦9,600 to purchase it. So, the profit is ₦400. This is more or less the upfront interest in your investment.
The yield or discount rate is the percentage of your profit relative to the actual price of the T-bill. So, in the example above, ₦400 is 4% of ₦10,000, so the yield is 4%. However, the actual yield is the percentage ratio of the purchase price to the profit, in this case, equates to ₦400/₦9,600 = 4.16%.
#4. Dollar Denominated Assets
Dollar-denominated assets are securities priced in U.S. dollars. The strength of dollar-denominated investments is in the devaluation of the Naira. That means that you can prevent your investments from devaluing by investing in dollar-priced assets.
Let’s say you invested ₦2 million worth of a dollar-priced asset at the rate of ₦450 per Dollar; that’s $4,444. Say the annual interest rate on the investment is 12%. That means you’re expecting a total return of $4,977 after one year, and the naira equivalent is ₦2,239,650.
Let’s assume that on account of naira devaluation, the dollar rate increases to ₦485 per Dollar as at when the investment is due. That means your investment is now worth ₦2,155,340 without interest. At 12% per annum, the investment value will be ₦2,413,980.
These whole calculations imply that, instead of an interest of ₦239,650, you are liable to earn an interest of ₦413,980. That means the dollar-denominated investment didn’t just shield you from devaluation; it turned out to be a profit of ₦174,330 within one year.
#5. Trading Canadian Stocks
Canada is considered one of the most stable economies in the world and one of the wealthiest countries. As it stands, no stock exchange lists more oil and gas and mining companies than the Toronto Stock Exchange (TSX). In terms of market capitalization, the TSX is also the 8th largest in the world stock market.
The Canadian Dollar is the 5th largest reserve currency in the world. It also features the list of the most actively traded national currencies globally, ranking 7th. All these buttress the fact that the Canadian stock market is one with excellent prospects.
Trading Canadian stocks follow similar procedures with general stock trading. For example, the TSX opens at 9:30 am and closes by 4 pm. In addition, you may register with brokerage services such as T.D. Ameritrade to buy and do other transactions with Canadian securities.
#6. An RSA Account With A PFA
If you’re a team member in Nigeria, your employer is obligated by law to separate part of your earnings as your pension contribution. This money goes into your Retirement Savings Account (RSA).
The National Pension Commission (PenComm) licenses some companies to manage and invest funds in the RSA of employees. These companies are called the Pension Fund Administrators (PFA). A good example is the ARM Pension.
The idea is that by mandating your contribution to your RSA in your working days, you will save some money for your retirement. This is an excellent example of “investing into your future.” Then, at least, you have something to fall back on when you retire and can no longer work.
The beautiful thing about investing in your RSA account is that you can request withdrawal even if you’re not yet retired. You will be granted access to 25% of your RSA contributions in such a case, provided it has been up to 4 months since you got disengaged from work.
PFAs help you manage your retirement contributions and grant you access to its benefits when the retirement is due. PFAS also permits the release of the pension contributions benefits for a deceased person to another person authorized by the deceased will or any other legal premise.
#7. Trading Cryptocurrencies
There are many crypto assets, coins, and tokens you can make money from. Famous examples include Bitcoin (BTC), Etherium (ETH), Dogecoin, etc. According to CoinMarketCap, there are over 10,000 publicly traded coins in the crypto market.
Like stock trading, trading cryptocurrencies is whether you can correctly predict the movement of the market. You can buy a particular type of coin and resell it at a higher rate. Day traders stay on the crypto chart, monitoring every market move and seeking opportunities to turn out huge profits in the shortest time possible.
What makes crypto trading lucrative is the volatility of the market. Prices change very quickly and often numerous times per day. So you can register with a crypto exchange such as Binance to start your crypto trading journey.
#8. Investing in Stocks
Stock trading and stock investing are two different things. If you’re a stock trader, you buy stocks and resell at higher rates to profit. In essence, stock trading is for short-term gains.
Say you buy ₦10 million worth of stock, and in 10 years, the worth company increases by 40%. It means that your shares will then be worth ₦14 million. You can also receive other earnings such as dividends on your stocks.
#9. Holding Crypto
Similar to what we explained about stocks, trading crypto and investing in crypto are technically not exactly the same. HOLDING is the crypto jargon for “holding,” which signifies buying cryptocurrencies and holding them for long-term profits.
Cryptocurrencies are volatile, so the value of a coin may skyrocket to the moon in a matter of a few days or a few years. Since this can generate massive profits for holders, the reverse can also be the case. Conversely, a coin may diminish in value until it vanishes, so all your waiting will turn futile.
Hence, you need to analyze the future of any coin before you buy them for holding. You can consider essential factors such as:
- The purpose of the coin
- Whether it has an actual use case
- The development of the coin
- The prospects stated by the white paper
- The Volume of market supply
To purchase and hold coins, you can download and install crypto wallets such as Trust Wallet, Luno, Coinbase, etc. You can also join the crypto forum at Naijatradingroom for timely information and guidelines.
#10. Forex Trading
Forex simply means Foreign Exchange. In simple terms, forex traders make a profit by buying and selling fiat currencies. It’s the same idea with stock and crypto trading; to capitalize on price fluctuations to profit.
You can trade a currency against another on Forest by predicting which one rises against the other. The currencies you compare are known as currency pairs and are represented by three-letter symbols. For instance, if you trade a BUY on USDNGN, you predict that USD (U.S. Dollars) will rise against NGN (Nigerian Naira).
Like other digital tradings, forex trading works with brokerages. You can register with trusted brokers such as Hotforex, Deriv, etc., and trade on their platform, and most of them have mobile apps for trading. In addition, most of these brokers grant you access to a demo account to practice your strategy before you invest real money.
#11. Trading Forex Volatility Indices (Vix)
Besides the actual currency forex trading, you can also trade volatility indices on forex platforms. Volatility indices (Vix) are a simulation of the real forex market. In essence, you are trading virtual items that are not real.
The Vix market works precisely the same way the fiat currencies work. The significant difference is that, just as the name suggests, Vix is much more volatile than the stock forex market.
This high volatility can be both an advantage or a disadvantage to you as a trader, depending on your expertise in Box trading. So, you need to ensure that you learn an effective strategy and stick to it until you’re sure it’s working well before you start trading.
To trade Vix, you can register with brokers that support Vix trading, such as Deriv, Hotforex, etc. Remember, a significant rule in digital trading is: never invest an amount of money you cannot spare. Of course, you can always try out your strategy with a free demo account.
#12. Decentralized Finance
Decentralized Finance (DeFi) is one good way to earn passive income in the crypto space. It enables you to offer financial services to people beyond your geographical location and get rewarded in crypto.
For instance, you can offer a crypto loan from Nigeria to a client in New York and accumulate interest over the loan period. First, however, you need platforms that will guarantee your security in such transactions to avoid getting scammed. Examples of such platforms include Dy/DX and Compound Finance.
#13. Investing With Forex Companies
Learning and trading forex – whether fiat currencies or Vix – can take a lot of time to master. If you’re a very busy person, you might either not have enough time for it or take too long to learn well enough to start earning.
Well, this is where forex investment companies come into play. You can invest with companies who use your money to trade and give you interest in return. Examples of such companies include ClayTrader. OctaFX also offers a package known as Copy Trading, where you copy the market order settings of experts and pay them a commission.
However, beware of many fraudsters masquerading as forex investors and traders. Before you invest with any company, be sure you verify their authenticity, and even at that, invest what you can spare.
#14. Real Estate Investment Funds (REITs)
Before now, the only way you can invest in real estate would have been to buy or rent houses and other properties. But, of course, that demands a lot of capital, and even if you borrow, it might take a long time before you finish paying back and start earning profits.
But with REITs, the story has changed. REITs provide you with an opportunity to invest in a portion of real estate assets. Just the same way you buy a company’s shares, you don’t need to own the whole property to start making money.
Before you invest in REITs, it is best to understand how the property market works. Also, endeavor to crosscheck the investment strategy of the real estate managers and figure out whether it matches your own investment strategy.
#15. Investment in Gold
Gold is one of the most valuable resources in Nigeria and in other parts of the world. The value of gold in itself does not change. For instance, 50-carat gold at the moment remains 50-carat even 25 years later. However, you can maximize the change in the cost/price of gold to make a profit.
Apart from buying physical gold, there are various ways you can invest in gold online. For example, you can invest in the shares of gold mining companies and resell them as their value appreciates. Alternatively, you can invest in Gold Mutual Funds.
However, one of the fastest and most lucrative ways to earn from gold investment online is to trade in gold trading platforms. It works just like Forex and stock trading, leveraging changes in market price to make money.
#16. Online Tutorials
Investing and trading stocks, Forex, or crypto are not the only ways to make money from these digital assets. If you have enough knowledge and expertise in online trading and investment, you can convert your knowledge to cool cash.
Many Nigerians are eager to join the moving train and start making money from these digital assets. You can maximize this opportunity by offering trading and investment classes. It doesn’t have to be physical tutorials; you can run your classes online.
You can decide to run a crypto-based YouTube channel and upload regular video classes on it. You can make the lessons a series so that people can trace the sequence and learn properly. As you most likely already know, you can earn from YouTube in different ways if your channel qualifies to be monetized.
#17. Selling Digital Trading Resources
This is another excellent way to make money out of your skill, expertise, and flair for online trading. There are many types of online trading content you can create and push online. And trust me, people are looking for such content every day.
You can decide to put your knowledge on paper by creating ebooks and PDFs for online traders. Beginner’s guides sell very well in Nigerian marketplaces as more people are trying to learn the world of online trading.
Also, many people are looking for easy ways to find out which online trading platform is best for Forex and crypto. You can create research-based and experience-based educational content in this direction.
#18. Affiliate Marketing
If you’re a public figure or have a large audience you can influence, you can earn excellent money by marketing for digital companies. This has become even much easier in this era of high social media participation and interests.
Say you have a YouTube, Facebook, or Instagram channel with many followers and subscribers. Then, you can reach a deal with crypto or forex companies and market their products and services for them. This particular strategy has been consistent with Nigerian social media comedians.
You can also create, manage, and grow a blog or an online community where you post content on crypto, stocks, or Forex. Then, as people visit your website for these contents, you can position affiliate links in strategic places to redirect traffic to your dealer.