November 26, 2022

One thing that is almost certain is change. Change is constant. Nothing is the same forever.

Strong evidence is that we all grow old and there is no time to stand still to move forward. The song “Some Good Things Never Last” showed that nothing lasts in the realm of romance either.

Based on my personal experience in my previous job, I have seen changes in my tenure. I told myself from day one that I would serve my employer until I was 60.

How would I have known that my retirement at age 46 would depend on the company’s realignment? Fortunately, I was able to do something earlier that most people didn’t: I took the risk and INVESTED.

As Facebook founder Mark Zuckerberg said, “The biggest risk is not taking a risk. In a world that is changing very rapidly, the only strategy that is guaranteed to fail is not to take risks.”

What is investing?

Investing is an act of buying assets with the hope that they will generate income or increase in value in the future. Most often, the investment is a monetary asset that is bought with the idea that the asset will generate income in the future or be sold at a higher price for a profit.

Investing can also be in the form of time you invest in studying a potential business. It must be remembered that time is money. Facebook was the result of an investment of time that now reaps tons of benefits for Zuckerberg.

His idea benefited us all by bonding us together and making him one of the richest people in the world at a young age.

Why invest?

Investing wisely is the key to building wealth. But remember that investments come with risks. The return is not guaranteed, so it is very important to research the instrument. To build wealth, the investment must outperform inflation.

As commodity prices continue to rise, our money should grow faster, lest our money outlive us in the future. Otherwise, as we age, reality will set in, and no amount of regret can help us regain our lost ground.

How to invest

Depending on the knowledge you have acquired, you can invest through a bank, a broker or even with an insurance company. In most cases, these organizations pool investment money to make larger investments, and each individual investor has a share of the larger investment.

You can also invest with a broker who will process the order for a fee or commission.

types of investments

There are two main types of investments: fixed income and variable income. A fixed-income investment is an investment vehicle that regularly earns a regular amount of interest, such as a B. Bonds or time deposits.

Variable income investments refer to business or property holdings such as mutual funds or stock shares. With variable income investing, the resulting income can take many forms, including profit and appreciation, especially over the long term. Additional earnings can also be made from trading/speculation, which is short-term and often involves high turnover and consequently higher risk.

Before investing, make sure you have:

1. Debts paid off. Nothing beats being debt free. With no debt, you are free from attachments.

2. Emergency Fund. The emergency fund strikes at any time, so it makes sense to have a buffer fund so you don’t bother making more money for yourself.

3. Insurance. You need to cover the risks of life, as the risks materializing can easily wipe out your investments and potentially leave you heavily in debt.

Edmund Lao, is a Registered Financial Planner of RFP Philippines. To learn more about personal financial planning, join the 99th RFP program in January 2023. For inquiries, email or text to at 0917-6248110.