Embarking on a journey to financial freedom entails dealing with plenty of bumps along the way, one of which is deciding how to make your money compound with passive effort -- a well-loved concept known as investments. People make investments for various reasons: sometimes, a monthly salary isn’t enough to help them get by, so they may need a supplementary income to afford bigger expenses. For others, investments are a wonderful way to counter inflation so that the money they save remains relevant in value over the years. On another note, investing is simply a great way to increase your net worth while maintaining a full-time job.
READ: How To Prepare For Retirement By Investing In Government Platforms
The stock market is usually the first thing that comes to mind when thinking about investments. While playing the game of buying low and selling high can merit major returns, success stories don’t fill your feed every day. High-risk investments involve an equally high level of effort, time, money, and energy -- several resources that most people can’t risk. Instead, consider looking into investment options that suit your budget and lifestyle. There are certain ways by which you can indirectly contribute to funding your future.
Take retirement seriously
Setting up a dedicated retirement fund isn’t common among Filipinos, as the assumption is that kids will eventually take on the mantle. But free spirits will still want to do fun activities in old age, such as traveling the world. The idea of being cooped up at home for the last 20-or-so years of your life doesn’t sound like much fun, after all! A high-end retirement plan can be extremely expensive, even after stacking up all the senior discounts. Plus, more and more people are choosing not to have kids, and if you’re one of them, you’ll have to take charge of your future.
Investing in your retirement will ensure that your last years in the world are happy and comfortable. Many people rely on their Pag-IBIG contributions to carry them through seniority, but it’s unlikely to be enough for more than a few years. Remember -- your monthly contribution is a minuscule value, most of which will dwindle due to inflation. Instead, consider opening a dedicated high-yield retirement fund where you can make more substantial contributions.
You can explore options in GoBear’s depository of all things savings account-related. You can also consider opening a low maintenance time deposit account where your savings can compound year-by-year through interest. Alternatively, you can also look into Security Bank’s trust services for other long-term funding concerns. There’s no greater investment than you and your family’s future.
You’ve heard social butterflies talk about insurance. You’ve likely already sat through a bunch of meetings over free coffee with financial advisors who proactively pester you to sign up for life insurance. As annoying as they may seem, half the things they say are true -- there’s plenty of benefits to owning some form of insurance. It’s an easy, simple, and relatively low-cost investment that most people can afford. The only catch is that the most common and practical option, life insurance, is for your beneficiaries and not yourself.
Here’s how life insurance works: you pay a monthly premium so that on the occasion that something happens to you, such as an accident or death, your beneficiaries (usually a spouse or children) can claim a certain value dictated on your contract. However, note that only specific injuries or causes of death can merit insurance claims. It’s essentially a “just-in-case-this-happens-to-me” fallback that can save your family’s life in case of an untimely passing.
READ: Best Life Insurance Plans With Investment Options
Alternatively, you can choose to avail of health insurance, which you can benefit from in times of specific, severe medical need. After 30 years or so of paying the monthly premium, you can start reclaiming the money you spent, and the actual cost of insurance will sum to only a fraction of the total value. It’s a long-term commitment with little real-world return, so it isn’t for everyone. But if you can’t sleep at night out of worry for your kids’ finances in the future, then it may be a good idea to jump into the bandwagon.
Aim for high-quality education
A good number of people are straying from the idea that education is an important stairway to success, citing extracurriculars and alternative education as a viable means of living a good and financially-secure future. While you can undoubtedly carve a future through non-academic careers, it’s a risky move dependent on your talent, physical condition, and ability to make the most out of your golden years.
In the current job landscape, owning a degree is inevitably more important than ever, especially if you aren’t guaranteed fame in sports, arts, crafts, and other hands-on career options. After all, a fallback is one of the biggest investments you can offer to yourself amid a shaky economy. But there’s another problem: so many people have college degrees that it isn’t rare to find factory workers with a computer science diploma.
What sets you apart in the job screening process is a high-quality education that has likely contributed to developing your personality, such as character building and preparing you for the professional world. Employers are less picky about university names, so you don’t have to aim for the highest peak, but aim for the best possible education you can afford for yourself or your children. It’s an investment that may directly contribute to a brighter future.
Start a small business
With everyone homebound due to a back-and-forth in COVID-19 policies, many are left jobless, on permanent leaves, or receiving half-pay. In times like these, you’ll significantly benefit from having a side hustle. It’s never too late to start a business, which can help you earn a side income or a full-time one if you’re a stay-at-home parent or currently unemployed. It doesn’t have to be fancy -- you can start small by selling homemade food or desserts, and then work your way up to bigger ventures such as a franchise or expansion once you save enough capital.
READ: Mind Your Business: Tips On Registering A New Enterprise
The key to retaining a small business in operation is to treat it like an actual business and not a hobby. Reinvest your profit toward your business by purchasing more stock or better equipment, creating interesting marketing collaterals, trying new recipes, and putting money toward the venture to help it grow.
Investing your money is a tried-and-true way of making a small amount of money grow over time. While it comes with risks, you can opt for the low-risk investment options above to decrease the possibility of losing cash. Having a small budget shouldn’t bar you from aiming for greater heights. Check out GoBear’s blog to learn more about anything credit, banking, insurance, investment, and personal finance-related.