#OverwoodChat – Financial Planning for Relationships with Kalu Aja
Money Management Mar 01, 2021
Kalu is an astute banking and asset management professional with over 20 years of extensive experience in capital market operations, investment and asset management, and pension services. His skill sets include Financial planning, leading and coaching teams, brand management, marketing, and process management.
He started his professional career as a Brand Manager with the UAC of Nigeria Plc conglomerate. In 2004, he was a core and pioneer AGM that set up FCMB Pension Managers Limited (PFA) and grew the start-up PFA to managing over N270b in Assets under Management as of 2014. Before FCMB Pension, Kalu had established an Asset Management franchise for the Private Banking unit of the Fidelity Bank Plc and managed the Pension Desk at BGL Limited.
He is a postgraduate alumnus at the Lagos Business School and the New York Institute of Finance. Kalu has an MBA from the University of Nigeria and is a member of the H. Pierson faculty and a Fellow of the Certified Pension Institute of Nigeria, and the musical society of Nigeria.
Kalu is semi-retired and consulting whilst being an advocate on increasing the level of financial literacy via advocacy on social media where he enjoys a following. Kalu writes a weekly column on personal finance and the economy for Nigeria’s largest online journal Nairametrics.
Must be Warren Buffet.
He makes complicated investing concepts very easy to grasp, he plays the long game and demonstrates that wealth is really a function of strategy and time combining…slowly
Three things with Warren that everyone can copy:
- long term compounding
- buying at the right price
- leveraging the portfolio to buy more without debt
Couples should think about money as a tool, a means to an end.
You need money to buy a house so the house is the end goal, money is the tool. Get a plan to hit your goal, don’t just seek money.
Like any tool, you become an expert from using it all the time and appreciating its functionality. Make good money activities a habit.
e.g. Never spend more than ₦xxxx.xx without a budget.
Start financial planning from the end.
Picture yourself at the end, then walk back.
Do you want to retire with ₦50m in the bank? Walk it back to today. At current interest rates, how much should you invest to hit that figure?
Remember, plans are not fixed, but they are guides and milestones. So build in scenarios, e.g. What happens if I lose my job? What happens if I win the lottery?
- Understand each other’s “money language”. Who is the saver? Who is the spender?
- Agree on a budget together
- Automate investing
- Appoint a “manager”
- Review together
- Reward together
Key point? Together there has to be buy-in.
It’s also important the couple understand their limitations and seek professional advice where necessary. A financial plan is a commitment to delay consumption, both parties have to understand this and support it.
Joint account for dating?
Not so sure, maybe a joint expenses plan where you both share the cost of the pizza.
Joint account if married?
Yes, but have your own personal spending accounts, create one joint, contribute to invest, and pay expenses from that account.
Joint investment account?
Yes, you get some tax benefits.
Assets in both names?
Yes. Not Mr. & Mrs. Greg Smith, but Mr. Greg Smith and Mrs. Angala Smith.
Next of Kin?
Yes, update employer.
Yes, if married. YES, if married with kids.
Study and enjoy!
Today it’s easy to learn about money, you can wake to Alexa telling you about the Stock market, listen to a podcast as you drive to work, read finance tweets during the day, watch Youtube Videos as you eat dinner.
A good investment strategy:
- Is simple and scalable.
- Is flexible, with milestones.
- Is ambitious.
- Allows for review.
A strategy is a long-term plan, but you live tactically i.e. short term. so build in redundancies.
Cryptocurrencies are a strange animal.
They are currencies, assets, and commodities all one. I was a skeptic, now I buy a fixed amount (Only Bitcoin), irrespective of price, why?
- Inflation cometh.
- Greater US regulatory oversight.
- Increased utility.
I would allocate 5% to just hold Bitcoin in my portfolio, like gold, but more volatile. The main risk to Bitcoin is that the US Government or Facebook introduced her own bitcoin tied to gold, which takes away the allure of holding Bitcoin to hedge against inflation.
- Start early.
- Save then invest.
- Be constant.
- Watch inflation.
- Don’t lose money.
- Donate to charity.
Fortune Favours the Prepared.
Hard to project for Nigeria.
But let’s look over a few questions:
- Will crude oil prices go up?
- Will local food prices fall?
- Will the Corona go & remittances go up?
- Will power supply go up?
If your answers are:
Then you are bullish on Nigeria and you should buy Naira assets.
And that concluded our TweetChat on financial planning for relationships with Kalu Aja! Don’t forget to join us on twitter (@overwoodng) on Wednesdays 7pm WAT for more insightful conversations with our astute guests!