With the many years that we have been in school, I don’t remember us being taught about how to invest our money. We were mostly told to save money, instead. Now, don’t get confused with these two words. When we talk about saving money, it is the money that we set aside but we have easy access to. Example, the money that we earn in a month should be wisely distributed among the immediate needs of the family such as food, clothing, utilities, education, and for emergency purposes. It is said that one should have a savings of at least equivalent to 6 months salary. You may never know when you will need it. So, why not set aside at least 10-15% of your monthly salary each time?
Investment is something that you place your money in, kept for a certain number of months or years which you allow to grow through interest. So, over time, you are aware that the money that you have invested in (principal amount) will be more than that when the investment matures. If you check with your local banks, you will be offered with different kinds of investments. Some may have a low-interest rate and some would offer high-interest rates. I am not a financial expert, but I do know that the bigger the money that you invest in, the larger the interest rate.
Types of Investments
There are many types of investment which you can consider if you wish to have a secure future. These are:
- Stocks. Check on which companies have a good standing these days. We used to have Petron. The IPO back in the 1990s was just about Php6.00/share. We were able to sell it when it reached Php24.00/share. It was quite unfortunate for my father in law because he was not able to sell his stocks when it was that high. Now, I think it has never gone up more than Php10.00/share. You might want to consider checking on this as your guide.
- Bank products. Different banks offer different kinds of products with great benefits. For example, the Bank of the Philippine Islands is offering BPI Philam Life Assurance, an insurance with investment. Apart from securing your money, it has an added benefit of encouraging you to live a healthy lifestyle via Vitality Mental Wellbeing Assessment. So, this is practically a win-win situation. The money that you let the bank keep for you will ultimately grow and at the same time works with you to make a great change to your health.
- Investment Funds – These are money from various investors that are pooled together and is invested according to a specific investment strategy while each investor retains ownership and control of his own shares. Such investment funds include mutual funds, money market funds, and hedge funds.
- Real estate. This is probably the best investment any OFW should have as soon as they have earned enough money. The cost of real estate properties always appreciates. And by choosing the right location, you may just hit it big time. I remember my father in law used to tell us that when he was younger, the property near Max’s Restaurant in Scout Tuazon St. in Timog, Quezon City. It was sold under Php10.00/sq. meters, and now there is no property in that area that you can buy for less than Php5M for just a 240 sq.m. property.
How To Set Your Retirement Goals
Newly employed or the young entrepreneurs may have their eyes on going to parties, visiting different local and international destinations. And as we would always hear from millennials after working hard, that they deserve the treat. I couldn’t agree more. However, to splurge on luxurious things without setting aside money for the future may just lead them back to just where they have started – to NOTHING! I do encourage young people to focus on their long-term goals rather than just living for now and not having the resources when they grow old. Do you think your future children will be able to sustain all your needs all the time when they start to have their own families? We only hope that they will become successful. As much as possible our goal should be to become financially independent and not to become a burden to our children.
An ideal way to be able to achieve your financial goals is to remain focused on what you need for your future. As much as possible, set realistic goals to make it easier for you to concoct a perfect plan. Unwisely using your hard-earned money will make you just unhappy and will surely stress you over. And we know what comes next – deteriorating health. So, how can you even enjoy your retirement when you have spent all your days in bed or in the hospital.
Don’t hesitate! Start planning for your future now and not when you have more time or money to invest. Never think that making an investment is only for the rich people. You don’t need to force yourself to invest Php1M if you don’t have that much now. Just increase your investment in increments. And one day, you will just be surprised at how far you have gone. Make an action plan to reach them. Who knows? You might even retire younger than you thought.
- Determine how much annual income you will need to sustain your lifestyle. Do include the maintenance medications that you need, the utilities, and the basic necessities, of course. You are likely to spend less, assuming that you are free from any monthly mortgage on your home or car.
- Receiving a pension from Social Security Service is very beneficial. For some, it may be their only money during their retirement years which may be unfortunate since Filipinos are tightly-knit families, the children and grandchildren may still be dependent on their grandparents. The amount that a retiree may receive may go anywhere between Php2500 to as much as Php11,000. Therefore, the amount of contribution you paid depends entirely on how much you will receive each month.
- Stay on track with your retirement goals. If you think you have more than enough on your investment and savings, I don’t think it is wise to actually spend all of it to something not worthwhile. I do suggest, that to be able to have multiple streams of income, to invest in building an apartment and have it leased. In that way, you are sure that your money is safe and you have something that you can leave for your children.
Retirement for some may mean solely about themselves. As if it is their second chance to become fully independent and become worry-free from all financial obligations. But, I see it differently. We may be successful in achieving our financial/retirement goals but we should also consider the family that will all be left behind when the time comes. I’d rather have something left for my children than make them struggle all their lives. What do you think?
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