Bolu lay on the couch in his father’s sitting room, a wisp
of smoke curling upward from the cigarette in his hand.
He had somehow unlocked his father’s phone and now
understood what had been distressing the man for a while.
His father was in huge debt, and an email from the bank
had threatened a repossession of his properties.
Bolu was distressed. His father’s five properties in
Magodo, Maryland, Surulere, and Lekki were his hope
for a good future. They had been debating him managing
the restaurant in Lekki. University had not been for him,
but he was convinced he could run the restaurant better
than the business manager his father had hired. Now that
his dreams were evaporating with this revelation, he was
furious with his father. The man could not make anyone
happy. It’s why their mother killed herself, and now, why he
and his brother were going to be hustlers for life.
He grabbed the phone and opened his father’s chats
on WhatsApp, wondering what other revelations he would
find. He laughed when he read his chats with Ken.
“So na debtor you be?”
Ken wondered how Bolu had found out.
“So you don’t have any money, and you’re busy doing
Father Christmas and driving a big car?” He cackled so
loudly that Ken had to clench his fists to prevent himself
from striking the young man.
“What do you want?”
“I know your type. You like enjoying life, but you can’t
afford it. This is the deal: I won’t tell my brother, but you
will give me that money…”
“I will not…”
“This month, you will pay me ₦100k instead of
₦500k. Then next month, another ₦100k until you pay
everything.”
Ken could see how this could work out for him, but
what if the landlord regained functionality sooner than
later?
Bolu read his mind. “I’ll tell Daddy that you paid.
Babatunde will not know. It will be between you and me.
But if Babatunde finds out now, he will chase you and your
broke family out of this property.”
“He can’t. No one else knows I owe him.”
“I do. It’s either you give me smaller money or you
pay everything at once. Babatunde will disgrace you o. Just
imagine him calling boys to bundle you out of this place.”
Bolu smiled and then laughed. He knew he had cornered
the man.
“Let me think about it,” Ken replied.
“Think very well o.”
Layo stepped out of the house and joined Ken on
the veranda after Bolu had left. “Please don’t give him the
money. If you sell your car, we can take care of some of
these…”
“You must be insane. So I’ll be climbing okada at my
age?”
Ken left Layo standing on the veranda. She didn’t follow
him; instead, she began to wonder how long she could
continue to live with such uncertainty. What would happen
if her family got evicted from the compound? She couldn’t
imagine the shame. Layo realised she needed to take her life
and that of her children in her hands. Saheedat had told
her about the EasyInvest app, so she had downloaded it,
registered an account, and created her first savings goal —
emergency funds.
Later, she told Saheedat, who had another thought
about it.
“Based on what you’ve told me, I think it’s better to
save toward your short-term expense.”
“Saheedat, please break this thing down. Are you saying
I shouldn’t save for emergency funds?”
“No, I’m saying it seems you have a more important
goal. You mentioned your children’s school fees, right? Why
don’t you save towards that instead? You can put it in a
mutual fund.”
“What is a mutual fund o? You’re always talking as if I
understand these finance things.”
Saheedat chuckled. “I’m sorry. You know I’m not a
teacher like you, so I don’t know how to explain things like
you. So, basically, a mutual fund is adding your money
to a pool of funds that can be invested in stocks, treasury
bills, bonds, real estate, or other assets. It’s good for people
who can’t afford big investments, and it’s a great way to get
some interest on the money you set aside. So, instead of
your money just sitting in a savings account with a minimal
interest rate, it can earn you more in a mutual fund.”
“So where will I do this mutual fund? Is it like joining
a savings cooperative group? Like an ajo?”
“Yes and no. Yes because it’s a cooperative effort, but
no because you don’t know the people you’re investing
with.” Saheedat smiled. “To start a mutual fund, you need
to register for it with a funds management company. I use
EasyInvest. They invest in assets like mutual funds.”
“Hmm, are you sure it’s for people like me? How much
can I start with?”
“You can start with as low as ₦5,000…”
“And how much will I get on that ₦5,000?”
“It may not be much. The more you invest, the more
returns you get.”
“And when can I get my money?”
“Anytime you want. You know what? I think I should
introduce you to my financial advisor. He will go into more
detail about some of these things…”
“Don’t worry. I will just go to the website of the service
you’re using. What’s the name again?”
“EasyInvest.”…. to be continued.
Reflections
Mutual Funds
A mutual fund is a pool of money from different investors,
which is invested by professionals called fund managers to
earn returns. By investing in mutual funds, you leverage on
the power of numbers.
Mutual funds are divided into two main categories.
Open-ended mutual funds: This category of funds
does not limit entry and exit. That is, there is no restriction
on how many units can be purchased. Investors can enter
and exit throughout the year, which means the fund units
are available for subscription and redemption at any time
of the year.
Closed-ended mutual funds: These types of
funds issue only a specific number of shares and do not
issue new units as investors demand for more, hence the
name closed-ended.
There are various types of mutual funds:
1. Equity mutual funds: This is the most popular
category of mutual funds. Fund managers select
stocks based on the mutual fund’s objective and
investment style. An equity mutual fund is a must have
investment in meeting your long-term goals.
2. Money market mutual funds: A money market fund
is an open-ended mutual fund that invests in shortterm
debt securities such as treasury bills, commercial
papers, short-term bonds and other money funds.
They are considered extremely low-risk and safe.
3. Balanced mutual funds: This is a hybrid mutual fund
that invests in a mix of stocks, bonds and other asset
classes. They provide a greater level of diversification
compared to other types of mutual funds.
Benefits of mutual funds
1. Diversification: With mutual funds, your risk of loss
due to single asset investing is reduced.
2. Access: Mutual funds give small or individual
investors access to professionally managed portfolios
of equities, bonds, and other securities. Mutual funds
are operated by professionals called fund managers
who allocate the fund’s assets and attempt to produce
capital gains or income for the fund’s investors.
3. Affordability: The entry points are low and affordable
even for low-income earners. Did you know with
as little as ₦5,000, you can start your journey of
investing in mutual funds?
4. Lower transaction costs: The transaction costs are
lower when investing in a pool compared to investing
individually in a single asset class. That reinforces the
benefits of economies of scale.
The type of mutual funds you choose as an investor
will depend on your risk tolerance, financial goal(s), and
investment preference.
