commission

The agent at the estate agency in Lekki counts the money one more time before he hands the receipt over. Landlord wanted ₦2 million rent, tenant paid it, and the agent calmly kept his ten percent before passing the rest along. Nobody argued because everybody in that room knew the rule. Whoever makes the deal happen gets a cut of the deal.

Stockbroking runs on the same logic, just with shares instead of houses. When you tell your broker to buy ₦500,000 worth of MTN Nigeria shares on the floor of the Nigerian Exchange, the broker does not do it for love. A percentage of that ₦500,000 goes to them as commission, whether the trade makes you money next week or not.

This is worth knowing because commission is not tied to your success, only to your activity. A broker earns whether the stock rises or falls, because the fee is charged on the transaction, not the outcome. That is why people who trade too often, jumping in and out of positions, often find that commissions have calmly eaten a good part of their gains before the market even had a chance to reward patience.

It shows up outside shares too. A Nigerian in London sending money home through a transfer agent pays a commission on the amount sent, and a real estate agent helping someone buy a plot in Abuja typically charges a percentage once the sale closes. The shape is always the same. Someone connects two parties, and gets paid for making the connection work.

The lesson many investors learn late is to ask upfront what percentage a broker charges before placing an order, because that number determines how much of your money actually goes to work for you.