Probably everyone knows how bad the current inflation rate is and its effect on the economy and the prices of commodities. Many are learning to plan and cut down on their spending as a way of navigating this period and managing their finances. This process of planning is called Budgeting and such a plan is called a budget.



Budgeting is the estimation of one&#8217;s income and expenses over a defined period of time so as to curtail excessive spending. Creating a budget often includes how, when and what you wish to spend on.



Budgeting is an important financial strategy that helps you manage and keep track of your regular earnings and spending, giving you total control over your finances.



What is a family budget?



A family budget is a plan that covers the inflow and outflow of money of your entire family. It is essentially an estimation of how much you wish to spend on the things your family may want.



For families, especially low-income and large families, creating a family budget is essential as it allows you to utilise funds and prepares you for emergencies. It also gives you the opportunity to prioritise and focus your money on the things that are most important to you and your family.



Taking care of your family does not stop at making meals for them, buying their favourite things or just providing them with their basic needs. It also includes being intentional about the family’s finances and creating a proper family budget.



Essence of a family budget



Imagine you were to record and calculate the amount of money you spent just these past months on the needs and wants of your family, you may find that a reasonable amount of your income went into things that did not really matter.



For example, your family is subscribed to the DSTV premium subscription which gives you access to over 170 video and 53 audio channels. However, you end up just watching a few of these channels. Or the random gifts you get your kids at the end of each workday which when closely looked at, amount to a huge sum unaccounted for.



A family budget is an integral part of running the day to day activities of the family. It is a powerful tool that when utilised, avails you and your family the opportunity to create and also sustain wealth. This is because it eliminates room for impulse buying and allows you to plan how you wish to allocate your funds in order of priorities.



How to create a family budget



Although creating a family budget is uncommon, it is one of the most important money management strategies to keep your finances grounded. Family budgets can be planned either weekly, biweekly, monthly or every quarter of the year. However, going back regularly to review and probably readjust is key. This is because it helps you remain focused on strictly adhering to your family budget. It also gives you room for accountability.



So how do you create a realistic family budget?



<ol><li>Make an estimate of the family’s combined income: One way to start making a family budget is by getting an estimate of every stakeholder’s monthly income and the average agreed contribution each person is expected to make.</li></ol>



In many modern families, everyone who earns an income usually contributes to the upkeep of the family. This could be adult family members who live with you, a partner, parent(s) or adult children. So before you make a family budget, make sure you calculate an estimate of the family’s individual and combined income as it gives you an idea of how much money is available and how you expect to spend it.



However, this is only in the case where you have other adult people around. If you’re a single parent or have no support from a partner, you can work your budget around your total income and ensure that you do not spend more than you earn.



<ol start="2"><li>Create a list of things you want to spend on: If you have a pen and paper, then this is the next key thing to making that family budget. A budget is halfway complete when you have the list of your family’s expenses. It is good to note that expenses can be fixed or variable.</li></ol>



Variable expenses are costs that vary from time to time such as groceries, maintenance and repairs, gifts and special treats for your family.



Regular expenses are usually fixed. They remain the same for a long period of time. Some examples are school fees, utility bills, rent, subscriptions and loan repayments.



So depending on the order of priority and if your income allows it, it is important to consider all types of expenses when listing the general needs of your family.



<ol start="3"><li>Assign how much you wish to spend on each of these items: After making your list, what comes next? Your budget. How much money do you want to spend on groceries this month? How much TV subscription or toiletries does your family consume? It is important to not go overboard with your budget. Your spending should not surpass how much you earn or the estimated amount you wish to spend.</li></ol>



<ol start="4"><li>Review your budget: Now that you have your family budget, it is time to take another look at it, run your family through it and be sure it is what they want. At this point, you can tweak your family budget by adding or eliminating any expense that does not fit into what you or your family want.</li></ol>



For example, you may decide to cancel a particular subscription or replace it with a cheaper one, if you don’t use it often.



Things to consider when creating a family budget



Family budgets are quite different from personal budgets as they aren’t just for or about you; they cover other members of your family. So, when making one, it is necessary to remember that a pot of stew may not be enough; there will be more clothes to buy, more light and resources will be consumed. Here are a few things to put into consideration before you create your family’s budget.



<ol><li>Your family’s combined income and the average amount you wish to spend: Budgets are meant to keep your finances in check by controlling the inflow and outflow of money. Considering how much each participating adult earns and the average contribution they are expected to make goes a long way into creating that realistic budget that helps you achieve the above goal.&nbsp;</li></ol>



<ol start="2"><li>The needs and wants of your family: It is important to consider each person’s needs before the overall needs of the family. Everyone has different needs; what A wants might not be what E needs. And vice versa.</li></ol>



<ol start="3"><li>How often you wish to revisit your budget: Regularly revisiting your family budget is a smart way to keep yourself in check and track how well you’re doing with sticking to your budget. You can schedule a bi monthly, monthly or quarterly budget review.</li></ol>



<ol start="4"><li>Flexibility of your budget: It is normal to figure out more things after creating a family budget, so your family budget doesn’t have to be perfect or unflexible. You should be able to occasionally tweak it as you want as long as you do not go beyond your income or the cash particularly set aside for your budget.</li></ol>



<ol start="5"><li>Budget type: There are different budget types to consider when creating a family budget, and you can choose the best option that works for your family. These budget types are dependent on your family’s choices and how regular their income is.</li></ol>



One of the most common budget types is the 50-30-20 budget. This budget splits your income into three categories where 50% goes into your family’s needs and essential bills; 30% into their wants; and 20% into savings or investments. In this <a href="https://risevest.com/blog/savings-and-investment-what-makes-the-difference-in-wealth-creation">article</a>, we talk about the differences between savings and investments and which of them you need to create wealth.



<ol start="6"><li>Open communication: Conversations can be hard to have, especially when they are about money. However, to achieve a realistic budget and reach a set financial goal, it is important to be open about expectations and financial changes, even with your kids. Teach them the differences between their needs and wants and how to categorise them according to priorities. You may not have all the money to indulge their excesses, so it is key that they know. Involve everyone that needs to be involved and ensure that you continually check in with them.</li></ol>



Finally, have it in mind that you may at some point, be needed to share bank statements, receipts and a breakdown of how you spend the money.



<ol start="7"><li>Consider getting a tool: It doesn’t get easier, does it? While keeping track of your spending may be one of the hardest things to do, there are thousands of apps and worksheets designed specifically to help you achieve this. These tools allow you to log in every household expense you make whilst providing you with other amazing features.</li></ol>



For example, the google spreadsheet and microsoft excel are two free amazing spreadsheets amongst many others that allow you to create and track your budget.



You can access other free budget spreadsheets <a href="https://www.nerdwallet.com/article/finance/free-budget-spreadsheets-templates">here</a> and mobile apps for budgeting <a href="https://www.nerdwallet.com/article/finance/best-budget-apps">here</a>. However, whether you are using a spreadsheet, a mobile app or even paper and pen, ensure they are easy to use and efficient for tracking your expenses.



Finally, your family budget is incomplete if you do not put away some funds towards your savings and investments as the goal is to gain control of your finances and grow your wealth. To help you achieve this, Risevest offers you the best investment options in addition to tailored goal-based plans to make your budgeting a lot easier. Some of these goal-based plans allow you to save and invest towards a particular goal you may have such as higher education, owning a home, rent, travel plans and even your kid’s future! To access these options, start <a href="https://risevest.com/">here</a>.

Family Budget: Why You Need One.

Inflation is a phenomenon that we all have to navigate through because it reduces the purchasing power of our money. Although a million naira will always be a million naira, the amount of goods and services it can purchase reduces over time as a result of inflation.



When we factor supply chain issues caused by the COVID-19 pandemic-induced lockdowns and the effects of the Russia-Ukraine war on food and energy prices, we start to understand the upward pressure on prices globally.&nbsp;



It is the mandate for Central Banks to keep inflation at a healthy pace in order to protect the purchasing power of our money, but the lingering question that everyone needs an answer to is how we can manage our finances in a high inflation world. Let us split this into managing money and investing money during high inflationary periods. 



Managing money during high inflationary periods



One way to navigate through inflation is to earn more income. If things become more expensive, one can simply increase their income so that they can maintain their standard of living and purchase the same things that they could purchase before.



It is often easier to reduce our spending than it is to increase our income, so what we want to do during periods of high inflation is to review our budget with the aim of saving money. One way we can achieve this is by changing our spending patterns/behaviors.



This means that when prices are going up, we need to find ways to cut out non-essential expenses and save money on necessities by buying things in bulk, finding alternatives or negotiating better deals.



<h2>Investing money during high inflationary periods</h2>



Generally, there are two categories of investment options one must consider when investing;



<ol><li>Fixed return investments where you know the returns you will receive during the investment period as in the case of bonds.</li><li>Variable return investments where the returns you receive vary in relation to the performance of an underlying asset as in the case of stocks.</li></ol>



Fixed return investments like bonds and treasury bills do not perform well during periods of high inflation. This is because the returns can fall in value as it is overshadowed by the rate of inflation.



Real estate as an asset class is generally considered to be a great hedge against inflation because while rental income can be fixed at the start, it can always be adjusted upwards to reflect the increase in prices.



Variable return investments like stocks are the ones that perform best in high inflationary environments because the returns received from investing in this asset class can be adjusted to keep up with inflation.



However not all stocks perform well during inflationary periods The category of stocks that do well during these periods are defensive stocks.



These are stocks of companies that produce goods and services that are essential to the population such as consumer staples, utilities and healthcare. Regardless of prices, we always need to consume these products and services. So while we cut out non-essentials expenses and services,we still patronize these companies.



<h2>How about commodities and alternative asset classes like crypto?</h2>



Essential commodities like energy and agricultural produce are great hedges against inflation because they are also necessities and will always be in demand regardless of price.



<figure class="wp-block-image"><img src="https://lh6.googleusercontent.com/v7Jrh_qGfKUG9cRDZ-H8KAXM1o4G31XWQccJKvofktrOr6uSW1mMH-FsU8s5I1xQzh_iUjpVcNZsVbuaJkWcCehkKZhY0QLzd9Fu6SAsRi0old9DkjyjBxUUz91J3swrne8hWRnD_YuJrZ64Sg" alt=""/></figure>



According to Standard &amp;&nbsp; Poor’s, energy has been one of the best performing sectors in 2022 so far.



Bitcoin has been labeled “digital gold” in reference to its perceived ability to serve as a store of value during economic downturns. But with inflation being on the rise, the stock market has been down, and so has Bitcoin.



Since the start of&nbsp; 2022, Bitcoin has had the same correlation with the broader stock market, so it has not held up to its label as digital gold yet and a hedge against inflation.



In conclusion, we need to reduce our non-essential expenses during periods of high inflation by reviewing our spending habits. It is also important that we&nbsp; invest in assets that perform well during high inflationary periods such as real estate and defensive stocks as fixed income assets such as bonds do not perform well during inflation..

The Best Tips To Navigate a High Inflation World w/ Kalu Aja.

For this week’s MoneyRise User Story, we spoke to Deji, a Cinematographer and an AMVCA Best Documentary nominee who not only aggressively earns, but also invests. He believes in the gospel of Rise and preaches it to the nations of the world.



<h2>What was growing up like?</h2>



Growing up was interesting. I come from a middle-income family that experienced high-income wealth at one point, but for a brief period. So it was an interesting situation where I lived in what I’d call a rich neighbourhood, but my family wasn’t as wealthy as anybody that lived around us



<h2>How did that influence you?</h2>



There is this popular saying that what you turn out to be in life is an average of the influences you have around you. Everybody around me was doing better than I was in some way, so it was easy to aspire to bigger things; things that I wouldn’t normally aspire to be because my family just couldn&#8217;t afford to do some of those things.



<h2>That must be inspiring&nbsp;</h2>



Yeah. I mean, it still inspires me till now. My parents still live there, so, I still have some of the same friends from my childhood and most of them are doing better than I am, which still inspires me to work till now. It’s a continuous thing and although I’m not wealthy right now, it is a work in progress.



<h2>What do you do?</h2>



I’m a cinematographer; I shoot commercials, ads, documentaries, etc. I recently got nominated for AMVCA Best Documentary, for a documentary called Road2Blow, which follows the story of 14 people on their search for fame; these people&nbsp; are artists, actors, models and musicians.



<h2>Yayyy! That must be nice. So how was your journey to Cinematography?</h2>



After I left the University, things didn’t quite work out the way I hoped. I couldn’t find science-related jobs that paid enough, but then I stumbled on Graphics Design. I did that for about two years. The person I used to work under <a href="https://risevest.com/blog/mayowa-shares-his-art-journey-with-moneyrise">(Mayowa Alabi a.k.a Shutabug)</a> had a knack for photography and so, he would give me his camera to play around with. 



That was how my interest in photography came to be. I did that for about a year and while playing around with the camera, I found Cinematography. I guess for me, the push to go into Cinematography full time was first because I enjoyed the craft and secondly because I don’t think that there is any creative industry in Nigeria or in the world that is as valuable as the video industry. I knew Cinematography was something I enjoyed that also has a lot of value, so I thought, “why not do it?” That was how I started



<h2>Valuable?</h2>



Yes. So I was having this conversation with a friend recently about how difficult it is to gauge the value of industry directly. But something I use as a good metric is that I gauge the value of an industry by looking at the top earners in that industry. So If you think about the biggest earning graphics designer you know, you sort of have an idea how valuable that industry is. Think about the richest UI designer you know, and you can peg that value somewhere also. So for me, when I look at some of the biggest video directors that I know, those guys are making a killing. 



So till now, I’m very far from what those guys earn. I think last week, TG Omori  was talking about how 8 million naira was last year’s money. And that’s for a 3 mins video that he shot in one day, which probably took him another 4 or 5 days to edit. So in one week, one job brought 8 million naira, of which he could have taken 2 or 3 jobs in that same week. There are very few creative fields in Nigeria where you can make 8 million naira in revenue that quick.



<h2>We have talked about the valuable side of it, are there any challenges?</h2>



Yeah, definitely. Video is very capital intensive, unlike some other creative industries like design where you can have one laptop and use it for the next ten years. You may struggle, but if your skill is good, nobody can tell whether your laptop is good or bad. With video, new cameras come out every other year, so if you are using the same camera for two or three years, eventually, people will be far ahead of you and you will have to catch up.&nbsp;



I think an average cinema camera costs around $30,000. If you want to get an Alexa, you could be looking at spending as much as $80,000. Most music videos now in Nigeria are shot with an Alexa, so it&#8217;s very capital intensive.



Personally, in the video industry, I know I have invested maybe around $7000 or $8000 over the last 4 years into buying equipment.&nbsp;



<h2>Wow. That&#8217;s a lot. So, have you been able to recoup your investment?</h2>



Yes, yes. I have broken even on most of the investments. I try to be wise with what I buy. I’m not like most people who buy things just because it’s fancy and it just came out. Before I buy something, I look at how much it costs, and I ask myself how long it will take to break even. If I cannot break even on the equipment in 6 months, then the purchase doesn’t make any sense. So I get myself only the equipment that I need and make sure I can break even in that period. 



<h2>What is your relationship with money like?</h2>



I’d say that I’m an aggressive earner. So I learned a while ago that the only way to be rich, especially at my level as a beginner is to earn more money. I can’t save my way out of poverty, I can’t invest my way out of poverty. 



I have a 9-5, but I run my own business on the side. And I try to make sure that I have revenue that comes in every week — that’s my target, so every week I get revenue. I try to go the extra mile just to make sure that I achieve this, so I never have free time. At the end of the month, my salary will also come in. So yeah, that’s what my current relationship with money is like. Besides the aggressive earning, I also aggressively invest. I aggressively save.



<h2>How do you invest?</h2>



I wish I could give actual figures, but what I do is that, of all the revenue I make, which is my salary and the extra income on the side, I probably save/invest about 60 or 70% of it.



<h2>70% How do you manage ?</h2>



80% of my salary alone is enough to cover all my expenses in a month. So in a good month, if I don’t have any side income, I could still save/invest maybe 10 or 15% of my salary. 



I travel a lot, but when I’m in Lagos, I stay with my parents. When I’m out of Lagos, wherever I stay is paid for by somebody else. I’m in a hotel right now, and I’m not the one paying for it. I also barely have to bother about feeding; in Lagos, my mum cooks (I do have to buy foodstuff though), and out of Lagos, the job pays for it.



So there are many costs that the average Nigerian would have to deal with that I rarely have to deal with. For instance, I don’t have a car so I don’t have to buy fuel or drive anywhere. Because I stay with my parents (I mean, I contribute to stuff around the house), I don’t have to pay rent.



So yeah, I still have to spend out of my salary but the fact that I have income on the side, allows me to aggressively save or invest from the extra I make.&nbsp;



<h2>Let’s talk about Rise, how did you hear about us?</h2>



I honestly don’t remember. Somebody must have said something about it on Twitter. I follow your CEO on Twitter and some of my friends are also friends with your CEO, so they talk about him on a personal level and about the work he is doing. 



So I’m not sure, I just know that one day I stumbled on it. And it was around the period I had some spare change. I had just made about 200k and was looking for what I could use it for because I just didn’t want to blow it.



At the time, I wasn’t saving or investing at all. I heard about Rise and decided to try it out, so I downloaded the app. I also downloaded a couple of other platforms to see which one worked best for me.



<h2>So what portfolios do you have on Rise?</h2>



I think I have 80% of my entire portfolio in Build Wealth, then 20% of my portfolio in stocks. That 20% floats, depending on how the markets are doing. Recently, the markets have been very dilly dally, so I have been going in and out of stocks.



<h2>What has your experience been like since you started?</h2>



I’d say that my experience using the app has been amazing. One of the benefits of Risevest is that you don’t have to day trade. You don’t have to continuously watch the market. That was one of my turnoffs for other platforms. I like the fact that with Rise, I could just put my money in there and face my work, come back in time and see how it’s doing. I also like the fact that savings and investments on Rise are dollar-denominated. 



So you know how the exchange rate goes up and down? Recently, there was a huge increase in the exchange rate, so the value of my dollars went up. I don’t know what the exact figure is, but the point is that the difference in that recent increase in the exchange rate alone gave a profit equivalent to about 75% of my current monthly salary at work.



When I initially came into Risevest, the value of the dollar was at 480, now it’s about 580. In that period, I gained so much value from the exchange rate change. Right now, the exchange rate increase accounts for about 70% of all the money I have made on Rise. 



From June to April, I think I have been there for like 10 months now. Apart from the value, I get from the exchange rate increase, I’ve also made about $500 from my investments during that time. That’s a lot of money. 



<h2>On a scale of 1–5, how likely are you going to recommend Rise to new users?</h2>



I’m always recommending Rise, so I’d say 10. I’m always talking about Rise and sharing my referral code. I preach the Rise gospel because I have made actual money off it.



Thank you so much for your time, we appreciate it.

I Preach The RiseVest Gospel Because I Have Made Money off it. My Name Is Deji, And This Is How I Make My MoneyRise

We are adding to our Apple Inc. position after we analyzed the company&#8217;s latest earnings result. Despite harsh economic conditions since the turn of the year, the smartphone giant recorded impressive returns, a testament to Apple’s resilience and a validation of our investment thesis on the company.   



At the end of first quarter, March 2022, Apple Inc. recorded $97 billion in revenue, representing a 9% jump from the $90 billion it had recorded 12 months ago, March 2021. Meanwhile, supporting its better than expected financial performance is the Iphone maker’s Services business segment which made $19.31 billion. This is the highest Apple has recorded of all time in its Service Segment. Improved customer demand for iPhone, Mac, Wearables, Home and Accessories helped the company achieve an all-time high for its installed base of active devices.



The wearables category also contributed greatly to the company overcoming inflationary pressures and Fed rate hikes as Apple made $8.8 billion from sales of things like AirPods and watches, compared to the $7.8 billion it made this time last year.&nbsp;



&#8220;Our wearables business has doubled in three years and is nearly the size of a Fortune 100 business. If you&#8217;re keeping track, that means the Services category made Apple almost twice as much money as Macs, which is the next closest category” &nbsp; &#8211;&nbsp; Luca Maestri, Chief Financial Officer (CFO) at Apple Inc.&nbsp;&nbsp;



Rise believes that despite harsh economic realities such as record inflation, hiked interest rates, and supply chain logjams across the US and other markets, Apple, having established itself as an industry leader through its relentless focus on innovation and ability to create the best products and services in the world will still continue to experience future growth.&nbsp;



Like we said in our <a href="https://risevest.com/blog/apple-earnings-report">Q1 report</a> of the company’s performance, Rise believes that the trend of working from home and learning remotely, has reinvigorated growth for the iPad and Mac. We understand that these products are much more important now as we continue to make our way through the post-pandemic era, changing Apple’s offerings story from being just a story about the iPhone to including tablets, Macs and services.



We take absolute pride at Rise by exposing our investors to the best assets in the world so that they can do what they know how to do best while we help them compound their wealth. You can start building a stock portfolio from today. <a href="https://rise.capital/">Download the Risevest app</a> to start.&nbsp;



<figure class="wp-block-table"><table><tbody><tr><td>Financial Ratios</td><td>Q2 2021</td><td>Q2 2022</td></tr><tr><td>Return on Asset</td><td>7.01%</td><td>7.13%</td></tr><tr><td>Return on Equity</td><td>34.16%</td><td>37.11%</td></tr><tr><td>EPS</td><td>$1.41</td><td>$1.54</td></tr><tr><td>Gross Margin</td><td>42.51%</td><td>43.75%</td></tr><tr><td>Net Margin</td><td>26.38%</td><td>25.71%</td></tr></tbody></table></figure>



<figure class="wp-block-table"><table><tbody><tr><td>Net Sales by Category</td><td>Q2 2021</td><td>Q2 2022</td><td>% growth</td></tr><tr><td>Iphone</td><td>$47,938</td><td>$50,570</td><td>5.49%</td></tr><tr><td>Mac</td><td>9,102</td><td>10,435</td><td>14.65%</td></tr><tr><td>Ipad</td><td>7,807</td><td>7,646</td><td>-2.06%</td></tr><tr><td>Wearable. Home and Accessories</td><td>7,836</td><td>8,806</td><td>12.38%</td></tr><tr><td>Services</td><td>16,901</td><td>19,821</td><td>17.28%</td></tr></tbody></table></figure>

Earnings Report: We Are Increasing Our Apple Position After Impressive Q2 Performance

In the simplest of terms, a recession signifies moving backwards, the opposite of an advancement. Under normal conditions, we all would like to advance/grow in our endeavours.&nbsp;



For an economy, growth means an increase in the value of services and goods produced — Gross Domestic Product (GDP). While economic growth means the price of goods and services will steadily become more expensive over time, for most people, it is a good thing.&nbsp;



As the economy grows, companies make more money and can afford to pay current employees higher salaries, hire more people, thus creating jobs, and give shareholders more returns. This gives everybody more money to spend and continues the cycle of growth.



Economies generally grow most of the time. But sometimes, the value of goods and services in a country falls. An economic recession is when a nation&#8217;s GDP falls for two consecutive quarters. The US National Bureau of Research (NBR) defines it as a significant decline in economic activity spread across the economy.



In numerical terms, a recession would be if the GDP for the 1st quarter of 2022 was 1000, the 2nd quarter GDP was 900, and that of the 3rd quarter was 800. Experts consider recessions as an unavoidable part of the economic cycle.&nbsp;



<h3>What causes recession?</h3>



There are several causes of recession. We will focus on the three likely causes of the impending recession the world currently faces.



<h4>A sudden economic shock</h4>



This means a serious problem that no one could have reasonably foreseen. A good example of this would be the global lockdown caused by COVID-19. The global shutdown caused factories, businesses etc., to close down, creating a huge shock to many economies.



<h4>Too much inflation</h4>



Inflation is the consistent and general increase in the prices of goods and services. Inflation is an essential part of economic growth. We need the price of goods and services to increase, so companies make more money, create jobs, create value for shareholders, pay higher taxes to governments etc.



Like many other things, inflation is good, but too much inflation is bad. Central banks generally set their inflation targets. In developed countries like the US and UK, the Central bank aims to achieve an average inflation rate of 2%.



When countries begin to see too much inflation, as we’ve seen all over the world this year, the price of goods rises so fast that the cash available to citizens cannot keep up. This is what causes a recession.



<h4>Excessive Debt</h4>



Many countries borrow to finance the difference between their expected revenue and budgeted expenses. However, when countries take on too much debt that they can’t afford to repay, this can lead to recession.



When countries can’t afford to repay their debt, they default. This means those who lent money to the government, e.g. large companies, banks etc., no longer have that cash to spend, invest, or in the case of banks, to lend to others.



When banks don’t have cash, they cannot lend to companies who need the money to grow their business and improve GDP. This causes GDP to fall and creates a recession.



Fun Fact: Global debt stood at $300 trillion as of 2021, about 356% of global GDP. For every $1 of goods/services produced, we borrowed $3.56.&nbsp;



<h3>How does a recession affect you?</h3>



<h4>Business</h4>



The problem starts when sales and profits start declining. To cut costs, businesses stop hiring, stop buying new equipment and pause all development of new products.



Other businesses that supply those large businesses with equipment, raw materials and other services they require will see their revenues fall. To increase revenue, companies might reduce the quantity and quality of their products to maintain the same price.&nbsp;



There are many examples in Nigeria of packaged products now having more air than content. If any of these companies have too much debt and cannot pay back with the revenue they have left behind, they might have to file for bankruptcy.



The government tries to support businesses during this challenging time, as we saw in countries like the US and UK during the first COVID lockdown. They offered loan programs to businesses of different sizes and in badly affected industries.



However, these loans are not always enough and sometimes they don’t come in time. Thus, the damage is probably already done before the loans come along.



<h4>Employment</h4>



Unemployment levels generally rise during recessions as companies see their profits and revenue shrink and have to reduce expenses to stay afloat. This causes many companies to have mass layoffs leaving many unemployed and those left behind having to do more work for the same or even less pay, creating more stress for them.



Those who are now without jobs find it difficult to get jobs because most companies have stopped hiring, so they too are under stress to earn money to meet their needs. This forces them to start businesses or turn to crime to survive.



<h4>Investment</h4>



Declining revenues and profits cause share prices to fall and companies to either reduce or completely stop paying dividends. The loss of their jobs or reduction in earnings will force some investors to sell their investments even if it&#8217;s at a loss to get cash further, causing companies&#8217; share prices to fall.



In countries where people can take mortgages (loans to buy houses), a fall or loss in income can make borrowers unable to make their mortgage payments and make them lose all the money they have paid in the past towards their home in a foreclosure.



<h4>Borrowing</h4>



Borrowing becomes more difficult during recessions. As more people and companies cannot pay their bills, lenders make it more difficult to get loans. They increase interest rates and the&nbsp; requirements individuals and businesses need to get loans.



<h4>Health</h4>



Many <a href="https://socialsciences.mcmaster.ca/econ/faculty/decicca/unemphealth_0807_web.pdf">studies</a> found that suicide and mental illnesses increase in <a href="https://oxfordre.com/economics/view/10.1093/acrefore/9780190625979.001.0001/acrefore-9780190625979-e-282">recessions</a>. One <a href="http://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.434.5147&amp;rep=rep1&amp;type=pdf">study</a> found that death rates were higher for people who lost their jobs even 20 years after the job loss.



However, some researchers have found that recessions might actually be good for some people’s health. One group of <a href="https://www.jstor.org/stable/2587005?refreqid=excelsior%3A043c759e2544727778e13b1b76b22470">researchers</a> found that death rates during recessions were lower than rates recorded during economic booms.



Another group of <a href="http://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.936.5204&amp;rep=rep1&amp;type=pdf">researchers</a> found that during recessions, the reduced economic activity reduced air pollution, which reduces diseases caused and worsened by air pollution. <a href="https://www.aeaweb.org/articles?id=10.1257/aer.99.2.122">They</a> also found that being unemployed reduced workplace and road accidents.



Researchers also found that the fall in personal income forced more people to reduce <a href="https://ifs.org.uk/uploads/publications/wps/WP201529.pdf">alcohol</a> and <a href="https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1294522">cigarette</a> consumption, reducing diseases linked to them. Another <a href="https://ftp.iza.org/dp9326.pdf">study</a> found that reduced income means fewer people travel, thus slowing down the spread of viral diseases.



<h3>What can you do to prepare and protect yourself before a recession</h3>



<h4>Have an Emergency fund</h4>



An emergency fund is 3-6 months of your monthly expenses in a low-risk vehicle that you can quickly convert to cash at little to no cost. For example, if you spend ₦100,000 on average every month between housing, food, entertainment etc., your emergency fund would be ₦300,000 to ₦600,000.&nbsp;



Ideally, you should put your emergency fund in a savings account that gives you some interest, so you aren&#8217;t losing too much to inflation. You don&#8217;t want your funds in any investment vehicle, so you don&#8217;t run the risk of losing money if there&#8217;s an economic downturn.



No rule says your emergency fund must stop at six months. If you can afford to have up to 1 year of expenses stored up, that&#8217;d give you even more legroom if something affects your primary source of income.&nbsp;



However, experts generally recommend 3-6 months, so you have something for emergencies but not too much money tied down and not working for you. This advice goes for individuals and businesses alike.



<h4>Avoid Short Term Risky Investments</h4>



If an investment already has a low chance of survival during normal periods, it is even more likely to crash during a recession. Investments that are risky during regular periods would be extra risky during recessions.



You should avoid risky investments altogether as fear of recession rises, but if you must, ensure that you can afford to stay invested for at least five years which allows you to wait out any downturn in your investment.



<h4>Strive to be an Invaluable Employee</h4>



During recessions, companies might be forced to lay off some staff. While it is not a 100% guarantee, being incredibly good at your job reduces your chances of being laid off. If you weren’t already putting in your best, as recession looms, you might want to increase your effort.



<h4>Diversify your Investment Portfolio</h4>



Risky assets are harder hit during recessions. Although lower-risk assets like bonds tend to offer poor returns, they don’t perform as poorly as riskier assets like stocks in the short term. Commodities tend to perform better in the short term than most other asset classes during recessions.



Having exposure to a diverse pool of assets can reduce the losses you suffer during a recession. Check out the diverse offerings Rise offers today.



<h3>Silver Lining/Final Thoughts</h3>



Most countries have experienced few recessions in their lifetime. The UK had one recently in 2020. Nigeria has had 2 in the last five years. According to the NBER, the US has experienced 33 recessions since 1857.&nbsp;



While the word recession can seem like it spells doom, many nations sustain recessions for short periods. The average recession in the US, for example, lasts for 11 months. Things should return to normal in no time.

What Is Recession And How Does It Affect You?

We believe that great things should be shared, and this is why we’re reintroducing our weekly referral leaderboards! Yay!



We created this referral program just to encourage you to share our app and reward you anytime you successfully do so.



So every week, there will be cash prizes to be won in our leaderboard referral race. These prizes of $100, $50 and $30 will go to top 3 Risers who refer the most number of users with a minimum funding amount of $10 which will be credited into their Rise wallet, respectively.



The leaderboard rankings reset every Sunday with the new batch of winners for the previous week announced and credited on Monday. It’s time to leverage your network and marketing skills to make more income for yourself. Start sharing the benefits of investing with Rise to your friends and family, including your grandma! Also make sure they invest and stay invested through the duration of their plan.



To share your unique link/code, simply open your app, click on “Account”, click on “Affiliates &amp; Referrals” and then share your link/code on your social media platforms.



 You can always keep track of the leaderboard ranking <a href="https://risevest.com/affiliate-program">here</a>&nbsp; Start sharing today! And goodluck to y’all!&nbsp;

Join Our Weekly Leaderboard and Win Cash Prizes of up to $100 Every Week!

There are typically four stages of the economic cycle. The first stage is the expansion stage or boom stage when credit is expanding, stocks are booming, the economy is growing and everyone feels like their investments are green and going up. This is followed by a slowdown stage where asset values have reached their peak and are no longer growing, company profits slow, credit starts to tighten and the economy tends to slow down a lot. The third stage is the contracting stage when asset values start to fall, credit supply begins to contract, there is less money flowing and companies lose money. The economy tends to experience declines in this period and sometimes job losses and loan defaults spike. This is a traditional recession. After this recession we enter into the final stage which is the recovery stage where things start to pick back up, credit starts to flow again and the economy rekindles. If the recovery is sustained it grows into a new boom or expansion cycle, on and on.&nbsp;



Today we are in a slow down stage of the cycle. Cost of capital is increasing due to the Fed raising interest rates after years of zero rate. Stocks and company earnings have slowed down. What does this mean for your investments?



First, it is important to stick to your investment plan through every market cycle. There are opportunities in every market cycle and leaving the markets can be detrimental to your long term returns. While you need to avoid overly risky investments at this time, this does not mean you should abandon stocks entirely. It takes about 30 months on average for rate hikes to start to impact stocks so for now there is still some time to shift strategies to more value stocks. The good thing is that Rise does this for you automatically without any extra work on your part.&nbsp;



The biggest worry for most portfolios at this time is inflation. The US economy has now experienced 14 months of above 2.5% inflation, proving that inflation is not as transitory as most analysts thought earlier. While rates hikes are still happening across most central banks, it has not been enough to slow inflation down. We expect some kind of decline in stock market prices possibly followed by a recession.&nbsp;



<h2>How are we navigating this?</h2>



In the last two years we have seen more opportunities in real estate than in the stock market. With home prices at great highs and available inventory at less than two months supply, we believe the opportunity in real estate is coming close to being maxed out. Which means that while real estate will continue acting as an inflation hedge, growth will come from non-US markets and nontraditional strategies like Airbnb rentals (we are test running our first Airbnb rental as we speak). At the same time, as stock prices fall we expect to see a lot more opportunities to buy great companies at a lot cheaper prices. So we expect the markets to deliver great returns once we go from slowdown back to recovery. Remember that it is when everyone is selling that the best investors buy.&nbsp; At Rise, our goal is not to outperform massively in the short term. Our goal is to outperform modestly but consistently over a long period in order to compound your capital into real tangible wealth over time. So despite all the market upheavals, Rise will monitor the market for the best opportunities to acquire high quality assets at great prices in order to grow your wealth. No need for you to worry and stress about your investments. We do all that so you don’t have to. Start investing with Rise at <a href="http://www.risevest">www.risevest</a>.com today.

Investing During This Tightening Economic Cycle

US homeowners continue to reap returns in the US housing markets as rents for single-family houses and apartments continue to trend upwards, putting the Rise real estate portfolio in a prime position to deliver even higher returns.



Rents of single-family houses across the US jumped by 12.6% in January. The spike is the highest the housing market has experienced over the last 12 months and represents the 10th month in a row of record rent increases.



All indicators show that the rental market is heating up, as would-be buyers of houses increasingly turn to rentals because they can’t find and can’t afford their dream houses.



Meanwhile, due to historic stimulus payments and increased wages, renters are bringing significant incomes and paying rent on time.



Historically, low numbers of homes for sale and skyrocketing home sale prices fuel the rental demand. This means it is an excellent time to invest in the Rise real estate portfolio, which primarily comprises single-family apartments.



Become a landlord in the US today, and make your money grow with <a href="https://risevest.com/real-estate#get-rise">Rise</a>

Why You Should Invest in the Rise Real Estate Portfolio Today

Savings can be traced back to the 16th century, when people stored items and spare coins in jars and clay pots for rainy days. 



Over time, however, savings gradually and progressively evolved to what it is today &#8211; local club savings (Ajo in Yoruba), traditional banking systems, and even digital savings.



According to <a href="https://focusedfinancial.co.uk/the-history-of-investing-what-the-past-can-teach-us-about-market-cycles/">Focused Financial</a>, the modern investment structure can be traced back to the 17th century when the Dutch East India Company listed its shares on the Amsterdam Stock Exchange in 1602.



However, evidence shows that investments had long started before. One of these pieces of evidence is the Hammurabi Code, which dates back to 1700 BC and provides a legal framework for investing.



In a Wikipedia <a href="https://en.wikipedia.org/wiki/Investment#History">article</a>, stocks, bonds, and other securities buyers were described as speculators in the media, academia, and commerce at the beginning of the 20th century.



At that time, investments, like the current financial markets, connected investors to businesses and helped them grow their wealth.



Saving in finance is putting money away in cash or its equivalent, after subtracting your expenses from your income over a certain period. 



It is storing what is left of your money after making the necessary deductions, expecting little or no interests.



On the other hand, investing means buying assets or investing your money into ventures in hopes of increasing value and getting higher returns. 



It is basically putting your money to work to earn more money for you. One of the things you could invest your money in include Eurobonds.



<figure class="wp-block-image size-large is-resized"><img loading="lazy" src="https://money.rise.capital/wp-content/uploads/2022/03/Investing-2.jpg" alt="Savings and investment
 " class="wp-image-1531" width="414" height="316"/><figcaption> </figcaption></figure>



Eurobonds are bonds or debt instruments denominated in a currency other than the local currency of the country in which the bonds are issued. 



They are the most common form of fixed income securities and one of the safest investments. 



A bond denominated in Japanese Yen and issued in the UK, or a bond denominated in US dollars and issued in France or the UK are examples of Eurobonds. 



Eurobonds are securities that are issued by the government or a company to raise the money needed to finance projects, without any form of forex risk. Investing in <a href="https://risevest.com/fixed-income">fixed income</a> on Rise guarantees you 10% returns in dollars per annum.



Other forms of investing include stocks and real estate. You can start <a href="https://risevest.com/">here</a>.



How much money should you save or invest from your income? Well, according to the <a href="https://www.investopedia.com/ask/answers/022916/what-502030-budget-rule.asp">50/30/20 rule</a> by financial experts, 50% of your income should go into paying for those expenses that are essential to your survival like groceries, healthcare, insurance, taxes and other basic utilities. 



30% is expected to go into your wants like buying that chanel purse, ordering from your favourite restaurant or organising a house party. While 20% is allocated to your savings or investment.



<h3>Here’s an example:</h3>



Yemi makes 500,000 naira monthly and following the above rule, 50% (250k) is expected to go into his essential needs; 30% (150k) into his wants; and 20% (100k) into savings or investments.



Although a brilliant budgeting rule, this may not be ideal for every earner as everyone has different needs and different earning rates. So how much you choose to save or invest is <a href="https://risevest.com/blog/how-to-be-a-good-investor">dependent</a> on how much you make and your level of needs.



It is also important to note that despite being essential to building wealth and gaining financial security, both concepts are different and often used interchangeably. 



While one helps you pile your money with little or no returns and with minimal risk involved, the other helps multiply your wealth, exploring various options amidst the risks involved.



As a finance enthusiast, bearing in mind the Naira&#8217;s rate of devaluation and the level of inflation around the world, it is crucial to understand the differences and similarities <a href="https://risevest.com/blog/investing-is-for-you-6-women-on-why-women-should-invest">between</a> savings and investments.



This way you can make the right financial decisions and take the right steps to growing your wealth.



One common similarity between savings and investment is that they are both strategies we can use to achieve our financial goals and secure our financial future.







<h2>Six major differences between savings and investment</h2>



<h3>Returns</h3>



Savings, compared to investments, have lower or no returns, especially in the Nigerian banking system where accounts, regardless of type, are often charged different minor fees. This sometimes reduces the total sum of a saver’s funds. 



However, with the wide range of options that investment offers and the possibility of diversification, higher returns are expected.



<h3>Devaluation</h3>



While investments offer a hedge against currency devaluation and inflation as their value primarily increases, a currency’s value drops as inflation skyrockets. This, in turn, reduces the value of your savings.



<h3>Purpose and Duration</h3>



Why are you saving or investing? Are you targeting a specific goal? How long do you want to do it? It is crucial to identify your objectives before deciding whether to invest or save. 



Although both are goal-based, savings are better for short-term, specific and straightforward goals. They are targeted towards easy goals, irregular spending, and emergencies, as they are easier to meet. 



To achieve a long-term goal, investments are the best fit. They meet bigger financial goals while promising you higher returns.



<h3>Risk</h3>



Savings come with little or no risks. This is because they are often deposited into bank savings accounts or fixed deposits.



Local savings systems like the Ajo and piggy banking are also relatively safe, as there is a level of trust and prior relationship among the community of savers. 



However, there is a higher risk of losing money with investments, as they depend on market situations and fluctuating return rates. 



These risks are even higher when an investor fails to invest in quality assets with long-term growth potential.



In addition, you could lose your capital in investment, as there is often no guarantee of possible returns. However, the higher the risks involved, the higher the returns.



<h3>Diversification</h3>



Investments offer various options like stocks, real estate, crypto, gold, bonds and mutual funds. 



These allow investors to earn from different sources and shield them from harsh market conditions. When one investment option is down, the other is up or doing reasonably well. Savings, however, have limited options.



<h3>Access to Funds</h3>



In times of emergencies or urgent needs, it is easier to access savings, as they are liquid.



You have access to them and can withdraw at any time, although this could incur early withdrawal charges. 



While this is a good thing, it leaves your account prone to withdrawals at any time, leading to unplanned and unnecessary spending. 



On the other hand, investments do not allow easy access to your money, especially when the markets are neck-deep in loss. This helps investors examine their spending and stay on track with their goals of building wealth.



<h2>Summary of the key differences between Savings and Investment</h2>



<figure class="wp-block-table"><table><tbody><tr><td>Key Differences</td><td>Savings</td><td>Investments</td></tr><tr><td>Returns</td><td>No or low interest rates</td><td>Relatively higher returns</td></tr><tr><td>Devaluation</td><td>Does not provide a safety net against devaluation and inflation</td><td>Provides safety net against devaluation and inflation</td></tr><tr><td>Purpose and Duration</td><td>Short term and short-term, specific goals</td><td>Long term and long-term goals (two years or more)</td></tr><tr><td>Risk&nbsp;</td><td>Little to no risk, as they are often deposited in banks and fixed deposits or using the local savings systems</td><td>Risk level varies according to the investment option.</td></tr><tr><td>Diversification</td><td>No diversification option&nbsp;</td><td>Allows diversification across different investment options</td></tr><tr><td>Access to funds</td><td>Savings are more liquid</td><td>Investments are less liquid</td></tr><tr><td>Options</td><td>Bank savings account, piggy bank, local collective savings (Ajo)</td><td>Stocks, real estates, mutual bonds, crypto and NFTs</td></tr></tbody></table></figure>



<h2>Savings and Investment, Which Should You Choose?</h2>



Should you be saving or investing? Knowing all the above, and having a defined vision of what you want to achieve helps you to make better money decisions.



<figure class="wp-block-image size-large"><img loading="lazy" width="537" height="390" src="https://money.rise.capital/wp-content/uploads/2022/03/1nu8au.jpg" alt="Saving and Investment, what is the difference in wealth creation " class="wp-image-1529" srcset="https://money.rise.capital/wp-content/uploads/2022/03/1nu8au.jpg 537w, https://money.rise.capital/wp-content/uploads/2022/03/1nu8au-300x218.jpg 300w" sizes="(max-width: 537px) 100vw, 537px" /></figure>



However, whether it is saving or investing you have chosen to do, Rise has you covered.



Risevest has three asset classes for people who are looking to invest. There are <a href="https://risevest.com/stocks#get-rise">stock</a>, <a href="https://risevest.com/real-estate">real estate</a>, and <a href="https://risevest.com/fixed-income">fixed income</a> options.



There are also goal-based plans for people who want to allocate funds towards a specific goal; dream wedding, travel, school, owning a home, rent, and even saving for your kids’ trust fund.



But remember, savings are targeted towards short term goals while investments are for the long term. 



Savings do not yield much returns whereas, investments often provide higher returns, despite the risks involved. And the higher the risks, the higher the returns promised.



You can only achieve financial freedom and create the wealth you dream of by investing. Start <a href="https://risevest.com/">here</a>. To be a good investor, here are some <a href="https://risevest.com/blog/how-to-be-a-good-investor">things</a> you need to know.

Savings And Investment: What Makes The Difference In Wealth Creation?

Hi Risers,



We are currently in a period of high inflation across most markets and many investors are facing the problem of how to achieve a level of returns that beats inflation and grows their money.&nbsp;



What assets provide the best protection against inflation and what investment strategy should long term investors follow in order to grow their portfolio through inflationary periods? As your investment managers, we have answered your questions through this article.



The last time inflation hit these levels in the US and other developed economies were in the 1930s and 1970s. In the early 70s, easy money policies were implemented by the US central monetary authorities in an effort to generate full employment. This resulted in high inflation numbers, with the rate of inflation going from 5.9% in 1970 and hitting 13.3% by the end of the decade. As a result, the US Federal Reserve raised interest rates to nearly 20% to curb inflation, leading to the decline of the stock market by nearly 50%  over a 20-month period. 



Research has also shown that during periods of high inflation and a volatile economic environment, an investor whose first priority is safeguarding their funds while having a pure inflation target should invest mainly in Government Treasury Bills when the investment horizon is short; and should increase their allocation to inflation-linked bonds, equities, commodities and real estate when horizon increases. This is because these asset classes are able to outperform inflation in the long term. 



Meanwhile, in a more stable economic environment with high inflation shocks, the optimal set investment changes for an investor even while still invested in Government Treasury Bills, especially when the investment horizon is short; the investor should increase their investment in equities and nominal bonds commodities when their horizon increases. As various research outcomes confirm the value of alternative asset classes in protecting the portfolio against inflation.    



However, generally, when it comes to the stocks market, our research suggests that reducing the number of stocks bought during inflation may be beneficial to portfolio returns in the short term. Stocks linked to energy and commodities are usually the best bet during such times as they tend to outperform a diversified equity index when the economy is suffering from structural inflation. This means that these equities provide fewer diversification benefits than commodities. Compared to commodities, equities provide a poor inflation hedge but offer better long term returns.



This can be a line of thought for an investor thinking about how best to achieve an objective of return above inflation. But unlike commodities, portions of the equity market, especially those that are more related to energy or materials, provide stronger inflation hedging properties.&nbsp;



However, Real Estate Investment Trust (REITs) in general, provide a poor inflation hedge, although residential REITs do seem to provide better hedging characteristics than the broad REIT index.&nbsp;



Also, cash and leveraged loans provide reasonable inflation hedging characteristics, despite the fact that the former does not provide sufficient return for most long term investors. Non-US currencies provide diversification and potentially better returns than cash. Commodities are a non-homogenous asset class and sub-sectors such as energy and industrial metals provide good inflation betas. Implementation of a commodity’s position within a portfolio is key to ensuring that this does not result in a drag on the portfolio due to their lack of cash-generating properties.



Finally, the best investment strategy all depends on your time horizon; and because Rise believes in building or creating wealth over a period of time, we have provided asset classes that perform well for investors with both short and long term horizons.&nbsp;



Showing below are the various asset classes and how they performed during periods of inflation and periods of low inflation.&nbsp;



<figure class="wp-block-image is-style-default"><img src="https://lh3.googleusercontent.com/qOvMbYGyABlB3MXDOBLdpv9rEmzaDPqp120y5tuFnbI9UFN1CfA2gRXwqSxvDQfyLcb0HlMftFUJKkutN6vRYsPcpQKBuSYG-KcfFH_ouLMhJNScqFyuxceAM5QyB17GW5A2b2WB" alt=""/></figure>

Investing During Inflationary Periods

As the world progresses, more people understand the need to invest and how investment helps you attain financial freedom, especially with the rule of compounding.



The right investment, regardless of the risk involved, provides you with long-term financial security, rather than just putting your money away in a bank or using the traditional savings system. It also allows you to build wealth at your own pace while giving you access to compete with other investors.



For someone new to investing and still trying to understand how it works, choosing what to invest in can be daunting, as there are many factors to consider.



If you are looking to avoid scams and be a good investor, here are some things you need to know:



<h2>Commit to a certain amount of money </h2>



For anyone looking to be a good investor, discipline and commitment are key to growing your finances. It is important to adopt a sense of financial discipline, as it helps you develop the habit of setting aside a particular percentage of your weekly or monthly earnings towards your investments. While doing this, it is also important to understand what you want to achieve at the end of your investment period. A target or goal-based investment and follow-up action plans make it easy to focus and commit towards achieving your goals



<h2>Understand how the market works </h2>



Good investing involves understanding the market dynamics and how things work. Reading books on finance and investments, taking courses, and following trusted financial advisors and investment, experts are key to making the right investment choices. It is also essential to research the options available to you: the company, its investment strategies, past performances and its average annual return. Warren Buffet, one of the world’s greatest investors, said, &#8220;Never invest in a business you cannot understand.&#8221; If you don’t understand it, don’t do it. Understanding the rules of compounding is also essential in investing. The higher your investment, the more returns you’re likely to make.&nbsp;



<h2>Know what type of investor you are </h2>



There are many types of investors, but the most common ones are the high-risk investor, moderate or medium risk investor and low-risk investor. As a good investor, you need to “know thyself” and your level of risk appetite. Although investments are often long-term, the low-risk investor prefers to stick to a shorter investment period and safer investment options, as they are usually risk-averse.&nbsp;



The medium-risk investor has a moderate risk level and prefers to invest in low-average risk assets like real estate and stable stocks, while the high-risk investor goes all in. They are not scared of taking huge financial risks with high promising returns. These types of investors invest mainly in stocks and crypto, and because the goal is usually long term, they are not afraid to invest.



To make the right choice of investment, it is important to know what category of investor you fall under.



<h2>Diversify</h2>



Diversification is a key investment strategy that helps reduce an investor’s risk by allowing them to allocate funds or capital across different investment platforms and options. It also offers the opportunity to make different returns across these options. The Rise app offers three different investment options for our users, who are looking to diversify their portfolio while promising decent returns.



<h2>Avoid get-rich-schemes</h2>



When the offer sounds too good to be true, then fly as far as your wings can carry you.



<h2>Learn to drain the noise</h2>



A good investor knows not to follow the crowd for fear of missing out. When the market is red and everyone seems to sell, a good investor knows it is one of the downsides of the market, and because they have confidence in their choice of investment, know that everything will go back up again.



<h2>Learn the language of the market</h2>



The financial/investment market has a lingo, and a good investor knows it is important to learn, as it makes it easier to understand and navigate the market. Words like FOMO, bear and bull market, APR, ROI, dollar-cost averaging, and the most common one on the internet right now, WAGMI, are some of the investment lingo out there.



Lastly, a good investor plans a clear, defined exit strategy for when the markets are down. With Rise, you can become an even better investor, as it helps you achieve all of this while managing your investment and providing you with the best financial updates. <a href="https://risevest.com/">Get started</a>.

How To Be A Good Investor

Seun is currently undergoing his National Youth Service Corps program. He earns N33,000 from the Federal Government and N5,000 from his place of primary assignment.&nbsp;



Last Saturday was his father’s social club meeting, and Seun was asked to buy drinks for the celebration. Seun sent N40,000 for the drinks; everything he earned last month went into purchasing them. I asked why he did that and he replied, “I had to do it.”&nbsp;&nbsp;



Are you like Seun dealing with added responsibilities from family? You are not alone. We spoke to several young Nigerians who are struggling with the financial pressures of being the family breadwinners.&nbsp;



<h2>What is Black Tax?&nbsp;</h2>



Black Tax, in its simplest form, is money that black people or people of colour (POC) give every month to their family members, especially struggling ones to support them.&nbsp;



90 million Nigerians live below the national poverty line, and this puts pressure on those who earn more to support those who don’t.&nbsp;



Bolaji works for a telecommunication firm in Lagos, earning N160,000 per month. Last month, she told the MoneyRise team she had to buy 2 mobile phones for her siblings; and this month, she is preparing to pay half of her parent’s house rent. Asking if she can save or build wealth, doing that, she says it has an impact on her ability to save or build wealth.



In her words, “Instead of saving a significant portion of my money, I always have to worry about that cousin that needs to go to school or the little brother that needs new shoes”.&nbsp;



<figure class="wp-block-image"><img src="https://lh4.googleusercontent.com/EepB48Dn2iR2rWWc2whJKWv6ZJdKRjE1v3s8vBS7j5edp24OH_T2Kd6r3CkoiPZtuRxn_-t5pm38GjG71qKQz7gaKgyLp7-z4YiDIYeV8pLW8oNCAq2qNyIdNINilBzOZ5kEKVEj" alt=""/></figure>



The root of the culture of Black Tax, can be found in the African philosophy that says “It takes a village to raise a child”. In return, the child grows up and takes care of the village that nurtured them. This care comes in the form of providing for parents and community members who supported you while you grew; and it ranges from paying rent to paying school fees of a relative, buying clothes and starting a business for them and generally, catering to their financial needs.



Speaking to Chukwuma on how black tax affects his income, he sounded quite excited like he had been waiting for someone to broach the conversation with him. He says the biggest challenge he faces with black tax is not knowing how to say no.&nbsp;



Chukwuma is currently in a tight corner as his dad wants him to contribute N150,000 towards his younger brother’s school fees. In his words, “I don&#8217;t know how to tell him that I do not have the money.”&nbsp;&nbsp;



Taiwo likens Black Tax to a rat race — an endless or pointless pursuit. He is struggling to be financially free and the family weight on his shoulders keeps dragging him back every time.&nbsp;



“I earn money, but can’t seem to get my finances in order”, he said. “I have just rented and furnished my parents&#8217; new apartment and next month, I am going to pay for my brother’s school fees.”



<h2>How to Deal with Black Tax</h2>



It’s a blessing to be able to provide for the family but if black tax is not properly managed, it can lead to resentment and the inability to save and build generational wealth.



Here’s how to deal with it



<ul><li>Everyone does not need to know how much you earn: When people know how much you earn, it’s easier for them to be entitled to your help. Try as much as possible to not disclose your earnings.</li></ul>



<ul><li>Set a black tax budget: Set an amount that you can give out in a month. Once you’ve reached that limit, tell them to wait till next month, except it is an emergency.&nbsp;</li></ul>



<ul><li>It is important to have a necessity test: This means choosing your battles and only paying for what is necessary like education and basic physiological needs. There’s no reason to pay for things like parties or drinks.&nbsp;&nbsp;</li></ul>



<ul><li>Learn how to say no: If you didn’t exist they would have found another means to solve their problems so be comfortable with saying no.</li></ul>



<ul><li>Insurance is important: To avoid emergency bills, it is important to pay for insurance that can cover unforeseen expenses. Paying for insurance such as home insurance, health insurance, comprehensive car insurance will help ease the financial stress relating to issues like this.</li></ul>



<ul><li>Pay Yourself first: Putting some money aside for retirement is a way to avoid not falling into the cycle of dependency. Rise has a build wealth plan where you put the money you set aside.&nbsp;</li></ul>



<ul><li>Financial goals are important to you: Set specific, measurable, achievable, relevant and time-bound goals that will give you the financial freedom and wealth you seek. You can start by creating a <a href="https://risevest.com/">build wealth plan</a> on Rise.</li></ul>

How to deal with Black Tax

Last Wednesday, PayPal shares fell almost 25%, hitting a 21-month low of $132.57 and losing nearly $50 billion of market capitalisation. At the time of writing this, PayPal shares are trading at about $120.



Like many tech companies, PayPal saw an influx of new users during the pandemic. It gained a whopping 120 million new users between 2020 and 2021. However, it quickly became clear to the company that those new accounts did not actively use the platform; as such, PayPal did not generate any meaningful business.&nbsp;



PayPal also saw a drop in payment volumes in the last quarter of 2021. The company’s management cited supply chain problems, reduced travel and events due to COVID, removal of government stimulus and inflation as the reasons behind this. Supply chain constraints caused international transaction volumes to shrink because fewer people were buying physical goods, given that it could take months before they would receive their delivery.



Despite this, PayPal did not have a down quarter. It reported $6.92 billion revenue in Q4 2021, a 13.1% increase over Q4 2020, which exceeded analysts expectations by over $50 million. Like Meta, it was not their past performance that had investors worried; it was their future outlook.



PayPal had previously set a medium-term target of reaching 750 million users. To achieve this, last year, they began offering a $10 referral bonus to existing users who signed up a friend with their referral link. The CFO, John Rainey, revealed that the company discovered 4.5 million fake accounts created under this scheme. He also said those accounts affected their ability to meet their revenue forecasts for Q4 2021.



PayPal has now slashed its forecasts for new users and instead, is shifting focus to making already active users spend more. This decision is likely to make many of the people who were drawn towards the platform during the pandemic to fall away.&nbsp;



The company has also adjusted the revenue forecasts it gave a few months ago. In November, PayPal had forecasted an 18% growth in revenue in 2022, but they have now reviewed that growth figure to 15-17%. This is the second consecutive quarter that PayPal has reduced the forecasts they had previously given.&nbsp;



In November, after they published their financial statements for Q3 2021, they reviewed their revenue forecasts causing their share price to plunge 12%. This behaviour will likely cause investors to doubt any forecast management makes in the future.



It is vital to view the drop in PayPal’s shares in light of what is happening in the US economy. The US Federal Reserve will raise interest rates this year which would make other investments outside of stocks more attractive and reduce the funds investors have to invest in stocks. Given this backdrop, any disappointing news from companies is likely to be greeted with a massive drop in stock price as seen with Meta, Spotify and Snapchat, which all declined by over 20%.



The excess cash in the US economy created by different rounds of stimulus has accounted for rapid growth in share prices since May 2020. The end of stimulus and the rise in interest rates means that stocks are likely to see price corrections. However, investors in good businesses will be rewarded richly in the long term.



Want to invest in a portfolio of expertly selected growth stocks? Create a <a href="https://risevest.com/stocks">Rise stocks plan</a>.

Why PayPal Stocks Took A Dive

For the first time in Facebook’s 18-year history, the platform recorded a drop in Daily Active Users (DAU) from 1.93 billion to 1.929 billion. Although the fall in DAU might seem so small, it could be a rounding error; this news sent Facebook’s share price falling over 25%, wiping out about $251 billion in market value, the largest single-day equity wipeout EVER. The CEO of Facebook, Mark Zuckerberg, saw his net worth fall by $29 billion.



<h2>Backdrop:&nbsp;</h2>



Facebook has been plagued with privacy scandals, government crackdowns, and user distrust. In a bid to rebrand, the group that owns WhatsApp, Instagram, Messenger, and of course Facebook changed its name to Meta last year. Amidst all these scandals, Facebook has maintained its position as the number 1 most used social media platform. This position has earned it top dollar in advertising revenue. However, that changed in 2021.&nbsp;



In April 2021, Apple made some software privacy changes that affected how platforms like Facebook tracked users and targeted them with adverts. Meta estimated that this decision alone could cost them $10 billion in revenue as they can only make top dollar from advertisers when they can track user data fully. While they were trying to grapple with that, macroeconomic conditions such as rising inflation in the US and global supply chain disruptions also weighed on advertisers’ budgets, limiting the amount of money they could spend on advertisements.



Even with all of this turmoil, Meta still managed to outperform analysts’ expectations for revenue. The company reported revenue of $33.67 billion for Q4 2021, despite analysts predicting revenue to be $33.4 billion. The biggest shocker for investors was the fall in daily active users. Meta’s CEO, Mark, pointed to the competition from TikTok being the reason for the drop in DAU.



However, it was the company’s forward guidance that led to the share price’s nosedive. Meta warned that revenue in the first quarter of 2022 will be $27 billion to $29 billion, the slowest period of growth on record. Analysts were expecting $30.15 billion in revenue, according to Refinitiv. The drastic fall in share price reflects how unclear the future for Meta seems beyond new competition from TikTok, privacy, and macroeconomic concerns.



In the past, Facebook had overcome challenges to its hegemony in social media by acquiring its competition like Instagram and WhatsApp, and when they couldn’t, they resorted to copying the feature that made the app special, as in the case of Snapchat. Meta has taken the latter approach by cloning TikTok with its short-form video feature called Reels. This feature is not much profitable in terms of advertising revenue as advertisers pay less for ads placed in video feeds than those placed in news feeds or stories.



Investors are looking at the bigger picture. Could the writing on the wall be spelling the end of Facebook’s reign? Could they lose the war for users&#8217; attention? One thing is for sure; Meta will not be going down without a fight.



Zuckerberg is seeking to diversify Meta’s revenues beyond advertising. But some of its efforts on that front have proven futile. Last week, a Facebook-led initiative to launch a global digital currency, Libra (formerly Diem), was abandoned after facing regulatory hurdles. Now, Mark has shifted his gaze to the metaverse, an immersive virtual world supported by virtual and augmented reality technology. However, he warned last quarter that the investment in the metaverse is not going to be profitable for investors any time soon. In 2021, the meta business ​​posted a full-year operating loss of $10.2bn.



Analysts seem to agree that the 25% single-day drop in the market value of Facebook was an overreaction, and it&#8217;s likely that the stock would recover some of those losses in time. However, the longer-term outlook might be grim for Facebook. Could this be the beginning of the end for the social media giant, or could they find new life in the metaverse? Only time will tell.

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