Personal Finance by the masses.

Byline: Khalil Ahmed

A youth in his late 20s, a banking professional, was not glad when asked about his investment. He disclosed that he invested certain amount in one asset management company with the aim that his money would compound. As per his statement, he paid certain amount around five months ago to a representative of an asset management company and has been getting regular update about his investment. He does not seem glad since he thinks that certain amount was charged as a fee for the service since his money would be invested in the stock market with the prudent decision of a mutual funds expert. He expressed his displeasure that as of today, his amount is less than what he invested five months ago. He does not agree with the reality that stock market is not performing as well as it did in 2016. He intends to backtrack on his decision of investing through an asset management company where a specialist manages the funds with his/her expertise.

Well, this may be an exceptional instance of an individual and his approach for personal finance.

One seems befuddled when intending to invest for retirement planning, weddings and higher education of kids, purchasing a house etc. It is mandatory to have financial independence after retirement for multifarious reasons. This calls for prudent retirement planning. However there is no culture in Pakistan for saving for the days after retirement. The concept of annuity is not pervasive in our country. The planning for the wedding of kids is a monumental task. It is a whopping one-time expense since there are multiple expenses such as Wedding Ceremony Rental, Wedding Planner (in some cases), Valima Reception Venue, Full-Service Catering, Photography and Videography, Attire etc.

On average one spends from over a million to five million rupees. The cost of wedding has witnessed a dramatic rise over the period. One finds oneself beleaguered since the cost is increasing dramatically whereas income of household is almost static. There are some insurance companies which keep sending emails and text messages to the masses to invest for the education and weddings of their kids. The investors are lured with the fact that by investing only a meagre some on monthly basis, one can get a substantial amount at the time of maturity.

School education is getting more and more expensive and out of the reach of the millions of Pakistanis. An average school operating in a street in Karachi charges Rs5000/- (five...