David Alade

A place where I organise the chaos of my mind

Author: David Alade (Page 8 of 15)

I am a student of the world. I learn, build and share.

Is It Too Late To Invest In Bitcoin

January 27, 2021 /

The straight answer is no, it’s not too late.

Let me share the contextual answer with you.

The first time I knew something existed that is called Bitcoin was in 2015. The person who introduced it to me asked a simple question: “If you transfer a file from one phone to another, which one is the original?” I was stunned by that question and it immediately clicked in my head how interesting that question was. Of course, to save the day, this person asked for my flash drive and sent me a lot of videos explaining how Bitcoin is relevant to that question. I watched the videos but didn’t fully understand things.

Fast forward to 2017 during the bull ride before the peak. Somehow, I found myself on this group where the message on the platform was that Bitcoin is now too expensive and no one should buy. The group admin and his men, of course, we’re pitching alternative coins then called SwissCoin. It was polished as the next Bitcoin that will rise from £0.2 to thousands of euros. In fact, the timeline of when that will happen was shown. Today, they are no were to be found.

Throughout this period of knowing about Bitcoin, I didn’t trade or invest in it at all. While the reasons may be a lot, the most crucial was that I didn’t have the money to invest. However, every year since I knew about Bitcoin, people have always wondered if it was the right time to invest in it or if it was too expensive already or if they could wait for another perfect time. And I mean every time.

Just to confirm that hypothesis, since you first heard about Bitcoin, how many times have you wondered if it was the right time to invest in it? And how many of those times have Bitcoin gone up more in price and you start imagining the kind of returns you could have made if you’d invested the previous time? A lot, right? I know.

I will share with you the simplest reason why I bought my first Bitcoin and which I’ve not sold until today.

Remember the question my friend asked me from above? “If you transfer a file from one phone to another, which one is the original?” Bitcoin is the technological breakthrough that solved that problem of infinite replicability. That is, you can successfully transfer the original version of Bitcoin over the internet. Beyond that though, Bitcoin was built with features that make it infinitely scarce. As you may know already, only 21 million units of it will ever exist.

Maybe that sounded interesting so far but that’s not my reason. Building on the problem it solves and how it is designed, two outcomes are possible for it. One it can fail utterly and not become anything. That will happen because society somehow agrees that they are okay with the status quo. Two, it succeeds massively and emerges to become the internet Gold. In which case, it’s value would be worth definitely more than what it is now at a less than $1T market capitalization.

Yes, that was the first understanding that I had that convinced me to invest in it. I chose to believe that society would see value in Bitcoin and choose it above others. I’m a technology optimist and my optimism is well-grounded, any bet against technology is a costly bet. The pages of history are full of proof.

So I chose the other side of the argument and put my money where my mouth is. That said, what’s even more important here is for you to know that so far, I have less than 5% of my investment in it. I am allocating just enough so that if I’m wrong, losing the capital won’t set me back and if my optimism is supported by the society, the return will be mouth-watering.

You are asking yourself the same question you’ve asked in the last 1 or more years. You wonder if you should still invest. I’m saying why not be like me and have optimism in technology and human ingenuity for efficiency. Beyond that, why not allocate just enough to get exposure to it but that won’t tamper with your survival if our optimism is unfounded.

Please note that Bitcoin is volatile a lot in the short term. However, if you look back at where it is coming from and where your optimism and mine and that of the society at large can carry it, you may just be surprised at how irrelevant that volatility may be.

WILKES-BARRE, UNITED STATES - 2020/11/27: A man wearing a face masks leaves Game Stop with the new Play Station 5 gaming console on Black Friday. (Photo by Aimee Dilger/SOPA Images/LightRocket via Getty Images)

GameStop! Same Lesson, The Future Is Unpredictable

January 26, 2021 /

When an unknown stock out of nowhere makes all the major headlines and takes over FinTwit, you will do well to pay attention to the story of what may be going on.

GameStop qualified for that description this week. Ordinarily, I don’t do so much as follow individual companies except they are interesting to me. So when GameStop started appearing here and there on my timeline, my default mode was to switch off my attention signal to it. But it persisted and I could not help but catch-up on the story. It’s a wild one and the most important lesson for me is that we can’t predict the future and the best we can do is to keep an optimistic view of it because humans will always find a way to progress.

So what’s the story?

A group of people on Reddit under the subreddit r/WallStreetBets (2.6 million members) saw that a stock has been shorted way too much. In fact, it would conveniently make the list of one of the most shorted stocks in history. Seeing that, they decided to organize one of the most popular if not the most popular games in the market. They started buying the stock. The result of buying the stock is that demand on the stock starts to rise. And as we learned from basic economics, when demand for a particular product/service starts to rise beyond the available supply, the price would naturally go up. That’s basic economics.

Shorting stocks means borrowing a stock today and selling it with the expectation that the price will fall further in the future. If it happens that things go as planned and the price falls further, the investor who borrowed earlier will simply buy the stock back at a lower price and return the borrowed shares. On the other hand, if instead of the price going up, the price starts going down, the investor who had earlier borrowed the stock will have to buy back the stock at a higher price in order to limit their loss.

Short Call Option Strategy Explained | The Options Bro

That is, you borrowed it at $10/share and now the price is rising instead of falling, let’s say it’s now at $15/share. The investor quickly buys the shares at 15 so he can return to limit their liability. This process of quickly buying back to forestall liability is called short squeezing. The problem with this process though is that the more the investors demand the stock, the higher the price of the stock would go. They end up in a trap and the liability can be unlimited.

So as Redditors started buying GameStop, this happened and the hedge fund investors started losing money on an unprecedented level.

That’s story

What are the lessons?

No doubt, the coordinated effort is now successful. Let’s talk about ramifications.

Like I mentioned earlier, the most important lesson for me is that the future is unpredictable. If you think you could have seen what’s happening to GameStop coming and you could have benefited from it, you are still far away from understanding the workings of the world. Sure, if you were a member of the community that masterminded this, you would have gotten information and maybe benefited. Alas, you are probably not. The benefit of hindsight can be misleading many times.

If the future is unpredictable, what can we all do then? Betting on a future of prosperity is the most reasonable thing to do. Yes, you just need to be guided on how you place your bet. The world rose from abject poverty to abundance that it is today based on human ingenuity, I am not ready to write off that ingenuity today. It is such ingenuity that caused the hedge funds to lose billions of dollars today, albeit a market manipulation scheme. It is easier to win if you bet on prosperity than betting on failure.

How to bet on prosperity is to identify a company at the edge of innovation and scientific breakthrough and put your stake with them or otherwise, bet on the sum total of all human effort represented by the total stock market index. If these hedge funds had not tried to predict the future and bet on woe, this wouldn’t have happened. The butterfly flapping its wing did not set a good condition in this case for some. We could argue it did for those who masterminded the scenario.

Some other lessons:

  • Don’t ever short a stock

The future is unknown and optimism is more rewarding. Neutral is better than shorting, even if you are convinced of an impending end. If you think you are very convinced that the stock will go one way, ask the hedge fund guys where their conviction brought them. If you think it cannot happen to you, you have not read enough articles on this blog, “risk always looks impossible until it happens” is an intrusive statement.

Believe rather in prosperity and invest accordingly.

  • Retail Investors have become more power

Throughout last year, comments were flying here and there about how Robinhood traders who don’t understand the market are pumping share price up. Some professional investors would probably have wished such access wasn’t made available. Unfortunately, it is available and can’t be taken away again. And the retail traders have demonstrated in the past 14 months that they have enormous power over the market just as much as the big guys could have. Always put that into consideration going forward.

  • This is not the end, legal possibilities

Market manipulations are illegal in the market, and this is a whole new dimension to it. So expect the men of the law to step in at a point in time. We will have some new guidance.

Did you wish you had participated on the GameStop ride at least to benefit a little? In this other article, I explained a methodical approach you can take to doing that.

Can’t Stay On Budget? Do This 5 Things

January 25, 2021 /

A conversation came up in a group that I belonged to recently and a few people spoke out jokingly that they are unable to resist the temptation to spend as long as they have the money. I recognized the joke in that but at the same time, I know that a lot of people may be battling with financial indiscipline in the area of spending. As with any other phenomenon, I turned to my own financial life to pick a couple of lessons on how I have managed to stay disciplined.

From my youthful age, I’ve always been prudent with money. While that is good for me as an individual, it’s sort of not so great for me as an educator that I am now. Meaning, I’ve not had to fight and battle some tendencies that my readers may have. Notwithstanding, I’ve listened to a lot of your stories and advised a lot of you. So to some extent, I share your struggles.

So if you are the type that always finds it hard to stay on budget, the 5 guides below would be your saving grace. They’ve worked for me and others and I know it will work for you as well.

Different accounts for different purposes

This principle has been amazingly helpful to me. Once I get paid, the first thing that I do is to transfer the money to different banks for different purposes. The first goes to a bank that I use to operate my monthly expenses, the other goes to my savings and I leave just a paltry in my salary account for a rainy day. Usually, a rainy day comes when I’ve almost exhausted my monthly expenses and need something as a cushion before the next pay comes in.

The number one benefit of this strategy is that I quickly lose the illusion of having a lot of money in my account. An illusion that triggers the “spend spend” hormone in you and I. In just a wink of an eye, I have lost the enthusiasm of a payday and back to the mood of “you’ve got to be prudent with what’s left”. I found that if I don’t do this, I tend to spend more than necessary.

And you know what, there’s one month in the year that I allow myself to let go of this rule. And it is that month that I spend the most in the 12 months of the year. That’s December. I tend to spend more in that month but it’s by design.

I save more than I should then give a mid-month allowance

As I mentioned above, I tend to leave some amount of money in my salary account that I often need to fall back on as the month runs to a close.

That happens because I usually save more than I should. I don’t give myself a generous budget. It’s another strategy that I’ve employed over the years. It has helped me to be financially disciplined enough for my expense not to rise in tandem with my income.

Of course, I don’t want to suffer myself on the back of saving for the future, lol. So if I need money mid-month I tend to pay myself more.

Huge projects expense come from a different account

Whenever I want to make huge purchases, the money doesn’t come from my expense account. Remember that the account is always too lean to be able to accommodate such expenses. So what I do is to withdraw the money from another account where I send all my money before they are either invested or used for huge purchases as the case may be.

The benefit of this is also to foster financial prudence. I know that every purchase of this nature is reducing my investable capital. And being someone that likes to invest money, it usually takes a lot before I can agree to make such purchases. When I say “take a lot”, I mean I take my time to consider it well and be rest assured that indeed the item/material is deserving.

I delay almost every purchases 

…and whenever I make the purchases, I always go for the quality.

This point is related to the one above. I don’t make huge purchases the moment I perceive I need them. The nature of huge purchases is usually that we can delay them for as long as we want and it won’t significantly affect our survival. So I tend to delay it more.

Something my Mama taught me is that if I am going to buy something, I could just as well buy the quality ones that will last longer. What’s the point of buying something that you need and you are buying a lower quality and that will soon need a replacement again? This is especially so if you can afford the quality one.

The process of delaying of course allows me to do research, weigh my options, stops me from being in haste and helps me to make an optimal decision. You should try it as well. Delay that purchase.

Don’t be an impulsive spender

Still related to the point above but I believe it needs a class of its own.

Fundamentally, I am freaked with materials. But I’ve never been impulsive enough to buy them on spot. Controlling my impulse is the key. Except you do so, of course, you won’t have discipline you so much needed.

3 Core Principles To Guide Your Investment Decisions

January 24, 2021 /

If you are conversant with this blog you would have learnt that I like simple things. I like my investment process to be as simple as possible, I like writing to be as simple as possible and I like to do things that will allow me to have a night sleep. The downside to my simple lifestyle is that I may not make the highest return in the market but I can be sure that my capital can stand the storm and that over a long enough time, I will outperform more than 80% those who complicate investment decisions.

Don’t get me wrong, doing simple things has ramifications. It could be buying a low-cost Index ETF over and over again, it could be buying a specialized ETF or it could be a combination of both mentioned already. And yes, it could also be doing the hard work to find the next Amazon or Apple and averaging in on them for the next 20 – 40 years of my working career. The idea is that keeping one’s investment process as simple as possible has dividends that surpass the alternative.

To further my agenda of helping you get wealthy through the practice of investing, I want to share with you 3 core principles that should guide all your investment decisions. These are principles that will serve as a light for you every time you want to put money into something and when you want to get it out.

Don’t lose

Whenever the issue of money comes up, our first instinct is always how do I make more of it. How do I double this amount of money in this short period? As Tony Robbins put it in his book, the best investors are obsessed with avoiding losses because they understand a simple but profound fact: the more money you lose, the harder it is to get back to where you started.

Let me put that statement in perspective for you. If you invest N100,000 and lose 50% of it, bringing your capital to N50,000, how much would you need to get back to N100,000? You may be tempted to say all you need is to make the 50% that you lose back. However, you would be wrong because turning N50,000 to N100,000 requires a 100% return. And 100% is an unprecedented number that may take up to 10 years depending on what you invested your money in.

This explains why Warren Buffett 2 rules of investing are, one, never lose your money and two, never forget rule number 1. The rules are instructive enough.

Never lose your money doesn’t however mean you should not invest your money at all or that you should avoid making more money in the name of not wanting to lose money. You would be wrong to think that way because even the Buffett himself is a legendary investor. So what does it mean to not lose money?

  1. Don’t invest in what you do not understand. Doing so would ordinarily force you to make investment decisions that will cost you money.
  2. Don’t risk too much of your capital.
  3. Define your investment strategy and stick with it
  4. Don’t chase the highest return in the market rather invest in what will give you a great sleep at night. 
  5. Aim for being reasonable over being rational. Humans are emotional and we can’t be rational all the time but we can be reasonable all the time. That’s why I wrote this article on how to deal with the fear of missing out.

That’s not all but I’m sure those would give general guidance about things you can do to lose your money. High returns are good, doubling your money is fun. However, not losing what you’ve worked hard to earn is even more rewarding and it’s a lofty aspiration and easily attainable goal.

Asymmetric risk/reward

While I was learning corporate finance, what I was taught was that the higher the risk the higher the expected returns. In order words, I should not expect higher returns except I’ve assumed a higher risk. And I think there is an element of truth in that no doubt. Yet, one of the best things you can do for your investment is to look for opportunities where the reward is really high relative to the risk you are taking. It’s called asymmetric risk/reward.

Let’s use numbers a bit. Imagine you have N1m to invest and you take 10% of that (N100k) to invest in an asset that returns 500%. That is to say, your N100k investment is now worth N600k. Even if you only made a moderate 10% on the remaining N900k, your new net worth at the end of such period would have become N1,590k N(900k + 90k + 600k). On average, your investment had made a return of 59% on your invested capital.

The temptation when one finds an asymmetric investment is to want to bet more than what is reasonable and prudent. Remembering the first guiding principle should be a guide here. Asymmetry investments are not definite, just as much as they can increase greatly, they can also reduce erratically. That’s why putting a moderate amount of money is always the optimal hedge. Thinking about our example from above, if you lose 50% of the N100k, overall, your portfolio will still stand strong because your total balance at the end of this scenario would now be N1,040k N(900k + 90k + 50k). In which case you would have been true to the first principle of not losing your money.

And asymmetry investments are always available even though it is only the benefit of hindsight that makes them obvious. To mention a few, Apple, Microsoft, Tesla, Bitcoin, Starbucks are a few that will qualify for an asymmetry bet. The relevant question as you will agree with me is which investments are the next asymmetry bet? Well, they are always known absolutely until it’s too late. Keep an eye out is my response to that.

Are asymmetry opportunities only available in the public market? The answer is no. Some get their asymmetry returns from private investments like investing in startups, some times, it could be just a friend introducing you to something from nowhere but which you feel confident enough to invest in. It can come from anywhere.

Diversification

The third one is obvious. We’ve all heard the statement “don’t put all your eggs in one basket”. But what does that mean? There’s a difference between blindly quoting a statement and knowing what it means plus doing it.

I learnt something interesting from Tony Robbins on the different kinds of diversification. I will share them with you because they are important.

There are 4 ways to diversify effectively:

  1. Diversify between assets within different classes (e.g., real estate, stocks, bonds, commodities, private equity)
  2. Diversify your holdings within asset classes (avoid concentrating putting all of your money into one stock or bond; you must diversify even within your asset classes)
  3. Diversify globally (e.g., markets, countries, currencies) – if you live in my part of the world where the currency depreciates very often, this point is even more important for you. Having some of your investment in a dollar-denominated asset, some Bitcoin, if you believe in it, would be a practical way of going about this.
  4. Diversify timelines (e.g., dollar-cost averaging, maturity date) – you are never going to know the right time to buy anything. But if you keep adding to your investment systematically over months and years (that is cost averaging), you’ll reduce your risk and increase your return over time.

All the principles mentioned so far are easy to repeat and read but doing them can be difficult. That’s the nature of simple things, they are difficult to implement but those who implement painstakingly are always rewarded. That’s why I like the wisdom of Charlie Munger when he said: “take a simple idea and take it seriously”. Doing so will put you in the top 10% of the world’s best I believe.

7 Things I Constantly Remind Myself Of

January 23, 2021 /

Real happiness comes from the journey, not the arrival

And upon arrival, what brings the most laughter are the reflections on the journey. So I can just as well enjoy the journey and make the most of it while I’m on it.

Don’t be a donkey

Many are the wishes and dreams of humans but he is not allowed to do all those things. Focusing on one thing per time has a way of abundantly rewarding him.

Don’t stop when you have failed

I actually call that “not stopping“. It’s a simple idea that even when what you’ve planned on doesn’t work, and you have failed on your schedule, don’t stop at making other attempts.

You planned to write every Thursday of the week in a month and you missed your second schedule. Don’t stop, just write on the following day. The act is more important than when the act is done. The world will reward you for doing before it considers when you do it.

It’s my responsibility

Yes, “many are the thoughts in the heart of a man but it is the will of God that will prevail”. Still, I remind myself that my life is my responsibility and it will become whatever I make out of it. If you like, believe something else like some forces beyond you is pushing you. The result of such life is that you don’t get past some level in life.

Taking responsibility for one’s life is a super power.

I don’t know what tomorrow holds

And it doesn’t matter how much I may try to predict tomorrow, it will always come with surprises. What I can do at best is to expose myself to more surprises so that I may have options.

Having the option to choose among different surprises is the only advantage I or you will ever have.

I can only be me

I will surely have a lot of things to admire in you and others. However, if I make any attempt to be like any or everyone else, I’d end up with a miserable life. Our conditions are different and so are our journeys.

Given enough time, things even out

If you are driven today with the fear of what people will say, you will learn that they are either not saying anything at all or they won’t say it for more than some time. With time, everyone moves on and I am the one to live with the consequences of my decisions. I can as well just never consider what people will say in my decision and just focus on regret minimization and happiness maximization.

Don’t Be A Donkey

January 22, 2021 /

Are you a polymath? Someone that wants to do a lot of things, you see yourself creating a massive empire in a lot of unrelated areas. You just want to do a lot of things or you are even doing them already. However, you noticed the results aren’t forthcoming, or importantly, you realize that the world wants you to pick one thing from all.

I used to be like that or I still am. I want to be 10 different things at a time, I want to have a successful corporate career, I want to create a successful startup, I want to be an investor and on another day I want to be an inventor as well. It’s a lot of things for one person. And you know what, anytime I remember each of those my “want to be’s”, I launch into research on them again. In the end, all those efforts amounted to nothing. Stuck is a more generous word to use for my situation and “being a donkey” would be a perfect word to use.

Let’s get something straight immediately, in this one life that you and I have, we can’t be everything that we possibly want to be. Enough of the “you can whatever you want to be”. Really that’s BS at best.

https://twitter.com/DavidAlade__/status/1351937183570128896?s=20

That said, we can be as many things as are important to us. We just have to stop thinking short term. I do all those my “want to be’s” because I used to think I must be everything right now or never. That’s why I’ve never got anything done until I changed my approach.

Thinking long term is the goal solution

Thinking long term affords us to see life differently. We have all agreed that we can’t possibly be everything that we want to be. However, we can be more than one thing in our lifetime.

Thinking long term means you allow yourself to be one thing per time. Be one thing for a few years, whenever you think you’ve done enough of that thing, gained mastery and accomplished enough, then take the next thing to do. Of course, the idea is that you have the time to do all those, and even if you don’t, the world will benefit more from the result of your extreme focus on one thing than from the dispersed focus you have for a lot. That’s because things that endure and change generations are built on those kinds of foundation.

And like I noted in this article, “another success” is always easier after the first success. You would have proven yourself worthy, capable and deserving of the resources that are required for the next adventure once you can show a result from previous wins. Do you remember that parable of the talent? You saw how those who made initial success were rewarded with more resources to have more success? And don’t forget the one who was into a lot of but had no success, even the little he had was collected from him.

What’s the donkey’s story?

A Buridan’s donkey is standing halfway between a pile of hay and a bucket of water. It keeps looking left and right, trying to decide between hay and water. Unable to decide, it eventually dies of hunger and thirst.

The donkey couldn’t think long term. If he could, he’d clearly realize that he could first drink the water, then go eat the hay.

“Don’t be a donkey. You can do everything you want to do. You just need foresight and patience.

If you’re thirty now and have six different directions you want to pursue, then you can do each one for ten years, and have done all of them by the time you’re ninety. It seems ridiculous to plan to age ninety when you’re thirsty, right? But it’s probably coming, so you might as well take advantage of it” said Sivers. He continued “You can fully focus on one direction at a time, without feeling conflicted or distracted, because you know you’ll get to the others.”

And while you are at that, never forget that most people overestimate what they can do in one year, and underestimate what they can do in ten years. That statement is always true. I’ve chosen to be extremely focused on one thing per time now and I’ve seen an amazing kind of result. This year, this website is my project. Let’s see what one year of extreme focus will bring me. 

Think long term.

Don’t be short-sighted.

Don’t be a donkey.

3 Lessons I learned From Lucky Dube

January 21, 2021 /

My friends, neighbours and family all know I’m a Lucky Dube fan. When I’m feeling bored and unmotivated, my girlfriend will often say “will you listen to Lucky Dube?” That’s how much I am recognized with the music.

I enjoyed a lot of things about Lucky Dube music but principally, it’s always about the lyrics for me. So braise up this is a short article to highlight 3 timeless lessons I’ve learnt from all these years of listening to him.

Don’t burn the bridge behind you

We will get to a lot of crossroads in life where burning the bridge we just crossed will be the reasonable action to take. When you get there, better to leave the bridge and walk away than burning it down. There are ramifications to our actions and it’s important to consider them.

Sometimes, you can’t do anything

When he sang “Is This The Way”, he lamented a lot about seeing some men every day at the corner Of Queens and Commissioner begging for a dollar every day, he cried to God in this lyrics 

Oh my God, oh my God

What we gonna do in this world

In this world we live in?

But as the song was coming to an end you would think he’s gotten a solution but he ended it with merely a question. Just where he started from.

What did I do to deserve this?

Begging for a dime every day

Trying to make a living out there.

Many times, that’s the reality of life. We are helpless. But we must ask the questions and make the attempts.

You can use your “Art” as an instrument of good

By Art, I mean the work of your hand. Whatever it is your hands find to do, you can use as a force for good on this green planet. That’s the lesson from this South African singer who through the power of his music spoke to the heart of government oppression, white supremacy and gave the people a voice. Importantly for me as well was that he promoted the virtue of education as a viable way out of suffering. 

Here are 3 of my favourite

Do A Little Act Of Kindness

January 20, 2021 /

Some months back I was returning late from the office. By late I mean some time around 10 pm. Ahead of me as I took a walk down to my was this woman, having a baby on back, carrying loads on her hand and another on her head. From afar I could tell that the woman is tired. She walked delicately so that the load on her head won’t fall. She moved slowly so that what she was carrying on her hand won’t fall. I will later realize that what was carrying on her hand was a cake due to be used for a wedding the following day.

Where could she be coming from this late-night I wondered and why can’t she get help with the loads. You don’t need anyone to tell you that the load was too much for her. It was an obvious glare.

It’s the 1970s. A 30-something man makes his way across the Golden Gate Bridge. He’s passed by pedestrians and cyclists, and steps around tourists taking pictures of Alcatraz, Angel Island, and the channel of water below that runs between San Francisco Bay and the Pacific Ocean. He gazes up at the reddish-orange towers soaring above and then climbs over the bridge’s four-foot safety railing. He steps out onto a 32-inch wide beam known as “the chord,” pauses, takes one last long look out at the bay, and then jumps. His body plummets 220 feet and violently hits the water at 75 mph. The impact breaks his ribs, snaps his vertebrae, and pulverizes his internal organs and brain. The Coast Guard soon arrives to recover his limp, lifeless body.

When the medical examiner later located and searched the jumper’s sparse apartment, he found a note the man had written and left on his bureau. 

It read: “I’m going to walk to the bridge. If one person smiles at me on the way, I will not jump.” The story was recounted here

As I read this story today realizing the eventual passing of this man, I remember again the story of the woman ladened with all sorts of things on my way back home. As I watched her from afar I doubled up my speed to relieve her of some of the loads. Upon meeting her I greeted and offered to help. Without hesitation, she handed me the cake in her hand. You can tell her hands must have been aching but what can she do. We spent the remaining minutes of walking together discussing why she was late and how she was delayed by circumstances beyond her. She felt relieved and that gave me more joy than any act of kindness I’ve ever done. I bet she’s probably remembering the encounter now as well.

I got to her estate gate, handed over the cake and bade farewell. I don’t know what she looks like. I’m sure she doesn’t know what I look like as well but we both departed better off.

Many times what it requires to show kindness doesn’t have to take so much. Many times, it only requires giving a helping hand like I did to this woman and other times all it requires is for you to smile back at someone and that will save their life. Unfortunately, the man in my story didn’t get anyone to smile at him and that cost his life.

"Many times what it requires to show kindness doesn’t have to take so much. Many times, it only requires giving a helping hand like I did to this woman and other times all it requires is for you to smile back at someone…" Share on X

A lot of us think of changing the world in ways that we most likely would end up not being able to do. A lot of hope to end world poverty or take all homeless kids out of the street. Those are noble aspirations, no doubt. However, just a little act of kindness, a little good, a little, a little checkup on an old friend, a little thank you and a little “you matter” comment can restore a soul, save a life and bring hope again.

What little act of kindness will you do today? Or will you walk by that woman carrying that much load without offering to relieve her? Or will you look that man in the eye with a frowny face and allow him to go on and commit that suicide?

Act of kindness doesn’t have to be strangers alone. Your girlfriend, when was the last time she was happy she had you? When was the last time you called your mama or papa to thank them (not give them money) for bringing you into the world? Your friends, are they proud to have you as a friend or all you do collect and collect from them and not a single time have you said: “take this N500 airtime, I just appreciate you”.

Do a little act of kindness today.

An old hymn “Have I Done Any Good?” has this following lyrics that pricks my heart:

1. Have I helped anyone in need? 

Have I cheered up the sad and made someone feel glad? 

If not, I have failed indeed. 

Has anyone’s burden been lighter today Because I was willing to share? 

Have the sick and the weary been helped on their way? 

When they needed my help was I there? 

2. There are chances for work all around just now,

Opportunities right in our way. 

Do not let them pass by, saying, “Sometime I’ll try,”

But go and do something today.

‘Tis noble of man to work and to give; Love’s labour has merit alone. 

Only he who does something helps others to live.

To God, each good work will be known. 

(Chorus)

Then wake up and do something more

Than dream of your mansion above. 

Doing good is a pleasure, a joy beyond measure, 

A blessing of duty and love.

Have I Done Any Good?

5 Ways To Reduce Your Black Tax Payable

January 19, 2021 /

Thinking about the concept of black tax, I don’t think there would be an average family in Nigeria that won’t have that one person that pays black tax. It is so because we are all predominantly poor. Few families have escaped the cycle of dependence on their children as an insurance policy for not only old age but also the survival of the entire family.

Black tax is the financial support that a member of the family is expected to pay to the extended family once they start earning income.

My maternal grandfather used to pray like “I will eat the food my children will give me but may I never have to look up to my children before I eat”. My mother prays that as well. And that is definitely my prayer as well.

Black tax can be psychologically pleasing and draining at the same time. There are occasions when the family might have had to sacrifice a lot to see one child through school with the goal that when such is done, they will be able to take care of others. But such arrangements almost always come off as tiring, as the young professional is tasked with responsibilities often too much for them to bear. Here are 8 examples of that in varying versions.

I must say that Black tax is no evil, the condition that subjects us to it is. And the fact that those conditions made them a necessity. As I mentioned from the beginning, we are predominantly poor as a people and only a few families have crossed the chasm of compulsory black tax.

"I must say that Black tax is no evil, the condition that subjects us to it is. And the fact that those conditions made them a necessity. But you can learn how to handle it here" Share on X

Here are the 5 ways I used in reducing my black tax

Compared to the 8 stories in my referenced article, I think I am lucky. Remember my mum’s prayer. Yes, it has its influence. As much as possible no dependency on her children is what she prays for. However, just like a lot of us, I still can’t escape it but I am given the ability to determine what I am capable of. This is of course also possible because Mama still has a good business that is giving her good income.

  • No one knows how much I earn – this is probably the only insurance that is available to everyone. I said available to everyone because you can learn to keep your mouth shut and not disclose. Doing so gives you the leverage to determine how much can be spared for black tax and what can’t be allowed. 
  • I am always proactive to pay the tax – being proactive to pay the tax absorbs me from the need to pay more than I’ve volunteered to pay in the first place. Yes, demands may come but when you put forward the defence that you are doing a lot already, (hopefully) no one will pressure you to do more. And remember to do all within your power to indeed help. Family is family and they might have sacrificed their comfort as well to get you to where you are.
  • My income is always calculated as net of investment – this is an important point especially for those who can’t but have to disclose how much they earn. Only disclose how much you earn as a net of what you’ve decided to save and invest. That way, even if you have to cough out everything in your account, you will know you have created security for yourself as well. I had a colleague who gave a standing order at his place of work that they should only pay him 50% of his monthly income and all else should be kept for him. That’s it. So black or white tax, he couldn’t pay beyond what he earns and since he has to survive as well, it means he can’t give out all the 50% that he gets.
  • I am always upfront about what I’m not capable of – I don’t have a flashy lifestyle that will suggest maybe I have some millions saved somewhere that is funding my lifestyle. So when demands come, I can comfortably say this is what I am capable of and that is beyond me. You could do so as well. The problem comes when you think you don’t have a responsibility to them, you actually do, I know I do. My mama had to go through a lot to educate me. So I take that responsibility seriously and it has helped.
  • Be someone of your word – I have reserved this to the last because you only resort to this option if all others are not working. It’s simple but difficult to implement. You say no and stand by the no. Period! Thank goodness, I’ve not had to use this tactic before.

I’ve said it before and will say again that the black tax in itself is not evil. Some people sacrificed to get you to where you are in the first place and the least you can do is to recognize that. Of course, we have instances where no one was there for you, if that’s your case, it only makes the 5 solutions above easier for you to implement.

However, what you should not allow is to let the cycle of dependence on black tax for survival continue with you. You need to make up your mind that it will end with you and pray the kind of prayer that my grandpa used to pray: “I will eat the food my children will give me but may I never have to look up to my children before I eat”.

For that to happen, you must take steps from those highlighted above to protect yourself. You must ensure that you don’t eat with your 10 fingers in the name of black tax or any other thing. You owe it to your children not to have a reason to depend on them for survival. You’ve seen how uncomfortable it can be, so work as much as you need to break that cycle.

Myth – You Will Not Get Rich By Investing

January 18, 2021 /

True riches come from your income source not how you spend your income. And investing is a function of how you spend your income.

My first salary when I relocated to Lagos was 70k/month. With such an amount, no matter how much I save, before I could have a million naira saved up, it might take between 1 year (if I save everything that I made) to 11 years (if I save just 10% of that income). That’s assuming of course, that I did not get an increase in income.

Good enough for me, I got a new job that allowed me to save about a million naira within the first 1 year on the job. Can you see the point I’m getting at now?

Savings and investing is good. A habit that must be cultivated else, one will remain in perpetual poverty. However, obsessing over saving and investing the small amount one earns instead radically working to increase one’s income is an ill-informed obsession.

”My first salary was 70k/month. With such an amount, no matter how much I save, before I could have a million naira saved up, it might take between 1 year (if I save everything that I made) to 11 years (if I save just 10% of that… Share on X

I tweeted recently that I would rather have a 5% ROI on an N100m than rejoice over 200% on N10k. The reason is obvious, the former gives me a larger capital and eventual N5m ROI, while the latter despite its high percentage only leaves me with a paltry amount of N30k.

And that’s why they that look for high ROI are usually those with small capital base. When you have large capital even a 3% “guaranteed” ROI would do you much good. That’s usually so because one, you don’t want to lose that capital since you must have worked really hard to earn it and two, since it’s large enough, little percentage returns are usually big enough to take care of your moderate lifestyle.

The goal for everyone who’s looking to make wealth is to ensure that they do everything within their power to increase their capital base. And that only comes by increasing your earnings. Savings and investment is a practice along the journey to riches that ensures that you preserve what you earn and grow it. It’s not a substitute for increasing your earnings capacity and it will never be.

So when I say investing will never make you rich, I don’t mean it literally. But that obsession over-investing at the expense of increasing your income will keep you in the poverty that you aim to escape. Just imagine if I’d remain in my first employment with no salary increase and I had to take 11 solid years to save up to N1m. That’s cruel.

How to increase your income 

I have seen people take all their savings and liquidate all their investments just to use it to pay for a professional exam. To the uninitiated, it looks foolish. They will wonder why will you not have an investment, why can’t you think long term and play to the tune of compounding, why are you so short-sighted? I will tell them to shut up. Yes.

You see, the biggest investment you can possibly make is an investment in yourself. An investment in yourself will return the highest ROI. And educating your mind is how you invest in yourself.

Let me ask you a few questions. Since you know that investment is the principal thing, why didn’t you save all your school fees and invest it in someplace instead of going to school? Why did you choose to go to school first? Isn’t it because of the school that you went to that is giving you some leverage to earn an income now? So why did you all of sudden think investing instead of more education (skill) would salvage your money problems?

You see, your income problems can’t be solved by investment in assets but an investment in yourself via the acquisition of more knowledge. That could be by taking professional exams or learning a new skill, or learning how to do something differently. Basically, it has to be an investment in yourself. That’s how you increase your income.

It is you that earns the income. When you are about to be paid, you will be paid based on what you have in your head and can do with your hand. Not what you have saved up and invested. Always remember that.

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