Entering the workforce as a teenager can be difficult, especially when you start with a lower income than expected and make it almost impossible to save or invest.
What Are The Best Investments For Beginners?
However, despite the challenges of getting started, there are benefits to starting small with your investment portfolio and learning investment strategies before committing to larger amounts.
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I want to commend you for reading this for thinking about your future and finding ways to improve by investing, but not too quickly.
Although I say you have the benefit of time, you should be careful when putting your hard earned money into any investment account.
For a strong financial base, you should follow the appropriate guidelines: increase cash flow, have life and health insurance, emergency fund, and no consumer debt.
It is also important to know your risk tolerance or the risk you are willing to take. As the price grows, so do the risks.
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So avoid entertaining the idea that there are low-risk, high-reward investments that will meet your financial goals immediately.
You should also know your goals and reasons for investing. This will determine which tool will be best for you.
Finally, it will be better if you put in the proper effort. Research the company you want to invest in. Avoid investing in anything you read on social media or from anyone who simply can’t explain it or doesn’t understand it yourself.
DISCLAIMER: Everything written in this post is based on personal experience and research. Nothing in this post constitutes professional and/or investment advice.1. Big interest in digital banking and neobanking
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High interest rates Digital banks, Maya, Tonic, Seabank and other similar platforms offer high interest rates like bonds.
The easiest investments for newbies and beginners are high-interest digital banks that offer interest rates of up to 6 or 8 percent annually, which is less than the 0.125% offered by banks traditional.
You have nowhere to put your money, but traditional banks that offer low interest rates and use your deposits to lend at a certain rate.
You can start saving on these platforms for as little as P500 or less. In addition, they usually do not have a waiting period to prevent you from stealing your money.
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The good thing about these digital banks is that they can be accessed by everyone with minimum requirements.
P.S. Remember, traditional banks have targets and cannot be avoided. They can be used in other applications.
If you’re just starting out in your investment journey, the stock market can be intimidating, so mutual funds are one investment product you can try.
Mutual funds are pools of money from individual and institutional investors that are managed by professional investment managers who charge you a small management fee.
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These mutual funds are offered by various financial institutions and are registered with the SEC. So if someone invites you to invest in a mutual fund, always check the company with the SEC.
There are four general types of mutual funds. Bonds and money market funds are low-risk, low-volatility and low-reward.
Equity funds, on the other hand, are risky investments but offer higher returns because they are usually invested in the stock market. Then the last type is the balanced fund, which is the marriage of the two worlds.
There are many mutual fund companies in the Philippines, as well as insurance companies such as Sun Life, Manulife, Prulife and others.
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Then there is also the second Metro first, PhilEquity and others. Other platforms also offer mutual funds such as COL Financial and Investa.
The good thing about mutual funds is that you can start investing as low as P50, even students can start investing. When you invest your money, you buy mutual fund shares in a pool of funds, represented by the net asset value per share (NAVPS).
The more NAVPS you have, the higher the value of your account. You can check your account balance and activity on the website or app of your preferred mutual fund company.
You can also invest through exchange-traded funds (ETFs), a pool of money similar to mutual funds.
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Like mutual funds, unit trust funds or UITFs are funds pooled from a number of individual and institutional investors managed by a professional fund manager.
The main difference is that UITFs are typically accessed by banks instead of mutual fund companies and are regulated by the Banko Sentral ng Pilipinas (BSP) instead of the SEC.
Like mutual funds, they have three common UITFs, they include bond funds and money market funds, balance funds, and equity funds.
Since you are investing through a bank, you must also have an existing account that you use to transfer funds to your investments.
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You can start with as little as P1,000 by investing in UITFs to buy units (net asset value per unit or NAVPU) instead of NAVPS.
Another great investment vehicle for beginners is the modified PAG-IBIG II Savings, often referred to as PAG-IBIG MP2, tax-free savings through the PAG-IBIG Fund.
The best thing about MP2 is that it is safe because the Philippine government supports them, so the country should collapse before you lose your investment.
It’s also tax-free, so your dividends are as good as cash. In the end, you can start with as little as P500.
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This is especially useful for existing PAG-IBIG members because they require you to have a PAG-IBIG account. You can check the details on their website.
This instrument is a life insurance with an investment component that is bundled into a valid investment vehicle.
Partial life insurance is typical life insurance, but it can also include types of health insurance, depending on the premium paid.
The second part is the investment component, which is usually invested as a mutual fund. Most major insurance companies also offer certain mutual fund investments.
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The initial investment for VULs will vary, but can be as little as P1,500. You should understand that since this is a two-for-one investment, what you put into the VUL does not go into the investment.
However, remember that when investing in a VUL, your primary concern should be the insurance portion, not the profit you can get.
You have just started and you should avoid jealousy, fear of missing out and greed because this is the trap that many young investors fall into and lose their money. Andrew Goldman has been writing for 20 years and investing for the past 10 years. He currently writes about personal finance and investing. Andrew’s past work has been published in The New York Times Magazine, Bloomberg Businessweek, New York Magazine and Wired. Television appearances include NBC’s Today show with Fox News. Andrew holds a Bachelor of Arts (English) from the University of Texas. He lives in Westport, Connecticut with his wife Robin, two sons and their Bedlington Terrier. In her spare time, she hosts the Origins podcast.
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We have a trick, you know what the investment is, but in case, let’s explain the terms of the investment. Then we will tell you how to do it.
Investing involves making money to get financial returns. It basically means making money and investing to reach your financial goals.
This is a short investment commentary courtesy of Merriam-Webster. Wherever you invest, you are giving your money to a company, government or other organization that you hope will give you more money in the future. Often people invest for a specific purpose, such as retirement, a child’s education, a home – the list goes on.
Investing is different from saving or trading. Investing is usually a long-term investment rather than trading stocks. Investing is more risky than saving money. Savings are sometimes guaranteed, but investments are not. If you keep your money under the mattress and don’t invest – you won’t get more money than you put into it.
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That is why many people decide to invest their money. There are many