The Managing Director and Chief Executive Officer, Sigma Pensions Mr. Dave Uduanu, has urged youths to adopt the habit of setting aside some amount of their income.
This, he said would enable them achieve financial independence.
He said this while speaking to youths at a master class session organised by the Junior achievement Nigeria (JAN), as part of their 20th anniversary youth leadership conference in Lagos over the weekend.
Uduanu, whose firm supported the forum added: “By starting pension saving immediately you start working, you are on your way to financial independence. You can start early; how much you save depends on you. The trick is that, from studies, if you save 20 to 30 per cent of your income from the day you start working, you are on your way to financial independence.”
Furthermore, he said as they become salary earners, they should work towards increasing their savings percentage.
He said: “Now as your income increases, the rate of increase in consumption should be lower than the rate of increase in income. This means that your savings rate should go up.
“If you start pension savings at age 25, and by the time you are 60 years, depending on the quality of your savings, and when you leave it in an account that compounds at 15 per cent a year, buy the time you are 60, it is going to worth a lot. But the trick is you need to start early.”
He added: “The other trick is, when the money is being invested, don’t touch it. Another distinction you need to make is that there is a difference between savings and investment.
“And there is a difference between investment and business, or ventures.”
“People often mix it up. People often think that their business is their retirement savings; it is not. “Your retirement savings account is that pot of money that you don’t touch till you retire.
“It has to be a conscious effort to be discipline on it till retirement. That pot of money should be kept intact, and you shouldn’t touch it.”