Many of us today depend upon a 9-5 job with a monthly salary as a source of income. We get our education, look for a job and feel secure once we get one. However, most of the private companies do not come with job security. The job that you have today may no longer be with you tomorrow; if such an unfortunate event occurs, you need to have an alternative source of income in order to pay for your expenses or an medical emergency.
Hence, depending on monthly salaries alone is not enough to gain financial independence today. You need to have a varied source of income to have a strong financial backbone. You also need to have a backup source of finance as private companies do not come with optimum job security. And the best way to gain that is through investments.
Investment refers to investing or allocating money with the hope of gaining profit or benefits over time. As an employee of a private company, it is really difficult to manage another job or spend hours every day in another company as a source of income. Thus, wisely investing your savings might be the right thing for you as it will act as an asset during a time of crisis and emergency.
There are various kinds of investments like stocks, bonds, mutual funds, exchange-traded funds ( ETFs), and so on. However, investments are majorly classified into three categories.
Ownership Investments
Ownership investments are the assets which when invested in are owned by the investor. This includes investing in stocks, business and startups, real estate properties, and bullion. Stocks refer to the ownership of shares in a company. People invest in ownership investments with the hopes that it will increase their value over time.
Lending Investments
Corporate bonds, government bonds, and saving accounts fall under lending investments. The money that you have in your savings account is like a loan that you give to the bank. When invested in such investment options, you earn interest over time as a profit.
Cash Equivalents
Cash equivalents are investments that can be converted into cash very easily. These are short-term investments and are highly liquid. They also have a high credit rating. Few examples of cash equivalents include commercial paper, treasury bills as well as short-term government bonds with a maturity date of fewer than three months.
Investing will serve as an asset during medical emergencies.
Investing will provide you with financial independence.
Investments provide security and financial freedom.
Investing serves as a backup source of income if you lose your job
You will have money saved for post-retirement.
You can start or grow your business.
Easy to sustain and provide your family with a quality life.
You can fulfil your desires without the pressure of money.
You will be able to support not only yourself but others as well.
1. Tourism Industry
It is no surprise that tourism is one of the best investment options in Nepal. Tourism serves as the backbone of the economy in Nepal.
There are many projects aimed and ongoing in the tourism sector which have an extremely high probability of yearning profit with very low risk.
Tourism as well as its a subset, medical tourism is one of the highest valued investments with huge potential.
2. Share market
In Nepal, the only stock exchange is done by the Nepal Stock Exchange Limited. According to the data acquired in February 2021, the equity market capitalization of the listed companies in the NEPSE was an approx of US$30 billion.
To buy shares in Nepal, you will have to visit a share broker, fill an agreement form and you will receive a link for the NEPSE TMS website with your ID and password once you submit a deposit.
A Demat account is mandatory to buy and sell shares in the primary share market.
3. Food and hospitality
The rise of tourism in the country will increase the demand for hotels and hospitality in Nepal. Thus, investing in this sector has a high potential for earning profit in the long term.
Similarly, even though Nepal is an agriculture-based country, we still face challenges in the food industry regarding supplies, raw materials and so on.
Therefore, investing in these sectors may yield profits when done through proper research and planning.
4. Healthcare
Even today, Nepal faces many challenges in the field of healthcare. There are many areas in the country where proper healthcare is a dream.
Hence, investing in the healthcare sector in Nepal too has high-profit potential. Hospitals and healthcare supplies are some of the best options for investments.
5. Agriculture
While already being an agricultural country, Nepal has extremely rich potential in the agriculture sector.
Even today, we face many problems in this sector due to lack of supplies, materials, transport, harvesting, and so on.
Investing in the field of agriculture is considered one of the best investment strategies in a country like Nepal.
6. Startups
Businesses in Nepal are growing rapidly. The startup culture has brought many enthusiastic youths into the field of business and numerous startups are emerging.
If you wish to invest in startups, make sure you are well informed regarding the plan and believe in the idea of the startup.
7. Education
One of the key sectors which require financial support and that has high profit potential is the education sector in Nepal. 100% literacy and quality education is still a dream.
Education in Nepal is still open to investment and is one of the prime infrastructures of development.
8. Energy and hydropower
Nepal is blessed with the grace of mother nature. The rich biodiversity and energy sources provide us with a huge potential for investment and development.
Being known as the second richest country in water sources, Nepal has a very high potential for hydropower and energy sourcing. This area is open to investments and the risk of investing in hydropower and energy sourcing is equal to none.
Nepal is also an advocate for clean energy solutions with the transition into biofuel run vehicles as well.
9. Mining
Another sector with rich investment potential in Nepal is mining. Valuable metals and stones are highly regarded and considered to be of great value. You can also use high-value metals as an asset to get cash during a time of crisis.
Experts have said that Nepal holds very high investment potential in mining however, the potential has not yet been put into action at an optimum level.
10. Real estate
Nepal is a boon for people who are interested in the real estate business or as an investment. The land in Nepal can be used not only for housing but due to the rich biodiversity and potential for tourism, the land in Nepal can be used as a valuable landmark for hotels, resorts, recreational centres, and so on.
Land in rural areas can be considered as a long-term investment that will increase its value over time. You can also lend the land on lease for a certain time and gain profit without lifting a finger.
Many people in the country have gained their finances and independence through the real estate business in Nepal.
Diversify
It is considered wise to diversify your investment portfolio as it will help you face lower risk and a variety of investments will yield a higher return.
A diversification strategy will also help you get stable returns. Don't be focused on one area of investment, research and invest in multiple kinds of investments.
Make a plan
Before jumping into investments, access your financial situation first. The investment plan for your future begins with your financial condition today.
You need to be mindful and check your expenses and savings and set goals for the future. A key step to keep in mind is to access your risk tolerance while investing.
You need to set realistic goals, calculate your potential savings, learn about your investment strategy and develop an investment policy statement.
Identifying your goals and expectations
While setting up an investment workflow, you must start with accessing your current financial situation. After you have accessed your financial situation, make a plan and be specific about your goals and what you expect from your investments.
You can frame each goal and take practical action to reach the goal. A major thing to keep in mind is that your goals need to relate to your life and have to be realistic while investing.
Research
Research is one of the most important things to do before investing. Whichever domain you decide to invest in, always perform in-depth research on the company or the investment plan.
Research is key if you are planning to invest in stocks. Firstly, you will have to understand the different types of stock analysis and be able to read the graphs and the data correctly.
Also, do not forget to consult with the brokerage team and understand the share market. You will also need to study all the basics of the company that you wish to invest in. Do your qualitative research.
Start small
If you are a complete beginner in investing, you do not need to invest all of your savings in one particular stock or a company.
Starting small while doing in-depth research and gradually building your investment portfolio will provide you with lower risk and stable investments.
When you are working a 9-5 job in a private company, most of the work hours are spent at the office. With no guarantee of job security and limited salary, the best thing that you can do as an employee of a private company is to save your earnings and invest them to grow your income.