Published: March 28, 2018 | Updated: April 7, 2020 | Posted by: Venus Zoleta | Personal Finance
Adulting is tough, more so for young adults who spend beyond their means. Easier to be magastos than matipid, right?
Are you a 20- or 30-something who’s struggling with finances? A recent study noted that Filipino millennials aren’t saving and investing enough, even if they’re aware of their future needs.
You may have heard it from your elders already, but it’s worth emphasizing this financial advice: don’t just save—invest your money!
Here are seven investment options ideal for millennials in the Philippines.
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Your own skills and knowledge are your greatest assets besides money. So it makes sense to begin your investing journey from within.
Learn new skills or pursue higher education related to your field to prepare yourself for career growth. Surviving the cutthroat competition in the corporate world is difficult as it is—growing professionally will give you a competitive advantage. With career growth, better income opportunities will open up for you.
Get started with your self-investment through these ways:
Why don’t you turn your hobby into a money-making venture? Let’s say you love fashion, and you always splurge on bags and shoes. You can sell your unused stuff via Facebook and Instagram or run a garage sale. Or if you love baking, you can start a pastry business and promote it online.
The best thing about starting a small business, especially for millennials, is that it doesn’t require a huge capital and a business degree. Even a measly bente pesos can go a long way, as this couple who became millionaires from selling ice candies had proved.
If you need additional funding to run your enterprise, you have lots of options to choose from. For one, you can get a personal loan from a bank.
Among the easiest initial investments for millennials are the investment/savings programs offered by the Pag-IBIG Fund and Social Security System (SSS). For a low investment of PHP 500 or PHP 1,000, respectively, you can start investing in the Modified Pag-IBIG 2 (MP2) or the SSS Personal Equity and Savings Option (P.E.S.O.) Fund.
Both investment schemes are guaranteed by the Philippine government, which means you have slim chances of losing your savings.
The MP2 and P.E.S.O. Fund are easy to avail, too, as long as you’re a registered Pag-IBIG and SSS member who meet the minimum qualifications. You can enroll over the counter at their branch or via their respective online facilities.
A VUL is a life insurance plan that doubles as an investment. When you get one, you protect the people who depend on you (your parents or children) against financial setbacks in case something bad happens to you. Plus, you earn profits from the money you put in every month.
What makes VULs a great investment tool for millennials is their liquidity—you can access your funds after a certain number of years, which can be extremely helpful during financial emergencies.
As a beginner, you’re likely to be wary of taking huge investment risks. This is why low-risk investment channels like bonds are perfect for millennials.
Because of their minimal risk, bonds yield lower profits than other investments like stocks. But investing in bonds is a lot better than putting all your money in a savings account. Bonds have higher interest rates than deposit accounts, so they bring higher returns.
Interested to know more about bonds? Check out this helpful beginner’s guide to investing in bonds.
Investing in the stock market is very profitable, but it can be overwhelming and complicated for first-time investors. You can start, though, by putting your money in a mutual fund.
Your money gets pooled with funds from other investors, which professional fund managers invest in different instruments such as bonds, stocks, and money market funds. Because experts handle your funds, you’re assured that they will grow in the long term.
Been thinking of investing in mutual funds? Learn the steps to get started by checking out this MoneyMax.ph guide on mutual funds.
UITFs are pooled investment funds almost similar to mutual funds. The key difference is that unlike mutual funds, UITFs are investment products offered by commercial banks. Since banks in the Philippines are supervised by the Bangko Sentral ng Pilipinas, you can be sure that UITF investing is safe and scam-free.
Get to know the basics of UITF investing with this comprehensive guide from Moneymax.
Adulting is tough in the present, but growing old broke is tougher in the future. As a millennial, you have time by your side. The earlier you invest, the better your chances of growing your hard-earned money. Investing regularly will also help you curb your overspending habit. It isn’t something you keep on postponing until you reach that age when you barely have time left to build a decent amount for your retirement fund.