I’m curious, if I gave you the option of picking between a paycheck and investment, which would you prefer?
Before the answers start rolling in, let us look at what a paycheck and investment really means.
An investment is an asset or item acquired with the intention of generating income, appreciation or profits from it much later. Appreciation refers to an increase in the value of an asset over time. When an individual makes an investment, the intent is not to reap the rewards of the investment immediately, in fact the concept of delayed gratification comes to play here.
Delayed gratification refers to the ability to keep at bay the need for an immediate or instantaneous reward in order to receive a more favorable and enduring one later.
A paycheck on the other hand is a salary or wages check issued to an employee by an employer. More often than not, a paycheck offers a smaller but more immediate reward than an investment whose reward may take time but is better and more enduring.
Now the million dollar question is between an investor and a worker/employee, which is more financially secure?
In recent times and even from time immemorial, lol, the key to financial success has been to diversify your source of income. Truth be told, it has become practically impossible to survive with only one source of income in Nigeria today. Imagine sitting on a table with five legs, suddenly one leg breaks off, balance can still be achieved on that table, but when you sit on a table with just two legs and suddenly one of the legs break off, falling will not be an option in that situation, it will be a must. This rule of thumb applies to our financial lives also hence the need to invest, and not just invest but invest in real estate.
Real estate offers a peculiar safety that is not common with other forms of investment. It in fact is an open secret that real estate always appreciates in value and rarely depreciates. As opposed to your job or paycheck, you can pass down real estate from generation to generation, it is a tangible investment, it provides an excellent protection against inflation; it suffices to say that your money in real estate cannot lose value.
On the other hand, total dependence on a paycheck is quite dangerous. You should always remember that the day it becomes unprofitable for you to work for your employer, the relationship comes to an end.
The solution you then ask: my candid advice would be to make the best of both worlds.