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Investing 101

Many Filipinos grew up knowing that there is only one way to make money: by studying hard and working hard to earn an income after performing a service or from running a business. However, there is another but less popular way to do it: by making money work for you through investing.

According to Investopedia, investing is the act of allocating resources, usually money, with the expectation of generating an income or profit. “Don’t work for money, let your money work for you.” This is a common saying utilized in the finance world. Unfortunately, only a few Filipinos invest. The Bangko Sentral ng Pilipinas (BSP) 2017 financial inclusion survey found that only 1 in every 5 adults in the Philippines have some sort of investment. You can also read the 15 Best Investments for Millennials in the Philippines under 100K PHP.

The most common reason is that many of us lack financial knowledge. According to Robert Kiyosaki, the author of Rich Dad, Poor Dad, most of the people attend school but hardly find any way to make their money work for them. So as a result, they spend their lives working for money. Most of us belong to a middle-class family and we all face financial difficulties in life. Fortunately, there are many investment options available to can start your investment. Please find them below:

Stocks- These are units of ownership in a corporation. This means that if you own or invest in stocks of a company, you become one of its owners.  Stocks are considered to be the riskiest but most profitable.

Bonds- Unlike stocks, bonds do not give you ownership rights. Bonds are loans offered by an investor to governments and corporations. In exchange, the borrower will pay the interest on the borrowed money over a certain period (annual or semi-annual). It’s a low-risk but low-profit investment.

Mutual Funds- A mutual fund is a company that pools money from many investors to invest in securities like stocks, bonds, and other assets. Mutual funds are managed by professional fund managers. They do the research, make investment decisions, and monitor them for you.

Variable Universal Life (VUL) Insurance- is a life insurance that has an investment component. You can get insured and put your savings in investment funds at the same time.

Pag-IBIG MP2/ SSS PESO Fund- a savings program offered to all its members and basically allows them to save their excess earnings and build a secure future. You can start for as low as Php500 for the MP2 or Php1,000 for the PESO Fund. Earnings from these investment schemes are tax-free, guaranteed, and backed by the Philippine government.

Investing is all about making your money work for you. But before you open an investment account, you must first match your investment with a particular goal. It could be for your retirement fund, the education of your kids, a business fund, or as funding for a future travel or charity work that will inspire and motivate you to keep on investing. It may make sense to let Robocash help you grow your money to meet your other financial goals.

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