How to stay safe (even when you make risky investment decisions)

One of the things I enjoy, as a member of an investment club, is access.

Access to people with great business ideas who need funding to bring those ideas to life. I always find it very exciting.

Now, I admit, I’ve also seen some funny business plans that make me go, hmm..really? In Nigeria? (covers face)

But that’s a story for another day.

So, some time ago, my investment club received a business deck (a summarized business plan) and once I reviewed it, I thought it was too risky.

My investment partners disagreed.

They thought it was exactly what we needed to be doing; investing in aggressive business ideas

I found it really hard to understand why they wanted to invest in that particular business venture.

In fact, I got upset and defensive about it at some point and spent time getting myself worked up with these questions; don’t they know what I have sacrificed to contribute to this investment club? They just want to throw money into the drain? What kind of nonsense is that?…….bla bla bla

and that’s when it hit me.

‘Tomie, your investment club is not your safety bucket, it’s your growth bucket’

I’ve written a post about the bucket approach to investing before, If you haven’t read it before or heard me speak about it at any of my workshops, you can check it out here in detail

I’ll break down the bucket approach in a nutshell here; On your investment journey, you need a safety bucket, a growth bucket and a dream bucket.

Your safety bucket should cover at least 6-12 months (or more) of your monthly expenses and you can invest this money in safe investment options such as treasury bills, fixed deposits etc.

Once you’ve got your safety bucket covered, you can afford to take risks or invest in long term assets to build your growth bucket. Finally, you need to enjoy your life, so build a dream bucket to fund vacations or fun activities in your life (please don’t get all carried away with building wealth and not enjoy the present. That’s my mantra at the moment*)

Back to my story.

The realization that my investment club was my growth bucket stopped me in my tracks and scared me for a bit.

Suddenly, I felt ‘unsafe’

Are you in the same boat? Have you invested in an asset only for you to find yourself cash-strapped when you needed to make an immediate or emergency payment?

or did you start a business thinking it would be your safety bucket? I attended a TFD series in December where Mrs Awosika taught us how it’s possible to build a successful business and still end up poor. That got me as well.

A safety bucket protects you from unforeseen problems and challenges.

If you’re just starting out on your investment journey and you do not have emergency funds, focus on building your safety bucket first. Do a quick calculation of what you spend on upkeep on a monthly basis and multiply that by 6 or more months; That’s what needs to go into your safety bucket.

If you have cushion funds all saved up and you want to work towards retiring at a certain time, feel free to focus on growth and take some risks, after all you’re all cushioned up *wink*

Honestly, I really don’t think you should aim at playing safe all the time. What’s the point, right?

Sometimes you’ll need to take some risks, even if it’s in little steps. What’s really important is that you understand the risk you’re taking and give yourself a little buffer to avoid getting stressed out.

This is what smart investors do.

The goal is to protect you from unnecessary heart ache so you can take advantage of some relatively growth options.

So stay safe.



  1. I love this article. Even before I got to that part, I already knew that what u should very aiming for right now is a safety bucket. Thank you for sharing your experiences with readers. My passion for investment is deep, I just need guidance and discipline to meet my goals.

    • Now I know you paid attention at the ‘How to invest’ workshop. Lol. Glad to know we have something in common for investment; passion. Thanks for your comment.

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