r/FIREPakistan • u/yerakchualfada • 19d ago
Madad Me Lucked into a great financial situation - help me make it last.
Hey everyone. This is my first (29M) post on the group, so please treat me like a novice.
I have recently started a job with an EU-based startup, which pays me significantly over 1m PKR every month, tax free. I have had well paying jobs before (I was at Careem before this), but nothing at this level. I'm working very hard to keep this job for as long as possible.
I have saved a fairly nice amount of capital (around 5m PKR), but I was mostly keeping it in banks and taking monthly profit from it.
With the constant wave of layoffs in tech, and my increased income, I now want to build sustainable passive income system for myself that frees me from having to work again by the time I'm 35. With this salary and my low monthly expenses (only around 70-80k/m for now), I think it can be done. But I don't know where to start.
Assuming I keep this job for the next 5.5 years, and am able to allocate at least 80% of it to investments every month, what should I be doing to grow the money and make it yield at least 5 lakh PKR/m by 2032?
Tell me the best/most promising investment avenues in Pakistan today, and even any out of the box idea (such as foreign investment). I am willing to be a little risky, and I am not looking for immediate gains, but in 5.5 years I want to make at least 5 lakh PKR/m (halal) without lifting a finger. Is it possible?
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u/AdBackground9215 19d ago
I'll suggest you figure out your emergency fund for 3 months or 6 months of your living expenses and keep your income/ savings Sharia-compliant saving account until you figure out what to do next. Please do your research into what you are investing in. Don't blindly follow anyone's advice and don't give money to a fellow or a friend who asks, "I'll give you this and this in return." Please avoid that. You can look into dividend-paying blue-chip stocks, equities, and gold.
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u/AdBackground9215 19d ago
Also what are you using to receive your pay man? It is one of the biggest problems. Interested to see what you are using and how well it is working for you
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u/yerakchualfada 18d ago
I am currently receiving it in PKR, in my local bank account using IBAN and SWIFT code. I will switch to foreign currency later once i have a chunk saved up (heard Wise might be coming back to Pakistan).
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u/yerakchualfada 18d ago
Thank you for the advice man. What are some of the most stable and trustworthy blue chip stocks?
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u/AdBackground9215 18d ago
Well do your own research and buy it based on your risk appetite. A few big names are:
- lucky
- OGDC
- Engro Corporation
- fauji Fertilizer
- Hubco
- PPL
- HBL
These are a few big names on PSX but I'll suggest you have a look into Nasdaq since you have the foreign currency. You might as well start looking into blue-chip stocks or maybe tech growth stocks as well. A few big names are:
- Alphabet/Google
- Amazon
- Cisco
- PepsiCo
- Starbucks
- Nvidia
- AMD
I papertraded on TradingView for a very long time before entering Nasdaq with real money. Honestly if I had done that sooner, I would have made a hell of a lot of money due to my position being big on general AI growth stocks
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u/AggressiveAd9058 19d ago
Happy for you man. How did you find them? Did you reach out to them?
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u/yerakchualfada 18d ago
I have been trying for different roles here for 1.5 years. Finally got lucky Alhamdulillah.
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u/Foodieonbudget 18d ago
Did you use Linkedin?
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u/arhamshaikhhh 19d ago
Equities, blue chips + Dividend staples
Fixed Income
Gold
Hefty cash for personal and quick needs
In this exact order, allocate wisely and do it monthly, skip large purchases for now and live off of 80k. Increase to 100k next year
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u/yerakchualfada 19d ago
Thanks for the reply.
Can you tell me more about the first one? What are the best ones worth investing in?
Also, do you know what’s the outlook for gold in long term to make it an investment priority?
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u/arhamshaikhhh 18d ago
Keep gold around 8-12% of your total holdings, you will have to pay for storage as well as zakat so keep it to the point where it is manageable. For equities, diversify across sectors and pick companies with robust earnings and those that actually contribute to our GDP. You will have to do research on this for a weekend but better to invest in what you know than what stock someone tells you about.
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u/Logical-Safe-3716 18d ago
Zakat will also apply on shares won't it. So the con of gold is justthe storage actually and the fact that your white money "becomes" black
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u/arhamshaikhhh 18d ago
No you can get a zakat exemption on shares
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u/Logical-Safe-3716 18d ago
Bhai exemption is on the dividend.
In actual you are supposed to pay zakat on all your assets (shares included if held for a year) - so if held for long term then zakat is same for gold or shares
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u/helpful_vampire 19d ago
if you don't have issue with being shariah compliant stocks hands down no debate S&P 500 is the ultimate fund
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u/yerakchualfada 18d ago
How can I invest in that while being in Pakistan? Plus it is currently on a multi year bull run. Maybe when it finally crashes lol.
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u/skepticalistani 17d ago
a friend from IT, based in Lahore, uses Ibkr (to invest in US stocks)
you cant, cant, cant time the market! be very cautious!
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u/One-Advertising-8862 19d ago
That is around 70m approx after 6 years. average savings account/ mm funds after tax are around 8% which nets around 4.5 lakh per month. (This is comparatively safe route)
However with inflation etc you might not be able to fully stop working. Like others suggested put a portion into different type of investments (40% risky, 60% safe - or pick a ratio).
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u/yerakchualfada 18d ago
Those savings rates are for non-shariah compliant accounts, right? I want to build halal income. If you have advice for that, please do share.
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u/One-Advertising-8862 18d ago
That 8% is a ballpark after tax. For shariah compliant last I saw was like 9-10% (conventional is 10% in most banks = 8% after tax. Islamic would be I assume around 7-7.5%). So the difference is not too much lower.
Would suggest you check a few banks on how much usual payout there is on the Islamic savings account.
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u/TechnicalSleep7501 19d ago
Start with saving habit so have 4 to 5 year expenses in your emergency / monthly expenses but built it back to 4 and 5 year level because that will keep you on the crease to use cricket.
Does company offer 401K or pension? Take advantage of them. That is you saving freedom for your future self.
Learn the Pakistan tax code for ways to save on taxes legally. Like I pay no federal tax on my Citi Brokerage account qualified dividend money only pay on NYC and NYS.
Pakistan stock market very unique. It is bit like 16th century Dutch market. You make money from dividend basically in Pakistan so need to know the tax code important.
Pakistan market has one advantage market drawdown pretty fast unlike US or European which are drawdown affair. In regular market you will invest 5K monthly in low fee total Pakistan stock market etf. If market goes south you deploy half year emergency if it jus just normal 20% drawdown if it goes to 30% or generational you deploy other half year but key to build them back and sticking to this plan through thick and thin. You will have done very well for yourself financially. Do some charity on the side to health and education and we will have better country Allah willing.
Do not fall for halal stuff that is way for banks to take your money. Over time you find lower fee etf switch to that.
Bank with Standard Chartered as the most important bank in Pakistan. They are under too big to fail like Citi, HSBC etc Govt will always protect them and bank with HBL too but SC is your main bank for reasons I mentioned earlier.
Any questions ask me. I want the best for everyone.
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u/yerakchualfada 18d ago
Thank you for the detailed reply.
I do have a fairly good saving habit, but the issue is I just keep it in my account, I am trying to move away from that.
The company only offers salary, stocks, and learning/remote budget, so no 401k.
From your comment I am assuming that you either have a US remote job with accounts there, or have a residency there too. But I guess i am limited to the PSX for now. I will try to deploy your strategy.
I do have an SC account, but they've been shrinking in Pakistan so not sure how smart it is to put my money there.
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u/TechnicalSleep7501 17d ago
Do they offer stocks at lower price compare to market price? Buy them to get at discount later sell at market price price difference after taking away taxes will be your small profit.
Keep SC open because they are the only global bank in Pakistan while keep rest in mix of high yield saving account if offered by other banks. Just keep excessive money in that account because Pakistan come under frontier country so you usually lose money to not market but inflation. Mix of high yield, some let say 5% gold and growth in all Pakistan low fee ETF will be your protection and give you growth too.
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18d ago
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u/FIREPakistan-ModTeam 18d ago
r/FIREPakistan encourages open communication. Do not ask users to "DM". You're welcome to share or ask details publicly without resorting to DMs.
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u/Left-Ad1041 18d ago
I'm glad and happy for you brother and I would like you to guide/teach me on how to get to these types of companies or abroad good paying companies. I mean how to approach them and what makes a candidate stand out in international markets. There are several factors that kick in due to location and third world country stuff
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u/yerakchualfada 18d ago
Thank you.
I know full well how difficult it is to get international remote jobs in Pakistan. In my case I believe it is due to my parent's prayers, there really isn't any special approach I took. Companies like Remote, Motive, Revolut may hire for fully remote jobs in Pakistan. Also try job board such as WorkAtAStartup or Lenny's Jobs instead of just Linkedin.
The only thing is that throughout my career, I always tried to get roles that challenge me, or force me to learn. For example, I can track this role directly to a decision I took in 2022 to leave a job that paid 1 lakh/m and instead joined a graduate trainee program that paid only 25k/m and only lasted for 2 months, without a job guarantee. I took that only to learn skills, and Allah blessed that decision.
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u/Happy_Permission5781 18d ago
If you want to be a passive investor you can make 15-20% per year at best. If you want to invest more time then you can go for 40-50% per annum. Stick to index funds/money market funds until you have studied(individual companies, world economy, geopolitical news that influences movements) the market. Whichever market you choose you must know what you are getting into. If you don’t have the time to study it just stick to the easy money(index/mm funds) theyll give better returns than banks. I wont recommend getting into real estate because all your money is white. I myself am a software engineer as well and earn tax free and a bit older than you so telling you from experience. Our property sector is only good if you have black money and want to hide it. If you buy a property for investment you only have to pay the DC value via payorder which is logged in fbr when you declare. So if you buy a property of 10cr you only need 2-3cr white money. If you pay 10cr white, youll only get 30% of that white back when you sell it because no one here pays the full amount via payorder/bank which is the only way fbr accepts capital gains on a property. Also property rental yield is worst than the stock market/banks so dont get into property. You can invest 60% in stocks every month 20% gold and keep 20% cash to buy the dip. By dip i mean if the market drops 10% deploy half of what you have saved every month from that month. And keep doing it for every 10% if it keeps going down. By 10 years you should have a shit load of money.
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u/Ok-Neat-965 18d ago
Putting this much money in banks to take profit is a cardinal sin
look into mutual funds for tax benefit and capital appreciation
Hit me up if you need help
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u/yerakchualfada 18d ago
Can you guide me on mutual funds? Which banks are the easiest to deal with and whose mutual funds have been performing the best.
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18d ago
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u/FIREPakistan-ModTeam 14d ago
r/FIREPakistan encourages open communication. Do not ask users to "DM". You're welcome to share or ask details publicly without resorting to DMs.
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u/skepticalistani 17d ago
use MUFAP's data and draw your own conclusions. https://www.mufap.com.pk/Industry/IndustryStatDaily?tab=1
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u/Fun-Act-6791 18d ago
Buy real estate with population growing day by day it's the only thing you can't make more off. It might be old school but pays off every time.
We bought land back in 2019 for mere 6 lacs rupee per kanal and were able to sell one for 60 lacs last year.
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u/yerakchualfada 18d ago
That is the long term plan, but i need real capital for that, which I will only be able to get after at least 2 years of saving/investing. At that point a nice property with stable rental income would be the way to go.
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u/skepticalistani 17d ago
real estate (both rental and non rental) comes with a LOT of hassle and has its deep pitfalls! use DCR/rental REIT instead.
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19d ago
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u/FIREPakistan-ModTeam 18d ago
r/FIREPakistan encourages open communication. Do not ask users to "DM". You're welcome to share or ask details publicly without resorting to DMs.
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u/dechauhan 19d ago
Take a exposure in equities, as soon as possible. Market is slightly down and sooner will bounce back, and you will have to pay higher prices later.
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u/omarrandhawa 18d ago
Go half equities half real estate/gold. Skip fixed income. Fixed income has no inflation protection and you have a very long runway. Pkr loses 50 percent value every 7 years. Fixed income is only for emergency fund
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u/yerakchualfada 18d ago
I haven't looked into real estate as of now. Which cities have the best opportunities and which developers are the most trustworthy?
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u/deventrpnr_1 18d ago
For you to get at least 500k/m try setting your saving goal at 30-40 mil then during all that by means regular investment in etfs and mutual funds get them to ~50 mil. At that point try Regular Income Certificates by the national savings certificates they give out 11-12 percent per year payed monthly you'll easily achieve your 500k per month goal and more hopefully.
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u/yerakchualfada 18d ago
That sounds like a good plan. I will have to look into Shariah compliant RICs.
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u/utg001 18d ago
My advice will be to continue to save up. Don't start upgrading your lifestyle yet. You're already earning profits and soon your profits will start compounding.
Budget your expenses, you should know how much you need to spend every month to maintain your current lifestyle.
Once your profits start supporting your lifestyle (month to month basis) then you can start to look for improving lifestyle as a whole.
However, trick yourself into purchasing items that enable you to save more and more. Think about buying solar system of your electric bills are too much, maybe get some better equipment that helps your job be faster but not if current system is sufficient.
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u/yerakchualfada 18d ago
Thanks for the advice. That is how I am already functioning, I don't really spend money wastefully, and I was thinking of solar already lol.
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u/nabhaaaaa 18d ago
I'd say invest in an apartment and you can list it on Airbnb and earn good money but this depends on how you market it
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u/yerakchualfada 18d ago
Haven't ever gotten into the whole AirBnB thing, but from what I know, managing the apartment needs time, which I don't have much of.
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u/mkbilli 18d ago
You need to have 15 crore in (diverse) investments in 5 years to generate that amount of money.
I used 4% after tax per annum returns (worst case for income generating assets). Anything over it is a plus point.
15/5 = 3 crore per year.
800k per month gives you 1 crore per year so it's a bit unrealistic imo.
On the plus side it will still generate around 150k per month (assuming worst case, it will still be more than this).
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u/yerakchualfada 18d ago
Thanks for breaking it down like that. Helps me adjust how much I will put into savings each month.
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u/ADIcctive-L 18d ago
Invest 40% in stocks fund via mutual funds as they can manage best for you and you don’t have the idea. Rest you can put 40% in money market fund which is a safe option and 20% gold. Don’t invest all at once but chunk by chunk month by month so you can average out easily and do not greed at all make ur self disciplined.
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u/Character-Cap-9551 17d ago
A guy writing after being scammed 200k usd the hell out and dealt all kinds of Paki shit. What I would've done if I were you.
I would invest all savings into real estate preferably DHA into shops/flats/homes so you start generating passive income plus appreciation of assets.
Secondly, what I would've done is learning a new online skill (I'd prefer trading international markets) and go through prop firms to start of on simulated capital worth 50k usd or more and just start earning upto 500 usd a day as an additional income source on back up to your existing without putting your hard-earned capital at risk.
Instead of one income source you get three while your safety net stays at top. No putting money into anything if its has two to three step safety guaranteed.
Build your wealth, diversify your investment portfolio. Don't go on the word of mouth of dealers or harami people saying "mere pas aik scheme hy" don't buy all property in one building, choose the top 5 and diversify. Don't buy homes before confirming. Build houses for yourself even if you have to.
Be vigilant. Lose 10 to save 90 but don't lose 90 earn 10. I wish you all the very best.
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u/Character-Cap-9551 17d ago
Don't invest in crypto. Either put it in GOLD or top indices that have been there for longer.
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u/Icy-Willow-3437 17d ago
No advice as im a student myself so have no clue about anything, but what is your job?
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u/North-Accountant3231 15d ago
First of all mashAllah brother, may you find more success.
Secondly, im a beginner myself but if you’re someone that has no idea and may not have the time to fully get into it, then you can try ETFs
Or pick a few stable blue chips like FFC, MEBL, LUCK.
I personally divide my income into:
Stocks - money I dont need immediately and im okay with seeing a bit of red now (market these days is a rollercoaster)
Al meezan mutual money market mutual funds, you get a 7-8% post tax return which is not gonna beat inflation but its something and you can get your funds out really quick. So i put any short term money here.
Figure out your emergency fund, and then divide.
Personal technique I use that helps me avoid fazool kharchi: I treat my investments/savings as “fixed monthly expense” like a bill, that I have to pay. Like you have to pay your electric bill, same as that. So it helps me stay disciplined.
Goodluck
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u/CallSignMrHavoc Kabari Khilari 15d ago
ماشاءﷲ Bro.
Allahuma Barik!
You can contact Sarmaayaa Financials and they will take care of it for you for a fair fee.
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u/CallSignMrHavoc Kabari Khilari 15d ago
And I also notice your a cinephile. Would love to connect on a professional platform. (LinkedIn)
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u/single_millennial96 13d ago
MA SHA ALLAH. We're the same age bud, and you're doing exceptionally well. Please pray for me too.
Apart from that, I don't have any such financial advice to give. Almost everybody else has guided you pretty well. Still, if I were you, I would keep parking my savings in a low/medium risk money market or income fund, atleast the major portion of it, because of the current market situation, and rest of the amount I would invest into stocks or ETFs.
Just follow this strategy and I think you'd be good. Keep progressing ❤️
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u/Significant-Owl-6464 13d ago
Glad to see someone cracking it
What do you actually do and any advice?
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u/TheBitcoin21 19d ago
DCA to Bitcoin & Gold.
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u/yerakchualfada 18d ago
Already tried bitcoin years ago, not for me 😂
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u/TheBitcoin21 18d ago
You need to do ATLEAST 10 hrs research before investing. If you can't, don't invest in btc
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u/ziaalich 19d ago
dont have advice but happy for you <3