Financial planning simply means having a plan for your finances so as to protect your cash flow from loss.
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Setting up a financial plan is a process, so if you want a step by step guide on how to establish a financial plan, it would be;
First, agree on a plan —you ask yourself, what do you want to achieve? By when?
Then, create an Emergency Fund. This simply implies funding your life insurance plans to protect expenses relying on your income for support. Once you have achieved this, you can then proceed on to create plans on how to invest your current income.
What should a cryptocurrency investor do in these times of economic crisis and fall in asset values?
As an investor, you don’t have to panic at this time especially now that the COVID-19 is going mainstream into different parts of the world. If you already have a financial plan covering you for up to 36 months period, do not panic, keep investing.
Most especially, if you are buying Bitcoin, keep buying more Bitcoin, keep buying that dream stock you have always wanted to buy. Buy that binance coin, take a look, its cheap now, so buy more.
“Now is a good time, to buy that property, that stock, Bitcoin. Whatever you vibe with. People are selling out of fear, you buy out of wisdom.”Eva Alordiah, Nigerian Musician and Motivational Speaker.
Don’t just sell that bitcoin or that binance coin you have because the price is falling. Always remember that someone is buying whatever you are selling, and whatever you sell is now on you in real life. Try your possible best to avoid panic selling, sell when you are certain that you have to.
Go and Review Your Budget Now:
Remember, at this time of economic crisis you will always need fiat to process emergency transactions. It’s time you cut down on expenses draining your cash. Now is the time to reduce your expenses and save more.
Most companies are already shutting down including Access bank, Union bank and some other commercial areas and buildings.
In the coming months, people might not be able to work again, there will be bulk buying of commodities like food items. Prepare for this, you can always keep unnecessary capital investment down. Make use of your emergency fund for purchases, then simply fund it back later.
Making Use of Your Emergency Fund
An Emergency Fund is a type of fund where you make some personal savings which will serve as a safe net in the time of financial mishap. It also involves saving up a three to six months of expenses you must make, like food and rent.
An emergency fund is an important part of any financial plan. It will encourage you to avoid selling off your assets at a lower price in other to cater for your expedient cash needs.
Keep Buying More Cryptocurrencies:
Adopting the Naira Cost Averaging approach might be a good option. Naira Cost Averaging is simply buying same amount of a cryptocurrency at regular intervals, no matter the price.
The volatility during this period of uncertainties is that as crypto prices fall, the investors are also able to buy more shares of the coin at that lower cost.
This helps investors to reduce the average cost per share, putting the portfolio on a better position for a positive return.
Looking for the Coin to Buy Now?
Always remember, while the market prices of many cryptocurrencies are indeed falling, some of these coins are not losing their values.
For example; The price of bitcoin has fallen by around 30 percent since the incident of the coronavirus pandemic.
But taking a look at the use cases of bitcoin, many companies will always list bitcoin first once they start accepting crypto payments. Always look at the falling markets as an opportunity to own quality coins at a good price.
Remember to Pay Your Debts:
Paying off your debts this time around should be one of the best options you have got. Many institutions are shutting down, many of your creditors including the banks need cash.
This is a good time to pay back your loans and avoid borrowing or lending. Also, paying your creditors will help to keep your insurance money, emergency funds etc safe.
Which Coins Will I Buy?
I know this is the question that will eventually come to your mind. You will be looking for ways to check the very best coin to buy. But then, you can follow these steps to know what coin you can buy.
- Highest Trading Volume: Check for the Coin with the highest trading volume during this period. At least $100 million trading volume.
- Use Case: Now is the time to check for assets with real use cases. You can always see the performance of an asset by researching diligently about it.
- Look for the coin with the highest gains since its launch.
During this period, keep your finance safe and always stay in doors, practice social distancing, report any suspicious case of coronavirus to NCDC – Nigeria Center for Disease Control.
“All Nigerians are called on to #TakeResponsibility in preventing the spread of #COVID19 in Nigeria Practice & talk to your community about”
Always practice the following safety measures:
- Avoiding large gatherings & physical contact
- Disinfecting surfaces
- Sharing information from official sources
We encourage you all to stay safe and practice the above safety measures.
This is not a financial advice. All the information shared here should not be taken as a financial advice. We will not be liable to any damage caused using this information whether in part or full. Always seek the assistance of a registered financial advisor.