Before Investing in the Philippine Stock Market, Mutual Funds, UITF, Bonds, Cooperatives, Pag-ibig MP2 and Time Deposit, Consider Investing in Your Self and Family First
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It is natural for people to look for platforms to increase the family's wealth to maximize hard-earned income. Much so, that we are still in a pandemic of great magnitude where no one is spared. Having more income will definitely help the survival of the family. The usual investment platforms of Filipinos are as follows:
- Time Deposit
- Cooperatives
- Pag-ibig MP2
- Bonds
- UITF/Mutual Funds
- Philippine Stock Market
Just a brief discussion about these investment platforms:
Time Deposit
A time deposit is an interest-bearing bank account that has a pre-set date of maturity.The money must remain in the account for the fixed term to earn the stated interest rate. 1/
Cooperatives
An organization, farm, business, or other organization that is owned and run jointly by its members, who share the profits or benefits. 2/
Pag-ibig MP2
The MP2 Savings is a special savings facility with a 5-year maturity, designed for Pag-IBIG Fund memberswho wish to save more and earn even higher dividends, in addition to their Pag-IBIG Regular Savings.The program is also open to pensioners and retirees who were former Pag-IBIG Fund members.
Read more below to learn more about your Pag-IBIG MP2 Savings! 3/
Bonds
A bondis afixed income instrumentthat represents a loan made by an investor to a borrower (typically corporate or governmental). 4/
UITF/Mutual Funds
A mutual fund is a type of financial vehicle made up of a pool of moneycollected from many investors to invest in securities like stocks, bonds, money market instruments, and other assets. Mutual funds are operated by professionalmoney managers, who allocate the fund's assets and attempt to produce capital gains or income for the fund's investors. A mutual fund's portfolio is structured and maintained to match the investment objectives stated in its prospectus. 5/
UITFor Unit investment trust fundis an open-ended pooled trust fund denominated in pesos or any acceptable currency, which is operated and administered by a trusted entity and made available by participation. 6/
Philippine Stock Market
Investing in the Philippine Stock market is already gaining traction to the young working professionals in the country even with zero knowledge about how corporations and businesses work. Read my detailed blog about investing in the stock market.
Just a reminder for everyone, if the investment platform GUARANTEES A DOUBLE YOUR MONEY in 10 days or 20 days or 30 days, that probably is a scam. Before investing, make sure that the entity that you are transacting with is a legitimate one.
There are other investment platforms available in the Philippines such as cryptocurrency, foreign exchange, commodities trading, options among others.
No one can question you with that in mind, nothing is wrong with that but before you invest all that cash in those legitimate investment platforms, let me just change your perception because you are missing an important step in maximizing your income.
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NEGLECTED STEP IN WEALTH CREATION
To fully maximize income, you should first protect your self and your family. Uunahan na kita, probably, you are thinking like this, kesa ibili ko para sa sarili ko, ilalagay ko nalang and pera ko sa platform na mas lalaki ang pera ko. This is how we Filipinos think, yung tipong, kakainin mo na lang, itatabi mo pa para sa mga anak mo. Tama ba? if yes, let me prove my point.
Remember that life can bring total mess to our lives, for instance, this Covid-19 pandemic which is still ravishing us for more than five (5) months now. These are the problems or risks that we face every day which include:
- Accidents
- natural calamities
- man-made disasters
- critical illnesses
- hospitalization
- retiring without money; and
- untimely death
These events can happen to us. If that happens, our family's budget will be put in peril. As a result, people are forced to do things against their will i.e. kapit ng patalim in our local tongue, just to attend to the life and death emergency. As an example, Mr. X has an investment in the stock market amounting to PhP150,000.00. However, he has no protection for himself i.e. insurance or HMO from his work. Hence, when he was diagnosed with cancer, he withdrew all his investment in the stock market just to attend to his illness. He also sold his house and car just to be able to cure himself of the disease. He also went to his distant relatives begging for donations to help him with his illness. Lastly, he mortgaged his house to get cash. This rule is likewise true for all the investment platforms because, at the end of the day, you will withdraw all your investment i.e. your Time Deposit, investments in Cooperatives, Pag-ibig MP2, Bonds, UITF and Mutual Fundsjust to address the aforementioned life's risks. Smart financial planning is now much needed to weather all the risks that we face. Smart financial planning in this time of pandemic acknowledges that our financial health is mainly dependent upon our family provider's health. If the famiy provider is out, the family will suffer. Hence, best thing to do is to protect the source of income of the family that is "You", so that their future is certain with or without you as family provider. In short, without proper protection, you will wipe out your whole life savings just to attend to these problems when in fact, the solution is simple. Start protecting yourself first before start investing in more aggressive platforms as mentioned above. At the end of the day, depending on the life insurance that you choose, you will get something from it. You will have protection and a source of income when the uncertainty occurred, enjoy Philam Vitality and if what you bought is a VUL Life Insurance, you will also have a withdrawable fund in the future for whatever purpose it may be.
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Disclaimer
The Author is advising readers to consult with your respective Financial Advisors before venturing in any investments. Investing your money is dependent to your goals and your risk tolerance. You should know the risks and rewards of investing before you actually do the same. The illustrations above are for educational purposes only and any risks or losses that you may incur are imputable to your respective decisions.
The author does not in any way provide a guaranty as to the effectiveness and quality of the products and services that are featured in this blog.The products and services were advertised based on personal experience and product and service reviews that the product/service received.
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Sources:
2/ Oxford Dictionaries
