I will discuss the 5 basic but powerful investment vehicles that you can ride on in starting your investment journey seriously. There are more than 5 investment vehicles available but these 5 will give a great start. I have noticed that many Filipinos only know one or two of the investment vehicles available.
Working in a bank gives me actual vision on this and it proves the vast statistics from news and internet that there are huge percentage of financial illiterate Filipinos. It breaks my heart seeing those old people who earns decently on their younger age but on their retirement age become poor and broke. One of the reasons maybe is that they depend solely to SSS or GSIS monthly pension. Hey! I am not saying do not get the SSS or GSIS government pension plans, enroll but do not depend on it Solely. Everyone will agree that 3,000 to 5,000 monthly income is not enough.
Working in a bank gives me actual vision on this and it proves the vast statistics from news and internet that there are huge percentage of financial illiterate Filipinos. It breaks my heart seeing those old people who earns decently on their younger age but on their retirement age become poor and broke. One of the reasons maybe is that they depend solely to SSS or GSIS monthly pension. Hey! I am not saying do not get the SSS or GSIS government pension plans, enroll but do not depend on it Solely. Everyone will agree that 3,000 to 5,000 monthly income is not enough.
What Is Investment Vehicle?
Maybe your wondering what do I mean by investment vehicle. Is it something that you ride on? like a car? Yes it is like going to Davao City from Cagayan de Oro City (ahm...You know now where I live). First, I want you to visualize yourself walking from Cagayan de Oro City to Davao City. How many days will it take? Second, what if you're riding on a bicycle how many hours will it take? 15 hours or 20 hours? Third, what if you're riding on a car how long will it take? Lastly, what if you're riding on an airplane how many minutes will it take? 30 minutes? 40 minutes? You must realize now my point here. How about your investments? what vehicle are you riding?
1. Savings Account - a bank account that earns a little interest, currently it is less than 1.0% a year. Yes, you can withdraw it anytime through ATM or your favorite local banks.
2. Time Deposit - a deposit in a bank account that cannot be withdrawn before a set of date. It has minimum placement period usually 30 Days or 60 Days.
Here are the 5 Basic Investment Vehicles that you can ride on.
http://www.sellpension.co.uk/wp-content/uploads/2013/03/saving.jpg
2. Time Deposit - a deposit in a bank account that cannot be withdrawn before a set of date. It has minimum placement period usually 30 Days or 60 Days.
http://www.dbs.com.hk/iwov-resources/images/deposits/top-time-deposit1.jpg
3. Bond - it is a debt security, under which the issuer owes the holders a debt and, depending on the terms of the bond, is obliged to pay them interest (the coupon) and/or repay the principal at a later date termed the maturity date. From https://en.wikipedia.org/wiki/Bond_(finance)
https://www.hennionandwalsh.com/wp-content/uploads/2014/08/Blog-31-image.jpg
4. Mutual Fund - an investment program funded by shareholders that rides in diversified holdings and is professionally managed by a fund manager. The shareholder (you) can choose which investment risk your are willing to take.
http://agahgroup.com/wp-content/uploads/2015/03/mutual_funds.jpg
5. Stock Market - a stock market, equity market or share market is the aggregation of buyers and sellers (a loose network of economic transactions, not a physical facility or discrete entity) of stocks (also called shares); these may include securities listed on a stock exchange as well as those only traded privately. From https://en.wikipedia.org/wiki/Stock_market
http://business.inquirer.net/files/2011/07/philippine-stocks-exchange4.jpg
I hope this helps you in selecting what type of investment vehicle you will choose on your financial planning. I will discuss more on each vehicle - Saving,Time Deposit, Bond, Mutual Fund, and Stock Market. Please Subscribe Now to my blog and be the first one to read it all for FREE. And be Financially Free!
