Start Investing with Only P10,000 in Your Wallet

There are many reasons why Filipinos are not investing. Aside from lack of financial literacy, one of the common reasons why Filipinos don’t invest is the lack of money.

What if we tell you that you don’t need hundreds of thousands to start investing. In fact, you can have as little as P5,000 or even P10,000 and you can grow your money in no time – assuming you made the right investment option.

Is that possible? The answer is yes and we will tell you how.

1) Start by knowing and educating yourself about the different investment options available. 

You only have P10,000 and you need to make it work. If you are serious about investing, start looking at the different investment options available that will fit your budget. This includes:

  • Unit Trust Investment Fund (UITF) – This investment options gathers funds from different individuals to create a larger fund managed by professional fund managers of the bank that take advantage of economies of scale. This is ideal to help you achieve mid- to long-term goals.
  • Mutual Fund – Similar to UITF, but this is often issued and managed by investment companies.
  • Stocks – This option allows you to buy shares from a particular company, thereby making you a part-owner. COL Financial is one of the top brokers that allows you to invest in stocks in as little as P5,000.
  • Time Deposit – The interest is slightly higher than savings account wherein your money is “put on hold” for an agreed term. Learn more about time deposit here.
  • Small Business – It can be in the form of a sari-sari store or starting your own craft or food business. If you are willing to shell out few more thousands, you can be a franchisee.

It is important that you read up and learn about the different investment options to help you not just decide but also understand how they work.

2) Identify your investment goal. 

It’s not enough that you know what kind of investment tool you will use to grow your money. You also need to identify your investment goal or where you plan to use the money you will earn.

Do you plan to open a small business? Do you want to buy a car or house for your family? By knowing your investment goal, it will be easier for you to choose what type of investment you will avail in order to achieve that goal.

3) Choose the right partner. 

Financial partner, that is. There are many banks and investment companies that offer investment products that promise to grow your money. Before you decide on who will help you achieve your financial goals, make sure you check the institution’s background, track record, and performance first. These factors could help you decide whether it is safe to seek help from these institutions in not only securing the money but also making it grow.

4) Add more, if you can. 

Don’t just limit yourself with P10,000. As much as possible, aim high and aim for a little bit more than your initial investment.

Instead of sending 90 percent of your money back home, allow 50 percent only for remittance and the rest for savings and other equally important expenses. The bigger your money, the higher the return will be and the faster it will be for you to achieve your investment goals, which leads you to this next tip.

5) Go long term. 

The secret to growing your money? Aim for long-term investment.

You might be excited to see your money grow, but keep in mind that many investment options such as time deposit is compounded. This means if you place P10,000 in a time deposit for six months with 5 percent interest, after six months, the earnings you will gain will be added on your P10,000. If you wish to continue for another six months, your P10,000 + earning will earn another 5 percent.

The bottom line is this: don’t let that “no or little money” excuse get in the way of investing. No amount of money is too small when it comes to investing – as long as you start early and you choose your investment option wisely.

Things You Shouldn’t Splurge On If You Want to Increase Your Savings

Many OFWs feel guilty for leaving their families behind in exchange of good life. To make up for it, many of you resort to material things and buying all the bilins as your way of showing your love.

That’s fine, as long as you do it occasionally. The problem lies when you send a balikbayan box to your family once a month (or once every two months) that is full of goods. Sure, you were able to appease your family, but what will be the effect of your purchases on your bank account?

The key here is to be wise with the items you need to buy. If you really want to retire early, then make sure you avoid splurging on these items:

1) The latest gadgets – Do you really need to buy the latest iPhone when you only bought one few months ago and the difference is the camera’s megapixels? It’s okay to buy gadgets, but if you will do it after every few months or if the existing gadgets are not yet broken, then these items are not worth splurging, even if they cost lower abroad than in the Philippines.

2) Too much cosmetics. Unless you plan to sell it for additional income, it is advisable to take it easy on makeup and other cosmetic products. Cosmetics have a short shelf life, which means they are not meant to last long, especially once it is opened. Plus, your wife doesn’t need a dozen of lipstick and surely, your daughter doesn’t need to wear one, especially when in school.

3) Food available in the Philippines. There’s a buy one, take one of chocolates and canned goods, so you bought tons to give it out to friends and family. The promo can be tempting, but it turns out that you can buy all those items in the Philippines too – and yes, it can be a waste of money. If you want to buy consumable items, make sure it is not available in the Philippines – but take it easy on your purchases, please.

4) Common pasalubong items. Keychains, generic shoes, shirts in different sizes, and fridge magnets – these are some of the common items you buy when you go home and to be honest, you don’t need them. Even if your intention is to give something to your family and friends, there is a chance that they won’t use it too, or at least treasure what you gave. Save yourself some time – and cash – and minimize buying for other people.

5) Expensive or trendy shoes and clothes. They may be in or they have “yabang” factor, but does your family really need them? One or two expensive shoes is fine, but buying them all the time can hurt your savings. Plus, it is something they won’t use forever, so what’s the point of spending on them?

The bottom line: Take it easy on your spending. It’s okay to buy pasalubong for your family, but don’t spend your hard-earned money worrying about your extended family and friends’ bilin. If you want to increase your savings, then you have to be wise with your spending.

What You Need to Know about the Special Power of Attorney

One of the most common questions asked to us is the process of applying for a loan when you are abroad. Many lenders require the OFW-borrower to be in the Philippines because of the documents that needs to be filled. Nonetheless, they understand that time is not on your side and there is a possibility that you have to go back in the middle of the application process or even before the funds are released.

What can you do? The lenders will ask you to sign a Special Power of Attorney or SPA.

Special Power of Attorney, simplified 

By definition, SPA is a type of legal document that allows you to appoint and authorize a person or an organization to handle your affairs when you are unavailable, unable to do so, or in your case, while you are abroad. The person you will assign will be called attorney-in-fact or agent and he or she will transact on your behalf.

Who can be your attorney-in-fact?

The answer is anyone, as long as you can trust him or her. He or she can be your spouse, any one of your parents, child above 18 years old, or a trusted friend or relative. There is no limitation as to who you can appoint, but make sure that person is honest and trustworthy since they are representing you.

Does the SPA have to be notarized? 

The general rule is no, the Special Power of Attorney need not be notarized to be valid; however, this rule applies ONLY when you executed the SPA in the Philippines.

What if you are abroad? Then the document must not only be notarized but also be consularized. This means the Philippine Embassy or Consul in the country where you are assigned duly certified and authenticated the SPA you executed. Otherwise, the SPA will not be binding and the lender will not allow anyone to process your loan application in the absence of this document.

For SPA to be consularized, you must comply with the following requirements:

  • Holder of Philippine passport, with the first and last page photocopied.
  • Presentation of any Philippine government ID in the absence of passport (please confirm this with the Philippine Embassy since some may require both passport and ID).
  • Personal appearance.
  • Two witnesses of legal age, who must accompany you in the Embassy to personally witness the execution of the SPA. Take note that the witnesses must also present proof of identification showing that they are of legal age.
  • Payment of notarial fee, which will vary per country.

Even if you assigned someone to transact on your behalf in connection with the loan, take note that the powers and duties are still limited. Your attorney-in-fact may receive the loan proceeds and sign documents on your behalf but s/he cannot sell any of your assets.