5 Things to Consider Before Investing

“𝑃𝑎𝑎𝑛𝑜 𝑘𝑜 𝑚𝑎𝑝𝑎𝑝𝑎𝑙𝑎𝑔𝑜 𝑎𝑛𝑔 𝑝𝑒𝑟𝑎 𝑘𝑜? 𝑆𝑎𝑎𝑛 𝑏𝑎 𝑚𝑎𝑔𝑎𝑛𝑑𝑎 𝑚𝑎𝑔-𝑖𝑛𝑣𝑒𝑠𝑡?”

I often see these questions posted on many finance-related communities in Facebook. Of course, it makes a lot of sense. Who wouldn’t want to grow their money? Ika nga, 𝑚𝑎𝑘𝑒 𝑚𝑜𝑛𝑒𝑦 𝑤𝑜𝑟𝑘 𝑓𝑜𝑟 𝑦𝑜𝑢 𝑖𝑛𝑠𝑡𝑒𝑎𝑑 𝑜𝑓 𝑦𝑜𝑢 𝑤𝑜𝑟𝑘𝑖𝑛𝑔 𝑓𝑜𝑟 𝑖𝑡. Nakaka-excite isiping hindi na tayo forever magpapakalipin sa trabaho, no? Kasi may mga investments na tayo, money will be working for us.

So paano nga ba malalaman na ready na talaga tayo mag-invest?

Here are 5 things to consider before investing so we can properly build our investment portfolio:

1. Establish a regular source of income.

It’s important to invest regularly. This means you should have extra money every month set aside solely for investment purposes. You should have a regular cash inflow na galing sa sweldo mo, sa mga side hustles, o sariling negosyo.

It’s also a great idea to make time to improve your ability to earn. After all, investing in yourself may be the most profitable investment you’ll ever make.

2. Have a money plan.

Start by setting your financial goals. Be as specific as possible. What do you want to achieve (and why), how much ba kelangan mo for each goal, and by when?

Have a monthly budget, and track your cashflow (income and expenses) para alam mo kung ano ang kayang i-adjust if kailangan.

3. Build your emergency fund.

Kailangan may ipon ka na worth 3-6 months of your expenses para may magamit ka sakaling may emergency. Kung walang dependents, okay na ang 3 months, pero kung may dependents, aim for at least 6 months for emergency fund. Kung freelancer ka, ideally meron kang up to 12 months ng expenses sa bank.

Hindi ka dapat nakarely sa investments mo lang.

4. Get insured.

Buying life insurance early actually saves you money and protects you from the what-ifs of life.

Make sure you invest in your protection. Get life insurance, especially if you are the breadwinner or you have dependents. If you don’t have dependents yet, it’s a great idea to start with health insurance with critical illness coverage, like Sun Fit and Well. (Contact me if you’d like to have a personalized quotation).

If you haven’t yet, reach out to a financial advisor you trust to help you study your options based on your current financial status and your money goals.

5. Do your own research.

Study your investment options. You have to be responsible for your own financial decisions. Huwag magpadala sa hype.

Balikan mo ang financial goals mo at i-assess ang iyong timeframe, at level of knowledge and confidence sa iba’t ibang investment vehicles.

Maraming factors ang dapat iconsider para makapili ng tamang investment para sa inyo.

• purpose ng investment at timeframe kung kelan nyo gagamitin ang pera. Example, kung pag-ibig MP2, isipin natin na after 5 years pa yun pwede makuha. If kailangan mo na sya in 1 year or less, baka better time deposit mo na lang. Or kung pang-retirement pa, pwede iconsider ang stock market, mutual funds, or VUL.
• amount na pwedeng mainvest. Kung gusto magstart lang, may GInvest ang gcash na pwede kahit 50 pesos. Kung malaki-laki, baka pwede ka sa mag-invest sa properties gaya ng lot or condo unit na pwede pa-rentahan.
• risk appetite ninyo. Ang investments kasi may kaakibat na risk. Kung low risk ang investment, maaaring mababa lang din ang tubo nito (ex: bonds). Kung high risk naman (ex: stock market or cryptocurrency), masmalaki ang potential na tutubo, malaki din ang chance na malugi.
• level ng expertise ninyo sa investment. Mag-invest lamang sa instruments na napag-aralan ang naiintindihan natin. If may time pag-aralan ang crypto at stock market, go. If wala naman and di masyadong komportable pero gusto pumasok sa stock market, baka pwede sa mutual funds or VUL kasi may fund managers yun.

Final Thoughts

Before we think about investing, it’s a great idea to focus first on our money foundations. And learn as much as you can. As Warren Buffett said, “The best investment you can make, is an investment in yourself. The more you learn, the more you’ll earn.” 

Do you have questions about achieving your best financial future? Let me know.