Passive Income Ideas To Start The Year With

Passive Income Ideas To Start The Year With

One of the most compelling reasons for having investments is the prospect of not having to work your entire life. By investing, your money generates more money; which is better than putting it away in static savings.

Compared to our neighboring nations, it’s glaring how only a few Filipinos see the value of investing. For example, the number of investors registered on the Philippine Stock Exchange doesn’t even come close to 1% of the country’s population. Comparatively, Singapore has about 33% of its population actively participating in its stock market, Malaysia with 18%, and Hong Kong with 17%.

Since time plays an important role in investments, investing early will put you in the best position. That’s why there’s no better time to start than right now. With the wide variety of investment options that are available today, it’s no longer that arduous to get your feet wet with investing.

To give you an idea, here is a selection of investment options that can help you get started.

1. Peer-to-peer (P2P) lending

Peer-to-peer lending is a new form of lending and borrowing money that is performed through a platform that connects both the lender and borrower. P2P lending platform basically aims to help small businesses secure funding through alternative means.

This form of funding can be done in two ways: you put up the whole sum to be borrowed, or you pool your cash with many other individuals to lend out..

However, you should note that P2P lending is one of the most risky forms of investment out there. Many of the businesses that turn to these platforms are new and may not be able to service the loan. If they go out of business, you lose your entire investment.

How does it work?

Your goal is to grow your money by charging interest on the amount that you lend out. In most cases, the P2P lending platform will pool money from its users in order to reach the amount needed by the borrowers. Over time, you will get paid back with interest.

Among the popular P2P lending platforms are the following:

Pro tip!

  1. You don’t need to invest millions altogether. The safest way to go is to start slow, as most of these P2P platforms can give you a jumpstart for as low as $25 (₱1, 250.00)
  1. You’ll never know when an investment defaults or flops. Just like with any investment, you should always have a contingency plan in case your investment defaults or flops.
  1. Invest within your risk tolerance. The platform categorizes the borrowers according to their risk level – the higher the risk, the higher the interest.
  1. Even then if the borrower that you’ve chosen to invest in has a low-risk record, it’s still worth doing a complete assessment on their profile before pitching in your funds to their pool.
  1. Reinvesting can be a good move. Try to reinvest your earnings instead of your capital to get more than what you expect.

2. Mutual funds

A mutual fund lets investors pool their money to invest in stocks that they may not normally be able to afford. These funds are run by licensed fund managers who buy carefully selected stocks, or other assets, from large and stable companies. Mutual funds reduce the stress of having to choose individual stocks to invest in and provide an easy entry into financial markets.. 

How does it work?

Investing in a well-managed mutual fund will spread your investment over numerous companies in which the fund will be invested. This assortment of mixed 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. Additionally in order for you to slowly increase your investment, adding funds as low as ₱1,000  every month is the way to go.

Pro tip!

  1. Know your risk tolerance. Your risk tolerance is a measure of how much fluctuation (a.k.a. volatility—ups and downs) or market risk you can handle.
  1. Determine your asset allocation. Once you determine your level of risk tolerance, you can determine your asset allocation, which is the mix of investment assets—stocks, bonds, and cash—that comprises your portfolio.
  1. Review the types and categories of mutual funds. Learning how mutual funds are categorized helps an investor learn how to choose the best funds for asset allocation and diversification purposes.

3. Stocks

While it’s true that the stock market can grow your money exponentially, it goes without saying that due diligence in learning the trade must come first. Figuring out how and where to put your money on the Philippine Stocks Exchange can be a challenging feat.

It will take a lot of homework to make a well-informed decision on every trade. However, it isn’t as hard as it once was with the existence of online stock brokers today. You can easily trade stocks online through COL financial – one of the country’s leading online stock brokers.

How does it work?

Buying stocks is like buying your share of a certain company; shares that you won’t be able to buy under normal circumstances. In the stock exchange, you buy shares (stocks) in the hopes that their value increases over time. Eventually, you sell these shares when their value is higher than your buying price, making them profitable.

Pro tip!

  1. Before heading onto the real deal, study everything first. Getting caught up in hype stocks is an easy way to lose money. 
  2. “Buy Low, Sell High” – this technique is the key to stock investing success. Buy stocks at their lowest and sell them when they’re at their peak.
  3. Do not expect too much. Even if the industry is lucrative, you cannot expect to have your money doubled overnight. Of course, just like any other business, it would still require perseverance, time, and patience.

As per a professional stocks investor, expecting that your money will double in a year can lead to heartbreak and tons of frustration. If you opt to invest in this kind of business, think of it long-term; maybe 5, 10 years, that’ll be the safest and least expectation you can have.

4. Cryptocurrency

Cryptocurrency is a digital asset that is developed and designed to function as a medium of exchange – just like real-life money, albeit – online. It is maintained and managed by cryptography which functions as a security measure.While Bitcoin may be the most popular cryptocurrency right now, there are other cryptocurrencies that are also on the rise which aren’t as expensive but are as good. Among the few cryptos that are worth considering are Ethereum, Ripple, Litecoin, Solana, and a lot more listed on

How does it work?

The cryptocurrency market has been very volatile since its inception. The price of Bitcoin alone can swing up or down hundreds of dollars in a day, and the price more than quadrupled in 2017. While it does not necessarily promise overnight wealth, it is worth investing in for the long term.  Despite the relentless volatility of Bitcoin, its value still managed to skyrocket and stabilize to what it is now (around $41,000 to $42,000) compared to its value since its inception.

Pro tip!

  1. Be educated enough about cryptocurrencies for you to be able to make informed decisions. Just like other investments, you should be knowledgeable enough in that field before putting any money in it.
  1. Just like the stock market, if you’re acquainted with its trends, you shouldn’t have any headaches – analysis is the key to success in this market.
  1. Trade it for real money. Rather than exchanging your cryptos with cash through your bitcoin wallets and banks, you can save more on the fees if you exchange them with actual people.  

5. Pag-IBIG MP2

Unlike the regular Pag-IBIG program that every employed and self-employed Filipino is part of, the MP2 is a voluntary program that provides a higher earning potential than a regular savings account. Your savings are invested by Pag-IBIG and will earn through dividends. 

Since its launch, MP2 has been earning higher interest than regular savings accounts, and tax-free dividends at that. In 2019, the Pag-IBIG MP2 dividend rate was 7.23%, and historically, it’s been increasing year on year. Its highest rate so far was in 2017 with an 8.11% interest rate.

How does it work?

Pag-IBIG is a mutual fund and your contributions are used to invest in assets and generate profit through home loan financing. By law, 70% of Pag-IBIG funds are allocated to housing loans. 

So the question isn’t really how it is earning, but rather why it’s earning higher than the regular savings account. Apparently, the Pag-IBIG Fund has been showing strong financial performance over the years, thus pushing the MP2 rates up. Its strong performance has been attributed to the agency’s operational efficiency and its strong housing loan payment collection. Due to this, the Pag-IBIG MP2 managed to yield the following interest rates in the past years.


The dividend rates are announced every March of the year, and the announcement is published on Pag-IBIG’s website.

How much can Pag-IBIG MP2 potentially earn? 

As mentioned initially, your MP2 account will earn through dividends, and the amount of money you’ll get in return will depend on the amount of money you’ve saved in MP2 and the length of your investment.

Pag-IBIG MP2 is a long-term investment; its gains will be ultimately beneficial only if you’ve managed to ride the tides of the investment market long enough and accumulate enough gains to counter the losses throughout the period.

Below is an example of a rough computation of how much your MP2 savings would have grown if you made a one-time investment of ₱100,000 since 2015.

YearValue of savings (year-on-year)

Whatever investment vehicle you choose to invest in, always remembers that they come with risks. The only way to mitigate these risks is by educating yourself further with the investment vehicle of your choosing for you to make informed decisions. Also as a golden rule, only invest the amount that you can afford to lose.  Lastly, starting early is the key to a more fruitful investment as time is the most valuable component in any investment.

This article was first published in January 2022 and has been updated for freshness, accuracy and comprehensiveness.

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