Are you seeking an alternative income but no time at your disposal to devote to finding one? It should interest you to learn that earning an extra income does not necessarily have to be as time consuming as usually perceived. The reality is that the time spent working can sometimes affect people’s ability to meet up with other life’s obligations. This is even more pathetic when in a bid to meet up with earning income to meet needs; some parents get estranged from their children.
Fact, is you can explore the option of building a passive income, spend less or no time working for it and still earn more or just as much as your paid employment.
According to respondents, hours put in paid employments ranged between 8 to 12 hours with some in a bid to avoid being laid off, work longer hours without compensation, revealing a situation where they work harder yet cannot meet basic needs.
Therefore, inability to meet spending needs can be attributable to the fixed income of most paid employments, which sets a ceiling on the income obtained whether weekly or monthly and is not construed to envelope expansion in personal needs or desires.
Consequently, most workers in paid employment complain of not being able to adequately meet basic needs despite putting in many hours at work.
The complaints may very well be across board as respondents all complained of working hard but incomes do not meet their basic needs especially as cost of living continues to rise.
A breakdown of the usage of the 24 hours available to everyone may include eight to 12 hours to and fro the work place (especially in Lagos where traffic jam is a major challenge), six to eight hours spent on sleep, leaving only four hours for other activities you may choose.
Worse still, work days have been extended in some companies to include weekends leaving out the choice of making a difference in finances with the remaining four hours a day.
A passive income stream is explained to be rent received on a regular basis with little effort required in maintaining it, while the active income is obtained in the work place and requires your full time participation to earn. You are being paid for the effort you put in and the moment you stop working, your active income will stop too.
In other words, to experience financial independence and sustenance, you need to explore ways of creating more passive income. Income that keeps flowing with minimal or little time put in, so that while working in a paid employment, extra income is comings in from built passive income streams.
Also called a residual income, it is revenue that occurs over time from work done one time; interestingly, there are many different ways to generate passive income across a wide variety of businesses. It may be recurring income from the same customers, or the sales of a product to new customers.
Financial experts posit different ways of building these passive income streams which will only require an initial effort and commitment. Writing a book for instance and contracting the sales either online or to a sales agent and earning percentages on every copy sold.
Although only requiring your initial time in completing the book, this source of income does not require any more of you time or effort, hence it is passive in nature.
Starting a business, though technically not a passive one, is a key strategy for earning more and working less; this may also involve making money from other people’s work which may include getting involved in a network marketing arrangement, where down lines are built and commissions received on sales made by people in the down line.
Making money online is also available as a passive income, investing in income and interest yielding instruments, such as the money market, stock market or property market.
Other ways of gaining passive income in experts’ opinion, is becoming an insurance agent who gets commission every year when a customer renews his policy.
You can also serve as a marketing or direct sales representative, earning income from customers when they re-order products every month or as often as needed, or a marketing consultant who creates a workbook and sells it in e-book format on the internet or other sales avenues.
Sunday, February 15, 2009
How to earn additional income spending less time
Saturday, February 14, 2009
Cheap stocks, no buyers
This could be investors best chance to put money in the stock market. This mean investors who still have some money to spare despite the present financial crisis can take advantage of this opportunity because stocks may never be this cheap again
A lot of people had waited for stocks to be this cheap but they did not envisaged that money would be this hard to get. There is no doubt that the fall of the Nigerian stock market caught a lot of investors by surprise and they had lost trillions in wealth.
Now, many of them may have to postpone their retirement dreams. Others may have to go back to work because their investments are no longer enough to get them through retirement.
Market watchers submitted that last week’s trading on the Nigerian Stock Exchange (NSE) would definitely pass as one of the worst weeks of the troubled season as the bottom got knocked off the market and stock prices went on a free-fall.
The massive price decline suffered by many stocks saw the NSE All-share Index dropping by a staggering 11.5 percent. Market capitalization dipped by the same margin, losing some N0.69 trillion in the process.
Jude Uzouwulu, a stock analyst, observed that “It was another dark week for investors whose hard-earned savings, locked in stocks, has been rapidly turning worthless, at least on paper. While long-term recovery is expected, it certainly offers no comfort to see the current values vaporize, as has proved the case”.
He stressed that the immediate problem is straightforward since the demand for stocks has virtually collapsed.
“As cash-strapped and frightened investors fret to sell, and with no serious buyers available for any sizeble mop-up, the price fall has been unrestrained. Even writing about it has become distressing”, he said.
Meanwhile, stakeholders have stepped up their campaign for government intervention in the market. According to Tunde Balogun, chief financial officer of Nigerian Aviation Handling Company plc (NAHCo), the problem in the market was compounded by banks’ concerted efforts to recover all margin facilities in the market. He urged the Federal Government needs to intervene by taking a summary of all margin loans in the market and work out a bail option for the banks in this regard.
‘Since the margin loans in the market has caused liquidity challenge to the banks, government should take a summary of all the exposed margin loans and decide on what the bail out sum should be. This I believe would move the market forward,” he said.
Friday, February 13, 2009
Investors accuse banks of inhibiting market recovery
As the Nigerian capital market continues to wallow in the troubled waters of prolonged loss of value, investors and operators are railing accusations against the banking sector for their die-hard posture on recovering margin loans, an instrument that played a crucial role during the market boom period.
This is coming against the backdrop of the directive by the CBN instructing financial institutions to reschedule all loans used for investment in the capital to the end of the current year in order to provide recourse to the borrowers of funds and allow for more time to pay back their debts.
Operators narrate their tale of woes in the hands of the banks who, they say, are the major cause of illiquidity in the stock market. According to them, the banks do not honour cheques they issue to their clients for selling their stocks if the stock broking firm owes the bank through the margin facility.
Also, as clients make payments into their accounts for the purpose of share purchases, the banks divert it to the loan account to reduce the debt portfolio, thereby leaving the brokers trapped, not being able to meet their obligations to their clients. This scenario, brokers regret, has resulted in lowering further market activities as there is no fund at their disposal to buy the stocks that are now peanuts.
Market watchers wonder why with all the good results coming from the banks, they are so much in a hurry to recover loans which were used to promote their stocks value when market was bullish.
Industry players say this suggests why none of the banks have come out boldly to defend its stock value by buying up the statutorily approved 15 percent of their shares in the market. In the light of this air of suspicion, analysts call for a closer monitoring and supervision by the CBN on banks’ activities, especially their financial records.
To some stakeholders, whether market will recover losses this year or not would depend on the Federal Government rolling out a robust bail out package for the market.
According to a source, “the unfortunate thing is that our leaders are clueless and have quickly run out of ideas. They seem not to be in touch with happenings around the world and the steps they have taken to restore investors’ confidence in other markets”.
Thursday, February 12, 2009
Bonds as alternative investment window
Variety they is the spice of life and this is true at all time and in every area of human life. Beyond human life, the financial industry is usually see as a veritable source of keeping businesses and institutions in existence. However, analysts have continued to decry the shortage of variant securities instruments in the capital market, leaving the equities market more as a monopoly. Available data confirms that equities alone constitute about 90 percent of the total market capitalization of the NSE. The implication of this is that the Nigeria’s financial market leaves investors with limited or no alternative investment instruments unlike their counterparts in other markets of the world.
The director general, Securities and Exchange Commission (SEC) Musa Al Faki in a recent training workshop for capital market operators pointed out that at this time in the life of our capital market the bonds market deserves all the possible attention and growth, at least for the purpose of portfolio diversification.
Analysts believe that the over dependence in equities market has caused investors much loses in the meltdown. They also call for more information and enlightenment on the advantages of bonds to encourage the investing public to patronize the bonds market. The need for education about the bonds market is not limited to the investors but also to the operators who would manage the investments as well as offer advice as professionals to the investors.
According to Al Faki, providing necessary education for the stockbrokers on bonds would encourage the introduction of such financial instruments into the market to complement equities and consequently result in deepening our market.
It would be recalled that last year a number of companies were cleared to come to the market to raise money in the equities market but could not muster the courage to come out with public offers due to the bearish market condition.
However, Crusader Nigeria plc came with an innovative product known a debenture stocks with 13 per cent coupon rate for five years and the option to convert to equity at maturity at the current price of crusader stocks. This product was lauded by stakeholders as a branching off from the status quo, being equities. Investors in this product are not affected with the melting down that has persisted.
Every year, 13 percent interest is paid while the principal sum invested is in tact to be fully paid at the end of the five years. This is perhaps the strong point about bonds against shares. Nigerians are however not embracing the bonds largely due to lack of information and the craze for quick gains through share appreciation that characterize the bullish market. But it must be pointed out that market is unpredictable but driven by market forces of demand and supply. Therefore, no one can guarantee the sustenance of bullish trend and for how long.
Tuesday, February 10, 2009
Transcorp broke all rules as NSE DG presides Tuesday, 10 February 2009 00:29 by our reporters
While in the past year investors in the stock market have seen the value of their investment eroded very significantly, investors in Transcorp are doubly troubled.
The over 250,000 retail investors that put their money in Transcorp few years ago, with a promise of long term returns on their investment are reeling. As the company is set for its first extra-ordinary general meeting (EGM) scheduled for the 25th of this month, investors are of the opinion that the director general of the Nigerian Stock Exchange (NSE), Ndidi Okereke-Onyiuke, has presided over at best a very loose structural company called a conglomerate.
Investors are concerned that it took the company many years to hold the first meeting of investors. During these years, there was no presentation of the financial situation of the company to investors through the stock market. Investors in Transcorp are routinely taken for granted and have not had any say in the running of the company since inception.
Investors now wonder very loudly the phony arrangement of having the director of the stock exchange, in effect, the umpire of the exchange, as the head of one of the companies listed on the same exchange. One investor asserted that “Ndi Okereke-Onyiuke as chairman of Transcorp is like the governor of the Central Bank being a chairman of one the banks”. “Is that acceptable”, he queried.
Companies listed on the stock exchange are expected to present facts and figures to investors. But Transcorp has not done that. During the period, directors of the company were changed without input from shareholders.
Okereke-Onyiuke as chairman has presided over the spectacular fall in the fortunes of the company. Last Friday, the shares traded for N0.65, a 4.41 percent drop over the previous trading day’s price. In the last, the stock has traded under N1 per share.
Since the start of the corporation, set up in the mode of “Chaebols” of South Korea, it has had three CEOs. When the present CEO, Tom Isegholi, arrived there were promises of the revival of NITEL after he presented positive earnings and profit outlook for the company. Since the promises, investors wondered what has happened, despite the billions spent on the company in salaries and consultants’ fees.
While the fortunes of investors decline, the promised revival of NITEL has failed to take off and the viable revenue streams from Transcorp Hotel and SAT 3 were daily used to prop up NITEL with significant hiring of consultants from abroad. Insider sources claim that the hiring of consultants are guises used in fleecing the fortunes of the company.
Indeed, the history of Transcorp appears to be that of breaking rules or contravening basic ethics in business. First, Transcorp was alleged to have broken the rules in listing on the Nigerian Stock Exchange (NSE). Normally, companies in the country can only be listed on the NSE after three years of incorporation in the second tier segment of the market and five years of incorporation for those seeking listing in the first tier segment of the market.
Transcorp was listed on the NSE only after two years, making it the first company to be listed on the NSE within two years of incorporation.
Those opposed to the listing had noted that such exceptional waiver for a company to be listed would have been overlooked except that the company was connected with the powers that be. Moreover, Transcorp’s prospectus showed that at the point of listing, it owed banks about N67.1 billion, N7.0 billion more than the N60 billion, the company went to source from the capital market.
The company had budgeted N25 billion to refinance part of the N65 billion loan it took to finance its acquisition of NITEL/MTEL. This still leaves a significant part (about N30 billion) of this loan unpaid which would have attracted significant interest payments in the last few years. Since, though, audited results, if available, have not been presented to shareholders. Investigations also reveal that the business is indebted to four major banks to the tune of about N80 billion, and struggling to manage the debts.