Saturday, July 19, 2014

Ipon muna bago invest

Nong umpisa hindi ko akalaing magkakaroon ako ng interest alamin/aralin ang Financial literacy o ang mga bagay bagay na may kaugnayan sa aspetong pinansyal. Ang sabi nga nila, no one is born knowing how to save or invest.

Every successful investors start with the basic.

Ayon sa Investopedia, financial literacy is the possesion of knowledge and understanding of financial matters. It is only last year where saving and investing piqued my curiosity, so I began watching helpful videos, attending seminars and reading books.

Tonight, I would like to share two questions we need to consider before we start saving and investing. First, look where are you now today in terms of your finances. Do you have debts? Dito kame nag-simula. Iba't ibang tao ay may iba't ibang pangangailangan depende sa lifestyle at sa life stages.

1. Do you have debts? I mean bad debts - usually, credit card bills, unplanned travel,  gadgets or appliances.
If you do ay mas maiging bayaran mo muna ang lahat ng iyong mga kautangan (maliban sa mortgage or real-estate loan) bago ka magsimula.

Pwede mong gamitin ang Debt Snowball made popular by Dave Ramsey. Ilista ang lahat ng iyong mga utang. Unahin mong bayaran ang may pinakamaliit na halaga bago ang mga utang na may kalakihan. Pay your debts from lowest balance to the highest balance. For me, it's a great way to get out of debt.

The bottomline here why you need to start paying off all your debt first is because the interest on your debts is much higher than the interest you will earned if you start savings. This can apply to pay off all your credit cards and other loan debts.

Last week after lunch my colleague asked me if it's okay to take a loan and deposit into savings account. I say, "No no". Dahil ang loan ay siguradong may interest at higit na mas mataas ang interest nito kesa sa kikitain ng perang ilalagay sa savings account.

Second, have a plan and financial goal with timeframes. Know where you stand and how are you doing financially.

2. Gusto mo bang mag-ipon o mag-invest?

Para sakin mahalaga ang dalawa but it's more important to understand the difference between saving and investing to start.

Saving - This act as your emergency fund. You will put away part of your money in a bank where you can access  immediately. Pag nilagay natin ang pera natin sa savings account we are less concerned with return but it's safe.

Investing - The act of placing money in risk assets with the hope of higher returns than savings. The higher the risk the higher the returns.

But there is no right answer here again it may depends on your circumstances. Over the long term, the stock market usually outperforms savings accounts. Kaya mabuting malaman natin anu ang babagay sa atin. Hindi lamang sa stock market tayo pwedeng mag-invest. We can choose investing  in mutual funds, bonds, property or starting a business. These investment vehicles gives higher interest than savings accounts and time deposits but they all involve risk that you may lose cash. #aralmunabagoinvest

If you can't afford to take risk with your cash as of now I strongly advice to start saving for emergency fund 3 to 6 months worth of your expenses first. To get there, pay yourself first, have a budget and live below your means.

Once you have enough money saved then think of going into other forms of investment para anumang mangyari sayo hindi mo mapupull-out agad ung mga perang nilagay mo sa investment. Tandaan, investment needs time and the earlier you begin investing, the longer your investment has time to grow. These two will not happen overnight ito ay tatrabahuhin natin over time slowly but surely kaya ipon muna bago invest.


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