Comparison: Property vs US Dollar Bank A/C vs Pak Rupee Fixed deposit Bank A/C vs Gold.
Factors to consider: Less risk, Inflation proof, More Liquidity, More Secure, Less Tension and overhead or maintenance, more profit, Less Tax.
My views: Dollar and Gold have been the best performers for the past five years for all the above mentioned factors and the value dollar has almost doubled, while property and Rs. FD A/C have suffered due to high inflation and stagnant real estate prices.
Gold is best investment. Stock market also perform very good in last 4 years. Few blue chip stocks increase by 100% and also pay dividend and even bonus. Mutual funds like Meezan return is around 12% plus rebate in tax.
Property suffers most in last 5 years and still no chance of improvement. Due to artificial hype by few investors and dealers the prices of property start moving. But in my opinion the price of the plots in most of the area is same which is 3-4 years back the increases actually due to rupee devaluation.
If banks start giving a reasonable return on foreign currency accounts than investment in foreign currency is aso a very good option.
Although Gold did perform well in the past 5 years by getting an average of more than 18%, but in the current scenario one would have to gamble to put his eggs in the basket which is already inflated very well.
Also do consider the 10.15 % average rate of inflation in pakistan from 2003 to 2010. (Source : CIA World Facbook). so in the whole picture getting around 12% gains will not be considered as "gains" in a true sense, it will rather be considered as to merely just saving the face of your savings from hot blows of unstoppable inflation in Pakistan.
Regards,
@Okhalid,
My analysis will be in two parts.
In short run:
- Spontaneous trading of plots/property (esp in places like Islamabad) is lucrative.
- Spontaneous trading of gold is a bit risky now a days for the last 1 year. very very much fluctuations in rates.
- PKR account with annual profit rate is a foolish task. u even cannot cover you inflation rate by doing so.
- Keeping dollars in your pocket or in bank account (because of nominal rate of profit offered on FC) means waiting for the rupee to be devalue. at end getting nothing.
In long run:
- Investment in the gold is best option. I am watching gold prices for almost 10 years. starts climbing since Jan 2006. Avg growth rate is more than 40% p.a. approx
other priorities should be; 2. property 3. FC 4. TDR (PKR)
(NOTE: it is worth to mention here that this is purely my personal analysis/opinion. others have the right of disagreement.)
Here an idea arise in my mind.
Let's talk/discuss about trading of different commodities among inter/intra city. you know trading is and will be the best ever business.
Gold prices have risen up by 285% since June 2007 to June 2012 in Pakistan market. So one can say in the past 5 years it has been increased by an avg 50%+. So no doubt its a lucrative investment option proven at times.
Can anyone tell what is the best /safest/easiest method to invest in gold esp if you are stationed abroad i.e. mid east ?
Well gold has done very well in the past few years but now it seems a bit risky to invest too much in gold because of the high prices… and experts never ever advise to invest more then 10-20% of your total assets in gold because of the risk of gold prices falling. I bought some gold few months back now if I want to sell it it will be in loss.
the other thing about gold is the security element… if you keep your gold in the bank locker remember it’s only insured upto 5 to 10 lac! incase of bank robbery or theft or bank burning down etc. but your forigen currency account is more secure as these factors don’t affect it!
@Shoaib
Now you got my point of view. Well if you are interested to invest in gold then only and only buy physical gold. No paper gold no future investment. and also buy 24 carat TT Bar.
If you are in Dubai that is very good. I can help you there by telling address of the concerned people doing this business. They are Hindus. And purely businessmen.
@OKhalid
That's why I wrote that it is for long term investment. Your concern about the security measurements for gold is true. But you can hire several lockers in several banks/branches in most secured places.
By this you can spread your risk.
What if govt seizes FC accounts?
Remember risk is always there.
What has been a good investment in the past does not mean it will be a good investment in the future.
Thanks everyone for giving out their valuable suggestions and comments.
@Mr Arshad
You are right. Gold is been climbing vertically since 2002. If you see the Gold prices graph before it, say from 1992 to 2002 its price was almost stable in the course of those 10 years. So its right, no one can predict the future. May be things will get change 180 degrees in the future, opposite to that we all are anticipating now...
@Faisal
I am stationed in KSA. If I got Suisse Gold bars 24K from Gold market in Riyadh, What will be the safe method to keep those in abroad? and if i wish to take those bars back with me in Pakistan then what will be the safe procedure for it ? Handling Gold with safety is the prime issue with this sort of investment.
@Faisal
Govt seizing FC accounts is also a risk it has happened in the past once in 1998 but Pakistan is still suffering the economic consequences of that move ! Now the Govt. has made a legalization that state bank can never issue such orders and now the foreign currency of the commercial banks will always be separated from the govt. reserves!
Now after all this is govt again seizes FC accounts it would mean total destruction of the economy and the country. Already because of the earlier move in 1998 very few people are keeping their saving or investing FC in Pakistan even major foreign have closed their operation in Pakistan if they do it again! which they can never do I think! If they do it would really mean the end!
Anyway every investment has some risk... but FCA has very less risk than gold, property etc.
Sir how can I invest my 60,000 for a good income? I’ve no idea about investing money.
-Dollar is not a good investment because it covers only rupee devaluation against the dollar. In fact the dollar itself may be losing against other currencies, and dollar is also losing its purchasing power in the international market due to inflation. Therefore, dollar investment does not even cover against real devaluation.
-Gold is a reasonably good investment but is subject to 2.5% zakat per year which makes it not so good. Gold provides coverage against inflation and devaluation.
But gold does not give you a real return on investment. Why? The reason is that gold rises in the international market as rupee inflation rises. Most demand for gold is in india where people buy it for safe investment. Gold will do well these days because indian economy is slowing down and therefore people will have to switch their investment from slowing stock markets to alternative options like gold and diamonds.
-Real estate in Pakistan remains a good but risky option. During real estate slump it is a good time to invest in Islamabad, Lahore and Karachi. But Islamabad remains the best option. The prices of property in Islamabad if purchased smartly at the right places will give you coverage against devaluation and inflation but may not give you a good real ROI in the short term. In the long term it will give you security plus ROI.
If anyone want to invest in dollars, I believe it is much better to invest to buy property in abroad such as canada / Australia.
I live in canada and if someone interested to get more information, please reply at the following email address.
Big investment can also allow you to get Canadian Citizenship.
Thanks
@Kashif
My cousin, a Canadian national, who lives in Calgary is investing at the moment in Pakistan real estate market with his money earned in Canada. We all know that if you invest in the right areas of Pakistan you can make better ROI in Pakistani real estate because property prices are rising faster in Pakistan than in Canada.
As for Canadian nationality, some people who went to Canada for nationality now want to move back to Pakistan or to middle east because they want to give their children a more Islamic upbringing.
There are many Islamic schools and good Islamic environment in UK but in Canada it is a different story and only 1 or 2 cities have this facility.
Nice to read but stock market (share business) is not covered. In my opinion normally all investments fields grow nearly equal but once in 20 years,big fishes eats small fishes like what happen with gold in last 8 years. Gold uprising was not the game actual game was when it was not rising compare to real estate and commodities and stocks. So same game is happening in other fields also, but big players keeping gaps of one generation to next generation so people should forget no surprise if gold fall badly if so it will repeat the history of gold.
My suggestion? Divide your money to all fields.
- Real estate (commercial) for long run.
- FC account
- Stock market (if cash in Rs)
- Gold
Pay zakat, help others by your money to earn more and more inshAllah.
Buy a plot and build flats on small scale , i mean to say you may buy an even small plot of 80 yards and build 8 flats on four floors, that way you can earn almost 1 crore 20 lacs, within a year, you have to invest just 30 lacs for buying the plot and then invest 30 lacs after a while for building it, many prospect buyers would come to you as soon as you start demolishatiion of old structure. That way they would pay you the half booking amount within few months. For more detials you can contact me at tausifhanif@gmail.Com
Aa Can any one guide what is the best way for people who save almost 10 to 20 thousand per month.What is the price of locker and tax plus other charges. Specially if you wana buy gold it is again lot of panic as it shall be difficult for a common person like me to evaluate its purity. Please guide what should a common man with a small saving should do.Someone has informed that buying of saving certificate is the best option in this regard and they can prove beneficial in long term. Kindly guide...