Personal Finance with Meristem


We all do. Trust is largely an emotional act, based on an anticipation of reliance. It is fragile, and like an eggshell, one slip can shatter it.

As Nigerians, our Trust issues run deep, this could be a result of our system of governance, political track records and diversity.

Remember the last time you ordered a product on a foreign website and you made payments without seeing the products, can do the same on a Nigerian platform?

The answer is in defining what and who you would typically trust, from close family members to even children, the blood they say is thicker than water isn’t it? People tend to trust named brands or established structures which to them have stood the test of time, therefore they can rely on them to offer a service or a product worthy of trust.

However, it is not unusual to hear stories of Trust between families lost and Trust between companies and customers slip due to service gap and in most cases greed.

Here is Chinwe’s Story:

Chinwe’s parents left Nigeria in search of a better life, as they were unable to afford for the whole family to leave at once, they left in batches. So, for many years Chinwe and her little brother lived with their Uncle awaiting their invitation to join both parents in America.

Chinwe always wondered why, her cousins went to the better schools, but she had to go the one close to home. Her Uncle never failed to remind her that her father could not afford to send her to school, he washed toilets for a living.

Mr. Okechukwu has decided, to pay a surprise visit to Nigeria he was excited to meet his daughter, she must be so big now he pondered.

He imagined, his new house in Banana Island, life wouldn’t be so bad in Nigeria after all. I am sure you can imagine the disaster Mr. Okechukwu met in Nigeria.

Stories like this are not uncommon in Nigeria, it almost as if nothing can be done to change our Trust Issues, however, the Meristem Diaspora Trust seeks to make investment hassle-free for Nigerians in the diaspora by helping to oversee the financial investment, building constructions and acquiring of properties, taking care of loved ones, etc. this will ensure that funds been set from around the world are used for their exact intentions giving you peace of mind and even wedge against exchange rates fluctuations.

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Gbenga is currently at the first income stage and he wonders what he can do to save effectively. He knows that he will have to entertain him and his friends every weekend but also knows it is time to move out of his father’s house.


Mr. Ola is not one for purchasing properties, Afterall his own Father made his money from shares and Investments… but his friend who died recently thought him a big lesson, he saw how difficult it was for the family to access ordinary money in the bank and the shares and Treasury Bills…this Nigeria is tough.

What the above situations show is, the fact that you have only Liquid Assets does not mean you cannot be protected.


As no one size fits all, it is important to first understand what stage you are in your finances so let us delve a little into these stages

The first income stage

When you first begin earning an income, budgeting is the critical financial skill that you need to master. Develop a suitable budget and build the discipline to live within your income so that you don’t fall into a debt trap. Once you learn to contain your expenses to available income, start building savings into your budget. The emergency fund will have the first claim on your savings, and this is an urgent and important task.

Initiating some investments for retirement is an important task at this stage even though the goal may seem too much in the future to be relevant now. Investments for other goals are optional at this stage and can commence once your income and savings stabilize.

Unless you have dependents on your income, life insurance is optional at this stage and you need not assign scarce funds for life cover. However, basic health insurance is important, particularly if you don’t have a health cover from your employer. Other products such as auto insurance and personal accident insurance should also be included as required. Servicing debt that you may have, such as student loan, is an important element, as is controlling debt use and building your credit history. A misstep can have long-term consequences on your borrowing ability in the future.

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Estate planning is optional at this stage and you can consider it in the future when wealth has been created.

The dependents stage

This is the phase that is the most demanding since many of the elements of financial planning need to be serviced. You are likely to have dependents on your income and, therefore, life insurance is a critical element for security. Consider term insurance which gives you the required protection at the most efficient cost. Expand health insurance to cover your family too.

Your income and expenses would have both expanded and you should be better at budgeting and saving by this stage. Living by the budget is critical to be able to find the savings for the many short-, medium- and long-term goals you are likely to have at this stage. Revise and fine-tune your budget periodically to reflect your income and need for savings. Invest the savings to construct a portfolio that is aligned to growth, income or liquidity needs of goals.

Make optimum use of time, funds and energy by concentrating on activities that are important at each stage in your life

Use a professional to help you do this efficiently if you find yourself procrastinating. Build basic estate planning into your finances by making clear nominations on your investments and insurance.

Debt management is a critical function at this stage given that your needs are likely to be more than the availability of funds. Keep your ability to repay in mind while adding debt and ensure you do not harm your credit score or credit history. You should not have to meet debt repayment obligations at the cost of your retirement savings, insurance protection and essential goals like housing. Borrow primarily for appreciating assets where it will help grow your net worth over time.

The growth stages

If you have managed your personal finances prudently so far, then this will be the golden stage for your finances. Your income would be high and seeing an upward growth trend, while your expenses would have stabilized resulting in growing savings. Being mindful of expenses is important even at this stage and the focus of budgeting would be to maximize savings.

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Managing investments is critical in this period. Many of your goals would be close to being funded and the investments must be rebalanced to reflect this. This is also the time to catch up on important goals like retirement with the excess savings being assigned to this. Where the goals are well in the future, the investments should reflect the ability to take a risk to earn higher returns.

Life and health insurance should be updated and aligned with your situation.

Now that you have accumulated wealth, take time to plan how you would like to distribute your estate and formalize a Will/ Trust. Make sure that the assets and investments do not have nominations that are contrary to what you have decided in your Will.

Servicing debt should not be difficult at this stage given the high income. But consider the funding needs of your other goals before you add to your debt burden.

The retirement stage

Budgeting becomes the focus of finances once again during retirement. The object now is to control expenses to stay within the available income. Managing the investments to generate income and protect the corpus from inflation becomes the primary investment activity at this stage.

Adequate health insurance is critical since health costs can throw your income off rails. Life insurance may be relevant only if it is required to protect retirement income for the spouse and debt should not be a big part of your finances at this juncture.

An important activity at the beginning of retirement is to simplify finances. This would include cutting down on multiple accounts and investments, organizing documents, updating details and consolidating investments to a few relevant ones. Make sure all your financial documents are updated and accessible.

Make optimum use of limited time, funds and energy by concentrating on the activities that are important and critical at each stage in your life. Over time you will find that you have knit together all the elements without finding the whole exercise too intimidating.

In Conclusion, remember that a problem shared is a problem half solved, speak to a Wealth Advisor today.

For Meristem Wealth Management

Chisom Nwogbo

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