We all know financial literacy is a mouthful. And yes, investing can get a little tricky. Sure, it’s easy to save money from your allowance. Then when it comes to putting a pool of money into stocks or mutual funds? That’s a risk.
As with many skills, it’s best to start young. Especially with investing. Why? The earlier you start, the more your money will grow. Basically, don’t procrastinate. It’s like getting a head start in reaching great financial returns.
Good thing we’ve got a couple of tips for you young investors.
Know why you’re investing.
Being financially smart all starts with a goal and a why. Figure out your short, medium, and long-term goals. How much do you want to make? Why are you investing? Is it to secure your future finances after college? To have money to start a business or to pay for upcoming expenses? Get on your financial literacy journey by understanding where you want to be in the future.
Having a financial goal will help you allocate your money and figure out where to put it.
Financial Literacy 101: Start as early as possible to gain interest!
Again, the earlier you invest, the greater the rewards. The lesser financial burden in the future, too. Money grows over time, so you don’t want to miss out now. It’s pretty much how compound interest works. Say if you were to invest at 20, you’d reach a goal of PHP 500,000 faster than if you started at 35.
Invest in yourself first.
The greatest investment you can ever make is in your potential. People can make money out of the stock market, side businesses, trust funds, and other lucrative accounts. These things are all subject to price spikes and lows. But the #1 thing you have control over is yourself. Read books, listen to podcasts, get better at your skills.
Start small. Save up for an account first.
Before you open up a stock account or mutual trust fund, you’ll obviously need a pool of money to invest. A beginner’s account requires a minimum investment of PHP 5,000 for long-term investing.
So go set up a savings account at your nearby bank. And don’t touch it or withdraw from it. Start saving up bits from your allowance. Say 50 to 100 pesos until it builds up into your goal.
Attend a free seminar or read up on investing.
But wait, what are stocks and mutual trusts anyway? It’s basically a piece of a company that helps you earn money from what they’re earning.
There are many seminars in the Philippines that can explain the nitty-gritty of investing so it’s easy for you to understand and get started. One is Citiseconline which holds free seminars in Metro Manila and Davao. Another is PSE Academy, which holds webinars and seminars in Metro Manila and Cebu.
What are you passionate about? See if you can invest in that.
Stocks aren’t the only investment options you can look into. There are small businesses you can invest in and earn from, too. You will need a bit of capital to get started, though.
Say you’re into fashion, why not start a retail business selling trendy clothes or shoes online? Can you market a street food stall well? Those are businesses you can start up with at least PHP 5,000 to 10,000.
Be smart with where you invest your money.
Don’t put your eggs in one basket. This is what stock investors mean when they tell you to “diversify your portfolio.” With stocks, choose on a long-term basis, and don’t just invest in one or three—you’re more likely to lose value that way because there are too few.
Be patient with your investments.
These things take time. Your money won’t grow overnight. There will also be ups and downs in the market. Sometimes you’ll see your account value go down, and that’s okay. It’s a risk that offers high rewards in the future. Same thing goes for small businesses. It takes time to gain attention and revenue.
These are just some tips on investing. We know it can get a bit daunting, but try and dip your toes in it for a bit. You’ll surely reap great rewards over time.
Want to know more about how to get your money matters in order? Check out more of our financial literacy tips so you can be better with your bucks! For other guides on surviving school, check out our College Life section on the Edukasyon.ph blog!