10 Practical Investment Tips for Filipinos

Nowadays, people get excited about the possibility of getting a nice return on their money through INVESTING.

So as soon as they have a little bit of cash on hand, they’re ready to invest. It’s completely understandable that they want to make their money work for them. I know I do.

But like any battle you choose to fight in, you need to be equipped. You don’t just go into war empty-handed and expect to make it out alive. The same goes for your journey in investing. You need to have the right arsenal to significantly increase your chances of winning.

10 Practical Investment Tips for Filipinos

1. Evaluate your “Net Worth” first

By allowing yourself to know your NET WORTH first, you can evaluate your financial standing at a glance.

Net Worth is the amount left over if you sold all of your assets to pay all of your liabilities.

Do you have enough cash in your emergency fund? Are you buried in too much debt? You may have too much of a certain Asset, so where should you invest your money next?

If you go straight to investing without a “backup” fund and the money you invested dwindles, how are you going to cope with emergencies?

These are some of the questions you should ask yourself before diving into investing. So better assess your Net Worth first. From there, you’ll have an idea of how and which financial instrument is worth investing in.

Below is an example of a Net worth Tracker that I personally use. I’ve added more categories for your perusal. You may download it to keep track of your Net worth too. 🙂

Download this Free Net Worth Tracker Here

Net worth tracker

More than anything else, your financial focus should be on how to make your Net Worth bigger. There are a lot of ways to make it bigger: paying off debts, not spending money on foolish or wasteful things, improving your income, and yes, investing.

2. Create an Emergency Fund

Having an emergency fund lets you start your investment journey with a bit more ease.

I’m an advocate for what I call the “perpetual” emergency fund. Set up an online savings account with your local bank of your choice and then set up an automatic weekly transfer from your payroll account into your savings for some small amount that won’t kill your budget but will build up reasonably rapidly.

Then forget about it. Let the cash build over time. I recommend never turning off the transfer. If you’ve reached the balance you’ve been aiming for, take some money out of the account and invest it.

3. Create SMART Financial Goals

One of the most unpopular yet critical investment tips for Filipinos is creating realistic goals.

It is equally important to have your financial goals set in place and then invest accordingly. Be it buying a dream home, car, or saving for retirement, you need to create a Financial Goal and you need to make it S.M.A.R.T.

SMART Goals should be Specific, Measurable, Attainable, Relevant and Time-bound. By making sure your financial goals have all these characteristics, you can make them more achievable.

The goal, “ I want to save more money starting today,” is ambiguous and meaningless because you haven’t planned out a specific way to accomplish your goal, nor have you created a benchmark to use so you will know if you are attaining your goal or not.

But if you compose a plan, let’s say,  to save P100,000 within 6 months by saving P10,000 from every paycheck, lessening your shopping spree and movie nights, then you’re on the right track.

Read more about Setting SMART Financial goals here:

https://thethriftypinay.com/2018/06/11/money-management-for-beginners-6-easy-tips-to-manage-your-money-wisely/

Or you can learn more about SMART Goals in this infographic:

4. Figure Out What Your Big Life Goals Are

Similar to No. 3, but this time, you need to determine your big “WHY?”

One of the key principles of investing is to NEVER INVEST without a PURPOSE.

What’s your goal? Why are you doing this? Figure that out before you invest a single peso.

Without a specific purpose in mind, you can’t really assess your timeframe for investing and how much risk you’re willing to take on, both of which are vital questions when it comes to investing.

Practical Investment Tips for Filipinos
10 Practical Investment Tips for Filipinos

Why are you investing? What are you hoping to do with this money? Are you hoping to attain Financial Freedom and live off the returns? That’s a long-term goal, so stock investing might make sense.

In case you are ready to invest in Stocks, you can consider investing through Ecn Trading platform to start the journey of earning in stocks.

Thus, if you have a short-term goal, it’s best to have a different approach.

Maybe you’re investing to go and take your family on a Ship Cruise after a year. In that case, investing in stocks probably isn’t the best idea, since you’ll need the money reasonably soon.

5. Due Diligence on Investment Options

If you want to know how to invest money wisely, then it is best if you do your due diligence on all the financial products in the market.

Read, read and read. There are many financial blogs like The Thrifty Pinay (ahem, ahem!), financial books, financial groups, and forums online that you can learn a thing or two from.

Do your research. Broadening your knowledge will give you the confidence in investing no matter how bullish or bearish the market may be.

Even if you plan to have a financial advisor to handle your investing, you should still take the time to understand the things that your money is going to be invested in. Simply trusting someone else to handle it is usually a no-no.

Remember, never invest your money in something you don’t fully understand.

6. Have a Healthy Understanding of Your Investment Options

Do you know the basics of what stocks, bonds, mutual funds, ETFs, Index funds, jewelry, and real estate are?  Have you read about Forex Trading? Do you know how to compare Equity Funds from Balanced Funds?

You need ample knowledge of those before you begin to invest.  It will help you determine which investment option suits you best.

7. Be transparent with your Spouse/Partner

I am a firm believer that TRANSPARENCY is key to a smooth and lasting relationship, most importantly when it comes to investing both of your hard-earned money.

If you’re married, any investment plan you take on should be discussed in full with your spouse. Here are some key points that need to be tackled:

  • What is the goal?  What are we hoping to achieve?
  •  What is the plan? What Financial instrument/s are we choosing?
  • Are we in this for the long haul or for the short term only?
  • Are we both on the aggressive/risky investment or should we both stick to a conservative one?
  • Where are the accounts and whose name is on them?
  • Is this something we both agree on?  Is the plan something that matches our values while also achieving the goal?

If you and your spouse are not in the same boat before you start investing, you’re begging for trouble down the road, trouble that can start as soon as your spouse notices the money vanishing into an investment account.

8. Have a Bank that offers Online Banking with Automatic transfers

Online banking is nearly a standard today, as are automatic transfers to and from different accounts. They simply make our banking transactions easier and more convenient, the reason why I always sign up for online banking.

Why are these features so important?

For newbies, you’re going to need to make automatic transfers if you want to set up a regular investing plan of any kind. You want your plan to run on autopilot.

You’re also going to want to be able to check regularly to make sure that money is being transferred out from one account to another, which you’ll need online banking for.

If your bank does not render this feature, start shopping around for another bank.

Related: Do you really need a Bank Account?

 

9. Have a support Social Circle with the same goal

You’re The Average Of The Five People You Spend The Most Time With.-Jim Rohn

Assess your social circle.

While it’s vital that you have a mindset that’s focused on net worth and smart financial moves, do remember that you are strongly influenced by your immediate social circle as well.

If they’re not committed to those things, it’s going to be harder for you to make those kinds of commitments.

Or better yet, spend some of your free time at gatherings with people who have a strong financial perspective.

Try to explore other friendships with people you might not have ever hung out with before. You’ll create friends over time, ones that are supportive of positive financial progress.

10. Practice DELAYING GRATIFICATION

This is the final strategy for getting ready for investing and it’s a big one. You need to have a strong grip over your wants and desires.

You need to rule them; they shouldn’t be ruling you.

It’s human nature to feel inevitable to want things sometimes.  We see airplane tickets on sale, items related to our hobbies and interests, and we may easily give in.

Will you go ahead and buy that item as soon as possible? Or will you put up the facade of thinking about it for a while before buying? Are you strong-willed enough to put off your desires for later, or do you give it instant attention?

Have self-control. Practice Delaying Gratification.

https://thethriftypinay.com/2022/03/18/list-of-best-investments-in-the-philippines-2022/

Final Thoughts:

Similar to constructing a building, if you don’t have your foundation in order, any building you assemble is just going to crumble right to the ground.

Get your foundation in order. I hope these 10 tips will help you get started on the right foot so you’ll never stumble.

Ameena Rey-Franc

10 Practical Investment Tips for Filipinos

 

 

By Ameena Rey-Franc

Recognized as one of the Top Finance Blogs in the PH. Ameena Rey-Franc (founder of TTP) is a former Banker and BS Accountancy graduate turned Blogger, Keynote Speaker, and entrepreneur. Currently an RFP delegate, she is also the Author of a book about Financial Resilience and has held seminars for reputable companies like GrabFoodPH, Pru Life UK, VISA, JPMorgan Chase& Co., Paypal, Fundline, Moneymax, and many more. The Thrifty Pinay's mission is to empower women to LEARN, EARN, and be FINANCIALLY-INDEPENDENT no matter what life stage they are in.