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22 Nov, 2022

Money , Value and Risks ! How do you view money?

With good financial literacy, some people take measures to grow their money over time. However, not many are well informed regarding this in the current scenario.

We view money as expendable, but not growable!!! And even if we do realize that money is growable, we don’t know how to get started.

It is a common concept that investments can be risky. There is also a potential that our money won't generate the output that we are aiming for. And since the market is also constantly changing, it is tricky to invest without fear and doubts. So, even when people have cash in hand and are eager to invest, many are still hiding it behind their lockers to keep safe. 

This ultimately points out the fear that people have imbued in their heart regarding the safety of their money.

What happens next? Inflation, being an ever-growing phenomenon in the current scenario, depreciates the value of money. The money stored behind lockers generates no interest or revenues, and in the future, the value of money decreases, causing a great opportunity loss to the general people.

Why does this type of loss occur?

Is this because of the fear that people have regarding investment risks? Is it because they don’t visualize the inflation’s effect on money? Or is it because they are skeptical regarding the available investing options?

In my opinion, I believe that it is purely because people are lacking in financial literacy. They don’t fully understand the nature of schemes that they invest in, and an even bigger dilemma is created due to the fact that they haven’t discovered a common platform that lets them compare financial products, especially in Nepal. 

How are we investing our money?

Money is growable. And it is growable through many options. Banks, investments on enterprises, shares, funds, etc. there are many ways how a person can approach the time value of money. But the product that offers the least risks are banking products.

In the case of Nepal, NRB backs up all the funds invested in all the private banks as well, so it can be ensured that the money invested won’t incur further losses. The interests being served are also attractive, and the monthly interest can be considered as a revenue source for the people who invest in these products. Saral Banking Sewa lets you compare the interest value banks are providing for these fixed deposit schemes, so you can choose the best value for the amount you wish to invest on fixed deposits.

Furthermore, if the individual is willing to take on the investment risks, investing on an enterprise level can also be seen as a great option to grow the value of their money over time. These types of investments return greater value, but also come up with greater financial risks. However, it is important to evaluate the risks and returns beforehand while investing. It is important that the investor checks out the company portfolio that they invest in. 

Another attractive option to manage your money is by buying appreciating assets such as land. Or, other assets that generate revenue over a long period of time.

Are we approaching ‘saving’ correctly?

Keeping the investing options aside, even the concept of saving seems skewed in people’s perceptions. Believing that it is safer to keep money stored behind the locker’s doors not only reduces the value of our money for the future, but also reduces our spending parity in the long run. Instead of keeping cash stored away, it is more profitable to seek savings accounts from banks. Many banks give saving schemes that align with the person’s requirements for saving. And what’s the benefit of doing this? The banks offer Interests on these accounts as well!! Your saved money can also grow with time, if you choose to keep it in a bank. 

Comparing these schemes along with interests it provides is necessary while choosing a scheme best suited for your needs. You can compare the banks and their deposit products through Saral Banking Sewa

I believe that we should all be smarter while managing our money, so that we can keep up with the inflation. I’m ending this blog with a question for you. If you won a lottery and received a huge sum of money, how would you manage it, such that you get the best possible outcome for the value you spend? What would be your saving decisions guided by? We specialise in providing personal-level financial literacy to our audience. Visit us at Saral Banking Sewa  to expand the horizon of your financial literacy. 

An article by Bandana Bhattarai. 
(Team SBS)