As the 'Ber' months officially settle in, Filipinos are already making their countdown for Christmas! Aside from being a predominantly Christian nation of Asia who celebrates Christmas early, Filipino's are excited about the 'ber' months because of the bonuses that are coming!
Where do you see yourself spending these extra money? Whether you are a fresh graduate, young professional, middle aged worker or even a retiree, ask yourself where it's best to keep this money? Travel? Gadgets? Gimmicks? or somewhere that will be beneficial to you in the future?
Where do you see yourself spending these extra money? Whether you are a fresh graduate, young professional, middle aged worker or even a retiree, ask yourself where it's best to keep this money? Travel? Gadgets? Gimmicks? or somewhere that will be beneficial to you in the future?
Well, you’re lucky because we’re giving you the 10 best ways to invest and grow that money! Content Source: Grit.Ph / https://grit.ph/best-investments/
Don’t let it just sit in the bank. With low-interest rates from 0.5 to 1.5%, you’re better off investing it elsewhere.
And even if you don’t have a lot of cash saved up, there are still many ways to let your money work for you.
For many young professionals and entrepreneurs – in this information age – it’s conventional wisdom to consider investments early on.
1. Insurance (VUL)
Minimum Investment: Php 1,500 to Php 5,000.00/month
Life Insurance is something every young professional should consider.
Having an insurance is necessary if you’re thinking about getting a house or a car. But more importantly, insurance is a must if you want to ensure that yours and your family’s lives are secured especially for young Filipinos, the time to think about investing is NOW.
What is VUL?
Something that people should look into is a Variable Universal Life Insurance or (VUL). According to Investopedia, a VUL is a form of cash-value life insurance that offers both a death benefit and an investment feature.
It is basically a type of insurance bundled with an investment component. You’re insured but you can also have the option to invest your money. It’s ideal because you get the best of both worlds.
Aside from that, there are other benefits to VUL that differentiates it from other traditional insurance policies, such as flexible premiums.
Any excess amount you add to the premium will go to your accumulated funds. In case of a financial emergency, on the other hand, you can choose to only pay the charges without the plan lapsing.
And speaking of financial emergencies, one great feature of VUL is its liquidity. You can still access your funds in times of need. And unlike traditional policies, this is treated as a withdrawal and not a loan.
Meaning the amount withdrawn does not incur interests. Although it is encouraged that whatever amount was withdrawn should be immediately reinvested to keep on track with your financial goals.
2. Micro-lending and peer-to-peer lending
Minimum Investment: $25 (Php 1,250)
Another investment option young professionals and investors can get into is Micro-lending and peer-to-peer lending.
What is P2P Lending?
Peer-to-peer lending is the borrowing and lending of money through a platform without going through traditional means like the bank or other financial institutions.
What happens is, usually, an online company will bring together borrowers who need financing and lenders who would like to invest their money and earn through interest rates.
People are attracted to P2P because it cuts out the middleman – which is the bank, and provides better deals for both the borrower and the lender.
Because rates are a lot flexible compared to banks, borrowers can get relatively cheaper interest rates while the lender can still profit from a decent amount of interest rate.
3. Stocks
Minimum Investment: Php 5,000 (First Metro and COL Financial)
People may stay away from stocks because of having no knowledge about it. Most even just prefer to let their money be stagnant and stay in a bank.
But knowledge can be acquired so it shouldn’t stop you from investing in stocks considering it could make your money grow exponentially.
Investing in stocks allows you to buy shares of companies, you won’t be able to buy under normal circumstances, said Marvin Germo, author of Stock Smarts.
“The stock market gives you the opportunity to buy in companies, like partnering with SM, GMA, Jollibee,” he said.
4. Mutual funds – UITF – Balanced Fund
Minimum Investment: Php, 5,000
What are Mutual Funds / UITF / Balanced Fund?
So what are Mutual funds or Unit Investment Trust Fund (UITF)? According to Smart Pinoy Investor, a Philippine mutual fund is an investment company registered with the Securities and Exchange Commission (SEC), which pools money from many investors creating a massive fund under a common objective.
This fund is then invested in specific types of securities to achieve the stated objective.
This type of investment is ideal for young and new investors because you’re investing your money to experts who would know what to do to make your money grow.
There are four main types of mutual funds offered:
- Money Market Funds –invest purely in short-term debt instruments (one year or less).
- Bond Funds– invest in “bonds” which are really long-term debt instruments offered by governments or corporations.
- Balanced Funds– invest in a mix of shares of stock and bonds.
- Stock / Equity Funds– invest primarily in shares of stock
5. Small Business
Minimum Investment: Php 5,000
Small business is another investment that you shouldn’t pass up. A lot of people might not be inclined to try this out because of the fear of failure. But why should that stop you?
Failure is just a part of life and taking risks is important if you want make your money grow.
But if you’re still apprehensive, you could always start small. With just 5,000 pesos, you can get into the food business. You can go with street foods, gotohan or mamihan.
If you’re the type of person who likes Karaoke, with a few more money (around 25,000), you can do Karaoke rentals. There are several options for those who want to start a small business for under Php 100,000.
6. Real Estate (foreclosed properties)
Minimum Investment: Php 10,000 – 15,000
For those who would like to own houses through installment, there are cheap mortgages that would only cost Php 2000 – 3,000 a month.
Another investment to of course consider is real estate. If you’re thinking about owning a property but you’re wary about how much you want to spend, you may consider buying Foreclosed Properties to get a cheaper deal. For as low as Php 11,000 you can own a foreclosed land.
7. Cryptocurrency
Minimum Investment: $100 – $1,000 (Depending on the Cryptocurrency)
What are Cryptocurrency?
If you’ve never heard of Bitcoins or cryptocurrency, don’t worry. It may be an unchartered territory for many people but it’s basically a simple concept.
Cryptocurrency is simply digital or virtual currency that people on the internet use to trade. It uses cryptography for security to ensure the safety of the traders. It’s most appealing feature is the security from the government that it offers. Because your currency is encrypted, the government can’t monitor it.
Bitcoin is mainly the most well-known type but there are other types of cryptocurrencies that are actually cheaper and might be more ideal for you.
Now you may try to avoid this because of the sketchy ways cryptocurrency can be used. But Bitcoins and cryptocurrency are legal depending on where you are and what you plan to do with it.
The Central Bank of the Philippines has issued a warning on virtual currencies but has stated that they are not subject to any regulation.
8. Buy a website (for passive income)
Minimum Investment: $500 – $1000 (depending on the bid)
Buying a website is something you should definitely consider. If you don’t want to go through the hassle of building a website and gather an audience for that site, then buying a readymade one that’s already profiting is definitely advisable.
It’s a great and easy way to acquire a passive income. You can check out Flippa.com to look for websites being auctioned.
9. Forex Trading
Minimum Investment: $100 (Php 5,000)
According to FXCM, Forex, also known as foreign exchange, FX or currency trading, is a decentralized global market where all the world’s currencies trade.
The forex market is the largest, most liquid market in the world with an average daily trading volume exceeding $5 trillion. So, it would really be advisable to dip your toes into foreign exchange trading if you want to grow your investments.
10. Invest in New Skills
Minimum Investment: Only your time and effort
Investing in new skills and yourself is something that people tend to forget but is very important whether you want to invest in business or not. You don’t have to go to a formal school to learn new skills. But if you have the money, you can take courses or even get a post-grad degree.
For those who don’t have the money for expensive degrees, here are other alternatives you can consider:
- Online Courses – Take online courses which are usually cheaper and may sometimes even be free. Take courses on starting your business, choosing the right investment, financial planning, blogging, SEO, marketing, anything under the sun. There are infinite courses to choose from and you have to take advantage of the services offered online. Skillshare is a great website to take classes from and you can get coupons to get free classes for a couple of months.
- Seminars and Workshops – There are seminars and workshops you can attend to, some for as low as Php 1,000. As was mentioned above, you can take seminars for investments in real estate and stock markets to name a few. It will also be a great way to meet peers who are interested in the same endeavors.
- Books – Books are investments. If you want solid knowledge on any subject matter, then buying a book on it is always a wise decision. The trick to reading a book if you’re busy is to look at the table of contents and to just pick chapters that would seem more applicable for you. This way you won’t have to read the whole book.
- Youtube – Youtube is a website that is truly helpful for no cost. You can learn any skill from watching thousands of free videos on any given subject, may it be Bitcoin, Forex, stocks. You name it. The site is a wealth of information you can access with just your smartphone.
Wrote by Diaries of A Financial Traveler
