The Cost of Not Investing

Many Pakistanis have their savings stacked in the form of cash or in a savings account. From a Finance perspective, the worst thing you can do is park your savings in cash. If you are keeping your savings in cash your money is losing value because it’s not keeping up with Inflation (prices of goods/services increasing).

Year over Year, your money’s worth is going down as things are getting more expensive and you are not making any return on your savings. Money needs to be invested, at worst to retain its value, at best to make it grow. Small investors face a dilemma in the choice of investment avenues. Investment options tend to shrink or expand according to the money available.

Where should they Invest their Savings..

In Pakistan, for most people, the first savings option has forever remained the National Savings Schemes (NSS). For other Pakistani’s its Property, Gold or Forex, but the fact remains that over the long term, the most affordable and Best-performing investment for middle class Pakistanis are Stocks, or better known as Equities. While Stocks are the best performing asset class, many Pakistanis don’t understand the stock market, and justifiably so. So, for individuals who do not understand the stock market and for those who don’t have the time to research stocks, the best way to get started with Investing in Stocks is via Mutual Funds (Al-Meezan, NBP Funds). Mutual funds have teams of Investment professionals who pool money from thousands of investors and invest on their behalf.

If you want to learn more about Stocks and Mutual Funds, head to the FinPocket Investor Education Portal for the best in class Financial Education.

Why don’t people invest in Stocks or Mutual Funds…

Lack of Trust: The Perception among investors about the possibility of being ripped off by frauds, lies at the center of the whole issue.

Low Financial Literacy: Most people don’t know how to trade or value companies and thus get intimidated into not Investing.

Ease of access: There is lack of clarity on how to get started with Investing.

These concerns and issues are legitimate and we at FinPocket are determined to help you circumvent these hurdles, so let's take a look at how to tackle these issues.

The possibility of getting ripped off significantly diminishes if you open a trading account with a reputable broker, referred to you by a friend or family, a few phone calls and you’ll know the most reputed ones in the industry. Mutual Funds are mostly subsidiaries of Banks for exp. (HBL Asset Management is a Subsidiary of HBL and Al-Meezan is a Subsidiary of Meezan Bank) thus they can be deemed credible and trustworthy.  For direct Investments in Stocks it’s necessary to have some knowledge and thus FinPocket has developed a curated Investor Education Platform that covers all the topics and jargon you need to know for Investing directly and via mutual funds. If you wish to skip the learning, you can always invest in Mutual Funds, they have a team of Investment Professionals with ample Investment Experience. To get started with Investing, visit

The best time to start Investing?

There is a popular saying in Finance
“The best time to Invest was 20 years ago, and the Second best time is now”.

In other words, the earlier you start, the more you can reap the benefits of compounding and Long-term profits. This also implies that the longer you say ‘not yet’ or wait for ‘someday’, the more you have to contribute later on just to catch up.

Think of it this way, every rupee that you earn via your Investment is a rupee you don’t have to earn at your job.

How many Pakistanis are actually Investing?

Let’s see some interesting numbers on how Pakistani’s compare to our regional peers when it comes to the Stock Market and Mutual Funds.


Fact 1
Sri Lanka has a population of 20 million with 700,000 active investors, while Pakistan had only around 250,000 stock market investors.

Fact 2
Bangladesh has 2.5 million investors in their stock market, Vietnam with a population of 90 million had 6 million retail investors in the capital market, while India had 25 million stock market investors.

Fact 3
Mutual Fund Penetration which calculated by looking at the Money Managed by Mutual Fund Companies (AUM) compared to GDP, reveals a startling fact, Pakistan’s AUM to GDP Ratio was 2% in 2017, compared to global average of 55%.

A recent study conducted by the Standard Chartered Bank of Pakistan identified that Pakistani’s could make up 82% more wealth by switching from cash and savings account to a Low-cost wealth management solution
(mutual funds)

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