S1 E6 Invest Now, Invest Early | The SavingsPinay Podcast
Investing is a big financial move.
And it can be pretty scary especially for first timers.
The day I decided to make my first investment, I wasn’t really sure what I was doing. I had my fears and reservations too.
But, what led me to consider investing my money came through constant reading and researching.
The more I got exposed in the basics of personal finance, the more I learned the principle of investing. And how it is more of a need rather than a want.
Let’s admit it, “INVESTING” is such a foreign word for Pinoys.
A lot of Filipinos are afraid of the word “investment” thinking its a scam, a form of networking or tactic to lure people and lose their money.
But investing doesn’t have to be complicated. It’s just a necessary move that every Pinoy ought to learn and take.
Here are some common reasons why people invests:
1. To build wealth
2. To reach financial goals and milestones
3. To reach financial independence and retire early. Let’s dive closer to each reason.
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Reason 1. To build wealth
This is a common goal of every investor. You want your money to build wealth over time by acquiring assets such as stocks, shares, bonds, properties, etc.
Can investing really build wealth for you?
Actually it can through compound interest.
I have tackled the science behind getting rich a.k.a. compound interest before but to give you a gist of this eighth wonder of the world, here it goes:
The returns from your investments, actually earns money by itself without you even noticing it.
And the earlier (or longer) your money stays invested the more return it earns, the more (and faster) it can build wealth for you!
So why do the rich get richer?
Because their investments from years before earns money compounded while they’re sleeping! Reason
2. To Reach Financial Goals and Milestones
We all have our financial bucket list in life.
Financial bucket list aka financial goals a.k.a. financial milestones are set of statuses involving money that you want to achieve in the future.
How investing your money this 2021 can help in achieving these financial goals?
Investing helps to shorten the gap between your current net worth vs. your bucket list.
To be a millionaire before 30 is part of my financial bucket list.
With my current net worth, salary, and expenses, I have to save Php 150,000 every year to reach that goal. It means, I have to save Php 12,500 monthly.
I ain’t got means for that!
That’s why I invest my money.
Investing helps me reach my big financial goals because my money is earning a higher rate of return versus normal savings account.
Reason 3. To Reach Financial Independence and Retire Early
I have mentioned what financial independence means to me.
Nothing major actually changed. I still believe in being a financially independent Pinay. I still long to be able to retire early, quit my job and live the rest of my life free from worries, earning passive income as a substitute.
The most simplified way you can achieve financial freedom and retire early is to generate enough passive income from your investments that can cover your overall expenses.
How To Start Investing Your Money?
Once you decide to start investing your money the very first step is to create a solid investment plan.
The investment plan will help you stay on track with your investments. The best and the fastest way you can generate an investment plan is to simply answer the following questions:
What are your financial goals?
Why do you want to invest your money?
When will you need the money?
Next is to know what type of investor you are. Are you the type who can take a lot of risks and can invest for a long-term? Or are you someone who can’t take that much risk and will need to the money sooner. More often than not your risk tolerance is in accordance of your age, income and goals too.
Then you need to choose the Investment Vehicle that suits you. This is something you might want to take time and really study. There are investments that work for some but might not work for your advantage. Learn more about the investment product before opening an account etc.
Lastly, always review and analyze how your investments are performing. Don’t let your hard earned money go to waste. Always check your portfolio and make sure that you are not losing your earnings. However, do not be swayed by a minimal failure or loss. Don’t let emotions cause you fear. Again the key is to invest long term. The longer you let your money invested the more it will work for you.
4 Ways to Get Started Investing without Worry
Be Informed. Listening to this podcast episode is only the first step to many. Continue gaining knowledge from other blogs and even financial books available to you. Gaining details and secrets to financial literature will help you become braver and worry-free as you start investing.
Have an Emergency Fund. An emergency fund is said to be equal to 3 months of your monthly expenses. This means when your monthly expense is 10,000 a month, your emergency fund should have 30,000 pesos. An emergency fund is a secure way for you not to be fearsome even if you lose some amount. Remember that investing is a risk. That Emergency Fund will be your fall back if and then anything happens beyond your control.
Study your Investment venture. Investing is not an overnight decision. You should think a lot no matter what. Review the investment company and know whether they have bad records or not.
Know that God wants you to be financially blessed. God’s plan is for us to prosper not to put us in harm. Know that God wants us to be successful with the talents and gifts He had given us.
In conclusion, invest your money “NOW.”
According to Philip Taylor of PTMoney,
“Time in the market is better than timing the market. Just start saving/investing now. Automate it. Pay yourself first. Your future self will thank you for it.”
What does this mean for you and me?
If you invested your money 10 years ago, you have already won. There’s no need to be greedy at all. Whatever happens to the market in the next 6 months to 1 year is not your battle anymore. Focus on the long-term possibility instead.
Over the years these three things remain the wisest advice I’ve ever read when it comes to investing –
Invest now, Invest regularly and Invest for the long-term.
Izza of SavingsPinay helps Filipinos bridge the financial literacy gap one content at a time by providing insights and tips on budgeting, saving, investing, side hustle and growing your net worth. Aside from this blog she also writes at www.izzaglinofull.com, a beauty and lifestyle blog for frugal Pinays and manages, www.izzagevents.com, a wedding and event business since 2011. For inquiries, topic suggestions or future collaborations email her at firstname.lastname@example.org