The exchange rate has been a hot topic in recent times. Over the years, we have watched the naira fall from 300/$1 to 900/$1, causing fears and uncertainty amongst investors like you. While fluctuations are a part of the market, understanding the economic landscape helps you make better long-term decisions relating to your investments.



Since the Central Bank of Nigeria (CBN) unified the exchange rate, the naira has witnessed ups and downs based on the demand and supply of USD in the market. Last week alone, the US Dollar exchanged at an all-time high of N950/$ before it gained 15% and exchanged for N855 per USD.



 Firstly, it&#8217;s essential to recognise that exchange rate movements are often short-term and should not necessarily prompt hasty decisions. When exchange rates start fluctuating, the fear of potential losses or missed opportunities might prompt you to make impulsive decisions. But reacting solely to short-term fluctuations can undermine the original investment strategy and lead to missed long-term gains.



However, if you&#8217;re concerned that the fluctuating exchange rates might lead to a loss in the value of your FX investments, that&#8217;s not the case. Here&#8217;s why: The Nigerian economy is currently facing challenges in the form of recessionary shocks and slow growth. The inflation rate remains high, standing at over 22%, leading to a rapid decrease in the value of the naira compared to the dollar.&nbsp;



Moreover, the country&#8217;s oil production is still below 2 million barrels per day, which limits the ability of the Central Bank of Nigeria to inject more dollars into the market. On top of that, Nigeria’s imports consistently surpass exports. While foreign portfolio investments (FPIs) are currently low, there&#8217;s a strong belief that they will increase in the next few quarters. This belief is driven by the ongoing liberalisation of the FX regime and the appealing nature of Nigerian stocks at a low cost. Unless these fundamental factors change significantly, you do not need to worry.



As an investor, it is important to differentiate between short-term price movements and the fundamental value of your investments. The intrinsic worth of an investment, its earnings potential, and growth prospects are the primary factors that should drive your investment decisions, not the exchange rate. 



Exchange rate fluctuations may impact the value of your investments in the short run. However, they often have limited influence on the company&#8217;s underlying health and potential for long-term growth.



As such, the end goal of investing is to achieve long-term financial growth by investing in assets that have the potential to increase in value over time. 



See how Amazon has performed over the years. In the history of Amazon, it has suffered as much as an 80% price decline, many 30% declines, and too many 10% declines. Yet even someone who invested in it just at the beginning of this year would have raked in a whopping 55.66% YTD by now.



With this knowledge, here’s our simple advice, borrowed from Charlie Munger, “Never interrupt compounding.”



When investing, the most important metric is your compound annual growth rate (CAGR), your return over your entire holding period (2, 5, 10, 20, or more years). The return you make in any given year is great, but because the money is still invested, you need to ensure that you allow it to continue to grow.



<h3>How can you interrupt compounding?</h3>



You interrupt compounding when you stop investing on schedule or liquidate your investment for fear of the unknown. Whatever your investing schedule is, stick to it or improve it. Never interrupt it by stopping it. And whatever may happen in the market, don’t fret. Don’t stop investing out of emotion. It is the nature of the market that you experience volatility in the exchange rate; it’s part of what you signed up for. Trust that you are safe with Risevest; we will help you navigate it.



So learn to ignore the noise because there will be a lot of it, but focus on ensuring you do not interrupt compounding.

Here’s Why You Should Avoid The Exchange Rate Noise and Focus on Your Long-Term Investment

August was eventful in the US stock market as there were sell-offs amidst less impressive Q2 earnings reports. These sell-offs have left many pondering their next moves, while the Fed&#8217;s battle against persistent inflation adds another layer of intrigue to the global economic space.



Amidst this financial turbulence, the BRICS summit takes centre stage, with leaders from Brazil, Russia, India, China, and South Africa converging to discuss similar economic aspirations and ambitions. The backdrop of this summit is not only about strengthening ties among these emerging economic powerhouses but also the subtle yet significant battle for currency domination.



Let’s delve into the strategies and insights you need to steer your investments through these uncertain times, ultimately aiming to emerge stronger and more informed amidst the currents of uncertainty.



<h2>Asset Classes Overview</h2>



<h3>Stocks</h3>



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August was a rough month for the stock market. The S&amp;P 500 index closed the month negative, down by -1.77%. Our Rise Equity portfolio barely closed positive, up by 0.33%, beating the benchmark index. Amidst the sell-offs in the market, we activated our market hedges to reduce the impact of the market downturn on our stock portfolio. 



We added two more positions to our stock portfolio last month: Adyen and ProShares UltraShort S&amp;P500. We recognized a unique buying opportunity in the market for Adyen when the stock was down by 14% in a single trading day amidst a weak Q2 earnings report. In our investment thesis, we are convinced the Dutch payment company has great business fundamentals and significant upside to boost our overall portfolio.&nbsp;



Also, we opened a short position on the S&amp;P 500 index to offset the downward market movement. This position inversely mirrors the overall market performance, helping our portfolio stay green for the month.



Regardless of the current market conditions, we remain optimistic about the prospects of the stocks in our portfolio and will continue to make quick and insightful strategic decisions to optimise our returns. We encourage you to approach your investments with a long-term perspective and a diversified portfolio strategy.



<h3>Real Estate</h3>



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Our Rise Real Estate portfolio returned 1.07% in rental income this past month. Ripple effects from rising interest rates can be seen in higher mortgage rates, higher home prices, and higher rental income, which we have benefited from.&nbsp;



Home prices in the US climbed for the fifth straight month amid tight inventory. Buyers are battling over a limited supply of homes for sale and are resorting to renting instead. The median home value-to-income ratio in the US now stands at a record ~ 4.5x. This is 45% above the historical average of 3.1x, with the median home payment now at a record $2,800/mo, up by 90% since 2020.



Currently, renting a house in the US requires 35% of the median pre-tax household income. Buying requires ~46% of the median pre-tax household income. Simply having a place to live has never been more expensive.



While rising mortgage rates have pushed some would-be homebuyers to the sidelines, there&#8217;s still plenty of demand from determined shoppers, who are left to battle over a severely limited inventory of listings. Elevated prices spurred by the supply crunch and higher borrowing costs have made this the most unaffordable housing market in many years.



The average 30-year mortgage rate reached 6.79% in early June, according to data from Freddie Mac. It has since jumped to 7.23%, further squeezing buyers.



With a soft landing in sight for the economy due to robust economic growth and slow growth in inflation figures, we expect to see a turnaround in the real estate market. Our real estate asset portfolio provides investors with stable and consistent cash flow and is a haven in this inflationary period. You can own real estate assets by investing in our real estate portfolio or through a direct purchase in your name.



<h3>Fixed Income</h3>



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Our fixed-income investments generated a return of 0.83% for the month of August 2023 against the backdrop of an evolving global economic and geopolitical landscape, this performance underscores the resilience and stability of our fixed-income strategy.&nbsp;



With the Fed&#8217;s preferred inflation measure, the PCE, ticking upward to 3.3% in August from 3% in July 2023, the market is already pricing another rate hike in September 2023. This further rate hike benefits our fixed-income portfolio amidst a higher yield on treasuries.



As we look ahead, we anticipate developments in various sectors to continue to shape market trends. Stay vigilant and informed, and remember that wise investment decisions are built upon the foundations of research and analysis and a willingness to adapt to changing market conditions.

Rise August 2023 Portfolio Report

The Okirika market is deeply rooted in Nigeria’s economic ecosystem. Everywhere you look— in vibrant markets, under the bridges and bustling street sides— you’ll most likely see someone selling second-hand clothes, colloquially known as Okrika, bend-down select, or ‘boskoro’ condensed from ‘Bọ́ sí korò’, Yoruba for ‘move to the corner’ (describing the shopping process of selecting and trying on new finds)



To the average Nigerian, Okrika embodies more than just affordability; it reflects the intricate interplay between consumer choices, market intricacies, and socio-economic influences. In this article, we will thoroughly explore the economic dimensions of Okrika, delving into its nuanced intricacies and implications. But before we begin, let us trace its origin. 



<h2>History of Okrika</h2>



The emergence of Okrika can be traced back to the 15th century when African societies encountered European traders, missionaries, and colonisers. As these external influences introduced Western clothing, locals began incorporating these styles into their wardrobes. This cultural fusion gained momentum in the late 19th century, driven by Western clothing symbolising modernity and sophistication. Wearing such clothing became a status symbol, signifying adaptation to changing times.



Crucially, Christian missionaries played a role in promoting Western dressing to spread Christianity and European cultural norms. As formal education and urban centres expanded in Nigeria, exposure to Western clothing increased. This exposure was further heightened through media and communication channels like newspapers, magazines, and photography.



The demand for Western clothing led to the birth of a market for second-hand garments known as the Okrika market. The term &#8220;Okrika&#8221; originated from a town strategically located along the coast, facilitating the arrival of European ships loaded with second-hand clothing. This market catered to a growing consumer base seeking affordable and fashionable options.



What started as an embrace of Western clothing eventually evolved into a diverse market encompassing various second-hand garments. The Okrika market adapted to changing trends and preferences, incorporating styles from different regions and eras. This adaptability underscored its role as a reflection of consumer desires and the fusion of cultural influences.



The impact of Okrika on contemporary Nigerian society is profound. It embodies the complexities of globalisation, cultural exchange, and economic dynamism. The market&#8217;s ability to evolve and diversify speaks to Nigeria&#8217;s cultural fluidity and resilience in changing times. Moreover, the Okrika market showcases the integration of local and global elements, highlighting Nigeria&#8217;s unique capacity to shape its cultural identity.



<h2>How has Okrika evolved over time?</h2>



The evolution of Okrika in Nigeria is a testament to the dynamic interplay between changing consumer preferences, economic realities, and cultural shifts. From its humble beginnings as a practical solution to economic challenges, thrift shopping has become a prominent and multi-faceted retail phenomenon that resonates deeply with Nigerian society.&nbsp;&nbsp;



We spoke to Oyinda*, a fashion enthusiast on her thoughts on Okrika, and she said, &#8220;Okrika has been a game-changer for me. As a fashion enthusiast on a tight budget, it&#8217;s like discovering a treasure trove of unique styles. I&#8217;ve found pieces that express my individuality without breaking the bank. Anytime I go to Yaba, I am able to buy dresses for N3000 and still manage to look presentable. As the economy tumbled, individuals and families sought ways to maintain a sense of normalcy while being mindful of their financial limitations. Thrift shopping provided a practical alternative, allowing people to acquire clothing still in good condition at a fraction of the cost of new garments. This approach addressed immediate clothing needs and allowed for prudent budgeting, a crucial skill in times of economic instability.



However, what started as a response to economic necessity gradually evolved to play a more significant role in shaping how people shop and what they value. Thrift shopping moved beyond its practical beginnings to become a way for individuals to express their uniqueness and creativity. As more people embraced thrift shopping, it changed how fashion and style were perceived. This practice challenged traditional clothing ideas, encouraging a departure from constantly pursuing new items.



 According to Olumide*, a young and fashionable Nigerian banker, “Okrika shopping has transformed how I approach fashion. It&#8217;s not about compromising quality for affordability; it&#8217;s about being savvy with my choices. I&#8217;ve built a professional wardrobe that&#8217;s just as stylish and versatile as new clothing but without breaking the bank. Okrika allows me to invest in quality pieces without the hefty price tag.”



In recent years, the digital era has transformed thrift shopping in Nigeria. Online platforms and social media channels have enabled the growth of virtual thrift stores, expanding the reach of second-hand markets beyond physical locations. Consumers can now browse, select, and purchase thrifted items from the comfort of their homes. This digital shift has not only broadened accessibility but also contributed to the normalisation of thrift shopping. One thing remains clear: Okrika sells because it is affordable.



<h2>THE PROPOSED BAN</h2>



On June 8, 2023, the Nigeria Customs Service made a significant announcement regarding the intention of the Federal Government to prohibit the trade of Okrika, within Nigeria. This decision was motivated by concerns spanning health, economics, and sustainability. However, this isn&#8217;t the first time banning second-hand clothing in Nigeria has come up. Back in 1971, the Nigerian government made it illegal to sell used clothing. In more recent times, in 2020, Francis Fadahunsi, the vice-chairman of the Senate Committee on Customs, Excise and Tariffs, proposed banning the import of used clothes due to concerns about preventing the spread of the coronavirus in the country.&nbsp;



<h2>What are the implications of this ban?</h2>



1. Health Implications: The concerns surrounding health primarily pertain to hygiene standards associated with second-hand clothing. The ban could be seen as a measure to address potential health risks associated with purchasing and wearing used garments, which may not always meet the desired sanitation standards.



2. Economic Impact: The ban could significantly impact the economy in multiple ways. The Okrika market significantly contributes to informal employment, providing income to many individuals involved in the second-hand clothing trade. If the ban comes into effect, it could lead to job losses and a disruption in the livelihoods of those dependent on the Okrika industry.



3. Sustainability Concerns: The call for banning Okrika aligns with sustainability concerns, which emphasise reducing waste and promoting environmentally friendly practices. However, this aspect also requires a closer examination. While reducing waste is important, there might be potential alternative solutions that strike a balance between sustainability and socio-economic considerations.



4. Impact on Accessibility: Okrika has long been a source of accessible and affordable clothing options for many Nigerians, particularly those with limited financial resources. A ban could affect the availability of budget-friendly clothing, potentially impacting the ability of marginalised populations to access decent attire.



5. Competing with Local Producers: The proposed ban raises questions about the challenges Nigeria&#8217;s local clothing producers face. These producers must already navigate pricing and quality issues to compete with Okrika and new imported clothing. The ban might offer a competitive edge to local producers but would also necessitate considerations of affordability for the general population.



<h2>Why Nigeria Loves Protectionist Policies&nbsp;</h2>



Protectionist policies are designed to safeguard local producers against stronger competition from larger and often more favoured foreign producers. These foreign goods can legally enter the country by paying tariffs or be illicitly smuggled in without tariffs. The presence of foreign goods poses challenges for local producers in gaining market share, as the competition from abroad hampers their growth potential.&nbsp;



One of the most recognised forms of protectionism involves imposing tariffs, essentially taxes on foreign goods. For instance, in 2013, Nigeria introduced a tariff of 70% on imported rice, resulting in imported rice costing around 30% more than locally produced rice. The aim of this measure is to give local rice a greater portion of the market. Another approach involves subsidies, wherein the government employs methods such as grants to provide advantages to domestic producers over foreign counterparts.



This is not the first time Nigeria has tried to ban things. Looking back, Nigeria&#8217;s history of protective policies has often resulted in negative consequences. A prime example is the widely known closure of land borders in August 2019, which lasted 16 months. During this time, the Nigerian government shut down land borders to curb smuggling and boost local rice production. However, this strategy didn&#8217;t achieve the intended results. Instead, it led to a substantial surge in the price of rice, skyrocketing by more than 100 per cent from N13,500 before the border closure to N28,000 by December 2020. Subsequently, the cost of a 50kg bag of rice has continued to rise, reaching around N50,000 as of August 2023.



The failure can be attributed to the fact that while the house is engulfed in flames, policymakers in Nigeria are often preoccupied with chasing rats.



Let&#8217;s not lose sight of the core issue here. The Nigerian fashion industry&#8217;s challenge isn&#8217;t solely about thrift clothes; it is more about the struggle of local clothing producers to compete on pricing and quality against thrift clothes and even newly imported ones.



While protecting local industries through banning or closing borders might be considered, it is not a guaranteed solution as such policies&#8217; success doesn&#8217;t depend on implementing them; it also hinges on addressing the underlying structural problems hindering growth.



Tough border conditions and corruption influenced the government&#8217;s choice to close borders instead of increasing tariffs. This meant even goods that should have faced high tariffs still managed to enter the country, showing that just closing borders doesn&#8217;t solve the widespread corruption issue at land borders. Even after the closure, goods continued to cross, often thanks to bribes.



Additionally, Nigeria faces a significant lack of proper infrastructure, including electricity, transportation, and essential farming equipment. When these fundamental issues aren&#8217;t dealt with, it compounds the problems local producers face and limits their potential to grow and compete.



Ensuring a steady production of local clothing is very important. However, implementing extreme protectionist measures like border closures can lead to a sudden decrease in the availability of clothes made within the country, causing their prices to rise. This immediate disruption worsens the problem in the short run without providing lasting solutions for those who make clothes and those who buy them.



Simply put, a comprehensive approach is needed to address the main issues affecting the fashion industry and local clothing production. This approach involves not only considering policies but also changing the underlying conditions to promote growth, increase competitiveness, and ensure the long-term sustainability of Nigeria&#8217;s clothing sector.

Is This the End of The Road for Okrika?

Secure Your Money

Inflation is the continuous and consistent increase in the general price level of goods and services in an economy. In this article, we will delve into the strategies and insights that can empower you to make informed investment decisions during times of escalating inflation.



<h2>Moderate and controlled Inflation can be good for Investors</h2>



As goods and services prices increase moderately, businesses make more money in sales and profits. These profits can be used to pay investors more money in the form of dividends or to reinvest in the business to increase revenues and profits, ultimately making companies more valuable.



<h2>High and hyper-inflation is bad for Investors</h2>



When inflation rises beyond a certain point, consumers will not be able to afford to pay for goods and services if their incomes don’t rise to match. If consumers cannot afford to buy as many goods, company revenues and profits will fall, which could cause an economic recession. For assets like real estate, if people looking to buy homes cannot afford to pay more for houses, prices will fall.&nbsp;



This is why Central Banks set inflation targets to allow for long term sustainable growth. While inflation is generally suitable for investors, too much inflation can be harmful.



<h2>How Inflation Affects Different Assets</h2>



Inflation affects assets differently. Some investments perform well when inflation is rising while others suffer. While it’s difficult to precisely predict how each asset will perform, we can look at history and economic theory to get a clue.



<h2>Cash</h2>



Cash is widely known as the worst asset to have as inflation rises. As major definition of inflation is the steady decline in the purchasing power of money. In 2016, it cost a family of five ₦4,087 to make a pot of jollof rice. Last month, the same quantity cost ₦8,590.



That is, the ₦4,087 someone had six years ago that was “strong/powerful enough” to cook one pot of hot delicious jollof rice is no longer “powerful enough” to cook the same today. The purchasing power of cash has been diminished, and inflation has eroded value.



Even cash left in savings or fixed deposit accounts is still not protected because the interest bank accounts pay is significantly lower than inflation. <a href="https://www.banknaija.com/best-high-interest-savings-accounts-in-2020/#:~:text=Currently%2C%20banks%20are%20under%20pressure,speculated%20in%20the%20near%20future.">Nigerian banks</a> offer 3% interest on a savings account on average, while Nigeria’s inflation is at 24.08%, a huge gap.



<h2>Bonds</h2>



A bond is a promise from one person, known as the issuer, to pay another person (bondholder) the money borrowed (principal) at an agreed future date and interest (coupon) regularly. It is an asset that allows governments and companies to borrow money from investors.



Bonds allow issuers to borrow money from investors today, pay the agreed coupons over the bond’s life (agreed borrowing period), and pay the principal upon maturity (agreed future date). E.g. If a company issues a 10% $100 bond with a life of 5 years, the company will pay $10 to investors every year, and at the end of the five years, the company will repay the $100 principal.



Bond issuers can choose to pay investors fixed or variable coupons. When the issuer initially offers the bond for sale, they state the type of payment structure they’ll use.&nbsp;



Inflation is very damaging to fixed-rate bonds because it reduces the value of the coupons paid over the life of the bond and the principal paid at the end. A bond that was paying ₦4,000 in 2016 could cook you a pot of Jollof, but that same bond can no longer do the same in 2022.



If the inflation is higher than the interest rate, investors essentially lose money after adjusting for inflation. However, there is a type of bond that protects investors against inflation. These bonds are called Inflation-Linked Bonds (ILBs).&nbsp;



ILBs have their coupons and principal linked to the inflation rate in an economy. The coupons and principal investors get from holding ILBs rise and fall with inflation. 



<h2>Real Estate</h2>



Investors can own real estate either directly by owning a house or land or indirectly through Real Estate Investment Trusts (REITs). Real Estate is often referred to as a store of value. The asset class has performed relatively well historically during high inflationary periods.



Investors who own rental properties will generally still be able to rent their property as inflation rises because housing is necessary. However, Central Banks are more likely to raise interest rates as inflation increases.



Higher interest rates can be bad for owners of rental properties and those who sell houses. As interest rates rise, the rate banks charge on mortgages (home loans) rises. An investor who bought their rental property with a floating rate mortgage will pay higher interest on their home; thus, they would have to increase rent to afford their mortgage.&nbsp;



Higher mortgages also mean it is more expensive for people to buy houses. It also reduces the number of people who qualify for loans to buy homes.



<h2>Commodities</h2>



Commodities are a broad category that includes natural gas, petroleum, precious metals, minerals, grains, electricity, currencies, emissions, and other financial instruments. Commodities have historically been seen as an indicator that inflation is to come.



As commodity prices rise, the price of the products that the commodity is used to produce rises as well. Commodities have historically performed well in high inflationary periods.



Investors don’t generally own physical commodities like a barrel of oil or a bar of gold in their homes. They use commodity derivatives to invest in commodities. Commodity derivatives are traded on exchanges like stocks.



Investors can also invest in multiple commodities via exchange-traded funds (ETFs) like the iShares S&amp;P GSCI Commodity-Indexed Trust (GSG).



<h2>Precious Metals</h2>



Gold is often considered one of the best hedges against inflation. Gold was the global reserve currency before it was replaced by the US Dollar almost half a century ago. Some investors still view gold as a reserve currency.&nbsp;



When inflation rises, and the value of traditional currencies like the US dollar falls, investors consider the old reserve currency a safehaven. However, gold is not a perfect hedge against inflation. Central Banks tend to raise interest rates to combat high inflation. Gold doesn’t pay dividends like stocks or coupons like bonds. This reduces the value it can offer investors when interest rates rise.



Stocks



Stocks can be good as a long-term inflation hedge but suffer in the short term if inflation spikes. Not all stocks are created equal. The stocks of high-growth companies do not perform well during inflationary periods, while value companies perform better.



Growth companies are fast-growing companies catering to a rapidly growing customer base. These companies spend a lot of money on advertising, research and product development to achieve this growth.



As such, many growth companies are not profitable, and the ones that make profits end up reinvesting all the profits in the business instead of paying shareholders dividends. When inflation rises, the cost of funding growth companies increases, and future cash flows are discounted to lower values.



This makes it more expensive to fund the desired growth and increases the risk that they might not achieve their goals. On the other hand, value companies like consumer staples, energy, and pharmacy companies will still see revenues because their services are essential to users.



High dividend-paying stocks also tend to suffer when inflation rises beyond manageable. As explained earlier, companies earn more profits when inflation increases and can pay higher dividends. But when inflation is too high, profits fall, forcing companies to reduce their dividends.



<h2>How to Invest when Inflation is rising</h2>



The best bet is to have a diversified portfolio of different assets. Lower-risk assets like cash and bonds tend to perform poorly when inflation rises, so seek opportunities outside those assets.



Assets like commodities, high-dividend stocks and real estate tend to perform better in high inflationary periods. However, it’s essential to have a healthy balance of high and low-risk assets to protect the value of your investment. Because as we learned in this article, high inflation can lead to recessions, and high-risk assets don’t perform too well during recessions.



<a href="https://risevest.com/">Rise</a> offers a diverse selection of assets, giving you great opportunities to make profits and protect your investments during market downturns. Check out our offering today.

How to Invest when Inflation is Rising

Several significant life decisions often appear as if they&#8217;re already set in stone, even though they are options that you can choose from. Consider the typical path of getting married, purchasing a home, and having children. Although societal norms concerning marriage and parenting have evolved, the urge to own a house remains quite influential.



Like any other major life choice, deciding whether to rent or buy property requires careful thought; you must consider several factors and make essential enquiries. This article outlines all the things you must consider when choosing&nbsp; between becoming a homeowner or remaining a renter.



<h2>Focus on What You Want</h2>



You might have heard that renting is a waste of money and that owning a home is a better investment. But these ideas are not always true and depend on your situation. To figure out what&#8217;s best for you, ask yourself some of these important questions,&nbsp; “Do you plan to move soon? Are you going to have a bigger family? Do you want to work from home or at an office?”



Some of these questions might not have easy answers, but it&#8217;s really important for us to think about these short pieces of advice we hear about renting versus buying, considering how they fit with our own lives,&#8221;



Simply put, don&#8217;t pay too much attention to what others say you should do. Focus on what you want. There&#8217;s no one-size-fits-all way to decide where you live and how you pay for it.



<h2>Consider Your Life Situation</h2>



Many financial experts challenge the idea that renting is always a waste of money. They emphasise that having a place to live is a fundamental need for everyone, hence renting isn&#8217;t necessarily throwing money away. The decision to buy or rent a house isn&#8217;t black and white; it depends on your financial situation, needs, and where you are in life.



For people still saving up to buy a house or prefer not to deal with property maintenance, renting can be a smart choice. It&#8217;s also beneficial when exploring a new city or a different neighbourhood because it gives you flexibility. Sometimes, the freedom you get from renting makes up for the monthly money you spend.



Ultimately, whether to rent or buy isn&#8217;t just about the numbers. It&#8217;s about your personal circumstances, how much money you have, and what kind of life you want.



<h2>Crunch Some Numbers</h2>



If you aim to choose the most economical option, it&#8217;s crucial to analyse the figures involved. Acquiring a home has the potential to reduce expenses associated with yearly rent and monthly costs. In the same vein, iit is possible that the money paid for the house might be more expensive than the equivalent rent for a similar space.



For instance, Chydee, who purchased a house with the intention of owning a valuable asset, shared his perspective: &#8220;Let&#8217;s assume I spent ₦35 million on buying the house and an additional ₦10 million on finishing it. In January 2021, this was over $100,000. Had I invested this amount in the Fixed Income plan on Risevest, I would have gained a yearly return of $10,000. This sum is sufficient to rent a superior house compared to mine, situated in a more convenient location. Meanwhile, I would retain the compounded $100,000 (now worth about ₦80 million), without the responsibilities and expenses tied to maintaining a house. This also offers the flexibility to relocate without excessive contemplation.&#8221;



Consequently, the argument that renting is wasteful and buying a house is an investment is nullified. Stock market investments generally yield an average annual return of around 10%, while home prices typically grow by approximately 4% each year. 



Given this, if you&#8217;re advising an average individual who&#8217;s debating between investing in the stock market and gradually building equity through homeownership, a direct comparison of the two numbers reveals a discrepancy.



<h2>Determine Your Readiness to Own a Home</h2>



Dreaming about having your own home can feel wonderful, but it&#8217;s important to know that owning a home comes with more than just the initial cost you pay. 



There are other things like property taxes that you need to think about, and these can add up over time. If you&#8217;re not ready or interested in handling these responsibilities independently, renting might be a better choice.



However, having your own home also has its special side. You can paint the walls any colour you like or even put in a door for your pet. This can be really nice. But if you&#8217;re ready to take on the not-so-fun parts of owning a home, like fixing things and keeping everything in good shape, it might be a good time to consider buying a home seriously.



<h2>Assess Your Financial Standing</h2>



When you&#8217;re thinking about buying a home, there are a few important things you should do. First, you need to make sure your finances are in good shape. 



This is the most important step, and it&#8217;s never too early to start getting organised with your money. Also, take some time to ask yourself some important questions. Are you confident that you&#8217;ll keep earning a steady income? How are your finances overall? Are you dealing with a lot of high-interest debt?



Even though the answers to these questions won&#8217;t give you a definite &#8220;yes&#8221; or &#8220;no&#8221; about whether you should buy a home, they can help you figure out what you need to do to get ready financially.



<h2>Take Your Location Into Account</h2>



Sometimes, you might be ready to buy a home financially, but the place you live might not be the best option. For instance, you could have enough money to afford a house in a town like Abiriba, but the same amount might only get you a much smaller property in a city like Port Harcourt. 



On the other hand, if the homes in your current area are too expensive, you&#8217;ll have to consider moving to a cheaper place to fulfil your dream of owning a home. Alternatively, it&#8217;s more important to stay where you are and keep renting, even if it costs more. It&#8217;s a decision that depends on how much you can afford, what kind of lifestyle you want, and what matters most to you.



<h2>Explore Renting and Buying</h2>



Sometimes, you don&#8217;t have to limit yourself to just one choice. If you&#8217;re in a good financial position to buy a home somewhere but are not ready to give up your city rental lifestyle in a more expensive area, there&#8217;s another option to consider. 



You could buy a property in a different location and still keep your rental where you are. Another idea is to invest in a property that you can rent out. This way, you&#8217;ll have another source of income, and you&#8217;ll also be building ownership in a property while still renting your own home.



Buying a property with the intention of renting it out can provide a better return on your investment than simply buying a home to live in. Think about it this way: when you look at the investment portfolios of wealthy people, you&#8217;ll often find that their main source of wealth isn&#8217;t the house they live in. 



It&#8217;s usually the real estate they own and rent out to others. This distinction is important. It means that a home can be seen as an investment if you&#8217;re renting it out, but if you&#8217;re living in it, there are many additional costs to consider.



<h2>Determine Which Choice Might Set You Up for Future Success</h2>



Many believe owning a home is a great way to build wealth over time. However, this isn&#8217;t always the case, and it&#8217;s important to make smart choices instead of just following what everyone else does.



There&#8217;s a common idea that you&#8217;re only a real grown-up when you&#8217;re living alone in your own house. But being a responsible adult also means managing your money and planning for your future, like retirement savings.



True adulting involves owning a home and caring for your future self. If owning a home actually makes it hard for you to save for the future, then that&#8217;s not really being a responsible adult. It&#8217;s more like putting yourself in a tough situation that will be difficult to get out of later on.



 In the end, whether your preference lies in purchasing a home or renting, there&#8217;s an opportunity to consider. You can explore the <a href="https://risevest.com/blog/how-real-estate-returns-work-on-rise">Risevest real estate plan</a>, a way to invest in property, particularly in the US and regardless of your chosen path. Click <a href="https://risevest.com/real-estate">here</a> to be a homeowner.

Now That You’re Rich; To Rent or To Buy?

Saving money is crucial to financial stability and security, which everyone should strive to achieve. In Nigeria, where the cost of living can be high and the economy is often volatile, saving money can be incredibly challenging. However, with more planning and effort, more Nigerians can save money and secure their financial future. This article explores some practical tips and strategies for saving money in Nigeria.



<h2>Never let your rent be more than your three months&#8217; income.&nbsp;</h2>



One of the most effective ways to save money is to ensure that your rent always falls within a few months of your income, specifically, not more than three months&#8217; worth. This means that if you make N600,000 per month, your rent should never be more than N1,800,000 per year. Keeping your rent at or below this threshold gives you flexibility and ensures you have enough leftover money each month to cover other expenses and save some for your future. Doing this can help you reach your financial goals easier, and live a fulfilling life.



Another benefit of keeping your rent within this guideline is that it can help you avoid falling into a cycle of debt. When rent is too high, it can be challenging to make ends meet and pay for other necessities, such as food, transportation, and healthcare, leading to financial stress and even debt, which can be difficult to break out of. You can avoid this trap and maintain a stable financial situation by keeping your rent affordable.



<h2>Buy in bulk, cut some costs.</h2>



Many of us grew up in Nigerian homes where our parents bought home supplies in bulk, lasting the family months and saving them the cost of buying in pieces. Maybe, at the time, we were kids who didn’t know its essence, but bulk buying is an essential tool when thinking about cutting down spending costs.



Buying in bulk is a cost-effective strategy that can help businesses and individuals take advantage of economies of scale and save money on their purchases. This strategy involves buying large quantities of a product at once, typically at a discounted price. By purchasing large quantities of a product at once, you can negotiate better prices with suppliers and reduce the overall costs of the items. The cost savings can come from various sources, including bulk discounts, volume discounts, or reduced shipping costs.



Additionally, buying in bulk can help businesses and individuals avoid purchasing products frequently, saving them time and money. However, it&#8217;s essential to remember that buying in bulk may not always be the best option. It may not be feasible for businesses or individuals with limited storage space or budget. It&#8217;s also important to consider the product’s expiration date before buying in bulk, as it may not be a good idea if the product goes bad before you can use it.



<h2>Have a giving bucket. When it’s full, close the tap.</h2>



As Nigerians will say, “It takes a village to raise a child.” In return, the child grows up and takes care of the village that nurtured them. This village includes parents, family members, and friends, and the nurture ranges from paying rent or the school fees of a relative, buying clothes, starting a business for them, and generally, catering to their financial needs. Some would call it black tax.



Having a budget for your black tax or how much you give is a great way to ensure that you give back to your community and support causes you believe in without overspending. This budget should be a set amount of money you allocate specifically for charitable donations and volunteer work.&nbsp;



When creating your giving budget, it is important to be realistic about how much you can afford to set aside each month. It can be tempting to give more than you can afford, but remember that you also need to take care of yourself and your financial needs.



Once your giving budget is set, it is important to stick to it. And when you reach the budget limit, you should close the tap and not overspend. This will help you stay on track with your overall financial goals and ensure that you are not only able to save but also able to continue giving back in the future.



It&#8217;s also important to remember that giving doesn&#8217;t always have to be monetary. You can give your time and skills by volunteering or mentoring, which can be equally valuable and impactful. Remember, the most important thing is to make a positive difference in the lives of others and contribute to your community while also saving.



<h2>Budget for everything, especially entertainment.</h2>



It&#8217;s important to budget for everything, including entertainment. Entertainment can be a big expense, especially in big cities like Lagos, and if you like to go out a lot. Whether going to the movies, going out to eat, or taking a weekend trip, these things can add up quickly and be a major drain on your budget.



One way to budget for entertainment is to set a monthly or weekly entertainment budget. You can base this budget on your income and other expenses, such as rent, utilities, and groceries. It&#8217;s important to stick to this budget, even if it means saying no to some fun activities or events.



Another way to budget for entertainment is to look for free or low-cost activities and events. You can attend free concerts, festivals, and other events that are open to the public. You can also check out local museums, parks, and libraries for free or low-cost activities.



When planning a trip or vacation, it&#8217;s important to budget for all expenses, including transportation, lodging, food, and entertainment. Plan and book your trip early to get the best deals. You can also look for travel deals and discounts on sites that offer them.



Budgeting for entertainment is about being mindful of how you spend and finding ways to have fun without breaking the bank. Setting a budget, looking for free or low-cost activities, and planning will allow you to enjoy all the fun and entertainment you want without breaking the bank or going into debt.



<h2>Get insurance; unforeseen events are a thief of wealth.</h2>



There’s a joke that says, “It won’t happen to me,” is Nigerians’ insurance. However, mere words are insufficient to protect anyone from car accidents, fire, theft, or any other type of loss.&nbsp;



Insurance provides individuals and businesses a safety net against financial loss in the case of unforeseen circumstances. Without insurance, unexpected events can cause significant financial strain and even bankruptcy. For example, a car accident can result in costly medical bills and repairs. Without a car and medical insurance, the individual would be responsible for paying for these expenses out of pocket, which could lead to financial ruin.



Hence, investing in a comprehensive insurance plan is essential to safeguard against potential financial loss and ensure peace of mind in the event of unexpected circumstances.



<h2>Buy original for longevity.</h2>



Buying original products for longevity is a smart financial decision that can save you money in the long run. When you purchase original products, you invest in products made with high-quality materials and built to last, which means that you will not have to replace the product as often, saving you money over time.



For example, purchasing an original handbag will likely last you for several years, whereas a knock-off handbag may only last you for a few months. In the long run, you will spend more money on knock-off handbags because you will have to replace them more frequently.



<figure class="wp-block-image"><img src="https://lh5.googleusercontent.com/gKW6BMwl4uP29vw30oc2-aXAoK0cOhnqWNCWXcbmgSGdRVn37GJLUYZV0fyCnyU9_8EoHlDAnrmLImBaupCaNHDPV_pfPRDjE0Ra-3AvicKZUHa-nhl8G_Ns-iW5DK6KDv_9VsWnpXd4qq1aW3Y-IjHJtWeS1J8_6mbZv_7YVl6rb1dXzEBKpiYsEXANxw" alt="Image"/></figure>



Another benefit of buying original products is that they often come with warranties and guarantees. If something goes wrong with the product, you can have it repaired or replaced at no extra cost, saving you money on repairs or replacements that you may have to pay for if you had purchased a knock-off product.



So, next time you shop, consider investing in original products for a more cost-effective purchase.



<h2>If you work remotely, move to a cheaper City&nbsp;</h2>



One of the biggest expenses in major cities is rent. However, living in a secondary city in Nigeria or anywhere in the world can be a great way to save money if you work remotely. Secondary cities in Nigeria, such as Abeokuta, Calabar, and Ibadan, offer a lower cost of living compared to the major cities like Lagos and Abuja, which means that you can save money on expenses like rent, transportation, and food.



For example, in Lagos, the average rent cost is as high as N500,000 per year. In contrast, the average cost of rent in a secondary city like Abeokuta can be as low as N200,000 annually, meaning that you can save N300,000 per year on rent alone by moving to a secondary city.



So if you work remotely and are looking to save cost, you should consider moving to a cheaper city.



<h2>There’s rice at home.&nbsp;</h2>



Eating outside, whether at a restaurant, fast food establishment, or just grabbing takeout, can be a significant expense. Preparing meals at home is often much cheaper and allows you to have more control over what goes into your meals and the nutritional value of your food. By cooking at home, you can buy food items in bulk, save money, and plan your meals, which can help you avoid impulse purchases at the grocery store. Eating at home can also save you money on transportation costs and other expenses associated with going out to eat.







As inflation keeps soaring and things get more challenging, it is essential to adopt these cost-saving tips and live up to them. This way, you can save and reach your financial goals faster and easier.



Remember, the more you save, the more you can invest into your future and the more money that gives you down the road. So channel some of those savings into your investment plans on Rise.

The Best Money Saving Tips for Nigerians

Everyone wants to grow their wealth and meet their financial goals— from the trader in the market to the university professor to the young tech founder. However, investing your hard-earned money is a crucial decision that can significantly impact your financial future. Where do you invest? How do you begin? What options do you have available? These are some of the questions you may have.



As a Nigerian investor— beginner or not— it is essential to consider the options available and weigh their pros and cons. Two popular investment options available in Nigeria are stock and real estate investments, which we&#8217;ll discuss in this article to help you decide which suits you better.



<h2>Stock Investment: Building Wealth through the Stock Market</h2>



Stock investment involves buying shares of publicly traded companies listed on the stock market. When you invest in stocks, you become a shareholder, owning a portion of the company&#8217;s assets and earnings.&nbsp;



Some companies offer investors different stock options in Nigeria, ranging from Nigerian stocks to foreign stocks like Meta, Alphabet, JPMorgan, and Apple. One of these companies is <a href="https://risevest.com/">Risevest</a>, a dollar-denominated investment platform that puts your money in high-quality assets, helping you build wealth and achieve your financial goals.



<h2>Benefits of investing in stocks</h2>



<ul><li>Liquidity</li></ul>



One of the key advantages of stock investment is liquidity. Stocks are highly liquid assets, meaning they can be easily bought or sold on the stock market. This flexibility allows investors to react quickly to market changes or take advantage of potential investment opportunities.



<ul><li>Opportunity for diversification</li></ul>



Another benefit of stock investment is the opportunity for diversification. The stock market offers a wide range of companies across various sectors. By investing in different stocks, you can spread your risk. If one company or sector underperforms, your portfolio can still be protected by the performance of other stocks in different industries.



<ul><li>Potential for significant growth</li></ul>



Stocks also provide the potential for significant growth. Well-performing companies can experience substantial capital appreciation over the long term. Investing in fundamentally strong companies with solid growth prospects can lead to impressive returns on investment.



Downsides of stock investing



Although stock investing has quite some benefits, it comes with its disadvantages. The stock market is volatile, with prices subject to frequent fluctuations due to market conditions and economic factors. This volatility can lead to short-term losses and requires investors to have a long-term perspective, remaining focused on their investment objectives.



Furthermore, stock investors have little control over the day-to-day operations of the companies they invest in. As a passive shareholder, you have no direct say in management decisions. Changes in company leadership, poor performance, or unforeseen events can impact the value of your investment.



<h2>Real Estate Investment: Profiting from Property Ownership</h2>



Real estate investment involves purchasing land, residential homes, commercial buildings, or rental properties. Real estate investments provide tangible assets with inherent value. Many Nigerian companies offer numerous opportunities for real estate investment, even in the global market, with a growing population and increasing demand for housing and commercial spaces. One such company is Risevest, which invests in a portfolio of <a href="https://risevest.com/real-estate">rented buildings in the US</a>, managing your money for returns through rent and capital appreciation.



<h2>Benefits of investing in real estate</h2>



Some of the benefits of real estate investing include:



<ul><li>Potential for cash flow</li></ul>



One of the main advantages of real estate investment is the potential for cash flow and passive income. By purchasing rental properties, you can generate regular income through rental payments. This offers a steady cash flow stream that can provide financial stability and grow over time.



<ul><li>Control and flexibility</li></ul>



Real estate also provides a certain level of control and flexibility. Unlike stocks, where you are a passive shareholder, real estate investments can allow you to make decisions that directly impact your investment returns. You can control property management, renovations, rental rates, and overall property strategy.



<ul><li>Hedge against inflation</li></ul>



Additionally, real estate investments can act as a hedge against inflation. Land and properties have the potential to appreciate over time, keeping pace with or even outpacing inflation. This can help preserve and grow your wealth in the long run.



<h2>Downsides of Real estate investing</h2>



Despite the above benefits associated with real estate investment, it has drawbacks. Here are some of them:



<ul><li>Not very liquid</li></ul>



Liquidity is the ease with which an asset can be readily converted to cash while maintaining its market price and value. Real estate is relatively illiquid (cannot be easily converted to cash) compared to stocks. Selling a property may take time, and the process can involve transaction costs such as legal fees and property transfer taxes. This lack of liquidity means that real estate investments may not be suitable for those needing quick access to cash.



<ul><li>Availability of funds</li></ul>



Real estate investment also requires a substantial initial investment. Purchasing properties often involves significant capital, including down payments, property maintenance costs, and other associated expenses. This can make it challenging for some individuals to enter the real estate market. Rise, however, makes real estate investing easy for investors. With as low as $10, you can invest in US real estate on Rise.&nbsp;



We aggregate investments from our clients, which we use to purchase rental properties across the United States to generate returns for our investors through rental income and price appreciation when properties get sold. If you haven&#8217;t started, you can start investing <a href="https://app.risevest.com/login">here</a>.



<ul><li>Potential market and location risks</li></ul>



Additionally, real estate investment carries market and location risks. The value of real estate can be influenced by factors such as the property&#8217;s location, market demand, and local economic conditions. Investing in properties in undesirable locations or during a downturn in the real estate market can result in decreased property values or difficulty finding tenants, impacting your investment returns.



<h2>Factors to consider before choosing between real estate and stocks.</h2>



When deciding between stock and real estate investments, you must consider some factors specific to your financial goals, risk tolerance, and personal circumstances.



<ol><li>Risk and Return: Stocks generally offer higher potential returns but have higher volatility. On the other hand, real estate tends to be more stable but may offer moderate returns over the long term. Consider your risk appetite and the level of risk you are comfortable with when making your investment decision.</li><li>Liquidity: If you require quick access to your funds or prefer investments that can be easily bought or sold, stocks offer greater liquidity. On the other hand, real estate investments can be more illiquid and may take time to sell.</li></ol>



<ol start="3"><li>Investment Horizon: Determine your investment horizon, i.e., the length of time you intend to hold your investment. Stocks are often more suitable for long-term investors who can weather short-term market fluctuations. Real estate investments, particularly rental properties, tend to provide stable income over a more extended period.</li></ol>



<ol start="4"><li>Expertise and Involvement: Consider your knowledge and experience in the respective investment fields. Stocks require research, analysis, and staying informed about the companies you invest in. Real estate investments may require understanding property market dynamics, property management, and tenant relations. Assess your comfort level with each investment option based on your expertise and willingness to be involved in the investment process.</li></ol>



On Risevest, however, we take that stress off you. We do the work for you and are fully committed to investing your money at the best available price and conditions. So you don&#8217;t have to worry too much about the market.



<ol start="5"><li>Portfolio Diversification: Diversification is key to managing risk. Assess how your investment in stocks or real estate would complement the existing assets in your investment portfolio. Diversifying across different asset classes can help mitigate risk and potentially enhance overall returns.</li><li>Tax Considerations: Evaluate the tax implications associated with each investment option. Both stocks and real estate have tax considerations, including capital gains tax, rental income tax, and property taxes.</li></ol>



<h2>Conclusion</h2>



Both stock and real estate investments offer unique advantages and disadvantages for Nigerian investors. Stocks provide liquidity, diversification, and the potential for high returns but also carry market volatility and lack of control. Real estate investment offers tangible assets, cash flow, and control but requires significant capital and can be less liquid.



Ultimately, the choice between stock and real estate investment depends on your financial goals, risk tolerance, investment horizon and other personal needs. It&#8217;s essential to conduct thorough research. You may also want to consider a diversified investment approach to maximise your chances of achieving your financial objectives. Rise gives you that. You can diversify your investment portfolio by investing in our stock and real estate plans, mitigating risks and tapping into the potential of higher returns.

Stock Investment vs Real Estate Investment: Which is Better for Nigerians?

The possibility that the United States Government might default on its debt is becoming very real, as the standoff between President Joe Biden and House Speaker Kevin McCarthy over raising the federal debt limit is causing some anxiety in the market.&nbsp;



And while the United States officially hit its debt limit on Jan 19, prompting the Treasury Department to use accounting manoeuvres known as extraordinary measures to continue paying the government’s obligations and avoid a default, Treasury Secretary Janet L. Yellen has warned lawmakers that the United States could run out of cash by June 1 if the borrowing cap isn’t raised or suspended.&nbsp;



The mere mention of the US Treasury defaulting on its debt is causing panic as such a scenario would have far-reaching consequences, impacting not only the US economy but also the global investment climate and stock markets.&nbsp;&nbsp;&nbsp;



In this article, we delve into the potential repercussions of a US Treasury default, exploring its effects on the stock market and investment climate, and how Rise will provide guidance in navigating these murky waters. So, fasten your seatbelts as we navigate the uncertain terrain of a hypothetical default.



<h2>But first, what is the debt limit?&nbsp;</h2>



The debt limit is a cap on the total amount of money the United States is authorised to borrow to fund the government and meet its financial obligations. Because the federal government runs budget deficits — meaning it spends more than it brings in through taxes and other revenue — it borrows huge sums of money to pay its bills. Those obligations include funding for social safety net programs, interest on the national debt, and salaries for members of the armed forces.



Approaching the debt ceiling has elicited calls by lawmakers to cut back on government spending. But lifting the debt limit does not authorise any new spending — in fact, it simply allows the United States to spend money on programs that Congress has already authorised.



<h2>Why does the United States have a debt limit?</h2>



According to the constitution, Congress must authorise government borrowing. In the early 20th century, the debt limit was instituted so that the Treasury would not need to ask Congress for permission each time it had to issue debt to pay bills.



During World War I, Congress passed the Second Liberty Bond Act of 1917 to give the Treasury more flexibility to issue debt and manage federal finances. The debt limit started to take its current shape in 1939 when Congress consolidated different limits set on different types of bonds into a single borrowing cap. At the time, the limit was set to $45 billion.



While the debt limit was created to make the government run more smoothly, many policymakers believe it has become more trouble than it’s worth. In 2021, Ms. Yellen said she supported abolishing the debt limit.



<h2>How much debt does the United States have, and how much is the borrowing cap?</h2>



The national debt crossed $31 trillion for the first time last year. The borrowing cap is set at $31.381 trillion.



<h2>What happens if the debt limit is not raised or suspended?</h2>



If the government exhausts its extraordinary measures and runs out of cash, it will be unable to issue new debt. That means it would not have enough money to pay its bills, including interest and other payments it owes to bondholders, military salaries and benefits to retirees.



Economists and Wall Street analysts warn that such a scenario would be economically devastating and could plunge the entire world into a financial crisis.&nbsp;



<ul><li>Investment Climate in Turmoil</li></ul>



A US Treasury default creates a hostile investment climate filled with uncertainty and risk aversion. Investors, both domestic and international, seek safe-haven assets during times of turmoil. US Treasury bonds have traditionally been considered safety pillars due to their perceived low risk. However, a default shatters this notion, leading investors to question the reliability of US government debt as a safe investment.



When trust is broken, investors look for alternative investment options. Precious metals like gold and silver and cryptocurrencies like Bitcoin often witness increased demand during uncertain times. These alternative investments are viewed as stores of value that can weather the storm of a default. Consequently, their prices surged, reflecting the flight of capital away from traditional markets.



<ul><li> The Stock Market Roller Coaster Ride</li></ul>



A US Treasury default would undoubtedly trigger significant volatility in the stock market. Investors thrive on stability and predictability, but a default would introduce a high degree of uncertainty, causing panic and anxiety. The US government debt is seen as a risk-free entity with a solid history and track record of financial stability. When the US government fails to pay its debts, it erodes investor confidence, leading to a rapid sell-off of stocks. As a result, stock prices plummet, and market indices experience sharp declines.



<ul><li> Policy Implications and the Road to Recovery</li></ul>



Following a US Treasury default, policymakers will be forced to undertake swift and decisive action to mitigate the damage and restore investor confidence. Emergency measures, like injecting liquidity into the financial system, implementing fiscal stimulus packages, and introducing regulatory safeguards, might be deployed to stabilise the markets and instil a sense of security.



Rebuilding the investment climate would require concerted efforts to restore trust in US government debt. This could involve implementing fiscal discipline measures, addressing structural issues in the economy, and crafting policies that demonstrate a commitment to debt repayment. These actions would gradually help restore investor confidence and encourage them to reenter the market.



At Rise, our position is clear— to protect your wealth and help you achieve your financial goals. We are optimistic that a deal will be reached soon between the executive and Congress. A deal will bring freshness and relief to the market, which could rally the market. Thus, the best time to INVEST in <a href="https://click.risevest.com/gb0g/ovb6r0h0" data-type="URL" data-id="https://click.risevest.com/gb0g/ovb6r0h0">RISE</a> is now.

Everything You Need To Know About The US Debt Ceiling

Apple recently launched a savings account in partnership with Goldman Sachs, which offers a 4.15% interest rate through its Apple Card product. This rate is more than 10 times higher than the US national average interest rate, drawing nearly $1 billion in deposits in just four days of its launch.



While the savings account is unlikely to have a material impact on Apple&#8217;s profit-and-loss statement, it reinforces the company&#8217;s strategy to increase customer loyalty to the Apple Card and key into the Apple ecosystem. 



This is where the savings account is easily accessible through the Wallet app, and users can view their balance, interest rate, and transaction history. Apple’s new offering is the most recent in a string of financial efforts from the company, helping the tech giant compete directly with banks. This move has the potential to significantly impact Apple&#8217;s business model in several ways.



As usual, in pursuit of our mission to help our users become better-informed investors, Rise will attempt to provide some perspectives on this and how Apple&#8217;s move will impact its business model and long-term growth prospects.&nbsp;



<h2>Generating New Revenue Streams</h2>



By offering savings accounts, Apple is providing a new product to consumers that could drive usage. While Apple&#8217;s business model has traditionally relied on hardware sales, such as iPhones and Macs (52% came from iPhone sales in 2022), the launch of savings accounts with a high interest rate could help the company generate new revenue streams.&nbsp;



<h2>Increasing Customer Loyalty</h2>



Apple has a loyal customer base, and by offering a high-interest savings account, the company is providing another incentive for customers to remain within the Apple ecosystem. This move could help boost customer retention and increase overall customer loyalty. Also, Apple&#8217;s reputation for innovation and excellence may also translate to financial services, enhancing customer trust in the company&#8217;s new offerings.



<h2>Enhancing Brand Value</h2>



The launch of savings accounts with a high interest rate could also enhance Apple&#8217;s brand value. By entering the financial services sector, Apple is positioning itself as a financial services provider, which could further enhance the company&#8217;s reputation and help attract new customers. This move could also help Apple differentiate itself from other technology companies and create a competitive advantage.



In conclusion, the launch of savings accounts is all about the power of hooks for Apple. Aside from the fact that it could drive new revenue streams, diversify revenue sources, this move will further increase customer loyalty, enhance brand value, and keep customers within its ecosystem. Only time will tell how successful Apple will be in this new venture, but it&#8217;s clear that this move represents a significant shift in the company&#8217;s business model and could have far-reaching implications for the technology and financial services industries.

How Apple’s New Savings Account Will Impact Its Business Model

The major story since the final weeks of March has been the move by a number of countries ranging from Russia, China, India, and now Saudi Arabia to switch their trade settlement currencies from the global reserve USD to their own individual currencies. 



These agreements have largely been bilateral, but it has accelerated with the Ukraine war and China’s growing influence. This has raised eyebrows from many about the status of the US Dollar on the global stage, and the continued value of investments domiciled in US dollars.&nbsp;



As always, Rise will try to provide some perspectives on this in response to a number of questions from our users and in pursuit of our mission to help our users become better-informed investors.&nbsp;



<ol><li>The US Dollar Is Not the World’s Only Reserve Currency</li></ol>



One of the first things we often have to point out is that the US dollar has never been the only reserve currency in the world. Reserve currency, in this case, is defined as the currencies countries use to settle trade balances, hold central bank reserves and flow to for a safe store of value. By this definition, the Euro, the Japanese Yen, the British pound, and the Chinese Yuan all qualify.&nbsp;



The primary difference between these other currencies and the dollar is the much larger share of world trade conducted in dollars versus the rest. In 2000, 71% of the world’s trade was settled in dollars. By 2022, this number had dropped to 58%. However, that is still far larger than the second-placed Euro (at 20%), third-place Yen (5.5%), fourth-place Pounds (4.9%) and the Chinese Yuan (2.2%) to round up the top 5. So while these shifts will continue to happen as China, India, and other countries control more of the world’s trade, it is not as dramatic as the media makes it seem. The higher the slice of global trade you control, the easier for more countries to accept and do business in your currency. So while the share of trade settled in US Dollars will ebb and flow in the long run, the dollar will always hold sway as a strong, reserve currency unless something catastrophic happens to the US economy.&nbsp;



<ol start="2"><li>The US Dollar Is Still Going to Be In Demand Despite the Switches</li></ol>



Despite some of the announced switches, it is crucial to understand that being used as a trade settlement currency is not the only reason for US Dollars demand globally. One of the advantages the dollar has is that it is connected to a deep, liquid and active securities market tied to it, which makes it fast and stable to do business in and protects you from a decent amount of exchange rate risk. For this reason alone, a lot of the world’s business will always be done in dollars. It’s a bit like a network effect— the dollar is the most massively traded currency and is connected to the deepest liquid markets.&nbsp;



The US economy, its monetary and credit system is also the most trusted globally, meaning that the majority of the world’s central banks, and the banks that rely on them, regardless of which currency they hold reserves in, want to ensure that when they need funds, they will get it. The dollar offers the best chances of that happening. The US also has a long creditworthiness history, which also means that parking money in the US Treasury is one of the few reliable choices for many central banks.&nbsp;



All these will ensure that dollar demand does not drop radically despite the current changes we are seeing.&nbsp;



<ol start="3"><li>The value of your dollar investments is not tied to the dollar being a reserve currency.</li></ol>



One of the mistakes a lot of people make is to think that the main driver of their investment returns is because it is in dollars. That is not the case. Investing in dollars is very beneficial, especially if your local currency is weakening or has high inflation— the dollar will be more valuable over time.&nbsp;



But the real gain in your investment comes from the increased value of the asset due to its performance and economic gains over time. For instance, while the dollar’s share of global trade dropped -13% from 2000 to 2022, the S&amp;P 500 gained over 311% in the same time frame. Several stocks like Domino’s Pizza, Tesla and Apple have gained more than 1000% in the period. As an investor in these assets, the acceptability of the dollar is not why your investment did well. Your investment did well because it gained value; it was domiciled in a strong securities market with a lot of liquidity and a large economy with a strong demand base. As long as these remain true, your investments will still do well no matter what happens with Yuan.&nbsp;



In conclusion, as we continue to navigate the ever-changing financial landscape, we understand that staying ahead of the curve is essential in providing you with the best investment opportunities worldwide. Hence, we are committed to adding additional investments representing the best opportunities for your money, and we look forward to helping you achieve your investment goals.

Why Countries Switching Trade Currencies Does Not Affect Your Dollar Investments

Ejigi was recently scammed of ₦51,000. He had seen a post on Twitter from one of the fintech companies he has an account with about a giveaway and decided to participate in it. 



That would be his first time ever. Just after he liked the post, the handle reached out to him with a link, and told him the steps he needed to follow to win the giveaway. 



Unsuspecting Ejigi clicked on the link, which requested for the sign-in details to his account, but nothing came up. A few moments later, he got another message from the same handle asking him to make a deposit of ₦50,000 into his account as it was one of the requirements that would qualify him for the giveaway. 



Prior to that, he had just a thousand naira in his account. Excitedly, Ejigi transferred ₦50,000 to his account, making his total balance ₦51,000. Right after his deposit, he received a debit alert of ₦51,000. This was when it dawned on him that he had just been scammed. Two months later, Ejigi is yet to get his money back. You may have had a similar experience as Ejigi or know someone who has. 



There has been a recent spike in the stories about cyber scams, particularly relating to financial apps and accounts. These stories range from the young woman who was unknowingly communicating with a fake help handle of a fintech company on Twitter, to the one whose account was hacked and wiped through a phishing link to the story of Ejigi above.



In today&#8217;s world, where most of our daily activities are conducted online, protecting our personal information and financial data has become more critical than ever. Scammers and hackers are always on the lookout for opportunities to steal passwords and exploit unsuspecting users to gain access to sensitive information to their accounts.



Hence, it is essential to take the necessary precautions to secure your passwords and financial apps.&nbsp;



<h2>Common scam methods:</h2>



There are quite a number of methods used by scammers to gain access to personal information of victims. Here are some of them:



Phishing Emails/Messages: Phishing emails are fake emails that look like they come from a legitimate source, such as a bank or a financial institution, but are designed to trick you into giving away your login credentials or personal information. Messages like this always contain malicious links or attachments, which the scammers use to get every information that they need.



Fake Social Media Handles/CS Representatives: For companies with social media presence, scammers usually create a misleading social media help account, which they often use to reach out to and scam unsuspecting victims who open up to them when they have issues relating to their account.



Scam Calls: With this type of scam, the caller pretends to be from your bank or a fintech company, claiming that your account has been compromised and that they want to help you fix it. They request for your personal information and sometimes a one-time password (OTP), which will be sent to your phone. Once they have all this information, they can then hijack your account and take out all the funds you have.&nbsp;



<h2>Here are some tips to help you stay safe from scammers:</h2>



<ol><li>Use strong passwords: A strong password is one that is at least 8 characters long and includes a mix of upper and lowercase letters, numbers, and special characters. It is important to avoid using easily guessable words or phrases such as your name, date of birth, or common words like &#8220;password&#8221; or &#8220;123456.&#8221; Use different passwords for different accounts, and change them regularly.</li></ol>



<ol start="2"><li>Enable two-factor authentication: Two-factor authentication (2FA) adds an extra layer of security to your accounts by requiring a second form of authentication, such as a fingerprint scan, a text message, or an app notification. This makes it harder for scammers to gain access to your accounts, even if they have your password.</li></ol>



<ol start="3"><li>Verify company’s handle and links: Before you click on any link or share any information with anyone, verify that the links are safe and secure and that the account you’re interacting with is a trusted one.</li></ol>



<ol start="4"><li>Report fake CS representatives and malicious activities: If a customer representative requests for your login credentials, ensure you report the situation to the company; they or the channel may have been compromised. In no context is a customer representative allowed to request for a user’s login credentials.</li></ol>



<ol start="5"><li>Keep your apps and devices updated: Updates to your apps and devices often contain security patches that address vulnerabilities and bugs that can be exploited by scammers. Make sure to keep your apps and devices up to date to ensure that you have the latest security features.</li></ol>



<ol start="6"><li>Be wary of phishing emails and scams: Threat actors leverage on a range of human emotions such as curiosity, urgency, fear, greed, and even trust to harvest and steal login credentials. Be cautious of unsolicited emails or messages and do not click on links or download attachments from unknown sources.&nbsp;</li></ol>



<ol start="7"><li>Use a reputable antivirus software: Antivirus software can help protect your computer or mobile device from malware, which can be used to steal your passwords or financial data. Use a reputable antivirus software and keep it up to date.</li></ol>



<ol start="8"><li>Be cautious when using public Wi-Fi: Public Wi-Fi networks are often not secure and can be easily hacked by scammers. Avoid using public Wi-Fi networks when accessing sensitive information or financial</li></ol>



Remember, Risevest will never ask you for your password, pin or other sensitive information required to gain access to your account. In such instances, reach out to our verified handles on Twitter (@Risevest), Instagram (@Rise.Vest), or email <a href="mailto:hello@risevest.com">hello@risevest.com</a>.

How To Stay Safe from Scammers: Securing Your Passwords Financial Apps

You may be aware of the recent meltdown at Silicon Valley Bank, which led to the bank entering receivership with &nbsp;the Federal Deposit Insurance Corporation (FDIC).&nbsp;



During episodes like this, many users ask questions about potential contagion and how Risevest manages users&#8217; investments to prevent such risks from affecting their portfolios. We want to proactively share some perspectives with you.&nbsp;&nbsp;



First, Risevest has no exposure or relationship with Silicon Valley Bank. As many know, we typically prefer to hold our US accounts with traditional banks like TD Bank, Bank of America etc. Our assets are also selected to minimize risk, and ensure long term stability. You can relax knowing we will always make the smart choice to ensure stable growth in your wealth.



As an asset management platform, our fixed income and wallet features are powered by providers who hold corporate bonds, consumer credit, real estate loans and other fixed income assets that are thoroughly vetted and intentionally held to strictly one year maturities.This way we can adjust rates based on market realities without taking undue risk.



We also hold assets across multiple asset classes like real estate, stocks and fixed income so that issues that impact any sector do not affect your entire portfolio.&nbsp;



Collectively, we want our users to understand that situations like these happen during stressful times; however,our assets and investment process is designed to ensure&nbsp; we help you navigate such times as stress-free as possible.&nbsp;



Our first risk management framework is to estimate risk of loss and account for that before pushing for returns. Sometimes that means we pass up higher return opportunities because they are too risky. And at all times, we will communicate the risks involved in the assets you choose on Rise.



Thank you for choosing Rise to grow your wealth. In good and bad times, trust us to always navigate the markets to deliver long term growth to you

Risevest Has No Exposure To Silicon Valley Bank

<h2>Summary</h2>



We just opened a new position in our portfolio for Crocs, Incorporated (CROX) on the back of exploding sales and increasing profitability. We will be investing some of the funds we sold off from Block into the new holding and keep adding to the position based on their performance.&nbsp;



<h2>Overview</h2>



Crocs, Incorporated is a footwear company based in Broomfield, Colorado, in the United States, that manufactures and distributes casual lifestyle footwear and accessories. Its lineup includes clogs, sandals, slides, flip-flops, loafers, sneakers, and shoe charms under the Crocs brand name. The company sells its products in over 85 countries through wholesalers, retailers, e-commerce sites, and third-party marketplaces, both online and offline.&nbsp;



<figure class="wp-block-image"><img src="https://lh6.googleusercontent.com/q3wnrV_w10nXyxnDVV3gGcHdHpXLnQT-d_0f56_3dlkbzpO8noQGx_OD-MpEMc0T4V1CsbI98s_zAqrK6AkFmJjIh-CrkGseC5xD7XiBb3GdE9Y-bsaweDo84LFA7dSzR9_W73IYIjRBZhS9DcYLqz8" alt=""/></figure>



<h2>Thesis</h2>



Over the last few years, Crocs has exploded in popularity among every demographic, especially Millenials and GenZ globally. Their highly simple and extremely comfortable footwear have garnered strong appeal among women, men and children and led to the company beating out established rivals like Skechers and Steve Madden and upstarts like Amazon-owned Allbirds. 



<figure class="wp-block-image size-large"><img src="https://media.giphy.com/media/XJy7i9KfXxYyc/giphy.gif" alt=""/></figure>



Their revenue has tripled in the last four years, hitting a record $3.2B in the last year, and is projected to hit $4B in 2023. The gross margin in the same period has grown from 51.5% to 56.3%, giving them one of the highest margins in the business. On a profitability level, they went from a -$70 million net loss in 2018&nbsp; to over $557 million net income last year, an incredible growth rate in such a short period.



While Crocs Inc. has returned more than 80% in the last two quarters. a combination of their attractive valuation at 11.74, forward price-to-earnings ratio, unrelenting growth, and strong and expanding margins makes us confident that the stock is still likely to outperform over the short and medium-term horizons.&nbsp;



<h2>Risks</h2>



Despite the strong thesis, there are a few risks with this investment. The first is that a potential recession on the horizon means that the company’s sales might drop, impacting its profit. Also, its stock performance might be affected by an overall drop in market levels.&nbsp;



Another risk is that their popularity and sales growth are only temporary and that sales might drop as the fad wanes. We don&#8217;t think this is the case,as their sales growth has lasted over four years and they have consistently expanded their product line up. Also, their footwear are designed to be casual staples which have very resilient demand as a category. However, it is still a possibility, which is somewhat accounted for in their current stock price.



<figure class="wp-block-image size-large"><img src="https://media.giphy.com/media/ogJm8p2NwnlGrGjyFj/giphy.gif" alt=""/></figure>



Lastly, one of the most significant risks is that Crocs has a significant amount of debt at around $2.9B in long-term debt. For comparison, Skechers has roughly $1.61B in debt. However, their strong cash-flow generation enables them to pay this down aggressively, and management has prioritised paying this down and strengthening their balance sheet over time. This is one of the items we will keep an eye on as the company continues to execute over the coming quarters.&nbsp;



<h2>Conclusion</h2>



We have opened a starter position to which we will be adding on a monthly and quarterly basis, subject to the performance of the company and the sustained growth in their business. We find the profitability, growth, and cash-flow generation compelling. We believe that Crocs’ simple business model, brand awareness, and viral popularity will translate to a significant competitive advantage in the footwear market.&nbsp;