I’ve been asked many questions about the best methods to invest for profit.
But by far, the most consistent question is what is the best way to invest 5,000 Naira to maximize returns.
You see, so many investors just want to invest 5,000 Naira somewhere consistently and be sure that their investment would yield reasonable returns.
So, I’ve come up with this article to show you how to invest 5,000 Naira and turn it into 1 million Naira within a reasonable time.
Preparing Your Investment Plan
Before you begin investing your money, you have to know what you want to achieve before even risking a penny.
Many investors today just throw money around with the hope that they get something back in return.
That spray-and-pray method rarely works, little wonder you see many investors today losing their investments and acting like it’s a normal phenomenon.
No, it’s not normal.
An astute investor plans for an investment outcome. If he fails to meet his target, he restrategizes, restructures, and improves his plan to match the realities of the market.
You need to ask yourself, how much do you want to make at the end of your investment?
How much ROI do you plan to get? Do you plan to continue servicing that investment portfolio until it matures?
These sort of questions would help you create a realistic roadmap for your investment plan, which would help you invest the right way.
So, now to the first step.
How Much Do You Need to Grow Your 5,000 Naira Investment?
With a plan to get a ROI of 1 million Naira, how much do you plan to grow your 5,000 Naira investment?
You would need to grow it X10 to get to 50,000 Naira.
You would need to grow it X100 to get to 500,000 Naira.
And you would need to grow it X200 to get to 1 Million Naira.
Now, we are getting the right data.
The question now is, which investment can help you grow your 5,000 Naira X200?
Your answer would depend on your experience and your risk tolerance.
Your Risk Tolerance
An investment that can grow your money exponentially would definitely be a high-risk investment.
But being high-risk is not the issue here.
Can you find a high-risk investment that gives you control to enter and exit the market at will?
Of course, they are available.
There are high growth stocks and there are high growth cryptocurrencies.
You just have to find the right ones to put your money on.
5,000 Naira Investment Options
Looking at the Stock options and Crypto options, your plan should be to find new trends of growing stocks and cryptos.
It is not unheard of to find a stock that grows 500% within a year.
In fact, some outlier stocks have been able to grow up to 2500% to the surprise of many investment analysts.
These stocks are mostly found in emerging markets in technology, and have low bets from experienced investors.
The crypto market has also proven to be a big jumper over the last few years, and although it can be volatile, there is room to plug in with a rising trend and plug out with a falling trend.
For better context, Ethereum has grown over 350% from December 2020 to August 2021.
If you had invested 5,000 Naira into Ethereum by December 2020, your money would have grown to almost 20,000 Naira today.
This is proof that there are viable investment opportunities to grow your money without exposure to significant risks.
Due to the limitation of capital, it can be quite difficult to grow 5,000 Naira into 1million Naira.
And when you consider that an investment portfolio can only grow as much within a time frame, it could take years to achieve a million Naira ROI with a 5,000 Naira capital.
Hence, savvy investors have learned to implement a reinvestment plan that reinvests their capital into new trending investment portfolios in order to raise the ceiling for their ROI.
If you put the 5,000 Naira into cryptocurrencies, you have to continually reinvest the capital into newly trending cryptos.
For example, if you invest 5,000 Naira into Ethereum and you get a 200% growth in 4 months, you can then reinvest the funds into Dogecoin which grew by almost 7,500% between August 2020 to July 2021.
Doubling Up Your Investment
To achieve the level of exponential growth for your capital, you might need to double up on your investment.
If it takes 4 years to turn 5,000 Naira into 1 million Naira, it would either take you 12 months if you double up your capital four times, or you would make 4 million Naira within that timeframe, all things being equal.
Either way, you would have made at least 1 million Naira per year.
That’s the power of doubling up your investment. You either buy the time or pay with time.
There is no one way to turn a 5,000 Naira investment into 1 million Naira.
Your result would largely depend on your experience and the growth potential of the portfolios you utilize.
You have to keep exploring and testing different portfolios and how they perform overtime.
Getting the right market data could be the difference between holding a stagnant portfolio and one that grows exponentially.