Last week we discussed investing in businesses and financial assets to earn income and create wealth for persons in phase II. Today we will conclude on the options for this phase by taking up investment in physical assets.
Invest in physical assets: Another group of assets individuals in phase II can consider investing in are physical assets such as land and its developments, precious metals, etc.
My late maternal grandfather was a graduate of al Azhar University, Cairo, and a Sharia judge. He was of the wise old school of those before us. Because of his experience in Sharia and knowing the kind of things that could go wrong in business transactions, extended family members would always involve him particularly when they were buying farmlands, residential plots or built houses. My grandfather was always happy whenever he was involved. He was meticulous and would get all documentation done right to protect the family member buying the asset.
Funnily, my grandfather would always decline if any family member invited him when the latter wanted to sell the land that they once bought with my grandfather as the ‘Chief Documentation Officer’. My grandfather obviously hated selling land. He once told me that land is very important in human life and that the demand for it will continue to increase because of the ever-increasing human population. He also had another way of looking at the value of land as he said to me; ‘Mallam Musbahu, land is highly valuable. God created us from it; We grow our foods on it; We get our water out of it; We build our residences on it; And when we die, we will be buried in it!”
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In the past, I invested only a little of what I could in land. I regret that because all my few land transactions were spectacularly profitable. I am working to make amends now. I mean, when done right, investing in land protects and grows your wealth in the long term in ways many other assets do not. Similarly, building residences and shops is also a veritable investment depending on the area and purpose for which you do it. Depending on your resources such as experiences, finances, and contacts, as well as the economic situation, you could do with leveraged or debt-free models. Land is relatively easy to buy into and develop. What is critical is to have a plan, buy at the right location and the right price, bearing in mind that we can buy lands now that may not currently seem at a ‘right location’ but which in a few years could become ‘hot cake’. What we need besides location and price is to do the required due diligence on ownership, any encumbrances and documentation.
Some people that I know have done reasonably well investing in the property markets in Europe and America. This requires more market awareness and expertise. Furthermore, foreign markets are more volatile because of their greater sensitivity to economic issues.
Other physical assets that persons could invest in include precious metals such as gold. Persons wishing to invest in these types of assets must be robustly knowledgeable in the market and their economic, social, and political drivers. I would suggest that as with most investments, persons considering this should go gradually, building their understanding, business network, and results. A graph that depicts the price trend of gold from 1915 to 2023 is available from https://www.macrotrends.net/1333/historical-gold-prices-100-year-chart. You can study it and, looking backwards, draw lessons from what pushed up or pulled down the price. Like land, but in more tricky ways, there are opportunities in gold for storing and protecting value and creating wealth. The same applies to other similar assets in not dissimilar ways.
As with all types of investments, we need the following:
Be aware: There are different pathways to our individual successes. Some people do very well early in life and sadly falter later. Others, on the other hand, may struggle at the beginning but do very well later. In between the two ends, anything can also happen. Regardless, phase II of our careers is the longest, and hence, we should build relationships, get more experienced and definitely make as much income and wealth as we can.
Do it right: In building wealth and planning for our retirement, we should be true to what is right and avoid any wrongdoing notwithstanding any immediate ‘benefit’ that might seem accruable to us by being incongruent. In the end, it is only doing the right things the right way that gives us true comfort and success in life.
Be aggressive, yet cautious: A lot of what we stand to gain in phase III and retirement will likely be a result of the good seeds we sowed at this stage. As we work hard, smart, and even aggressively at this stage, we need to yet be cautious by being alert to whatever may be the risks and other consequences of what we may be doing. Other than ensuring that we are doing the right things the right way as mentioned above, we need to take care of our health, which is something we will also talk about later in this column. If we don’t exercise, watch our diet, go for regular medical checkups, and monitor emotional comportments at this stage, we may create health issues that can cause complications and difficulties for us or even abruptly end our lives after all the hard work.
Next week we will take up the peculiar investment factors to be considered for those in phase III.
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