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.