Once you have settled all your debt and set aside fund for emergency needs, now is the time to carefully plan your investments. Plan your goals and dreams to make them happen. You may feel that in some point of your planning, you can’t afford to set aside funds for all your goals at the same time.
But don’t panic.
All you have to do first is to prioritize your goals. Categorize your goals into short-term (less than 5 years), medium-term (5 to 10 years) and long-term (10 years and more). The worst thing that can happen is that you may have to work on your goals one by one. But what important is you have a plan and direction.
Here are the tips on how you can invest your hard-earned money wisely:
Tip No. 1: Don’t invest in something you don’t understand
This doesn’t mean that you should put all your money in a time deposit because that is the only type of investment you know. You have to go out of your way to see what investment products are available in the market.
Educate yourself. You don’t need to enroll and take up Finance courses to gather information. As of the moment, you can get as many ideas as you want through the web, blogs, read related books, attend seminars, ask your friends and have conversations with them and look for financial mentors.
Don’t afraid to ask questions. Seek for financial wisdom. Try to understand the investment product being sold. To help you do this, evaluate each investment alternative according to the following criteria:
- Potential Return – How much can you reasonably expect to earn by investing in this product? What is the historical return on investment or yield on this instrument?
- Safety – What are the risks involved? Can you lose all or part of your investment?
- Liquidity and Marketability – Can you readily convert your investment into cash? Are there any penalties for pre-termination or early withdrawal/redemption? Is there a ready buyer or a market for your investment?
- Minimum Investment Amount – How much money are we talking about? Php5,000? Php100,000?
But if you have already chosen a specific company to be your partner towards the achievement of your goals, you may ask them some necessary questions like:
a. How is the company doing when it comes to stability, investment gains and asset portfolio, reputation in the industry and the service provided to the clients?
b. What are the risks involved and potential returns of the investment if I will choose to invest my money in your company?
c. Can I easily get my money if I need it? Are there other investment options aside from the one you’re presenting to me?
d. Do you also invest in the product you are telling me?
You should make time to learn more knowledge and understand your investment well.
After all, it is about your hard-earned money.