Investment Options For P5000 and over

Investment is “an asset or item that is purchased with the hope that it will generate income or appreciate in the future” (Source: Investopedia). It could be in a form of income or asset appreciation. You may have been reading several articles on the internet on how important it is to set aside some of your monthly income for savings and investments. But you are left with the question – where to start?

Good news though. You don’t need a hundred thousand pesos to start your investment portfolio. For as little as P5,000, you can now take charge of your finances and start building a nest egg for your future. Just note that to be able to fully realize the benefits of investing; it is ideal to set aside even just a small portion of your salary to top up your investment. As little as P1,000 per month allocated for investments will go a long way for you.

Mutual Funds: For the Newbie Investors

(Video Source: Wall Street Journal)

A mutual fund allows many investors to pool their money. This money is used by experienced fund managers to buy carefully selected stocks or other assets from large and stable companies. Mutual funds take the stress away from you who want to invest in the financial markets. This is because mutual funds are handled by professional fund managers who choose the right investment for you.

Investing your P50,000 in a well-managed mutual fund, your investment will spread over numerous companies in which the fund is invested. This assortment of mix investments is called a diversified portfolio, which is an effective way to lessen your risk. As long as you have the money to open an account, it’s all good. Also, in order for you to take advantage of this investment is by adding funds every month in as small as P1,000. Pretty good right?

Stock Market: For The Risk – Takers

stock market prices

When we speak of investment, the stock market usually comes to mind. The stock market is where you buy and sell shares of companies – a high risk investment. When you buy stocks, you essentially become a part-owner. As a matter of fact, some shares sell for less than a peso. Best in investing with stocks are the high returns. As the economy grows fast in 2013, some shares grew almost 40% this year alone. The bad thing is that the stock market is a high-risk investment, clearly not for the faint of heart because it can fluctuate madly and you can lose your hard-earned money in an instant.

Besides, it would be beneficial to learn some time, ideally around 3 to 6 months, to familiarize yourself with how the stock market works before actually getting your take a dip in the pool. This is an ideal investment option only if you have the time and dedication to regularly monitor your stock portfolio.

Business: For The Top Bettors

opening your own business

You may be raising an eyebrow on this one, but doing a business for only P5,000 is not far from possible. You just have to start finding out which product are you going to produce that only requires such small capital. You may have a passion for hygiene and beauty, why not sell organic shampoos and soaps. Or you may have a hobby of making small trinkets out of recyclable materials.

The good thing of having your own business – You have total control. You are your own boss and you can be as passive or aggressive or both when it comes to the phasing you want your business to have but doing it is a lot harder than what it seems. With a little capital and a lot of creativity, dedication and effort it will take off.

There’s No Such Thing as a Risk-Free Investment

There is no perfect and risk-free investment. There is always a little risk involved when it comes to growing your money. The good thing is that mutual funds are managed by experts and experienced professionals who have gone through the kind of education and training to effectively grow the funds under their management and at the same time, protect the funds in times of economic decline. On the other hand, if you are planning to go in the stock market and business route, this would mean that you will have to squeeze in more effort but, hey if these efforts were put in the right avenues, you are the clear winner.

You might want to know that the money you may want to invest in the mutual fund is not protected by the Philippine Deposit Insurance Corporation like your bank deposits. The mutual funds are regulated by the Securities and Exchange Commission and not by the Bangko Sentral ng Pilipinas.

So how are you going to invest that P5,000 you have been lying about? If you are convinced that mutual funds is for you, then get in touch with any of the companies offering mutual funds in the Philippines. If with the Stock Market, maybe you know a broker that can help you purchase shares for you. And if with starting your business, ask some friends or learn few tips on how others started theirs. You will surely find one which can offer you the best investment option given your risk appetite.

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