In this post-pandemic time, it seems we’re caught in between tides, working on our respective careers, working on our mental health while working for our future. Some of us are still massively distraught from the recessionary effects of the pandemic, and we’re still working on different ways to recover. Others are healing quite nicely after the pandemic, while others are still figuring out how they can turn their lives around after the shock of the pandemic.
In this article, we will be discussing one of the hottest topics globally, which is – investing! People are talking about how and where they can support their hard-earned money, thinking about passive income routes, shortcuts, and stocks! We’ll save you time and get into the details of how you can obtain financial freedom through investments. Here are the top 10 best investments you can make in the Philippines…
What is an Investment?
An investment is an asset or item purchased along with the goal of creating profit or income from the property acquired. Investing is driven by the concept that the purchased good will appreciate and offer a more significant return. Investments come in different types; some vary from short-term to long-term investments, while others set the bar for medium investments. Whichever investment you will be choosing, this will entirely depend on your goals and the amount of money you wish to invest in a particular asset or item.
The Different Types of Investments
- Short-term Investments
These investments are considered the most accessible and affordable type of investment. Short-term investments have lower costs to purchase but yield lower rates of return. Despite their size, these investments are usually malleable with zero to no lock-in period and will often come with an opportunity to withdraw your investment should you change your mind.
- Medium-term Investments
Medium-term investments are often locked into a saving period of five to ten years. Some assets that fall under this category include time deposits and trust funds. Medium-term investments are also affordable, but they have more extended time requirements.
- Long-term Investments
This type of investment is often designed for retirement. Hence, long-term investments come with a more considerable sum of money once the investment period is due. Long-term investments appreciate through the years with a set interest rate pleasing to the fund we have invested in.
Importance of Investments
Investing is an effective way for you to grow your money. By putting your money to work, you are building the amount you have invested in creating a compounding interest for your allotted investment. Whichever type of investment you decide on, you are helping the potential for your money to grow and inflate through the period you have selected for your investment period. Beat inflation and have enough money for rainy days, this is one of the primary reasons why investments exist.
The Top 9 Investments
- Stocks
Investing in the stock market is one of the most popular investments in the Philippines and all over the world. When you invest in the stock market, you will be placing your money under a calculated risk for highs and lows, this is otherwise referred to as “financial risk.” Buying stocks means that you will be purchasing a portion of shares from a profitable company.
Investing in the stock market can be done through reliable financial institutions such as COL financial services or a reliable bank. In the Philippines, you can invest in the stock market with an initial investment of as low as Php 5,000.00. You can keep your money rolling by purchasing more stocks at lower costs and selling them off when stocks change.
- Mutual Funds
Mutual fund investment is a process where a company pools together different amounts of money and uses this amount to invest in another company, such as a startup or business that has a proven track record of generating monetary growth. Investing in a mutual fund requires good research before one should invest, as a person who will be investing in a mutual fund must understand that some advantages and disadvantages come with this form of investment.
Mutual funds, on the other hand, offer lower risks than the stock market. It is important to consider which companies you will work with in this type of investment to avoid experiencing troubles with obtaining your return on investment, or “ROI.”
- Insurance
Insurance investments seem like they’re everywhere lately, and it’s like they have been more accessible since the pandemic. Now insurance is a little different compared to stocks and mutual funds investment. However, if you’re looking to have enough when the going gets tough, investing in insurance is your partner!
There are many different insurance plans you can avail of, and more accessible at that. Insurance agents are all over these days; you probably know of a handful of people who work in insurance. The only catch when investing in insurance is that you will have to invest a particular amount of money each month or every other month. On a lighter note, you can also invest your money on plans that don’t feel too heavy in your pocket. Some insurance plans start at Php 500 per month, while others have higher rates – choosing whichever plan suits you best entirely depends on you.
- Real Estate
Real estate investments are on the heftier side of investing. From its title, it already suggests an idea about how much it might cost. Some real estate investments go from one million pesos to higher amounts. Real estate investments may be in the form of a house and lot, a condominium, or a townhouse for rent. Others ignite their creativity by offering rent and Airbnb options for their properties.
Real estate investment is a lucrative way to raise the notch on the value of a particular property you will be purchasing or have already purchased. This type of investment is often more stable compared to the stock market or bonds. Should you choose to invest in real estate, be weary about the legal and governmental requirements you will have to work on and accomplish, such as taxes and permits.
When you invest in real estate, you can also buy and sell properties. Purchase pre-selling condominium units and sell them off at a higher price that is still lower than the standard-reselling price – this way, you will get your return on investment while also making a good profit. If you think outside the box, you can also invest in commercial real estate, which includes buildings, offices, and warehouses.
- Bonds
Bond investments are often offered by a private company to another company or government institution. Bond investment is a debt security that can sometimes perform the role of an inflation hedge. Bond investments reduce the volatility rate of a company’s portfolio performance. This means there will be less motion for a particular investment, and the amount invested will remain within a safe border.
- Exchange-traded funds (ETFs)
Exchange-traded funds are similar to mutual funds as both of these investments require a process of pooling money, but the difference is that exchange-traded funds track a particular asset, index, or commodity. Exchange-traded funds can be sold the same way as stocks are traded. In ETFs, there is a requirement to pay their investors any dividend generated from the progress of the fund. This way, there is a guarantee that an investor will their a return on investment.
- Bank Investments
Second, to stock investments, bank investments are also a popular choice among people who want to invest. One of the best things about bank investments is that any amount you invest under Php 500,000 is insured by the Banko Sentral ng Pilipinas. This means that in any occurrence that a bank goes under, your invested amount is safe and will find its way back to you.
Some bank investments include the buying and selling of shares, but to be specific, you can invest in deposit accounts or time-restricted accounts. Bank investments are known for their security; however, they are also known to be the entities that provide the lowest interest rates. If you are not fond of investing with low-interest rates, you can also open a savings account which will help you build a practice of investing.
- Business
Like any investment, there are risks associated with your decision to invest. Investing in a business requires you to calculate and research a marketable idea that will help your money grow. Some business investments include franchising or creating an online business and joining one of the world’s leading industries – eCommerce.
If you’re thinking about starting your own business, make sure you are not blinded by an idea alone. See to it that you research the market you want to serve and how you will go about your procurement process, and everything else. Investing in a business also involves a lot of legwork on your end. Before making your first million, think about how you will build a company or product that people want and how much you will allot to make that happen.
Do your research and analyze the trends in the market. Consider what your goals are and how much time you are giving your business to grow and earn a profit. Gather as much information as you can about your chosen industry, and be keen on observing how your market changes over time. While you’re at it, you can also get some help from professionals who are experts in your chosen industry and work with a team who can help you grow your business from scratch to growth.
- Personal Investment
There is no other investment in the world that will beat investing in yourself. Investing in yourself is the top-tier investment you can make. Invest in skills that help build up your strengths. It could be public speaking, graphic design, writing, or something completely different. Invest in your health, go for long walks, go for a bike ride, and take your vitamins. If you only invest in tangible investments and lose sight of investing in yourself, you will have the most challenging time appreciating the fruits of your investment. Invest in being present for yourself on a daily basis.
Takeaway
All investments come with a risk. No investment is a hundred percent risk-free, and if anybody tells you otherwise, you should run away because that’s a scam. In all forms of investment, there will always be a chance for financial losses, but there are also ways that companies practice to minimize risks and prevent these losses. Aside from risks alone, different investments come with their respective gains. Selecting which investment plan suits you best is dependent on how much you are willing to allow for the process of investing and how long you want to invest.
One of the world’s most well-known polymaths – Benjamin Franklin, shared a timeless sentiment that investors today ought to know. Benjamin Franklin shared: “An investment in knowledge pays the best interest.” When it comes to investing, be it tangible or intangible, there is nothing that will pay more than being keen. Becoming a well-rounded person with good intellect will help you strategize in the stock market, in mutual funds investments, or in business ventures. There are countless investors who are stricken by the idea of investing only in the most popular forms of investment. May you be the investor who works on achieving your goals outside the bandwagon.
No matter what situation the economy is in, be it in a state of inflation or recession, you must play the role of being smart with deciding where to invest and how you can take the intelligent route which will yield good returns.
nice post, very helpfull.