Investing Money

The phrase “money should work, not lie under the mattress” is known to
everyone, but it is much more difficult to “get” them to work, that is, to
determine ways of investing. So it’s time to talk about what contribution
correctly invested money can make to your budget and what investment
options exist.
To be honest, there are many applicants for the free money of a private
investor: these are banks, financial institutions, ordinary shops, and even
scammers. So, you need to carefully consider where to invest and what lies
behind the process.

There are several important points that it is essential to learn before you even
decide to invest your savings in something. First, you need to know about
these important points
Do not invest your last cash
The experts from Sky Marketing suggest that First, that does not invest every
bit of your money. Always make sure to have some backup in case of an
emergency. Also, never try to spend your salary as daily needs are to be
fulfilled. You can use money as investments like savings, bonuses, or free
money.
Do not start with large sums
Invest money that you can afford to withdraw from your personal or family
budget without fear of being aground. Private investment is not a game of
chance, but a process that requires knowledge, skills, and therefore it costs a
little to learn.
Always remember the risk
Any investment of funds carries risks of different levels. Learn to calculate
them and find out how to reduce them (for example, compiling a diversified
investment portfolio is the case when you invest in several different
instruments). Simply put, do not put all your eggs in one basket.
Do not use doubtful sources of information
Unfortunately, there are a lot of useful virtual sites on the Internet that offer
attractive but dangerous strategies. Refer to official sources – sites of certified
brokers only.
Moreover, serious companies have available mobile applications – this way,
you can invest and monitor the movement of your money in real-time,
wherever it is convenient for you.
Diversify your investment
DO not invest in one place, use different tools of investment like choose
sophisticated strategies, and combine methods of generating income. In the
conditions of the modern economy and current situation, it is better to diversify
your investment portfolio not only by instruments but also by industry and
country of issuers, timing, reliability, and liquidity. So you somehow insure
yourself against losses.

Invest only in the place or tool which you

understand
You must have an accurate idea and knowledge of your investment tool of
how your money will work, due to which and in what time frame the income is
formed, what risks you can incur.
Be sure to try reinvesting.
Even if the first was not the most successful, analyze your mistakes, evaluate
new opportunities, consult with a broker, and try again.
Work with professionals, especially at the initial
stage.
Working with a broker or a professional company such as capital smart
city allows you to avoid stupid and offensive mistakes, learn how to work with
tools, and gain access to exclusive analytics, without which competent
investments are impossible. And most importantly, remember: a professional
broker guarantees the transparency and accountability of all operations. If this
is not the case, refuse the services offered to you.

Now as I have told you some essential things to remember before investment,
let’s talk about investment opportunities which you can have on a small scale
1.Investing in yourself
I know it sounds weird or worthless, but you should think about yourself first.
Invest in your health, education, appearance, personal development.

This is one of the most win-win investment options – after all, becoming the
best version of yourself, you will not only change the quality and perception of
life, but you will also be able to earn more.
Minimum investment:
Investing in your self is as low as 10 rupees and as high as in Millions and
billions. It’s all on you.
2.Bank deposit
Perhaps the most popular and understandable way to invest money: you bring
the amount to the selected bank, indicate the term, choose the interest rate
and conditions, and at the end of the time, take the money or capitalize the
interest, prolonging the deposit.
Minimum investment:
Bank deposit also does not require a large amount of investment, but still,
there are some rules and terms of banks. So it is reasonable to start your
investment at least from 50,000 rupees, but you can begin to deposit from 100
rupees in the bank also.
3.Currency operations
Another popular way to increase your saving is currency operation. You can
simply buy and sells a currency in a nearby bank, trying to catch exchange
rate differences.
In currency operations, you can transfer all the money in dollars and stores it
at home or on a bank deposit with a meager percentage. And when dollar
rates get high, you can simply change it to your currency (rupees) again.

This is still a reasonably reliable, liquid, and profitable way of investing. But if
you deposit your dollars in the bank, then they might charge you some interest
or make you follow their policies and rules.
So for more profit, save you dollars at your home. Or it is better r to use the
services of a broker to benefit from exchange rate differences, perform
transactions at the right time, and not overpay the bank.
Minimum investment:
You can buy currency starting from 1 dollar. So your initial investment
depends on rupees against the dollar. Let’s say the minimum amount as 100
rupees only.
4.Stock market
A private investment tool that everyone has heard about: at least, many of us
from our grandmothers and parents have shares in the stock market
This is a profitable way of investing. But most private investors do not
understand how to enter the stock market and what the benefits are.

It’s simple: an individual cannot be allowed to bid, which means that you need
to contact a broker for help. The broker acts as an intermediary who, on your
behalf and at your expense, will operate with securities or exchange
commodities acquired by you, record income, pay taxes. For this, he will
receive a small commission.
Besides, you can purchase securities (stocks, bonds) from the bank and sell
them again to the bank after some time. In addition to foreign exchange gains,
a securities holder may receive dividends (per share) or coupon income (per
bond).
The disadvantages of this type of investment include the complexity and need
for training, as well as the riskiness of investments; the pluses are the
potentially higher profitability, long-term and reliable investments, as well as
the ability to combine tools and build investment strategies.
Minimum investment:
Stocks allow you to invest minimal, as low as 10 rupees only.
5.Real estate investment
Investment in real estate is one of the most common and popular investment
methods.
There are several options: buy an apartment and rent it out, buy an apartment
at the construction stage and sell the finished one at an increased price,
invest in the repair of old housing, and sell it more expensive. Buy residential
or commercial plots in housing societies and sell it when their market
becomes high, buy houses and sell it on commission or put it on rent. Buy any
shop and put it on rent and sell real estate for office.
This method as the right to exist, but has several disadvantages also: you
need a significant sum of money for investment even in the beginning, more
than a million. There is a risk of reliable property agents, but you can search
for trustable property agencies like Sky Marketing.
Low liquidity means you need to wait before selling your property at a profit as
it takes time. Also, another risk is a fraud of society developers. They can be
fake. But all of these can be solve if you have experienced and reliable
property agent.
Minimum investment:
It requires high investment than others, as real estate’s properties like houses,
lands, shops, etc. are expansive. You need the placement of at least ten lacs.
6.Collection of valuable Arts
Investing in artistic values and collecting: stamps, books, money, paintings, art
objects, exclusive jewelry, cars and antiques
This investment is one of the most luxurious and romantic ways to increase
capital. There are two problems: the first – it is costly to buy such things, the
second is exceptionally illiquid investments, it is complicated to find a buyer
for the collection. However, if you have big money and appropriate links, then
go for this option.
Minimum investment:
It also requires high investment, as valuable art is very expansive and only
affordable to rich people. You need at least 5 lac to buy a little thing.
7.Travel investment
This is a different and new investment approach but perfect for youth.
You can travel, develop language skills, communicate, blog, and make money
on it. By the way, the blog itself is also a new-fangled way to invest with a
small entry threshold. But here we need talent, luck and the same big idea, so
as not to get lost in terabytes of information.

Minimum investment:
It depends where you want to travel, but you can start moving to 10,000
rupees only.
8.Networking Investments
It is also the new investing method, not one of the stereotype methods.
It is simple: You buy tickets for cool events, lectures, exhibitions, conferences,
get to know the necessary and useful people, and then try to use the
connections for your benefit. For example, to find highly paid jobs in the
capital regions or sell tickets on commission.
Minimum investment:
You just need minimal amount for it, starting from 1000 rupees only
9.Innovation and venture capital investment
Innovations and venture capital investments today appeal to everyone – from
venerable oligarchs to private participants in crowdfunding companies.
Indeed, you can invest in the development of a technological startup or a
separate product, but it is expensive, lengthy, and hazardous.

Minimum investment:
It requires an investment of 1 lac, as you are investing in a company.
10.Personal business
Your business is a great way to invest if you have a high-quality idea. Starting
your own company or business, even on a small is scale, and is one of the
most creative ideas to invest your money. But you should keep in mind that
starting anything from scratch means a lot of hard work and wait. You cannot
get any profit at the start; you need to work, work, and work on it. Then after
some time, you will see results.
But as we all know, the market is very competitive nowadays, so you should
consider all the pros and cons before starting your own business. Also, do not
try to make a big setup at the start. Initiate at a small level go for online
business options first. It will be saved and a more stable way.

Minimum investment:
For starting your business, you need at least 1 lac rupees as an initial
investment.
11.Term Deposit
If you have a long-term aim for your investment and can wait for the outcome,
then a term deposit may provide a trusted method to generate prospects
towards your goal.
A term deposit is very similar to a savings account, so you deposit your cash
using a bank and make it to earn interest over time. Many times, the more the
duration you consent to collect your cash for, the higher the interest rate you
may make.
The primary difference between a word deposits along with a savings account
is that there is no simple way to make withdrawals from a term deposit. As
soon as you have deposited your money from the reports, it is going to remain
in there till the conclusion of this pre-set term.
Even though this means less versatility, besides, it eliminates the desire to
break out of your investment program and dip into your savings. You also do
not need to be concerned about meeting ailments to maintain enjoying a
higher rate of interest, like making regular deposits.
Besides, since the particulars of a term deposit have been beforehand, you
may quickly calculate just how much you can make in interest beforehand,
and price range accordingly.
Minimum investment:
A reasonable amount to invest is in lacs, but you can start from 50,000
rupees only.
12.Bonds, Fixed Income and Money Market Accounts
Bonds or fixed income is like investing in government banks only. If you fixed
your income or money, then you get it back any time you want. Also, you get
some amount of profit on it, but this profit is minimal, so you do not find fixing
income as a profitable way of investing, but your actual money is save
Buying bonds from the government banks is just like buying the lottery tickets,
but you can return bonds any time and can get your full money back without
any deduction. Also, if you have bonds and you are lucky enough, then you
can win cash in bonds. This is the only profit that is available on bonds.

 
You can fix or buy bonds in a minimal amount as low as 100 rupees
13.ETFs
ETFs are called Exchange Traded Funds. It is like the hybrid of mutual funds
and equities like security or stocks etc.
It has one of the features of general mutual funds as ETFs allow you to invest
your money into several assets. Still, only from a particular area of investment,
for example, you can invest only in shares, currencies stocks, etc. but not in
companies or small scale business.
The variance is that instead of purchasing units in an ETF as you would do in
mutual or managed funds, you can only buy stocks or shares in an ETF. It is
just like purchasing equities in the stock market. After that, if you want to, you
can trade or sell your stakes.
One of the perks of an ETFs is that buying stock or shares is often more
rapidly, more flexible, and less expensive than purchasing units in mutual
funding. Also, ETFs can give you a more straightforward method to invest in a
range of assets as in Mutual funds.
But you cannot do it yourself; You need to pay the authorized brokers while
trading or investing in ETF shares.
Minimum investment:
As ETFs or Exchange Traded, Funds are treated as shares and stocks; that’s
why you need investment money at least 10,000 rupees.
14.Mutual Funds
In Mutual funds, your pool up to your money with your friends or other
shareholders who want to invest their money but have fewer investments.
Then you can buy shares or invest whole money on some businesses or
companies as you want too.
Profit or loss will divide according to the percentage of money everybody has
invested in this pool.

 
Mutual funds allow you to invest according to your will, and you can
start your investment from 1000 rupees only.
(You should also read about Park View City)
15.Peer-to-Peer Lending
This type of investment includes Banking, saving your investment with intense
calculations. One way to explain peer to peer lending is like consider it as the
“Uber,” but instead of a car, it is for money.
In peer to peer lending, mostly two persons are involved.
One individual who needs to borrow t the person who has extra money in
cash asks to borrow. This arrangement is made with interest just like in banks,
a person who I am giving money put some attention on the funds on returning
as the profit.
There can be direct contact between two parties, or mostly a third party is also
involved in it. Who has links and connection and help appropriate people to
find each other. They mostly take some commission for this purpose. There
are many websites also which let you find lenders and borrowers.
This type of lending does not provide any guarantees as there are present in
another traditionally-structured credit.
The lowest sum of cash that you can invest in a Peer to peer lending can be
1000 rupees. It all depends on you. But you need more investment if the
demands of borrowers for the loan in the market are high.
Minimum
Investment required Profit return on Risk factor on The period of p
name amount in investment investment return
rupees

Investing in
As low as 10 High None Starts immedia
yourself

Bank Deposits Only 1000 Less None 4 to 5 years

Currency
As low as100 Variable none Variable
operation

The average return

Variable (depen
Stock market As low as10 can be 10%. but, it Medium
the market)
can change
 Real estate Variable (depen
10 lac High Less
investment the market)

Collection of Variable (depen

5 lac High None
valuable Arts the market)

Travel
10,000 Low None Starts immedia
investment

Networking
Only 1000 Low None In days or mon
Investments

Innovation and
1 lac High Less 1 to 2 years
venture capital

Personal
1 lac Variable High 1 to 2 years
business

Term Deposit 50,000 Low None 5 to 6 years

Bonds and Variable(somet

As low as 100 Low or none None
Fixed Income never)

Variable (depen
ETFs 10,000 Variable Variable
the market)

Variable (depen
Mutual funds 1000 only Variable Variable
the market)

Peer to peer
1000 only High None In months
lending

Some Ways where you should not invest

There are several areas and things that you should not invest in, since such
an investment is essentially just purchase and will not bring any added value,
and in some cases also entail expenses.
 Serial jewelry – even if it’s costly diamond jewelry, it’s still a piece of factory
jewelry that does not have much value and can be obtained after a couple of
hundred years;
Cars (not collection cars) are the worst investment: firstly, the car will require
new and new costs, and secondly, the dealer proverb tells the truth: “A car
that drives out with a buyer outside the passenger compartment gates
immediately loses half the cost”;
Technology – almost without comment: it becomes obsolete in less than a
year;
Virtual things: tanks, game mana, bitcoins, cryptocurrencies, etc. .. It’s just
not worth buying virtual stuff for real money; the risk of losses and legislative
risk is too high.
Investments in gambling, lotteries, sports and other sweepstakes, funds
for the development of promising drugs, and so on, also look completely
unjustified and even dangerous. Behind all this are smart people and even
more intelligent machines and programs that will find a way to leave you with
nothing at best, and with debt at worst.
How to start investing
If you are planning to invest and need some guidance and essential points to
remember so you can build an excellent investment portfolio of yourself, then
here are some tips and suggestion which can help you to get on track:
 Do proper research – First things first, find answers to initial questions
like how much amount of money you can afford to invest, what are your best
options, and what sorts of venture items can help you to reach your goals.
 Be acquainted with investment risk and threats – Analyze how much
risk you are ready to take and also what sorts of investment items will help
you to reduce risk factors. Various investment items have diverse levels of risk
with them, so it is your job to realize the risk which is involved in every
investment opportunity or strategy which you are thinking about.
 Consult with professional or an adviser – As you are starting new
investment plans, Do not consider yourself as an expert; have a meeting with
professionals and ask them as many questions as you can so you can
understand every aspect of your investment strategy. Organize several
meetings with such professionals and experts.
As you can see, there are many investment options for every taste and any
starting amount. The main thing is not to be afraid of anything, to start, not to
stop gaining knowledge and experience, and not to let things go by
themselves. To paraphrase famous lines, do not make money being lazy.
Work for the result.
Now finding the best option for investment depends on you, where you find
the most productive and save way to put your money. Just analyze your
acceptance level for risk, the sum of money you want to capitalize, and your
investment timeline. After that, select the investment opportunity that fits
perfectly in your circumstances. Best of Luck!!
NVESTOR'S TUTORIAL
Every successful investor starts with the basics. Anyone with a small amount of savings can start investing
through the various investment vehicles available in the market. It is important to remember that investment
unlike gambling is not a get-rich-quick scheme and requires a long-term commitment.

Year after year, we hear stories about people of very modest means who start investing over a long period of
time reaching financial security, and goals such as: buying a house, paying for a child’s college education, and
a comfortable retirement.

Through these lessons, we will help you understand the investment process, the miracle of compounding,
investment strategies and the types of investment products available in the marketplace.  After you have
finished reading these lessons, please visit our knowledge center to acquire deeper understanding about these
topics.

Lesson 1

Saving and investing

Generally one places savings in a product or scheme that allows ready access to funds on an as and when
needed basis. However, the tradeoff for ready access is lower returns. Savings products may include savings
accounts, chequing accounts (earning low interest) and certificates of deposit.  It is always advisable to set
aside savings to cover a personally benchmarked sustenance period in case of emergencies such as sudden
unemployment, medical illnesses etc. 

Money left in ordinary savings account with a bank will not keep up with inflation. Simply put, inflation is the
rise in prices relative to money available. For example, if you save Rs.100 today that can buy a kilo of rice,
years later if you withdraw that the Rs.100 plus interest earned on it, you may only be able to buy half a kilo of
rice.  For this reason, people look to investing so that they can counter the effects of inflation, and earn more
over a longer period of time.

However, one must realize that money invested in securities, mutual funds, and other similar investments may
earn you better returns but your decision to do so carries more risk.

Lesson 2

What is compounding?

Compounding is generally defined as the process of generating more return on an asset's reinvested earnings:  
to work, it requires two things, the reinvestment of earnings and time. This rapid growth takes place because
the total earnings along with the original principal amount invested, earn money in the next period. It is the
best investment tool available for young investors. This phenomenon based on the time value of money is also
known as compound interest.

Example:

How much does your daily soft drink cost? Would you believe Rs.466 or more?

If you buy a soft drink every day for assuming Rs1, it adds up to Rs. 365 a year. If you saved the Rs. 365 and
put it into an investment that earns 5% a year, it would grow to Rs. 466 by the end of five years, and by the end
of 30 years to Rs. 1577.50  Over time, even a small amount saved can add  up to a large sum of money.

Lesson 3

Knowing your goals, risk tolerance, and time horizon

We all have different goals, risk tolerance, and a time horizon; your investment strategy will be guided by your
individual circumstances.

Goals

What are your goals for investing? Are you trying to accumulate money for a comfortable retirement or college
education for your children? It is important to understand why you are investing, and the result that you want.
However, before investing any money it is important to know your risk tolerance.
Risk tolerance

All investments involve risk in one way or another. How much of a decline in the value of your investment can
you tolerate? You should have a realistic understanding of your financial ability to withstand large swings in
the value of your investments. If you take on too much risk, you could panic in a market decline, and sell at the
wrong time. Your risk tolerance is dependent on when you need the money.

Time horizon

In general, you should have a long-term horizon to recover fluctuations in the value of your investments. Your
time horizon is dependent on your age. For example, younger investors who are in their 20’s or 30’s while
saving for retirement can better weather fluctuations in the value of their investments due to their long time
horizon. Accordingly, they can take on a bit more risk.

Older investors who are over 60 years of age have less time to recoup their losses in the market and should not
take on too much risk. Your investments should match the time horizon during which you will need the
money.

You may have heard about day traders who buy and sell stocks on a daily basis, sometimes winning and other
times losing money. This may be fine for professionals but never a good idea for the average investor.

Lesson 4

Types of investments

There are many different types of investments available in the marketplace such as individual stocks, bonds,
mutual funds and other alternative investments. For our lesson, we will discuss stocks, bonds, and mutual
funds.

Stock

Also known as shares or equity. A stock is a type of security that gives you ownership in a corporation and
represents a claim on part of the corporation’s assets and earnings. There are two types of stock: common and
preferred. Common stock entitles the owner to vote at shareholders meetings and to receive dividends. 
Preferred stock does not have voting rights but receives dividends before common shareholders, has a
preferential claim on the company’s assets if the company goes bankrupt and is liquidated.

Bonds
When you purchase a bond, you are effectively lending money in exchange for periodic interest payments plus
the return of the bond’s face value when the bond matures. Governments and corporations issue bonds to raise
money.  Here are some of the terms used with respect to bonds:

 Face value is the amount of money the bond will be worth at maturity
 Coupon rate is the rate of interest the bond issuer will pay on the face value of the bond. For
example, a 5% annual coupon rate means that bondholders will receive Rs.50 every year (5% x Rs.1000
face value = Rs.50).
 Coupon dates are the dates on which the bond issuer will make interest payments. Typical intervals
are annual or semi-annual (every 6-months) coupon payments.
 Maturity date is the date on which the bond will mature and the bond issuer will pay the bondholder
the face value of the bond.
 Issue price is the price at which the bond issuer originally sells the bonds

Because fixed-rate interest bonds pay the same interest rate over time, their market price will move up and
down with changes in the prevailing interest rates. The price of a bond moves in the opposite direction than
market interest rates—like opposing ends of a seesaw. When interest rates go up, the price of the bond goes
down; when interest rates go down, the bond's price goes up.

For example, if a bondholder purchases Rs.1000 bond when prevailing interest rates are 5%, the bondholder
will receive Rs.50 interest income annually. However, if interest rates in the economy drop to 4%, the bond
will continue paying 5% coupon rates, making it a more attractive option. Investors will be willing to pay a
higher price for these bonds until the effective rate is 5%.   On the other hand, if interest rates rise to 6%, the
5% coupon is no longer attractive and investors will be willing to pay a lower price for the bond until its
effective rate is 6%.

Bonds can be classified into a fixed rate or floating/variable rate. In Pakistan, either the government or the
corporate sector issues bonds.

Government Bonds

 The different types of bond products available in the marketplace include:

 Pakistan Investment Bonds (PIBs) are long-term, coupon bearing instruments with semi-annual (six
monthly) coupon payments with maturities up to 10 Years. State Bank of Pakistan issues bonds in
multiples of Rs. 100,000. Auction schedules and targets for fresh PIBs issuance are announced on a
quarterly basis.
 Treasury Bills are short-term, liquid zero-coupon government debt instruments sold at discount to
face value with terms of up to 1 year. Auction conducted by SBP on a fortnightly basis.
  Ijarah Sukuk are low risk medium term investment instruments with floating coupon payments
issued and guaranteed by the government of Pakistan. They pay semi-annual profit and are Shariah
compliant

Other types of government bonds include National Saving Bonds and WAPDA Bonds.

Corporate Bonds

A corporate bond is a debt security issued by a company to meet its financial requirements. In Pakistan, these
are commonly known as Term Finance Certificates (TFCs) and are normally issued for a specified period, with
an assurance for return of principal amount of the certificate plus interest to the certificate holder.

Mutual funds

A mutual fund is a collective investment scheme that pools money from many investors.  The money is
managed by an asset management company (AMC) duly licensed by the Securities and Exchange Commission
of Pakistan (SECP). A majority of mutual funds in Pakistan are open-end funds which create and sell new
units on a continuous basis to accommodate new investors. The money is invested by the asset management
company on behalf of the unitholders in a portfolio of securities or other financial assets for profits and
income.

Under the regulations, an independent trustee registered with the SECP has custody of all mutual fund assets.
The trustee is obligated to ensure that AMC Invests the fund’s assets in accordance with the approved
investment policy and authorized investments of the mutual fund.

Distinguishing characteristics of mutual funds include the following:

 Mutual fund units are purchased from the fund itself (or through a distribution agent for the fund)
instead of from other investors on a secondary market, such as the PSX.  
 The investment portfolios of mutual funds are managed by separate entities known as “asset
management companies (AMCs)” that are licensed by the Securities and Exchange Commission of
Pakistan.
 Under the regulations, an independent trustee registered with the SECP has custody of all mutual fund
assets.
 Each unit/share represents an investor’s proportionate ownership of the fund’s undivided portfolio;
each unitholder shares equally with other investors in distributions.
 Price paid for mutual fund units is the net asset value (NAV) per unit and any sales load.
 Unlike other securities, there is always a willing buyer for your units; an open-end mutual fund must
redeem shares at the net asset value, meaning investors can sell their shares back to the fund. 
 Majority of the income earned by the mutual fund’s portfolio is given back to the investors/ unit holders as
illustrated below:

===============================-

Real Estate the Best Investment in

Pakistan
 July 4, 2019

 admin

 Category: Blog, Life Style

To act of investing can be simply defined as the allocation of resources with the
expectation of reaping benefits at a future time. Something which is common with
all investors is that all of them expect to gain maximum out of their investment. In a
developing country like Pakistan, getting the most out of direct investment can be
considered a huge achievement.

The potential attractiveness of investing in Pakistan has traditionally remained

lower than neighbouring India, but equal to Sri Lanka and Bangladesh. Against the
backdrop of a challenging security environment, electricity shortages, and a
burdensome investment climate the potential attractiveness of investing in
Pakistan improves very slowly.

This also shows in World Bank’s global ease of doing business report 2019, in which
Pakistan was ranked 136 out of a total of 190 countries in World. Simply put, if you
do have some extra bucks and you wish to invest them you do have a tough time in
deciding where to invest them for a safe and good return.
One of the fastest-growing sectors of Pakistan over the years is the Real Estate
sector. Pakistan spends about $5.2 billion on real estate related construction in a
given year. Investing in real estate involves the purchase, ownership, management,
rental and sale of real estate for the sake of profit. According to FPCCI (The
Federation of Pakistan Chambers of Commerce and Industry), real estate agents
are playing an important role in the economic development of the country since
they facilitate the investors and make them realize their potential gains. 

The traditional investment options in Pakistan have been investing in stocks, bonds
or mutual funds, agriculture, gold, currency exchange etc. has been typically
unattractive for some time now since they end up delivering about 7% to 9% net
return, which is better than nothing when compared to the same investment made
in real estate in Pakistan. On the other hand, there are passive investment options
that do allow you to have more control, greater return and, a sustained return. One
of the best options for passive income in Pakistan is investing in real estate. 

Investment in agriculture Sector; Issues and challenges:

Pakistan is an agriculture-based economy, where the majority of the population

directly or indirectly depends on this sector. The agriculture sector contributes
around 24% to gross domestic product (GDP) and accounts for half of the employed
labour force. It has been a big source of foreign exchange earnings, but sadly the
sector has been neglected over the years. Therefore, in agriculture, it is vital to
identify and evaluate risks to be sure that decisions made on the farm will bring
positive results. So, investment in this sector is very risky and no one is sure about
its advantages. 

Pakistan is an agriculture-based economy, where the majority of the population

directly or indirectly depends on this sector. The agriculture sector contributes
around 24% to gross domestic product (GDP) and accounts for half of the employed
labour force.

Investment in Textile Industry; Challenges Faced by the Textile Industry of

Pakistan:

Another option is to invest in the Textile Industry. The textile industry is the

largest manufacturing industry in Pakistan. Pakistan is the 8th largest exporter of
textile commodities in Asia. Textile sector contributes 8.5% to the GDP of
Pakistan. In addition, the sector employs about 45% of the total labour force in the
country (and 38% of the manufacturing workers).

Due to an increase in rates of electricity and raw materials, along with elimination
of tax regimes over the world and free trade agreements, investing in textile has
not remained as attractive over the years. Due to these difficulties over 125 textile
units have closed down in the last couple of years with majority caving into the
pressure in 2018.

Gold; cons of investing in gold

In Pakistan a lot of people also invest in gold as gold prices are usually on a
constant upward trend. Hence, the risk of losing out on your investment is very low.
However, investing in gold brings back just meagre returns at best. Currently, the
state of the international economy is suggestive of the fact that investment in gold
might not remain as attractive. No doubt; gold price has been climbing for two
decades but the international scenarios shaping up are suggestive of the fact that
this bubble will burst soon as well.

Investing in Saving accounts and ISSUES

People also chose to invest in saving accounts or National Savings Bond through
which they earn a return at a fixed interest rate. Devaluation of Pakistani currency
and inflation is usually greater than the return which is offered by banks. Similar to
gold, return on this investment is usually small that is why more people avoid
investing in saving accounts.

Investment in foreign currency and forecasted ISSUES

Another investor favourite has been foreign currency (commonly US Dollar) to

realize a gain on investment because of the fluctuating exchange rate (usually a
negative trend for Pakistani rupee). With the current exchange rate trend, this
might seem like a suitable option at this time.
However, this is not a long term investment as this option will seize to be attractive
as soon as the economy starts to stabilize a little. Also, since the exchange rate is
fluctuating a lot and it’s prediction is difficult so you also might end up losing your
investment. This is something which changes daily, if not hourly, so the effort is
never proportional to the effort and the money that has been put in.

Investment in Real Estate; why it’s a good time to invest

in Pakistan’s real estate?

Another sector to invest your money is real estate. Millions agree that real estate is
among one of the best types of investments as the pros clearly outnumber than
cons. Although the real estate market has been slow for some time now and there
have been quite a few scams in the market to shun away investor interest. The trick
of the trade is to choose the investment destination carefully and after scrutiny. If
due care is taken then investing in real estate is something that brings unparalleled
returns.

The returns are far better in terms of numbers and the time span in which they are
realized. Other benefits of investing in real estate include potentially stability,
inflation hedging, diversification, and convenience, surety of ever-increasing
demand and security of investment. It goes without saying that there are
many benefits of investing in real estate that outweigh the costs, and you as a real
estate investor could be earning a steady flow of income to secure financial
freedom in the longer run. 

Although the smaller cities have now opened up as well the traditional high return
real estate markets in Pakistan have been Karachi, Islamabad, Lahore, Peshawar
and Faisalabad. Clearly so because these are the cities which have been
experiencing unprecedented infrastructure development in the last decade or so.

Islamabad expressway in Islamabad, Ring Road in Lahore and Peshawar, Bypass in

Faisalabad etc. These infrastructure developments have made sure that any and
every residential or commercial project in close vicinity of these developments has
had an unprecedented realization of growth in investment. Let us take Lahore as an
example and the effect that Ring Road has had on prices of different housing
projects around it;

Serial Number Housing Project Price in 2015 – 10 Marla Plot  (Lakhs) Current Price – 10 Marla Plot (Lakh

1 DHA Phase 5 72 125

2 Sui Gas Housing Society 26 38

3 State Life  Housing Society 33 48

4 Eden Garden 21 30

5 Valencia Town 75 90

6 Khayaban-e-Amin 25 42

7 Lake City 28 35

8 Fazaia Housing Scheme 18 30

9 Bahria Town 39 52

10 ZAITOOON New Lahore City 21 40

 
Similar trends have been observed in all cities undergoing rigorous infrastructure
development. Just by one-time investment, long term benefits will be cherished for
the investors. There are a wide range of options available when investing in real
estate, depending upon the down payment that you can make you get to choose
from a residential or commercial property or on-plan or off-plan property. Most
people also generate income by gaining rental income from the properties that
they own. Owning a rental property can bring about a sense of security because of
the steady income that it brings and the appreciation in the value of the property.