THINK PIECE: Where to start to invest?

Image courtesy of https://www.bpiassetmanagement.com/pages/bpi-investment-funds/

The answer is: Start with your Bank!

1. Investing in and through your bank is the first step in exploring investment opportunities simply because that is where your money is.

Banks have what they call, "Unit Investment Trust Fund (UITF)". UITFs are like Mutual Funds (MF). They are both pooled investments being managed by a trust entity or investment management company. The managers of UITFs/MFs invest the fund in equities and other securities, and if the fund earns, you earn proportionately to the size of your subscription or portfolio.

You could buy or subscribe to UITFs/MFs straight from your bank accounts. It does not require investment experience. Hence, if you are just starting to invest or just starting to build your confidence in making riskier investment decisions, UITFs/MFs are good stepping stones.

Navigate your online bank accounts and look for UITF to subscribe

2. Barring recession and depending on the fund you choose, you can earn from UITFs at a rate of 4% to 20% per annum; these rates are better compared to .025% to 2% per annum that you can earn if you only let your money sleep on your savings accounts.

However, with higher rewards come higher risks. UITFs do not a guarantee a return. There will be times that UITFs have negative calendar year performance. Just don't panic and don't sell. They only reflect the natural movement of the stock market ---up and down. For down times, it is important to manage your risks by diversifying your portfolio. There goes the saying, "do not put all your eggs in one basket". It means, do not put 100% of your savings to UITFs.

3. In my experience, UITF was my first investment. From UITFs, I shifted to MFs and then to stocks. 

My first UITF investment was BPI Balanced Fund because that was the golden mean between the bonds fund and the equity fund. Based on my assessment at that time, I found the ROI in bonds fund too low for me, and the market volatility in equity fund too high for me. Thus, I just chose to invest in balanced fund because it got both bonds and equities in its investment allocation.

4. Hindsight 2020. I should have invested in equity fund for higher returns, now that I understand how the stock market works.

THINK PIECE: How to save money

Image courtesy of https://www.slideshare.net/luizdeasis/building-wealth-through-philippine-stock-market-investing

Pay yourself first, then live within or below your means! That is the ultimate tip.

1. It just means that every time you receive your allowance or income, you immediately allocate a portion thereof to your savings.

There is no hard and fast rule on what percentage of your allowance/income should you allocate for savings. You can even start with just 1% or 2% of your allowance/income, but you have to save consistently and regularly until it becomes your habit. No buts, no ifs, no don'ts.

2. Whatever is left from your allowance/income, you allocate it to your expenses ---your budget for expenses. Then, you have to "live within your means". Meaning, you adjust your spending to make everything fit to your budget; this actually compels you to observe yourself and be mindful of the prices of goods you are spending on.

Once it becomes your habit to Pay Yourself First, that is the time that you can (gradually or drastically) increase the percentage of your savings allocation because you already have insights about your spending tendencies or habit, like you are now able to identify what expenses are dispensable. You may reallocate some of your funds from the expenses side to the savings side as you please.

With your hard-earned savings, you are now in a position to explore investment opportunities!