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Millennials Need To Learn How To Save and Invest - Felix Imafidon

Capital Market	867 VIEWS
Capital Market
867 VIEWS

Monday, August 03, 2020 / 11:45 AM / Nifemi Taiyese for Proshare WebTV / Header Image Credit: WebTV

Savings, investments and portfolio diversification are three key areas millennials need to learn as they try to create wealth.

Mr. Felix Imafidon the CEO of reQuid Technologies said this while speaking as a guest on WebTV's Market Opening Gong programme which looked at the topic, "millennial interest and participation in Fintech investments".

He said that millennials need to understand how the product they are investing in works, and how news information around such products will impact the value of their investments.

Imafidon said for the future of Nigeria, refocusing on the transformation from farming to agric-investments was critical for the nation, if it is to achieve increased revenue generation and foreign exchange.

Speaking on the agric-investment space, he noted that from the last couple of years agri-tech has presented opportunities for those who cannot put their effort into farming to invest their funds into it in a bid to support the farmers who do not have access to capital (funds) and also access more recent, optimized input and technology for the farming process.

According to him, the agric tech companies have been able to successfully create a bridge for the gap present in Nigeria's agricultural sector, through the building of platforms for individuals to lend their income (funds) to farmers and get a return on investments, ROI from the farmers' proceeds at the end of a farming season.

He was of the view that the beauty of agri-tech, created the enabler for young people who are not interested in farming, to develop an interest in funding the farmers.

reQuid Technologies is a company that helps to drive millennial participation in the capital market and by winning the maiden hackathon organized by the Nigeria Stock Exchange the CEO said it was able to validate the investment product; the market place where they aggregate all the different farm funding opportunities for their young investors and also to be recognized as a fintech startup engaging in work and thereby increasing participation of millennials.

Very critically, with the advent of crowdfunding in the past four years, a lot of people have come in to participate in that space.

He noted that while there are credible agro tech investment institutions, he decried that there are also a lot of institutions that are structured to defraud people of their hard-earned income, stating that other institutions that didn't come out to defraud people failed on their promise to investors because they are either making losses or their business is not structured enough to deliver on what they promise to do.

With over 1m transactions in H1,2020, Imafidon observed that a lot of the users on the reQuid platform were mostly millennials who were participating more in investments.

From his research, he noted that millennials want messages on investment to be crafted simply.

Before he started investing in the stock market, the CEO of ReQuid Platform said that information on the stock market was not millennial-friendly, which led him to go the extra mile of discussing with stockbrokers and investment experts on learning and understanding the workings and activities of the stock market.

Recalling his investment journey, Imafidon noted that his first investments were in the money and capital markets, focusing on simple products like treasury bills (T-bills).

"We are in an age where the average millennial does not have the time to do research and understand the dynamics around investing".

He added that "The quest for millennials to have the investment terms communicated is part of the reasons why they fall prey to the likes of MMM and other Ponzi schemes who latch on simple communication in getting their attention".

The Agri-tech CEO advocated for investment education as to how participation in the capital market, can work for the millennials and also how existing products in the market space can be re-crafted for them to understand products better.

He also emphasized the importance of providing a platform that is seamless for young persons to use in monitoring investments, from making payments to maturity date; critical to increasing millennial participation in both the money and capital markets.

Imafidon explained that the higher the risk involved in an investment, the higher the reward, which in many cases shows that the higher the risk the more likely the investor may not get any reward at all.

In understanding the risk assessment framework for investors, he highlighted the following processes;

Understanding the company structure
Determining asset base
Identifying key drivers of boards and management
Assessing credit ratings of the companies and the team behind the company
Verifying claims and assessing risk exposure

Imafidon made the case for investors to be properly educated on the risks involved in any investment option ranging from the stock market, agri-tech investments, state government bonds and so on.

He advised millennials to invest in markets they find interesting as it would help them in monitoring their investments.

On the part of the regulators, he called for increased effort in investor education, connecting with market participants which would help give investors some comfort.

"Due to the reality of Nigeria being a high inflation environment, it is important for the millennials to look for investment vehicles that will give at least the 12.4% inflation rate to retain funds and income at the value that they were," he said.

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