You might have heard about the importance of saving and investing money but do not precisely know where to begin. Everyone has a different financial situation. Some people have debts, and some are not making enough to save, while others do not have control over their spending habits.
Waiting to hit the jackpot someday, and then invest, is just not realistic and won’t help you in the near future.
The global economic aspect has drastically changed its orientation from limited to evolving considerably. Now, we see cryptocurrencies, the most trending concept of blockchain technology. This technology can revolutionize the financial world.
A few decades ago, there were very fewer options to consider before investing. But with time and increasing standards of living, people are more prone to upsurge their wealth. For this purpose, one needs to invest in some way. To make a smart choice about investing, you need information on the options available and the returns of different assets.
Since you are reading this blog, perhaps you have made up your mind to start taking your financial matters a bit seriously. If that is you, way to go! Whatever your current financial situation is, you can still get your life on track, save money, and eventually invest it too. Take a look at the following tips useful for money investment and saving tricks:
1. Set Goals
The first step to saving money or investing is to have some goals. It is not sufficient to just say that you want to save money. Coming up with a plan is utterly necessary, particularly if you want to put your money in the financial market.
So here is what you need to do: Ask yourself what exactly should you save or invest before putting it away. With goal-based money management, it is easier to handle your money and investments, as you will know when you can afford to spend more and when not.
2. Real Estate
Real estate is the most favored and traditional way of investment. The majority of people in Pakistan prefer to invest in real estate market if they have enough amount of money to invest in property. The investment in this domain typically gives attractive and stable returns. The mechanism follows the underlying economic fundamentals, as the population keeps growing, and there exists a limited area in the world to live in, the demand-supply gap remains.
Investment in real estate normally provides good returns, but this form of investment requires much patience because any profit earned would be seen over a period of five to ten years. Property professionals believed that people who have a mentality inclined towards conservatism prefer property because they believe it is a stable asset. Furthermore, the returns offered by the real estate sector over the past decade have shown meaningful profits compared to other alternatives. Though, from an investment point of view, real estate is still the most compatible domain with stable returns.
The stock market of any state is the reflection of its well-being in the economy and shows that companies are doing well, which makes up the economy of the state. Stock prices, in the longer run, show how good the company is accomplishing in terms of profit, which is then interpreted to complete economic performance.
Even though there is a risk attached to this investment option, stocks remain one of the most popular investment choices for Pakistanis. According to a report published in the Tribune newspaper, the number of Central Depository Company (CDC) accounts – the company where shares are placed in Pakistan – has improved over the last six years. Probably, the attraction of significant returns outshines the extreme volatility of the market and attracts people to it. Still, investors must keep in mind the risk factor.
4. Buy Gold
It is everyone’s all-time favorite way of investing money, and let us be honest, it is safe, and it is always rewarding. You can buy gold coins or bars, both of them will work. Gold is considered to be a great hedge against inflation, i.e., if you are worried that the value of the currency will decrease.
The aspect of currencies is somehow related to that of the stock market, and their variation is also linked with the economic situation similar to the stock market. In the case of currencies, there are two possibilities; either they strengthen or weaken against another. In the past, only companies and banks invest in the foreign exchange market, but as time passes by, the percentage of individuals in this form of trading has improved, and many are currently engaged with it.
The variation of currencies is generally driven by demand and supply. Currencies with high demand will have sky-high prices, while the opposite will lower. Nonetheless, demand and supply are determined by the economic developments and stability in the political front of a country.
Investment in currencies increases the risk factor, but at the same time, it enables investors to balance their portfolios. Trading in currency also provides for a hedge against exchange-rate fluctuation, helping many institutions against any adverse movement.
6. Prize Bonds
Prize bonds are the most trouble-free and convenient way to invest your money. They are not only hassle-free but also endorsed by the government to refund if claimed by the owner anytime.
There are several numbers of denominations of prize bonds ranging from 100 rupees to 50,000 rupees. This broad range allows people to invest even as little as 100 rupees, unlike the other investment options that require a large sum for better returns. These bonds can be obtained from the State Bank of Pakistan, the National Savings Centre, and some designated branches of commercial banks. Every bond consists of a serial number, based on which draws are held every three months.
7. Mutual Fund
You can not only save your money but gain a profit on it over time with mutual funds. There are no separate trades or purchases involved. They are generally available through investment firms and banks, and you are free to sell your shares at any time if you want your money. But if you wait, then the money that you have invested is returned with profit over and above your initial investment.
8. Diversify your Money
When investing your money, try to avoid putting all eggs in one basket. That means, for instance, do not just invest in real estate, invest in gold too. This is essential because certain investments may rise and fall in their value, so you got to act smart.
Before you invest your money, do some study, and find out which option would be most suitable for you. Invest because you want a better future.