Tag: Bamboo

Predictability Makes Wealth Building Easier

February 20, 2021 / David Alade

“People will do whatever they can to find a world in which they can predict the outcomes of their actions and the consequences of those outcomes”, Howard Stevenson wrote in a Harvard Business Review essay of 1995.

A profound observation I must say. And over the years our quest for predictability has only increased. We believe since we have more data about the past we should be able to predict the future. We believe since we have access to more information, we should be able to predict the future.

The quest to predict the future is honourable and we shouldn’t give it up. In fact, it makes risk-taking and wealth building easier. Which is the purpose of this article.

The first place to look at when we are discussing this quest for predictability is the stock market. The easier it is for investors to predict the revenue and profit of a company the higher the value accorded to such companies.

That’s why companies with a recurring revenue business model get the attention and money of investors more than any other company. Those companies grow wealth for their investors quickly as well.

A predictable outcome makes wealth building easier. Risk is easier to take and reasonable bets can be placed about the future when we have an idea of what we can expect.

In Nigeria, we have been deprived of this ability since I can recollect.

Sometimes in 2008, I was walking down the street with my mama, out of a thirst for predictability, she said “I wished I had some money now so I can buy some shares (of Nigeria banks) for you and your sister so that many years from now when it would have increased in value, you will have something to start life with.” A profound thought from a woman who knows nothing about the stock market but just that money invested in it can increase in value over the years.

Her ability to predict what the future would be was motivation enough for her to take a bet on the future. Also, it was enough for her to make a sacrifice today that will benefit her and us, her children in the future. She could tell with reasonable assurance that the shares she wanted to buy will increase in value.

Before 2019/2020, the truth is that Nigerians haven’t had the privilege of predictability handed over to them. Even if my mama had invested in those shares in 2008 when she made that remark, there is a high likelihood that neither us, the children nor her would benefit from that optimism. For a couple of reasons.

First, 2008 was the middle of the financial crisis and I guess that’s why she got to know about the opportunity to buy shares of banks. Not a lot of those banks have recovered and not a lot are doing great. Below is the Banking Index performance of the Nigeria stock exchange since then. Not much has happened in 13 years to make wealth for the investors. You will agree with me.

Compare that with the same period for the S&P 500, the measure of aggregate wealth creation via the stock market in the US. You see a clear dip and eventual recovery. Not just recovery but also growth.

So our stock market hasn’t made predictability easier. And oh, don’t talk to me about the dividends that would have been paid by those banks or any other. The history of dividend payments in Nigeria only started to get better with reforms from a recent time. Nigerians used to find it extremely hard to recover their dividend.

The second reason is the instability in the exchange rate plus continuous devaluation of our local currency, Naira. In 2008, you only needed about N115 to buy $1. Today, you will need N480 to buy the same dollar. A more than 3x devaluation. That is, over the last 13 years, Naira has lost its value against the Dollar 3 times. That’s wild, compare that to the return one would have made by investing in Nigeria stock and you will see the gory image. No wealth of any significance has been created. Just wealth erosion and inflation-induced growth.

Government bonds didn’t help within this period either.

Well, within the past years, wealth building has left the dining table conversations of Nigerian families. What’s left is survival talks plus thrift contributions and a lot of debt that’s accumulating with no hope of income to furnish the repayment. Little wonder my generation talks a lot about the black tax.

When the future is predictable, humans tend to make decisions that will benefit them in the future. They are ready to make sacrifices today with the expectation of a potential upside in the future. That’s what we learn from my mama’s story and that of many others and the stock market reaction to a host of companies with business models that make their earnings easily predictable.

Otherwise, humans won’t even give a thought to the future beyond tomorrow. After the event between my mama and me that day, we didn’t have a conversation about things like buying shares anymore.

This experience is contrary to what is obtainable in the US, for example.

Before 2019, I read a lot of personal finance and investing books written by US authors. One thing that’s common among all books is the constant assumption that you could invest and reliably without any hassle make 10% ROI on an average for as long as you want to invest. This “as long” typically starts from 15 years and ends at 35 years term, it could be more. The people’s ability to reliably predict such a future gave them the motivation to sacrifice a portion of their income today to build wealth for the future. Otherwise, there’s no point.

The result of such a predictable outcome is not far-fetched. More than half of American households have an investment in the stock market.

The new renaissance

To express the gratitude I have right now, I will start by saying, God bless the innovators of this generation. They are incredibly brave, forward-thinking, and down to earth. These innovators will change a lot of things. They will bring back wealth conversation to the dining table and many generations starting from that of mine will benefit from what they are building. Already we do all these on Twitter. It’s no longer conversation as usual.

Alright, David enough of prayers and adulation. Lol.

The new renaissance is being led by companies like Risevest, InvestBamboo, Trove, and Chaka. They are at the forefront of this. What they bring to us is predictability. The single item that motivates us to build wealth.

With their products, they have made predictability easier by eliminating the devaluation and inflation risk and they also expose us to assets that are growing at a predictable estimate.

Together, they give us a form of exposure or the other to the US stock market. A market where you can reliably estimate what the future will look like. It’s market share where you don’t need to be a fortune teller to be able to tell that the future is that of growth and wealth creation. In fact, you can reliably put a measure of growth at 10% per annum and you won’t be too far from the truth.

You have no excuse anymore now. You must build wealth. I am not giving you the option not to build wealth. It’s a must.

The only excuse that is tenable is the lack of knowledge. And that’s why I work day and night to bring you articles on this blog. Make this blog one of those that you visit daily. Read the latest articles, and read past articles as well. Also, subscribe to my newsletter where I will bring you some of the contents that you may have missed. You have no excuse again afterward.

You can also book a session with me if you require one to plan your financial life and build wealth. You are a privileged generation. If my mama was able to invest even $1,000 for me in 2008, which would have cost her N115k, that amount would be more than $3,000 now or N1.4M. You have the advantage today. Utilize it. Okay, let me beg you, please, utilize it.

Rise vs Bamboo: Which One Is For You?

January 14, 2021 / David Alade

I was reviewing some data when I realized a lot of people are seriously wondering and interested in the answer to the question of if they should use Rise for their investment or Bamboo and its alternatives (Trove and Chaka).

First, it gives me joy that you are thinking about that. It means you want to do what’s best for you. You want to leverage on an advantage that no generation before us had. Secondly, I should mention to you that your goal is to save your money, make more money and not lose your sleep in between. It’s not to show off on anything at all.

Difference between Bamboo and Rise

– Bamboo

Bamboo is a trading platform that allows you to buy stocks and hold until you wish to sell.

Bamboo provides the platform where you can buy an individual stock, ETF, Inverse ETF or anything that is listed on US stocks exchanges. The responsibility of knowing what to buy and when to buy it rest on your shoulder. And so is the responsibility of knowing what to sell and when to sell.

Full control lies in your hand. Bamboo makes money from you by charging you a trading fee on every transaction. When you buy and sell you get charged for those activities.

Note: everything I have said and will say of Bamboo is the same for Trove and Chaka since they have the same business model.

– Risevest

Rise on the other hand is an investment manager that offers different investment products for you to choose from and invest in. The three products currently being offered are

Fixed Income – a form of investment whose return and maturity are fixed and determined from the inception of the investment. That is, once you invest, you can’t withdraw your money at any time until maturity and you are fairly certain about what the return will be upon such maturity. You may actually withdraw before maturity but you will have to pay some charges. This is considered low risk because it is a debt instrument with collateral

Real Estate – this works like fixed income as well. You have to hold it until maturity which you would set from the beginning, and you can’t withdraw your money anytime before that maturity hence you will pay some charges. The difference is that you can’t tell ahead of time what the return on investment would be. However, since it is a fund that invests in properties with rental income in the US, it’s a great product as well and consider medium risk.

Stock – risevest selects some good companies listed in the US and just like an ETF would operate, they invest your money in that basket of good companies. If you invest $100 for example, you would be buying as many stocks as is in that basket at the time. And what’s in your basket changes as often as Risevest changes it.

It’s called Rise Equity Index and currently has 48 stocks in the basket. Rise has often said that their goal is not to beat the market but to select a couple of great companies to invest in and if that beats the market, it would be great. That is the right way of looking at things if you ask me. It’s an appropriate optimization. 2020 performance is yet to be made public but 2019 was 19% for the number of months they were in operation.

Rise currently makes money from what is called a management fee. They charge up to 2% on total assets under management on the condition that you make a minimum of 10%. Read more about that here.

Which one should you choose?

Now that you understand the difference between both, it’s only fair for you to consider which one you should choose. To start with, nothing is stopping you from using both of them if you so wish.

With that in mind, if you are the type that does not want to go through the rigour of having to search for what to buy in the stock market then Rise is the best option available for you. If you are not interested in all the euphoria that owning an individual stock brings, and you don’t want anything more complicated than you already have in your day to day life, then Rise would probably just be perfect for you.

Also, if you want to exposure to other assets like fixed income and real estate, only Rise offers that. If you don’t want to take on a lot of risks and can’t bear seeing your money occasionally give negative returns, then Rise products are your best option. It’s the simplicity that makes Rise stand out. All you have to do is deposit your money and with few clicks invest your money.

On the other hand, if you are interested in the workings of a business, you want to know how the stock market works, you are ready to pay the price of putting your money in the stock market then Bamboo and its alternatives (Trove and Chaka) is a good go. If your goal is to trade in the market, also Bamboo is the way.

By the way, trading means buying and selling of stocks within a short period of time. Investing on the hand is done with a long term view.

However, this is not a rule and nothing should stop you from using both services if you so wish. But your goal again is to save your money, make more money and not lose your sleep in between. Don’t optimize for any other thing. Don’t allow the fear of missing out to push you to do what will make you lose your money. It’s your hard-earned money and your number one responsibility to that money is not to lose it unnecessarily. That’s an important responsibility even before multiplying the money.

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Your Wealth Door – Risevest, Bamboo and Trove

January 5, 2021 / David Alade

There is a story I enjoy telling everyone who cares to listen. It’s about my experience when I first invested in the stock market. Don’t worry I won’t tell you about it here. But if you wish to read it, please check it out here.

I chose to bring the memory of that story to life again because it’s relevant for this article, to show you that everyone has a beginning and the days of baby steps. Wealth is an eternally relevant topic to me. People used to say “I’ve been on both ends of the spectrum and I know which one to go with.” Unfortunately, I’ve only tasted one end of the spectrum in full, poverty, and I know it is not meant for anyone. So I am currently journeying to the end of the other spectrum, wealth.

As I journey, I want to keep on writing about my experiences and tools that are helping me. So today, I bring you the door to wealth. They are doors not key. Key would imply your action. You aren’t going to get wealthy by knowing alone, you get wealthy by acting on your knowledge.

What do the 3 names above have in common?

The 3 platforms allow you to invest in US-based assets all from Nigeria. Let me tell you the implication of that. It means you have the opportunity to participate in global prosperity and invest in assets that have birthed a lot of millionaires over centuries. That’s not just all, there is virtually no financially wealthy individual that I know of that is not invested in the stock market.

The US stock market is significant because it’s home of innovation and the most prosperous companies are located there. It means you can also invest in each of these massively successful companies and share in the global wealth.

Take is three companies for example:

Netflix:

Amazon:

Apple:

The 3 platforms (Rise, Trove and Bamboo) offer you unfiltered access to invest in these companies. The minimum amount to also begin your investment journey with is so very low. Just $10 or less.

How are they different then?

Risevest – is unique among the 3 in that it helps you select what specific asset to invest in. I showed 3 companies above that have performed so well but I must you there are numerous who have performed woefully as well. Knowing which one to invest in and which to not invest in is not a task for the uninitiated and even for the initiated, it can be time-consuming. In light of this, Risevest takes your money from you and invests it in a basket of stocks that are expected to bring positive returns yearly.

Beyond the companies listed on the stock market, Risevest also allows you to invest in Real Estate business in the US and Fixed Income assets. The opportunities are endless. So you could just take your 100 dollars and put some of it in the stock market, some in real estate and the remaining in fixed income and watch your money grow just as others of the centuries have.

Trove and Bamboo – unlike Risevest, both platforms allow you to invest directly in a company of your choice. That where they differ. You think Tesla will do great in the coming years or you Microsoft will be a good investment, then open your account and make an immediate purchase of these companies. Of course, it is expected that you would have done your research before you do this, else you may get your hands burnt and record loss. Thread carefully.

Personally, I believe my generation which is yours as well is extremely blessed to have been privy to this opportunity. I remember when I was young during the 2007 – 08 stock market boom before the eventual crash. I was walking down the street with my mama and she was telling me she wished she had the money to invest in stocks then so that 10 years or more later when I am grown I would have something to my name. Unfortunately, she couldn’t buy it because she does not have the money and because the barrier to buy was high. Now, with just 4 taps on your mobile phone, you can not only buy Nigeria stocks, but you can also buy the stocks of the best companies in the world. If that’s not extremely blessed, you tell me what it is.

Utilize these opportunities as I am also doing and let’s journey together to the wealth spectrum away from poverty.