Some months ago, Nigerian Twitter trended #RedFlag, an allusion to warning signs. It reminded me of the headaches I’ve been having for the last 2 years over a few of my investments.

Some institutions my investment company did business with, defaulted on their obligations. Suffice to say, it’s was harrowing as we had meetings back & forth, as well as several phone calls and email engagements. But, I was reminded of why due diligence is so important. Here are a few lessons:

• Always have legal agreements in place for all your investments, including web-based platforms. For websites, read the Terms & Conditions carefully, as that is the agreement that binds you.
• Ensure you are entering into an agreement with a legal entity or company that has significant assets, and not just an individual.
• Insist on knowing who the beneficial Directors of the company are.
• Be sure there are multiple signatories to the bank account to minimise key man risk.
• Do business with people who have personal integrity and shame. They will not hesitate to dip into their personal assets to settle debts. They will also be responsive and not dodge your calls.

Based on my experiences, I introduced an additional module on Due Diligence to my online investment course. There are up to 20 different items you can check before investing in anything. In my course, I also call out online platforms that have significant Red Flags.

Necessity is the Mother of Invention

I lost a significant slice of my income this year. A company I invested in is struggling, and so my dividends have been temporarily stalled. I had three choices:

• Go low: Reduce my expenses and wait for the company to rebound.
• Go deep: Generate more income from existing sources
• Go wide. Generate new sources of income

I chose to Go Wide. There’s a knowledge product I’ve been sitting on for months, that I was forced to finally launch. I was initially lazy about it because it would take some work to finish the curriculum. Losing one source of income was the wakeup call I needed.

It’s true people! You need multiple streams of income in an unpredictable market. When one door closes, simply open another.

On that note, what additional streams of income are you adding before the new year?

Best wishes on your investment journey.