How to Start Your Investment Portfolio Right from Your Salary?

Khurram
July 17, 2018

Many young people in Pakistan consider saving money rather investing because they find the process overly complex and full of risks. But the truth is different than what is told to the world or what general perception of the people is. In this article, we have discussed some of the basic investment options that can lead you to a healthy financial portfolio in your later life. Also, these ideas are something that you can be a part of, even with a limited salary.

Read also: How to Know If an Investment Scheme is a Scam?

Investing in Fixed Deposit

Fixed deposits are believed to be the safest form of investment and give you guaranteed results after the specified time duration. It will not only develop your habit to save but will also give you higher interest rates as compared to normal saving accounts. Another benefit of a fixed deposit is that it can serve you as a rescuer in your tough times or when you need a big amount of cash for an uncertain situation. If you are a salaried person, you must invest in a fixed deposit and ensure liquidity for any painful situation or hard times in your life.

Prize Bonds

Prize bonds are the easiest and a hassle-free way to invest with a limited amount in your hands. In this case, you are not only risk-free, the bonds guaranteed by the government and being an owner of the bond you can claim your money back whenever you want to.

The prize bonds in Pakistan come with various values starting from PKR 100 up to PKR 40,000. With this variation, you are not bound to invest a large amount or any specific amount of money in the market. You can start with a very small amount as well.

You can buy these bonds from the State Bank of Pakistan or any designated branch of a commercial bank operating in Pakistan. Your bond will have a specific serial number based on which the draws will be held every three months and if your number wins the draw you will be rich overnight. If not, your money is secure with the government, better luck next time.

Read also: How to Prepare Yourself Against Uncertainties in Life?

Mutual Funds

If you are not much interested in doing research and deal with the ups and downs of a business, a mutual fund is the best idea. You can keep your attention to whatever you are doing in your life and leave the hassle of business and market strategies to the expert who will be managing your funds.

Mutual funds are a pool of money where your assets are managed by the professional aided finance management companies. This is a professionally run business with the saving collected from the general public like you and invests that amount in a different business like real estate and stock etc. You will get the profit on your invested money after a specific time. If you are willing to invest your money is something but the savings are lower than what is required, you can invest in a mutual fund and make you money from it. In mutual funds, the risk is shared and it also offers a tax rebate in your investment.

Mutual funds are of many different types including; open-end, closed-end, low-risk, high-risk, equity or fixed income funds. It depends on you which of these you are willing to invest your amount in.

Become a Silent Business Partner

Do you know active businessmen in your circle that need some capital to expand? Investing your saved amount in that business will make you an angel investor for the business and that capital will help the business grow, giving you some extra profit in the invested amount.

business partner

Rather than thinking about it as a loan to the business owner, become his business partner. Let him manage everything that way he was doing in the past but the profit will be shared with you for any further deal made in the past. Being a silent partner to that business you will need to put efforts but just keep a check on the profit and loss sheet of the business.

Read also: Want to Know How to File Tax Returns in Pakistan? Read this Guide

Investing in Foreign Exchange

The term forex is used for foreign exchange trading and currency trading. It is the biggest market around the globe and is equally appreciated and operational. The market is highly liquid and makes a massive amount of trading on a daily basis. Although there are risks in investing in forex you can also make a lot of money if you are taking the assistance of the experts who are trained professionals in making a deal in the forex market.

forex trading

The forex market works round the clock and you can surely find an open market anywhere in the world. The high volume of liquidity offers you the opportunity to take your money out of the market anytime you want to. The forex market does not implement any restrictions and you can earn profit from rising and falling prices and you are completely open to make a deal anytime you want to.

Insurance Policies

Despite many arguments, the life insurance is advocated as a handsome investment plan. You can find many people referring you to the cash-value component of permanent life insurance and the options which can be considered as an investment idea. There are life insurance plans that can earn you tax-deferred growth which means that you do not need to pay taxes on any interest or to any dividends or a capital gain from the life insurance plan.

You can keep a policy till age 100 or as long as you can pay the premium. There are some life insurance policies in which you will not lose your coverage after set years or defined time. You can also put this money in savings accounts or in an account on which you do not pay fees or any kind of commission. A permanent life insurance can offer you accelerated benefits and help you in case you get seriously ill.

Read also: How to Manage your Expenses when you get Unemployed in Pakistan

Investing in Stocks

Most of us know that investment in stocks is something that can make you rich overnight. But it can also leave you with a massive loss if you are not working on the deals properly and the reason is that few of the new investors have the idea about how to make money from their shares in the stock market. However, if you are able to deal with the stock market dealing effectively you can earn a capital growth in your stocks and share prices. It will also help you to build a worthy financial portfolio to earn a profit in the future. The stock market offers you higher returns as compared to bonds or cash deposits and also offers some protection against inflation and in any such case, the corporate profiles increase in cash terms so that the dividends and the share prices can go up.

Pakistan Stock Exchange

Every person aims big in his or her life and if planned accordingly from the very first day, they could get success in achieving their goals. The advance technology aided lifestyle of this century have brought a wide range of opportunities to get your goals perfectly. However, a worthy financial portfolio can be of great help to you to achieve your goals. The above-mentioned ideas do not need a huge amount to invest but can lead you to greater benefits in your future.

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