Opportunities to save and invest for young people

Think about this: whilst one person scrolls through social media for an hour, someone their age somewhere else just earned enough returns to buy three months of groceries. The difference isn't luck. It's a matter of where money was positioned last year.

Bangladesh stands at a peculiar crossroads. Nearly 28 per cent of the population falls between ages 15 and 29, yet conversations about where earnings should go remain frustratingly absent. Swiss households maintain savings rates hovering around 19 per cent, whilst the European Union averages 6.0 per cent. Bangladesh barely measures youth-specific savings behaviour, which itself reveals how little priority this question receives.

The mathematics that matter: Consider what happens when nothing changes. Someone earning Tk 30,000 monthly and spending all of it represents a common pattern. Over five years, total earnings reach Tk 1.8 million with precisely nothing remaining. The alternative? Saving 20 per cent equals Tk 6,000 monthly, accumulating Tk 360,000 before any returns. That's a master's degree, medical emergency, or business seed capital.

Youth unemployment stands at 10.6 per cent, significantly above national averages. In reality, the number is much higher because many students stay in universities to avoid unemployment tag. But here's the structural problem: employment concentrates in Dhaka, where living costs devour income before meaningful savings accumulate. A garment worker or developer in Chattogram or Rajshahi could save double what their Dhaka counterpart manages, simply because rent drops from Tk 15,000 to TK 5,000 monthly. Bangladesh needs systematic deindustrialisation of Dhaka, not as retreat but strategic dispersal. When opportunities exist beyond the capital, young professionals can optimise for savings rather than sacrificing financial futures.

Income diversification— the missing conversation: Investment strategy gets abundant attention. Income diversification receives almost none. Although learning from multiple streams matters as much as where money gets invested.

Consider a peculiar reality: bankers now maintain freelancer accounts to work on pitch deck,financial analysis and what not. Not because banking pays poorly, but because smart professionals understand single income sources create fragility. Remote work fundamentally changed what's possible. A designer in Sylhet serves Singapore clients. A developer in Barishal codes for American startups. These aren't theoretical; they're daily realities.

The mathematics becomes compelling. Someone earning Tk 40,000 locally who adds Tk 20,000 through remote work hasn't just increased income by 50 per cent. They've created optionality and shock absorption. International clients pay international rates, but living costs remain Bangladeshi. An hour earning Tk 200 locally might earn Tk 2,000 internationally. That's recognising market realities and positioning accordingly.

Where money should actually go: For a young professional saving Tk 8,000 monthly, here's strategic allocation:

Treasury bonds currently yield 11.36 per cent for five-year bonds and 11.89 per cent for ten-year instruments. These represent government-backed securities with minimum to zero default risk. Minimum investment starts at Tk 100,000, achievable once emergency funds exist. Savings certificates offer 12.37 to 12.50 per cent under January 2025 rates, with the five-year Family Savings Certificate providing 12.50 per cent for investments up to Tk 750,000.

Think of these as foundations. Perhaps 30 per cent of investment allocation goes here, providing stability whilst the remainder pursues higher returns.

Prize bonds operate through quarterly draws with first prizes reaching Tk 600,000. Each 100 taka bond carries no interest but enters draws. The principal never disappears and can be sold back anytime for Tk 100. Expected returns approach zero mathematically, but as a psychological tool for those who can't resist spending, prize bonds offer an intriguing compromise. That Tk 5,000 that would otherwise vanish buying dinner instead becomes 50 bonds with intact principal.

Biniyog.io operates as a Shariah-compliant platform where, through January 2025, over Tk 420 million had been processed across 5,300 investments. Businesses seeking funds get vetted and graded. Investors choose specific campaigns, providing short-term financing for inventory or expansion. Returns typically range from 12 to 18 per cent annually with corresponding risk. What's compelling isn't just halal certification; it's transparency about exactly which business received capital.

iFarmer, Wegro, Fashol etc. enables individuals to fund farmer capital requirements. Investors advance working capital and receive predetermined returns, typically 14-20 per cent annually. Risks include crop failures, weather events, and market collapses. Diversification becomes crucial: spread Tk 50,000 across five different crops and farmers rather than one campaign.

The Dhaka Stock Exchange carries baggage of crashes and scams. Here's what goes unsaid: volatility stems partly from structural issues. Weak regulatory enforcement, manipulation concerns, inadequate investor protection create environments where retail investors lose whilst insiders profit. Until Bangladesh establishes genuine market stability and punishes manipulation severely, the stock market remains a speculation venue rather than investment platform.

For those willing to navigate this terrain, stocks represent actual businesses. Growth benefits accrue. Failure causes losses. Most brokerages now offer Shariah-compliant screening. If a person doesn't have knowledge of stock market, they should rather go for mutual funds where experienced professionals will pool assets and invest on behalf. The key remains patience and research, but critically: don't enter expecting safety. The structural reforms needed remain incomplete. Consider stock market allocation as money affordable to price volatility.

The geographic advantage: Let's return to that deindustrialisation argument. A software developer in Dhaka earning Tk 50,000 might spend Tk 45,000 on rent, transport, food, and utilities. Savings potential is minimal. The same developer in Rajshahi earning Tk 45,000 spends Tk 25,000 on necessities. Savings potential is Tk 20,000 monthly, or Tk 240,000 annually.

Over ten years, the Rajshahi developer accumulates Tk 2.4 million in principal alone. The Dhaka developer struggles to save Tk 600,000. That's life-changing wealth disparity driven purely by location. Leadership must prioritise economic dispersal through tax breaks for businesses outside Dhaka, infrastructure investment in secondary cities, distributed educational institutions.

The compound effect: Investing Tk 8,000 each month (Tk 96,000 annually) at a 14 per cent annual return demonstrates the remarkable power of compound growth. Over ten years, you'll contribute a total of Tk 960,000. Through compounding, this investment would grow to approximately Tk 1.98 million, meaning you'd earn over Tk 1.0 million in returns alone.

The true magic reveals itself over twenty years. Your total contributions of Tk 1.92 million would balloon to approximately Tk 8.74 million. That's an astounding Tk 6.82 million generated purely through compound growth—more than three times your actual contributions, earned without any additional effort on your part.

This example shows why consistent, long-term investing is so powerful: time transforms modest monthly contributions into substantial wealth through the exponential nature of compounding returns.

Add remote income diversification. Someone earning additional Tk 20,000 monthly through freelancing who invests that entirely generates approximately Tk 18.5 million over twenty years at 14 per cent returns. Combined with primary investment, total wealth approaches Tk 26 million. That's a paid-off house, funded education, retirement security, and family support capital.

The trust factor: None of these works without institutional trust. The stock market needs genuine reform: transparent enforcement, severe punishment for manipulation, robust investor protection. Government securities work because trust exists. Emerging platforms like biniyog.io and iFarmer must demonstrate consistent performance and adequate protections.

Leadership carries responsibility here. Creating environments where young people invest freely without fearing systemic corruption isn't optional; it's foundational. When trust erodes, money flows to real estate speculation, gold hoarding, or leaves the country entirely.

What success actually means: Five years from now, success means multiple income streams. Salary matters, but investment returns cover utilities. Remote work provides geographic flexibility. Ten years out, financial independence exists enough to take career risks. Twenty years ahead, that person becomes who younger people ask for advice.

This isn't about becoming wealthy, though some will. It's about building foundations solid enough that money stops being primary anxiety. The choice is mundane: continue spending everything, or redirect portions toward tomorrow. Someone will read this, nod appreciatively, and change nothing. Someone else will open a savings account tomorrow. Ten years from now, their financial realities will differ so dramatically they'll barely recognise each other's lives. Which sounds better?

tasnimazer02@gmail.com