Important Notice - iMoney Philippines (2024)

FAQs

What are the keys to building wealth through investments? ›

Retirement planning

Retirement planning is a key component of building wealth, as it ensures financial security in your later years. By contributing to retirement accounts like a 401(k) or individual retirement account (IRA), you can take advantage of compounding and tax advantages.

Saving is generally seen as preferable for investors with short-term financial goals, a low risk tolerance, or those in need of an emergency fund. Investing may be the best option for people who already have a rainy-day fund and are focused on longer-term financial goals or those who have a higher risk tolerance.

The potential benefits of investing in stocks include: Potential capital gains from owning a stock that grows in value over time. Potential income from dividends paid by the company. Lower tax rates on long-term capital gains.

Borrowing to invest, also known as gearing or leverage, is a risky business.

While get-rich-quick schemes sometimes may be enticing, the tried-and-true way to build wealth is through regular saving and investing—and patiently allowing that money to grow over time. It's fine to start small. The important thing is to start and to start early. Earn money and then save and invest it smartly.

“Your income is your most important wealth-building tool. And when your money is tied up in monthly debt payments, you're working hard to make everyone else rich.”

Is it illegal to borrow money to invest? ›

Personal loans are generally free of spending restrictions, so you can potentially use the funds to invest. However, some lenders disallow the use of loan proceeds to make certain investments.

Apart from borrowing from various lending institutions, you can also look into government interest-free loans. However, before opting for this loan, you must carefully assess your needs and affordability. At Tata Capital, we offer interest-free consumer durable loans for 6 to 24 months with minimal documentation.

The Rule of 72 is a calculation that estimates the number of years it takes to double your money at a specified rate of return. If, for example, your account earns 4 percent, divide 72 by 4 to get the number of years it will take for your money to double. In this case, 18 years.