Are millennials jumping into business partnerships too quickly?

This post originally appeared in The Guardian

A while ago, a friend of mine ran her business idea by me and I thought it was brilliant but several months later she still didn’t have it up and running. Why? Because she was looking for a partner. She gave me a few names and I was a little confused because I struggled to see what value they would add. She had the capital required to start the business, she had access to the same network of people and potential customers as her proposed partners and she had a better grasp of the numbers.

After a few conversations, it became clear that her hesitation to start the business boiled down to fear. The fear of failing, the fear of putting herself out there, the fear of failing alone, to her it would be less terrifying if she had a partner and wait for it…. the fear of social media!!! Social media was a big part of her sales strategy but she was convinced she was couldn’t hack the whole social media ‘thing’ and was willing to give up 40% of the equity in her new business to someone who had a better understanding of that terrain than her.

I found this hilarious but sad at the same time. She would be making the same mistake a lot of millennial entrepreneurs tend to make, giving up equity instead of hiring for the role. A business partnership is like a marriage; you have to think long term from day one. It is inevitable that over time people evolve individually within the partnership, so is this a partner you would be willing to deal with over the next 30 years? Partnerships can be great because as the saying goes, sometimes two heads are better than one but there are several things to consider because of the high rate of failure when it comes to business partnerships.

Here are a few of them.

Clearly define the roles and responsibilities of each partner

You have to decide very early on, the value that each person brings to the table. An ideal business partner has strengths where you have weaknesses. For example one person could be good at sales and marketing while the other is great at operations and the financials of the business. Most people go into partnerships with an abstract notion of what these strengths and weaknesses are but fail to clearly articulate, define and put in writing each person’s roles and responsibilities and this could be a recipe for disaster.  

Shared Long-Term Vision

Even more important than having a partner who knows what you don’t know is having one that has the same long -term vision for the business as you. Many people make the assumption that because their partner believes in the idea of the business they have the same long -term vision and this can cause disruption later on in the business. You can both love the idea but have different opinions on how the idea should be executed. Have discussions early on about your values, objectives, operation and marketing strategy and even exit strategy to make sure you are on the same page.

Consider working on smaller projects together first

Many people often have different personalities in social and work situations. So you can know someone socially but you’ll never know what they are like professionally if you’ve never worked together before, so consider collaborating with potential partners on smaller projects first to see if your work styles are compatible. For example, one partner could be someone who likes to take decisions, execute quickly and fail fast and the other partner could be a slow decision maker and takes their time to plan extensively before they take decisions. Neither of these is a bad approach but could cause disruption in the business if both partners don’t understand each other’s work styles early on.

Corporate Governance

In my opinion, every business should have a board of directors or an advisory board from the beginning. Even in the best partnerships, disagreements occur so having a group of people who have the best interest of the business in mind and can be relied on to take the final decision in situations where partners can’t agree is crucial.

Click here to watch the video on Guardian TV

Is debt ever a good idea?

This post originally appeared in The Guardian

In Nigeria, there seem to be two extremes when it comes to people’s general attitude to debt. On one extreme, there are people who are afraid to entertain the notion of any debt at all because they see it as dangerous and would rather pay cash for everything.  On the other extreme there are those that are so comfortable with debt that they don’t pay back and become known as what Yorubas call ‘onigbeses

However, debt can be a useful tool to attain financial success but how you use it matters.  There is good debt and bad debt. Wealthy people use debt as a tool to leverage their investments and grow their cash flow, but poor people use debt to buy things that make rich people richer. Only borrow to acquire an asset that will appreciate in value.

People with bad debt habits will typically go into debt buying things their income cannot support. They will borrow money to purchase big-ticket items that don’t appreciate in value and most likely can’t cover the cost of the debt over time.

Debt is typically considered good when you use it to acquire an asset that has the potential to appreciate in value and bad debt is when you do the opposite and take a loan or rely on credit cards to purchase things that depreciate in value i.e cars and consumer goods.

However, whether debt is good or bad there are some grey areas.

3 Commonly asked questions about debt

Should I take a loan to pay for my education?

Getting a good education is generally considered a positive thing because in principle it increases your chances of employment and the potential to earn more but we like degrees in Nigeria sha. In fact, we can be quite extreme, the more degrees the better is our motto when it comes to education. Its completely normal for someone to have 2 MScs in what I would consider meaningless degrees and still be trying to acquire a PHD. However, the reality is that multiple degrees do not guarantee employment let alone high paying jobs. These days it’s about how well you are able to apply knowledge in the real world. So in my opinion, if you take a loan to further your education it should be a degree in something that puts you in the best position to increase your earning potential enough to be able to pay back said loan. Otherwise, the consequences can put you in a situation where you are living from hand to mouth trying to repay said debt.

Should I take a loan to invest in real estate?

Real estate is a fantastic investment in the medium to long term and its generally advisable to take debt to acquire real estate assets. However, this can turn from good to bad debt if you haven’t considered your options and circumstances carefully. For example, if you take on a loan to buy a rental property, it’s a good loan if the rental income from the property can cover the cost of the loan (interest etc.) and in the best-case scenario even have some change left over. However, if you take a loan to buy land with the hopes of capital appreciation because of the high interest rates Nigeria is notorious for this might quickly turn into a bad loan if anything changes in your income and you can’t service the loan or capital appreciation does not happen fast enough because in the land scenario, the asset isn’t generating any immediate income so it might be advisable to either pay cash or save towards a real estate investment like that.

Should I take a loan for my business?

Access to capital is often cited as one of the major obstacles entrepreneurs in Nigeria face and to a large extent I agree. However, I find that raising debt or equity for your small business can be detrimental if your business model is faulty. The extra money will only help to amplify the problem as opposed to solving it. A N100, 000 problem can easily turn to a N1, 000,000 problem.  I often hear entrepreneurs complaining about making a loss and say things like if I just had ten million I would be able to grow my business but when asked further questions about how exactly that money would impact their bottom line they struggle to give a straight answer. Taking on debt for your business is usually only a good idea when you know said business can generate enough positive cash flow to pay at least the interest on the loan.

Click here to watch the video on Guardian TV

How to save when the bills just won’t stop

This article appeared originally in The Guardian

Biko! What is a bill abeg? I’m curious. I’ve overheard a lot of conversations in the last year where someone, usually someone with no real responsibility complains about how their bills keep piling up, so they can’t save. When you ask them what said bills are, they reel off a list of things that sound like consumption choices. A bill, in my opinion, has always meant something that is a necessity and has serious consequences if it is not paid. So in my mind this means rent, electricity, transportation and the like but the reality is, as we get older and our incomes increase, our consumption tends to rise to meet income but our consumption choices don’t always reflect the goals we have for our lives because the income we earn is being dragged in different directions.

Here are three tips that can help you allocate your limited resources

Set spending priorities

‘I would like to go on holiday this year’, If only I was debt free’, ‘If I had savings I would be able to fix my car’…. and the list goes on and on! Most people have a vague idea of what they want for their lives but they either complain about what they can’t do or make wishes, they don’t set goals. The difference between a wish and a goal is that a goal is realistic and has a time frame and a plan to achieve it. So break them down into short term and long -term goals.

Set Short -term Money goals.

      1.Write down 10 short-term Money goals you would like to achieve in the next 90 days to one year.

  1. Identify the three most important short term money goals on that list and focus on them first. They probably all seem important but which top three would make the biggest impact in your life within the next 90 days -1 year.
  1. Write down 10 action steps for each goal, 10 things you need to do to help you achieve each goal?

Here are some examples of Short- term Money Goals

Goal 1: Amaka wants to buy an apple laptop. She has estimated that it will cost N500, 000 by the time she can afford it given inflation. She sets a goal to save N50, 000 every month for the next 10 months.

Goal 2: She also wants to be more prepared in case of emergencies, so she has set a goal to build an emergency fund that is made up of 6- 9 months of her living expenses so she will put N100, 000 a month aside.

Examples of Action steps Amaka can take to achieve her goals.

  1. Cut her spending by 15% to fund her goals.
  2. Set aside 10% of the profits from her business
  3. Open a Zenith Aspire account to earn interest on savings.

Set Long-term Money goals.

Three goals you would like to achieve in the next five to ten years. Ideally, these three money goals should be centred around building assets that can provide you with an income in the future. (stock portfolio, land, property, bonds, treasury bills).

Lets face it Assets are not cheap. However, if you keep putting off building assets, waiting till you ‘hit’. You will end up wasting a lot of time and probably never get round to doing it. You have to learn to plan using your present income to make your tomorrow better than your today. Set aside a proportion of your income every month towards your goals, start small and set benchmarks you will get there eventually.

For example, Tony earns N100,000 and wants to build a house in Ogun state in 5 years. He estimates that the land will cost him N1,000,000. So he sets aside N20,000 every month towards his goal. He knows N20,000 isn’t enough to buy anything significant yet but he systematically saves and sets benchmarks for himself. i.e. when I get to 200,000 I’ll buy treasury bills when I save another N100,000 I’ll start building a stock portfolio etc.

How to smash your Long-term Money goals

  1. Write down 3 long- term money goals
  2. Decide what percentage of your income you can set aside to fund those goals?
  3. Write down 10 action steps for each goal, 10 things you need to do to help you achieve each goal?

Here are some examples of Long- term Money goals

Goal 1: Tony wants to improve his net worth by 25% in 5 years.
Goal 2: Ashake wants to become a landlord in Aja by the time she’s 30
Goal 3: Tokunbo wants to leave paid employment and start a beauty business in 5 years.

Click here to watch the video on Guardian TV


I’m over spending…Help!

This article originally appeared in The Guardian

Whether you earn N50, 000 a month or N5, 000,000 a month, I think we all have the tendency to overspend if there’s no specific plan for the money we earn. We’ve all been there: salary hits your account at the end of the month and seeing that ‘bulk money’ gives you that ‘I have money now’ feeling and you are lulled into a false sense of security which often leads to overspending.

The impulse to spend on the things we WANT first (those new shoes, that new phone) as opposed to the things we NEED takes over. Then the second wave is the realization that you need to pay bills. (Salaries, food, transportation). After the scramble, before the month even ends you have no money left, not only have you not saved or invested any of your earnings you have to borrow money to meet your obligations!

Here are some tips to help you curb your spending.

Track your spending

Most people don’t know where the money they earn goes. You have to learn to track your expenditure and take control of the income you earn now instead of waiting for your income to increase in the future before you start learning to manage money because the way you spend N10 is the way you’ll spend N10millionWe have to spend with intention by allocating our resources efficiently to reflect the lifestyle we want and are able to sustainably afford.

  • Write down everything you spent your income on in the last month. This will give you a good idea of where you are spending money and help you identify areas to cut or increase.
  • Review your bank statement from last month. Separate the items on there into wants and needs, then limit your wants and prioritise your needs. Spend on the things you love and cut expenses ruthlessly on the things that don’t matter to you.
  • Identify things to cut out, so you can create room in your spending to save at least 20% of your income.

Identify your spending triggers

80% winning of your money is behaviour so it’s all well and good to be told to cut your spending but that rarely ever works unless you are familiar with the root causes and behaviour that cause you to overspend in the first place.

We all have spending triggers, the stories we tell ourselves to justify our spending. For a lot of people the rationale is usually I work hard so I deserve it …but you don’t deserve anything you can’t afford. For others it could be everybody has it, so I want it. Maybe it’s the new iPhone or those shoes every ‘It’ girl is wearing on Instagram but if it’s not in the budget you have to remind yourself not to go broke trying to look rich. 

Write down your spending triggers. Think about every time you’ve overspent or gone over your budget this year and make a list of emotions that triggered it. It’s important to develop a habit of thinking before you buy. Ask yourself honest questions why am I buying this? Do I really need it?  Can I live without it?

Set spending limits for the things you like to splurge on. Figure out the things that matter to you most spend there and cut expenses ruthlessly on the ones that don’t and stay away from people and things that cause you to overspend and cause you to partake in activities you cannot afford and focus on what will help you succeed.

Automate your savings

Try to imagine that you earn 15-20% less than you currently earn, because if you did you would find a way to manage. Pay your future self first by setting aside that 15-20% first before you begin spending. Instead of saving what is left. Automate your savings by setting up a direct debit so the money goes out before you have a chance to spend it.

Watch the video on Guardian TV

How to live a richer life…the basics

This article appeared originally in The Guardian

There’s nothing that forces you to reconsider the way you manage your money like hard times. Between inflation, foreign exchange palaver, massive job cuts…the list is endless, so we can all agree that it’s a tough economy. However, the great thing about hard times is that, even though they force you into a corner, problems often create opportunity and if you are resilient you find creative ways to cut back and earn more. More importantly in these times we have to focus on how to manage the resources that are available to us because if you don’t respect the money you currently earn it will leave you with no respect.

These are 3 building blocks.

The Spending Plan
A budget is a dirty word to most people because they tend to think of it as something that restricts spending but a budget is your passport to a healthy financial life. It is basically a tool that helps you allocate your limited resources in the most efficient way. So lets call it a spending plan. And in these difficult times if your budget is not your best friend, you are on a long thing! Your budget doesn’t have to be complicated, keep it simple! Divide any income that you get into 3 parts. (Your salary, bonuses or your uncle ‘dashed’ you money) Long- term financial goals (20%), Short- term financial goals (10%) and living expenses (70%).LFG (20%) represents the proportion of your income that is set aside for purchasing assets that will earn an income. (Land, property, stock portfolio)SFG (10%) represents the proportion of your income you set aside for those seemingly ‘frivolous’ things that make life a little sweeter. (Travel, cars, phones) whatever tickles your fancy.Living Expenses (70%) this is pretty much self- explanatory (food, water, accommodation, transportation)

Emergency Fund
One of the most common mistakes we make as Nigerians when it comes to our money is wait for financial surprises to happen before we plan for them and no one likes financial surprises, unless they are credit alerts. The reality of the world that we live in is that things come up, your car will break down or generator will need repairs or you may lose your job. These things happen, so it’s best to set a little aside every month towards covering these unexpected expenses. An emergency fund should have 6-9 months of living expenses and should not be put in any risky investments because it has to be liquid and in tact in case of emergencies. An emergency fund is not there to make you money but to act as a financial cushion that protects your long term investments from short term unexpected expenses.

Organize your money
So confession time! My name is Arese and I am an impulsive spender! But they say the best way to deal with a problem is, acknowledge that you have one right? Then find a way to deal with it. So I guess I’m on the right track.

I have found that if I ‘mistakenly’ leave my disposable income in my ‘everyday’ account. I will find ways to spend it mindlessly, from drinks with the girls to new toys for Zikora, my daughter or furniture for the house because that’s just how my brain is programmed.

To deal with this I found a system that would remove me from the equation, help me avoid temptation and force me to achieve my goals without procrastinating because a habit I’ve spent years subconsciously cultivating, is not automatically going to change on its own.

This is how it works. Create multiple accounts, one for each goal. Then ensure that what you decide to allocate from your income to each goal is automatically debited from your salary. That way you don’t have a say in the matter. Make (arrangements with your bank to debit your account on particular dates).

However, the only way this will be effective, is if you limit your access to all but one account. The account you require to pay bills for the month and you should only have an Atm card or chequebook for this account.

All other accounts should be set up so you, either have to go into a bank, write a letter to request your funds or bear some type of monetary penalty to gain access to the money in all other accounts. This way your mind is programmed to ‘think broke’. For example, if you only have N75k in your ‘bills’ account every month and you are used to living on a N100k, it’ll be hard at first but you will eventually adjust to thinking that’s all you have.

Things might be tough at the moment but if you can’t find ways to manage the limited resources you have, spend less than you earn and preparing for the long term, they’ll be even tougher in the future.

Click here to watch the video on The Guardian

The Smart Money woman – Why I decided to write a book

Why I decided to write a book…? I just launched the platform and Adebola Williams said congratulations…you know what, I think you should really start thinking about writing a book

I was like “A book?!” It’s one thing to write an article and a completely different thing to write a book

I started thinking about it…what would it feel like? What would it look like if I decided to write a book?

At first I thought let me write a book about my life. Then again, I thought my life isn’t that interesting

I thought about a how to book for a 20 something year old but millennials don’t really love reading about finance.

Then I decided to write a book that I would like to read and I basically read 2 types of books

  1. Chick lits – books about the modern woman
  2. Business books

So the smart money woman is basically a mix of both. It’s fiction. It tells you the story of Zuri and her friends and their relationships and their love life

And it also has smart money lessons at the end of every chapter

To buy the book, click here

The Smart Money Woman – An African girl’s journey to financial freedom.

The Smart Money Woman

I’m super excited to announce that my book ‘The Smart Money Woman’ is finally ready and will be available to buy this August!💃💃💃its taken me a year to write 😩 and its been quite the journey..its one of the hardest things Ive ever had to do but its a body of work Im truly proud of. I’m grateful to God for the experience, the setbacks and the victory… its a fictional book that tells the story of Zuri a Nigerian girl who looks like she has it all but is actually broke…the book navigates her journey from broke to financial freedom and has smart money lessons at the end of each chapter…can’t wait for you guys to read it…. #thesmartmoneywoman


Analyse This: Episode 6 – The Real Estate Market In Nigeria

How soon should an individual consider investing in Real Estate in Nigeria? Is the Real Estate Market in Nigeria conducive enough to encourage individuals and businesses alike to make investments in property? Has the Federal Government put policies in place for the populace to gain easy access to property in Nigeria?

Watch Arese Ugwu and Tunji Andrews discuss these issues and more on an all new episode of AnalyseThis as they delve into the intricacies of investing in the Real Estate Market Nigeria.

You can also join in the conversation on Twitter by tweeting with the hashtag, #AnalyseThis


Money lessons from Kevin Hart’s success

Listen!! The concept of laughing till you cry was foreign to me for the longest time. In fact, I thought it was stupid. How can one possibly laugh so hard that they start crying? I had seen other people do it but I just thought ‘eleyi o gbadun’! This one is not well or maybe they are just confused about their feelings. However, this all changed when I saw the phenomenon that is Kevin Hart in ‘Soul Plane’. I watched that movie at least six times and I ‘cry laughed’ every single time.

I remember thinking, this guy is ‘hella’ funny and quite good looking but he’ll probably never be a superstar like Chris Rock because he’s too short. Boy was I wrong! 15 years later the guy is a comedic rock star, actor, producer, and writer with an estimated net worth of around $50 million USD and I’m in awe of his hustle.

There is no overnight success…hard work takes time
‘Soul Plane’ may have been extremely funny to me and a few other people but it was a box office flop! So it could be considered a failure. The next time I saw Kevin Hart was in a cameo he did in the video for Fat Joe and Remy Ma’s hit song ’ Lean back’ and I thought oh look at that funny short guy from soul plane ‘eyya now he’s doing skits in music videos’. For several years, Kevin Hart couldn’t get an audition or movie role, he starred in TV shows that were cancelled, he was booed off stage a number of times but he never let any of his failures deter him. He focused on perfecting his craft and taking the jobs he could get, not necessarily the jobs he wanted. He would do seven shows per weekend at smaller venues like college campuses and low-key comedy clubs. Today he stars in movies that gross $80 million USD at the box office and has sold out comedic tours.

We live in a generation where we expect instant success just because we have a good business idea or expect a high paying job or because we went to a fancy university but a champion is a champion long before they ever win the championship. We see the glory but we don’t see the time, effort, preparation and sacrifice that it takes prior to the championship for them to be successful. If you haven’t achieved your goals yet its because you haven’t developed the skillset knowledge and experience to be at the top yet so keep working, keep grinding.

Embrace your Authenticity
Authenticity is something that is somewhat elusive, especially in Nigeria. Most people believe that there is no point trying to re invent the wheel because if someone is already doing something and is successful at it then just copy their format and BOOM you’ll be successful! I can respect this philosophy up to a point because there are generally no new ideas. Everything you want to do or are thinking of doing, someone, somewhere has thought about it and is already executing some version of it.

However, I can’t get with the ‘copy and paste’ phenomenon that we tend to employ because at this point you are basically trying to be someone else and you can’t do that effectively or sustainably enough to make any real money since you don’t understand their vision or motivation for doing what they are doing, you’ll always be a poor imitation.

A better way to approach this is, ‘I think I can do what this person is doing but how do I put my own spin on it’? What makes me different?

What can I do better?
Kevin Hart is a G when it comes to this! There were comedians before him and there will be comedians after him but the guy is authentic. He incorporates every aspect of himself in his work. A lot of his work is centered on his 5’2 height, rejection from women, his painful divorce and his father’s battle with drug addiction. These are things that most people would hide but have made him more relatable. It’s not even about trying to be perfect. It’s about owning where you are in your journey and embracing what makes you different even when they are perceived flaws.

Never depend on a single income
Forget Beyoncé, Kevin Hart is arguably the hardest working person in showbiz! If you follow him on snap chat, you will agree that his hustle is relentless. He is always working on and promoting several opportunities. We haven’t even hit the 6-month mark in 2016 yet but he has achieved more than most people have in 5 years. His ‘What Now’ world tour which sold out arenas and was dubbed ‘the biggest comedy tour in history’, promotional tours for at least two movies ‘Ride Along 2’ and ‘central intelligence’, hosted the MTV movie awards and continued his

‘Move with Hart’ crusade. I could go on but… you get the point.
Did you know that Nike is paying Kevin Hart to create his own cross fit trainers? Which I am convinced came from his constant promotion of his fitness goals and the transformational progress he has made with his body. That’s another thing you can’t promote Kevin Hart more than Kevin Hart, he leverages his social media platforms and has become a marketing machine for his work and his brand such that every tour and every movie is sold out

In this economy, we all need to evaluate our skillset and look out for opportunities to leverage on to improve our earning potential. The average millionaire has seven sources of income. How many do you have?

Kevin Hart inspires me because that little man has the same 24 hours in a day.