Animal Sacrifice in Nepal

 CULTURE  /  RELIGION  /  ETHICS

Scriptural foundations, communal meaning, competing religious narratives, and the ethics of slaughter

An interpretive essay  •  October 2026

The central argument. Nepal’s sacrificial traditions have authentic scriptural and inherited ritual foundations. Their meanings cannot be reduced to cruelty; equally, religious meaning does not cancel animal suffering. Criticism may arise from compassion, Hindu reform, secular ethics, political contestation—or, at times, hostility toward another religion. Each motive must be evidenced, rather than assumed.

1  How sacrificial culture took root

Animal sacrifice in Nepal is not a single, uniform Hindu practice. It reflects overlapping currents: the goddess-centered Śākta/शक्त and Tantric traditions; older and locally rooted worship of protective deities; the politics of kingship and public festivals; and family obligations expressed through Kul Puja, vows, and seasonal rites. In many local settings, a bali/बली (offering) is understood as an act of reciprocity with a deity rather than simply a way of obtaining meat.

Socially, the rite may also reproduce collective memory: relatives assemble, ancestral obligations are renewed, ritual responsibilities pass between generations, and a shared meal follows. Ethnographic accounts of Nepal document both these bonds and the hierarchies sometimes reinforced by sacrificial institutions.^[1]

2  What the scriptures prescribe—and why

Different texts articulate different purposes. They should be read within their own ritual settings; a Vedic yajna (यज्ञ), a Kaula goddess rite, and a family Kul Puja are not interchangeable.

Sacrifice as ritually legitimate action

Manusmṛti 5.39 (Sanskrit and Medhātithi’s commentary) says:[2]

यज्ञार्थं पशवः सृष्टाः स्वयमेव स्वयम्भुवा ।

“Animals were created for the purpose of sacrifice”—the verse distinguishes properly prescribed ritual killing from ordinary killing.

The reasoning is normative: an act done under the authority of ritual law is assigned a different moral status. This is a description of what the text claims, not proof that animals feel less pain during sacrifice.

 

Blood as a consecrated offering

Kālikā Purāṇa 67.20 (Chapter 67, Sanskrit) explains:[3]

मन्त्रपूतं शोणितं तु पीयूषं जायते सदा ।

“Blood purified by mantra becomes nectar.”

In this Śākta ritual framework, blood acquires sacred significance through consecration. Earlier verses associate offerings with the deity’s satisfaction (tṛpti). It would be an overstatement, however, to claim that every Hindu tradition consequently requires literal blood; verse 67.23 allows certain substitute offerings, including gourd and sugarcane.

Completion of a specific Tantric rite

Mahānirvāṇa Tantra 6.118 (Sanskrit, translation and commentary) states:[4]

एवं बलिविधिः प्रोक्तः कौलिकानां कुलार्चने ।
अन्यथा देवताप्रीतिर्जायते न कदाचन ॥

“Thus the procedure of bali is declared for Kaula worship; otherwise the deity is never pleased.”

The operative limitation is “for Kaula worship.” The verse gives a strong ritual requirement within that system, not a universal mandate for every shrine or hereditary clan deity. In the preceding verse, blood and the sacrificial head are offered in a specified sequence.

The animal’s claimed spiritual benefit

Devī Bhāgavata Purāṇa 3.26.32–34 (Sanskrit and translation) associates sanctioned sacrifice with the animal’s attainment of heaven.^[5]

देव्यग्रे निहता यान्ति पशवः स्वर्गमव्ययम् ।

“Animals slain before the Goddess attain an imperishable heavenly state.”

The text addresses sacrifice specifically to meat-eaters. It is important to distinguish this theological claim about the animal’s destiny from any independently verifiable fact about its experience of pain or fear.

3  Why the rite still matters?

A sacrifice may bind four relationships: devotee and deity; descendants and ancestors; individual and community; and consumption and responsibility. An animal that might otherwise be treated as a market commodity becomes, for believers, an offering governed by vow, timing, mantra, and the rules of a sacred occasion. When meat is subsequently shared as prasād or in a communal feast, eating is integrated into religious reciprocity rather than purely private appetite.

Cultural meaning is not the same as moral immunity. Rituals can create solidarity while simultaneously imposing costs, caste exclusions, gendered obligations, or distress on animals. These questions have demanded examination within each community, especially when household sacrifice is compared with large public events such as Gadhimai.^[6]

4  Ritual sacrifice and slaughter for commerce

A comparison should separate purpose from outcomes. Sacred offerings and commercial meat production are not ethically identical, yet they cannot be ranked by intention alone.

Dimension	Sacrificial setting	Commercial slaughter
Immediate purpose	Devotion, fulfilment of vows, deity propitiation, communal observance	Saleable meat, food supply, income and market demand
Social relationship	Ritual obligation, kinship, festival identity, sometimes shared prasād	Employment, affordability, distribution and trade
Animal welfare	Varies with transport, handling, competence and scale; sacred intent is not anesthesia	Can be well regulated or severely harmful; welfare depends on practice and oversight
Ecological burden	Depends on livestock raised, festival scale, meat use and disposal	Depends on total livestock production, feed, land use, waste and transport

Animal welfare. The World Organisation for Animal Health(WOAH slaughter standards) identifies avoidable distress during handling, transport, restraint and slaughter. Both religious and commercial killing should be held to the same serious welfare expectations; neither a sacred purpose nor an industrial label guarantees humane treatment.^[7]

Ecological impact. Livestock footprints accrue largely while animals are raised—not because a butcher or priest performs the final act.FAO livestock analysis attributes substantial global emissions to livestock systems, whilelife-cycle food studies show that species, feed and land use matter greatly. A local ceremonial goat is not automatically greener than a commercially sold goat raised under the same conditions. At mass festivals, the concentration of carcasses, blood and waste adds local environmental and sanitation concerns.^[8]

An ethically consistent debate should therefore compare like with like: animal numbers, lifetime conditions, avoidable suffering, useful food produced, and waste—not merely shocking photographs of one setting versus an invisible supply chain in the other.

5  Criticism, religious rivalry, and the politics of moral judgment

It would be naïve to assume that opposition to sacrifice has always been religiously neutral. Religions have long criticized the rituals of rivals, often presenting what outsiders find disturbing as proof of the other faith’s moral inferiority. The history of missionary encounters with Hindu practice supplies direct evidence of this pattern.

A documented historical example. An 1819 letter by Christian missionary Charles Mead, reproduced and examined ina study of missionary–Hindu encounters in Travancore, referred to blood sacrifice to a “cruel goddess, insatiably greedy of blood.” The rhetoric was not simply a welfare assessment: it belonged to an explicitly Christian critique of Hindu deities and worship. HistorianBrian K. Pennington likewise documents how colonial missionary representations centered alleged Hindu idolatry and ritual excess.[9]

Nepal’s contemporary dispute also includes struggles over who gets to define authentic religion. Research on the 2016 Gadhimai litigation describes competing understandings of Hinduism: one reformist and text-centered, another rooted in inherited worship. A campaign may seek to remove animal killing while retaining a festival; nevertheless, its claim that a centuries-old rite is “not true religion” can delegitimize the authority of local practitioners.

The motives are not one and the same. At least four positions should be distinguished:

·       Animal-welfare activism: opposes suffering and advocates alternative offerings;

·       Internal religious reform: accepts Hindu worship but rejects sacrifice as inconsistent with ahimsa or a preferred scripture;

·       Social and political challenge: questions hierarchies, authority or exclusion attached to public rituals;

·       Inter-religious or anti-religious polemic: uses disturbing ritual images to discredit a competing faith or religion generally.

This final motive is historically real, but it must be demonstrated in a particular campaign. For example,Sneha’s Care expressly describes its aim as animal compassion alongside respect for cultural heritage, and its 2024 efforts included engagement with religious speakers. That public record does not justify describing the organization as pursuing conversion or an anti-Hindu agenda. Different actors may nevertheless exploit the same images for different ends.^[10]

There is also a consistency test for both sides: critics ought to explain why highly visible religious killings attract condemnation when commercial slaughter is tolerated or ignored; defenders ought to acknowledge that cultural sincerity does not make animal suffering unreal. Selective condemnation may expose prejudice, but it cannot by itself settle whether a practice is ethical.

6  The legal and practical question in Nepal

Nepal’s Supreme Court in 2016 (official English-language judgment) directed authorities to plan a phased end to animal sacrifice and strengthen animal-welfare, health and environmental safeguards. It explicitly declined to issue an immediate blanket prohibition without accounting for Nepal’s social and cultural circumstances. This is a significant difference between a judicial directive toward reform and an already operative nationwide ban.^[11]

A responsible path forward requires accurate scriptural interpretation, respect for religious freedom, effective animal-welfare rules, meaningful community participation, and transparent scrutiny of the commercial meat economy as well. Religious traditions can evolve without being caricatured; they can also be defended without denying difficult facts.

Conclusion

Sacrifice in Nepal is a religious practice with textual precedent and lived social purpose—not merely an unpleasant spectacle. But the fate of an animal must be considered together with the meaning people assign to its death. Ethical criticism can be sincere; religious hostility can also travel under the language of reform. The most credible public argument will identify both possibilities, apply consistent standards to ritual and economic killing, and allow communities to deliberate without either cultural contempt or indifference to suffering.

Categorized further reading

A categorized source guide follows as a linked Word endnote: original scriptures; Nepalese culture and religious contestation; and animal welfare, law and ecology.[i]

---

^[1]  Ethnographic qualification: the range from domestic offering to mass festival matters. See J. Gibson (2017) on Bhaktapur ritual feasting, and the 2025 Cambridge ethnography of social conflicts over sacrifice. [online source]

^[2]  Manusmṛti 5.39 concerns scripturally authorized sacrifice, notably the sacrificial context of yajña; it is not a blanket instruction for all Nepalese goddess or clan rites. The same chapter, 5.48, argues against meat consumption. [online source]

^[3]  Kālikā Purāṇa, ch. 67 (Rudhirādhyāya), v. 20 speaks of mantra-consecrated blood. Verse 23 provides ritual substitutes; Sanskrit readings can vary between editions. [online source]

[4]  Mahānirvāṇa Tantra 6.117–118 addresses Kaula worship. “Kula” in this text should not simply be equated with every Nepali family’s Kul Devta Puja. [online source]

[5]  Devī Bhāgavata Purāṇa 3.26.32 specifically addresses those who eat meat, while vv. 33–34 attribute heavenly benefit to the animal. This is a doctrinal claim, not a scientific one. [online source]

[6]  Distinguish social cohesion from caste privilege. See the Cambridge study “Contestations of sacrifice: boycott and litigation,” on indigenous and Dalit objections as well as animal-rights activism. [online source]

^[7]  WOAH Terrestrial Animal Health Code, ch. 7.5 (2024), identifies welfare hazards and practical expectations for slaughterhouses. Similar precautions are relevant outside industrial facilities. [online source]

^[8]  Environmental comparison depends on full livestock life cycles, and sanitation requires local assessment. See FAO’s livestock estimate and Acharya & Wilson (2020) on sacrifice and public health in Nepal. [online source]

^[9]  The historical quotation comes from Charles Mead’s letter dated 10 August 1819, quoted in a scholarly article on Hindu–missionary contestation in Travancore. The historical example cannot automatically establish present-day activists’ motives. [online source]

^[10]  Sneha’s Care and the Federation of Animal Welfare Nepal publicly advocate animal welfare and non-animal offerings; campaign-specific motives should be evaluated from stated objectives and documented actions. [online source]

^[11]  The translated Supreme Court order, Advocate Arjun Kumar Aryal and Others v. Nepal Government, explains its directive for phased policy change and separately orders meat inspection, quarantine and environmental measures. [online source]

---

[i] Additional Readings: 

   |    A. Primary scriptures and exegesis —

 • Manusmṛti 5.39 and commentary

 • Kālikā Purāṇa 67: Sanskrit

 • Mahānirvāṇa Tantra 6: commentary

 • Devī Bhāgavata 3.26: bilingual

   |   B. Nepalese culture and religious contestation —

 • Sacrifice and Violence: contestations

 • Letizia & Ripert: Gadhimai litigation

 • Pennington: missionary depictions

 • Hindu–missionary encounters, Travancore

   |   C. Animal welfare, law and ecology —

 • Nepal Supreme Court: Gadhimai judgment

 • Sneha’s Care: campaign objectives

 • WOAH: slaughter welfare standards

 • Our World in Data: food impacts

Money's Worth!

Money has evolved so much from what it used to be hundreds of years ago. With gradual advancements from the traditional barter system to individual IOUs to gold and silver as the direct representative of money – money has always been a measure of one’s wealth. Somebody with over a hundred thousand in cash was termed ‘लखपति’ and considered very rich, when I was a small boy. Today, finding someone with over a million rupees is not a rare instance. Does this mean that the Nepalese society has gotten richer? Or we have reached a newer height of prosperity? No! One of the fundamentals you must learn about money is that it is only worth what it can buy. Everything else is irrelevant.

Here’s a historical reference you might find interesting:

The Incan civilization had a lot of silver mines beneath their hills. While the primitive Incan population simply considered them tears of the sun (gold) and light of the moon (silver), the Spanish conquerors in early fifteenth century mined the hills and shipped all the bullions back to Spain. With increasing supply of gold and silver in Spain, people’s value for it decreased, as people already had abundant of it. This made gold and silver less important and thus people had to pay more to buy the same values that they previously bought for lesser amount of gold or silver.

To summarize, this surplus of precious metals did not make Spain richer, they simply made prices higher as an increased quantity of money chased the same amount of goods. What the Spaniards didn’t get is that

1.       Money is only worth what other people will give in exchange for it!

2.       Even a lump of clay can have better value than gold or silver, if people have more confidence in them!

This is a basic fundamental we all know by the terms of “Supply of Money” and “Inflation” that results from over-supply of money. For more about money supply in Nepal, refer to quarterly bulletin issued by Nepal Rastra Bank for the general price index developed by NRB’s internal research division. For more on how the government plans to tackle it, make a read of the Monetary Policy issued by the same office. The Budget Plan by the Ministry of Finance should come in handy as well.

Now let’s make a simple illustration.

If you check for how much you needed to pay for a bottle of Coca Cola two decades ago, and use that amount to divide how much you pay for that amount of Coca Cola today, that is the amount of inflation you have endured in the last twenty years. That means, that is the percentage by which your money eroded out of your hands!

What makes money so abundant and makes it loose its value? The answer is simple. When everybody is rich, nobody is actually rich. And when everybody can afford to buy something, and actually want to buy it, the merchant will start charging higher, and money simply starts buying less than what it used to.

For an individual exercise, take a ratio between how much your salary is now with how much 10 grams of gold costs today. Again, take the ratio between how much 10 grams of gold cost when your dad was your age. Now compare the ratios. This is a real-value comparison of your dad’s salary at your age with what you earn right now. Which one is higher?

Credit Card: Management Tips

Credit card is technically a loan facility your bank provides you. Loans provide you a leverage to realize your future income in the present day itself. Unlike Home Loans, Auto Loans, etc. that lets you realize your years of income in present day itself, credit cards simply lets realize your next month’s income. Following are the basics of how credit cards function with Credit Card providers in Nepal:

·         Re-Payment Structure: There are basically three structures in which you can service your credit cards:

1.      Pay full due every month on the due date

2.      Pay a certain percentage of your due amount on the due date. Pay the rest at your convenience.

3.      Pay a certain fixed amount every month on the due date. Pay the rest at yoru convenience.

·         Interest Free Credit Period: You pay your credit card dues on monthly basis. For example, even if you purchased an item on September first, you will not be billed for it until the first of October. On top, you receive a 15 day interest free grace on it. That means, you are entitled to a maximum of 45 days (30 + 15) and a minimum of 15 (if you purchased on September 30) days interest free period on each payment made through credit card.

·         Interest Rate is very high: Credit card is the most expensive credit product in the financial system. That is why your offer letters have interest rates quoted on monthly base instead of the conventional annual. That is, if it says your interest rate is 2.25% per month, your interest rate is 2.25% X 12 = 27% per annum. Wisest of credit card users never pay interest at all, and simply enjoy the monthly benefits.

·         Limit Approval Discretion: is primarily factor of your monthly cash flows. The basic service credit cards provide is for you to realize your next month’s salary right now – so you do not have to worry about the balance in your account, every time you feel like having a shopping spree at your favorite outlet. Banks set your credit card limits based on how much you can service every month.

Detriments to using a Credit Card

Ignoring common sense is one detriment of foolishly using a credit card. Going into debt over your eyeballs is another. Credit cards were designed to pay for things with the intention of paying off the entire balance at the end of a month. If you don’t, or won’t have the funds available at the end of the month, please do not end up buying something you can’t afford, or probably wouldn’t have bought, had you not had a credit card in the first place.

Discipline becomes a major challenge when using credit cards. Human brain is not yet equipped to calculate their purchases against their monthly budget and ability to afford them, when their credit card is there to tell them how easily a swipe over the POS machine can buy them everything on the trolley! It has been proven by several researches that consumers are likely to spend more when they pay using credit card. That’s because they do not feel the abstract ‘pain’ of payment when they use credit card. And when the monthly bill comes knocking on their doors, they realize they need more than a few months to settle its dues. And the mountain high interest rates make things even more difficult for you.

High Costs is undoubtedly the biggest risks in using a credit card. You’d be surprised to realize that First Premier Bank (10^th largest issuer of credit cards in the United States) has a record of charging as high as 79.9% p.a. interest rate on its credit cards. When banks only offer 6% to 8% on your savings account, they charge as high as 27% on your credit card. It would be foolish to use up your credit card without making a proper judgment call on it.

While the interest rates are there, customers sometimes ignore the annual fees and commissions merchants pay the bank on each of their purchase. Its only obvious - it is ultimately the consumer that pays the bank fees, though banks directly charges the merchants. Merchants would have already built in this cost in their price they quote you. This way cards actually make the market more expensive, along with they themselves being the most expensive financial instrument available in the banking industry.

Fraud Risk cannot be ignored when it comes to cards. There are several kinds of fraud risks – all to be fairly taken care of, should you be more careful and smart. There are several cases where the waiters in restaurants bill you twice, but provide you a receipt for only one. And they use your other bill to compensate for some other table’s bill where the customer chose to pay using cash. ‘Tip’ or partial cash payments in the manager’s record will reconcile at the restaurant’s end and the waiter takes some extra cash to home. If you are not used to checking your monthly credit card bills and reconcile with your monthly expenses, you will simply never know if you were cheated this way.

Then there are cases where somebody has stolen your card and used it. If you have noticed, POS machine swipes do not require you to press your PIN numbers, but require you to sign the slip. To minimize the risk, the merchant usually checks if your signature on the card resembles the signature on the slip to ensure your card is not being used by the guy who stole it. However, nothing mandates this upon the merchant, nor are these security aspects any popular in our markets. Best practice here would be to keep record of the Cards department of the bank that sold you the card. These department service lines are active 24/7 and receive your panic calls anytime. So call them the moment you realize your card is missing and they will block it for you.

There are many other fraud issues and precautions on them too, but these two should basically cover up most common problems. Basic other points to note include not letting someone take the card out of your sight, not using the card in un-trusted locations/shops/restaurants, etc.

Why take a credit card then?

Of course it is expensive, risky and difficult to manage. But they are still selling like hot cakes and everybody wants them. The primary benefit they provide is the flexibility in your monthly cash flows. Your expenses are not equally distributed across the months, but your salaries usually are. Just because you need a little more money for extra supplies this month your company won’t advance out the next month’s salary to you. Even if they do, its far more complicated than using a credit card for it.

Credit card also acts as a safety cushion. You own one, keep it in your drawer, and use it only when you meet some cash flow mismatch. Slowly settle it over the next few months and then dip it back into your drawer. While this would be a more ‘conservative’ user that is very much risk-averse and scared of using credits or loans, this does highlight one of the primary benefits of owning a credit card. In a way, it also provides you financial security. Even when your bank account is low, you still have a back up.

Credit cards also add to convenience. Just like any other cards, it means you do not have to carry a lot of cash along with you when you wish to buy the month’s groceries, or that 62” plasma TV you planned up since last year. Of course, you shouldn’t over do it, manage your money well, and keep it as a last resort to your finances.

Optimum utilization of a Credit Card

I am sure the 45 day interest-free period struck hard on your mind the first time you heard/read of it. It actually is the coolest offer a credit card can make to a consumer. Consider you are to purchase a particular furniture for fifty thousand rupees. If you pay it from your bank account, you stop earning interest on your savings account for that amount from the date of payment. It’s a simple logic, bank won’t pay interest on the amount that isn’t there in your account no more. However, if you’re using a credit card, then the amount stays. So you continue to earn interest on that amount. On top, there’s no charge on your credit card either. It means, you actually get an interest free credit and yet continue to earn interest on your savings which you would otherwise use to pay for your purchases.

You should not ignore the subscription and annual fees you pay on your card either. Lets consider a card that charges you a thousand rupees a year in annual fees. If we consider a loan of five lakhs at the interest of 16% p.a., your monthly interest is still lower than one thousand rupees (your annual fee on your credit card). This means, if you plan to spend less than five lakhs a year using your credit cards, you end up paying more on your credit card, even if you always pay in time and never server any interest on the dues.

To summarize: as long as you pay your credit card dues within the 15 day grace period, you do not pay the brutal interest rates that come along with it. But if you do not plan to use your credit card wisely and regularly, you might as well never subscribe to one and waste money on subscription and annual renewal fees.

Early Investment Options

So you’ve landed your first job. Congratulations! After treating your friends and family to the best eatery your startup salary can afford, it is time to consider putting aside others cash. After all, you are never too young to start investing for the future. But while your trusty piggy bank and savings account can aid you in saving for the rainy days, it will take decades before you can put aside adequate to purchase your dream home. So maybe you need to learn how to invest as early as now so you can secure a comfortable life for yourself in the future.

Approaches to investment

I notice this guy in my office who disposed of a significant fixed asset and holds a GIANT sum of money right now! He's got that money saved up in a bank somewhere; and sleeps sound every night with a big grin on his face - the 'rich man' grin! And then there is this other guy; same office, same team! But he's got small sums collected here and there, and he keeps on fiddling among various investment opportunities. Some he floats up in share market while some he's sunk down on medium term-deposits on some 'trusted' finance companies and cooperatives that have blossomed in recent years; and soon, as the amounts size up, he plans to plough on the real estate and stock markets and stock some bullions for safekeeping. Immediate liquid safety is not the first priority, growing is.

I don’t think he sleeps with the ‘grin’ on his face and keeps battering his mind among alternate investment opportunities and the risks involved. But he is farming money, is proud of himself, and life is moving in a direction.

Successful Investors of the past

One cannot talk of early investments without having a mention of how Warren Buffet accumulated wealth of over 75 Lakhs (USD 90 thousand) by the time he was only a student in his high school. He sold newspapers, worked as a door-to-door salesman, worked in a grocery store. Early in his high-school, Mr. Buffet purchased a pinball game in partnership with a friend at $25 and put it in a barber shop. Within months, they were already owning several pinball games across many barber shops. The key point is, he SAVED what he earned, and ploughed back most of it, to keep his money growing.

Take Carlos Slim Helu for example. He is currently the richest man in the world! At the age of 71, he owns over 74 Billion Dollars. And he too started early. At the age of 12, when Mr. Helu had just migrated from Lebanon, he made his first lot of stock market investment in a Mexican Bank, from the money his father had given him to migrate to Mexico to avoid being recruited in the OTTOMAN Army. By the age of 26, Mr. Helu had already accumulated forty million dollars and focused most of his investments in the construction, real estate and mining business within Mexico.

Inflation

Let me redefine inflation for you. Inflation is time’s way of taxing you on your money. The arithmetic makes it plain that inflation is a far more devastating tax than anything that has been enacted by our legislatures. (Warren Buffet, 1977, Fortune Magazine).

The bottom line is, keeping your cash idle erodes it away at the rate of the economy’s inflation rates. This means, at the inflation rate of 9.6% for the year 2010, if you put your money in a fixed deposit at 12% in a bank and earn 11.4% (pay 0.6% in income taxes), your actual earnings is 11.4 minus 9.6 only. That is, by the end of the year, you have actually earned only 1.8% on your money. If inflation was higher than 11.4%, your money would actually erode away!

The fundamental learning for any investor is to ensure that the friction applied out of inflation does not exceed the returns you expect out of your investments. Inflation in Nepal was as high as 21% during 1992. Without anything else happening, people lost 21% of their wealth that year.

Risk and return

High returns usually come along with high risks. If such high return options had low risk associated with it, everybody would invest in them. When everybody invests in them, the returns would then be diluted and bring the returns down.

Early investors start with small sums. Initial savings are very precious, and one always looks to minimize the risks first, and focuses on the returns later. While it could be counterproductive to be greedy about big returns to begin with, but letting your money erode away with inflation should be equally troubling. It is a personal judgment for every single investor to make the right balance between the risk appetite and the return requirement at any point in time.

Price Fluctuations

Sometimes ‘active trading’ and investing become inter-changeable terms. For example, as you see the share price for a bank soar up, you buy them. But when they have already soared up, be clever enough to know this and sell it right off to buy another share that’s started to soar up. But this isnt’ that easy, and if it were, everybody would jump into it and make sure it became difficult!

But there are times when the whole share market is bearish and there aren’t any shares soaring up. This is the time to start investing somewhere else. Real estate for example, or gold and silver. While investments in local stock market and real estate has mostly got to do with the local economy, dealing and gold & silver mostly concerns the international market movements. This means, gold and silver trading and investments are independent of the national economic status and trends. In an economy like ours, such bullions become a safe bet.

Investment Options

There aren’t much investment opportunities floated in the Nepalese market as you would find in the International market. So the tips you may find online or the instruments you have studied in your business schools will sadly not come in handy when you consider investing here. And investment here does not mean starting up a business. It’s about using your small regular savings that you slowly accumulate to start growing based on where you put them. Here are a few examples to guide you through the options:

Bullions

The charm in gold and silver never fade away. Their values remain untarnished by the effects of inflation. Their values remain stable when the economy collapses or even when the national sovereignty is at stake. They sell across the international market and will continue to be valued for as long as mankind shall prevail.

Gold prices are seeing new heights and some say they’ve reached their peaks. But they said the same thing a decade ago. And they will continue to say the same thing in the coming decade as well. So don’t fret over the soaring prices, but keenly stand on the tip of your toes and watch out for price fluctuations. If you play right, your returns per annum could be as high as a 1000% (ten folds). But be careful, your losses too could accumulate to the same levels if you do not play right.

Stock market

Nepalese stock market is too small with too small a population controlling its major stakes. This is more troubling because all the theories you studied in your B-Schools do not work in such a scenario. Share prices here do not go down based on change of CEOs here. Neither do they change with bonus declaration trends or balance sheet figures. Such makes the stock market extremely difficult to predict and manage for the early investors. And with a limited number of stock brokers around, and you standing at the back of a line requesting a low value ticket sale/purchase, you fall far behind in the priority line.

The trick here is to buy and sell shares from your friends, families and work peers, instead of being dependant on the broker.

Insurance

Insurance is a safe call, not an investment plan. Even when an insurance company offers you a pension plan that requires over 25 years of disciplined commitment from you, the returns are much lower than what a savings account would provide you in that long a period. Besides, Insurance companies here earn out of their deposits in the banks and pass on a portion of that income back to you. If you simply see it from an investment perspective, it is always better to get rid of the mediating channel and deposit the sum sincerely and regularly – directly to your bank account.

But insurance keeps you disciplined. Keeps you assured of your family’s well being as well, should something happen to you. And if it’s a pension plan, it ensures you keep on receiving your cash flow even during the last days of your life. Afterall, you start thinking about investments at an early age because you want to improve your financial stability and sustain that financial strength to the last days of your lives. Of course the rate of returns is relatively lower here, but you run no risk here. Instead, it takes a lot of risk burdens off your shoulders.

Fixed Deposits

Fixed deposits are your savings, not investments. Just that these savings have a ‘lock’ feature for a certain period and thus provide you higher returns than on your savings account, but that don’t change the nature of this instrument. Here again, the rate of return is directly proportional to the amount of risk involved.

You may take up a local cooperative in your neighborhood, or a newly opened bank that offers a handsome return. But banks with high rates can only sell high-priced loans. Buyers of high priced loans are the risky businesses who wouldn’t be honored by cheaper banks because these banks have safer clients they can invest on. So your high-interest deposits are actually invested in high-risk businesses, and should these businesses fail, the institution you bank upon fails alongwith.

Commodity Exchange

There are quite a few commodity exchange houses that have come up in recent days. And just like you trade in shares and bullions, they allow you to trade in commodities. You would be dealing in certificates and not real rice grains and sugarcanes and whiskey and so forth. The theory here is simple: buy when it is cheap, sell when it is expensive, enjoy the difference. But knowing the right times to buy and sell is a riddle you can only gamble upon. This means, commodity exchange is an option for those of you who are looking for high returns and are willing to bet high risk on your hard earned savings.

But it is also for those who go the extra mile to study the commodity trends, do sincere exercises to examine the past trends, influencing variables and stay on top of current affairs to affect the commodity prices. If you have what it takes to predict the price trends, this is a place for you. Gambling houses shut you off if you keep winning the house all the time. But Exchange houses will find you investors, supporters and followers when that happens here!

Make more out of your salary!

Make more out of your salary!

Did you know that there is a big gap between what you earn and what your company spends upon you. The difference is usually accounted for by TAX EXPENSE. However, there are a lot of benefits to work around for better returns out of your salary. While most are focused on minimizing your tax obligation, you will discover down the lines that you can actually make MORE out of your salary than what your company has to offer:

1. Invest in retirement funds. The government does not tax you on your retirement funds. In addition to the provident fund that goes into your retirement account, you can contribute up to 33% of your salary without exceeding a total of three lakhs per year, in contribution to your retirement fund. This option is of better value to you if you fall within the 25% tax bracket or above. This effectively increases the amount of money in your account by 24% (1% deducted as tax when you encash your retirement funds) and also allows you handsome interest on the funds. Though you may only withdraw the funds when you retire out of the job, you still can take loans against this fund to cover for some rainy day.

2. Invest in Life Insurance. The government also provides tax rebate on life insurance policies you take. However, tax is waived off on insurance premium of Rs. 20,000 per year. So if you are on a 25% tax bracket here, you end up saving Rs. 5,000 in your tax expense every year. So try contacting your insurance agent and asking for a policy that charges Rs. 20 thousand as premium per year. Different policies from different life insurance companies have varying returns at varying time frames. Do your homework to choose the policy that best meets your needs.

3. Take Loans. Sounds funny, but taking loans effectively increases your income! Of course, it’s a waste if you do not put your loan money to better use. Annual price inflations are at 18% per annum and growing. Just look back a few years and you will realize that a house or a gold/silver ornament or even the latest in electronic gadgets cost much more now than they used to cost a few years ago. Meaning, if you took a loan to buy a piece of land or a gram of gold three years ago, your total loan and the interest amount combined will not be able to buy that one gram of gold today. So, having taken the loan to capitalize on your ‘future income’ today itself, you have effectively accumulated more wealth.

While this is true in present context where expensive loan interest rates are still lower than inflation growth rates, it might not always be the same. However, for as long as inflation rate is higher than the difference between what rates you earn on your savings and what you pay on your loans, and you can afford to timely pay for the loan installments, taking loans for investments always makes you a richer person than one who waited to accumulate his/her savings for it.

4. Take loans to invest in retirement funds. Again a difficult idea to digest, but think about it – especially if you fall within the 25% tax bracket. If you take a loan of Rs. 100,000 and place it into your retirement funds during the fiscal year ends, you receive tax rebates of Rs. 25,000 on it. So your loan of Rs. 100,000 effectively becomes a loan of Rs. 75,000 only on the same day itself. You could further invest that Rs. 25,000 in your retirement funds or use it to settle that loan by Rs. 25,000. Either way, you would have earned yourself a 25% return on the loan right away. However, your benefit here is bound by a maximum of Rs. 300,000 you can put aside for your retirement fund every year. For amounts above that, government does not give you any tax returns and thus does not add to your savings or earnings.

Not only do these instruments add up to your earnings, they also add up to your safety and financial security for the long run. The government has allowed for tax returns on Provident Funds and Life Insurance Policies as a means to encourage public savings and risk hedging through insurance. Good luck with making more money out of the money that your employer spends on you.