I THOUGHT MY FUTURE WAS SECURE …. BUT IT WAS A PIPE DREAM
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Some years ago, I thought I had a secured financial future, but it was a pipe-dream. In the late 1990s and the early 2000s, I could boast of good savings from years of hard work. During that period, many Nigerians invested in bank stocks because the banking sector was apparently the safest and smartest place to invest.
Although lots of people were talking about the trend, I didn't consider getting involved because I lacked the knowledge of the stock market. However, I was compelled to join the band wagon after a visit to my younger brother who is a banker. He had just purchased a brand new car and when I asked how he made his money, the answer was short and straight: "dividend from bank shares"; he told me about the huge dividend he received. He encouraged me to participate, because according to him and based on indicators, a quantum leap in prices of shares was imminent.
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Truly, bank stocks were rising rapidly, and many investors believed the growth would continue. The press and financial advisers encouraged people to buy more shares. It looked like the road to quick wealth; I joined the movement with full confidence. I didn't just invest in one bank, but three. At first, everything seemed promising; the value of the stocks kept increasing, and I was excited. Because of the positive sign, some people borrowed money to invest.
But without any warning signs, the banking stock market crashed and a huge amount of investments disappeared. What people worked for all their lives disappeared almost overnight. Many investors became financially and emotionally devastated; some suffered strokes because of the shock. Some who couldn't handle the pressure ended their own lives. I was deeply affected but I controlled my emotions because I was fully aware of the consequences. I almost became a philosopher as I kept asking myself questions like, “How did this happen? …. Why did I put all my eggs in one basket? …. What made me think that the price rise would continue forever?”
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The crash affected me and my family seriously, but I learned some lessons. The greatest lesson was the issue of diversification. I also realised the need to work harder in order to cover lost grounds. I was lucky the crash happened when I was still young and eligible to work. Though the rebuilding process was difficult, I accepted the reality and started almost afresh. From personal experience, I can boldly say that recovering from financial loss takes time, discipline, patience, and emotional strength. I had to adjust my lifestyle and tweak my plans. In a nutshell, that painful experience has taught me some lessons I love to share as follows:-
Firstly, it's dangerous to put all available money in a single investment, no matter how lucrative it appears. Second, greed should be avoided by all means; a huge rise in profit shouldn't be a motivating factor to dump all available funds into any investment. Some percentage should be reserved. Thirdly, life is more important than money; losing money could be painful, but it should never push anyone to the point of ending it all. And finally, downfall shouldn't be seen as the end, but a stepping stone to a higher level. If disaster occurs, brace up and rebuild; never resign to fate. It's not a bad thing to fall; but when you fail to rise up after a fall, it becomes a disaster.
What happened to the three banks I invested in? One was acquired by a foreign bank, but it's shaky till today; it pays negligible dividends. The second, which used to be one of the big-three banks in Nigeria, is still existing but not strong. I have not received any dividend after the crash. The third is doing well and I'm earning a dividend regularly. I have resolved not to sell the shares of the non-performing investments; I have the feeling they will bounce back …. someday.
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In conclusion, investing is the right attitude, but invest wisely; don’t follow the crowd. Never allow financial setbacks to affect your mental and emotional health, if an investment turns sour. Sometimes things happen to test a person; there's always a second chance to those who refuse to surrender. And talking about second chances, I am a case study; I came out of the stock market crash stronger. It offered me the drive to keep learning and keep earning. Though the painful incident is fresh in my mind, I no longer see only the money I lost. I also see the strength I discovered within myself; I'm talking about the “can-do” spirit that propelled me to remain active till today.
Thanks for your time to read what I can call my testimonial; it's my true life story. I will appreciate your comments or advice, whether it's a good idea to hold the shares of the non-performing banks or sell them off to wipe out the sad memories.
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