Reality check: these days, P100,000 isn't a lot of money. With rising prices of basic goods and services compounded by heavy taxes—not to mention all the other necessities you have to pay for in order to run a smooth household and live a comfortable life—P100,000 can easily slip off your fingers.
But if you do manage to save P100K, don't just stash it under your bed or leave it in a savings account in hopes that it'll earn big interest (hint: It'll only earn a negligible amount every year). Invest in a place where it'll actually grow.
Admittedly, it can be a bit scary to put this kind of amount in the hands of someone else, but a bit of research can prove that a good investment can earn you a huge percentage of what you've initially put in, even if your money won't be accessible to you for a certain span of time. If you're looking to use your P100k to help you achieve that rich, madam life you've always wanted, here are a few options to consider.
What are fixed-rate bonds?
According to The Balance, "bonds are loans made to large organizations." You're basically lending money to these institutions in order to fund some of their projects. Fixed-rate bonds are those that earn the same interest throughout their term.
How do you earn from fixed-rate bonds?
As with every loan, the loaner (read: you) earns from interest. The best bonds to go for are those that give more than 5 percent annual interest rate, so, if you put in P100,000, you earn P5,000 a year until the maturity date, or the date when institution you lent your money to should give everything (plus interest) back. Now, that may not be a lot at first glance, but remember that savings accounts in big banks only earn an average of 0.1 percent per annum; a rare few offer until 0.75 to 1.56 percent per annum, and that depends on how much you put in.
Here's a good example: In April 2019, SMC Global Power Holdings Corporation offered a total of P30-billion worth of fixed-rate bonds, with three terms: a three-year option called Series H; a five-year option called Series I; and a seven-year option called Series J. Series H will earn you 6.8350 percent a year; Series I, 7.1783 percent a year; and Series J, 7.6 percent a year.
Here's how much your P100,000 can possibly earn for each series:
- Series H - P6,835 a year; P20,505 in three years
- Series I - P7,178.30 a year; P35,891.50 in five years
- Series J - P7,600 a year; P53,200 in seven years
Not bad at all, right?
How to you "buy" fixed-rate bonds?
The government and corporations usually announce their offers via the media, but if you're good friends with your bank, they can give you tips prior to the announcement so you can get first dibs. Institutions usually publish a list of banks where you can get your bonds from, so just keep your eyes peeled for the business sections off newspapers and legit websites.
A small franchise
If you're interested in becoming your own boss but you really don't want to start a business from scratch, getting a small franchise is a good way to get your feet wet. There are many franchises with franchise fees that go below P100,000, but of course, you have to remember that you still have to spend for other things, such as government permits, rent (if needed), and the salary of your employees.
Requirements when applying for a franchise
Franchises usually require the following:
- A letter of intent
- Personal identification
- Location information (inclusive of a sketch and average foot traffic a day)
- Marketing plan
The processing of your application usually takes a month to a month and a half. Of course, you'll still have to take in consideration you and your crew's training period as well as the construction of your stall.
How can you earn from a franchise
You earn through sales, after required costs such as inventory and royalty are subtracted. Given this, you'll have to understand that you may not break even and earn until a few months or even a year down the road, and that's normal. As long as your stall is in a location that has a lot of foot traffic, and you have a good product and interesting promotions, you'll get back the money you invested and more.
Room for rent via platforms like Airbnb
If by this point you already have your own space, or if your family home is often empty and unused, you may want to try renting out a room through platforms like Airbnb.
How do you get your property listed on Airbnb?
Before you get your property listed on Airbnb, you'll first need to get the necessarily permissions from whoever owns the property you want listed (whether it be your parents or other relatives), as well as the paperwork that go with process. As mentioned, you'll also want to get the appropriate business permits and pay the taxes that go along with them.
Once everything is down pat, you'll want to invest in refurbishing certain parts of your property. Remember that Airbnb requires essential amenities such as baths and toilets (inclusive of toiletries), proper beddings, and the like. You'll also need to be prepared to provide your guests with tools in case of emergencies, such as fire extinguishers and first aid kits. Your property should also have a marked emergency exit.
After getting a few good photos of your place, you can now get it listed.
While pre-listing tasks may seem daunting, remember that it's okay to start small. You don't need to compete with other Airbnbs with top-notch rooms for the time being. If you only have P100,000, work within the budget, and slowly make improvements as you go along.
How do you earn from Airbnb?
Your guests pay you through the platform itself, and after subtracting booking fees, Airbnb will pay you after 24 hours.
In a previous Female Network article, Airbnb host Julia Quisumbing reveals that she earns P40,000 to P50,000 a month by renting out her unit. While she initially shelled out a lot money since she had to buy the property first, she shares that she used around P100,000 to furnish the unit. (Imagine what you can do if you already have the property and the basic amenities, and you only have to go through permits and a bit of refurbishing?)
As long as you take into account the hosting costs, which, according to Investopedia, include "cleaning, higher utility bills, taxes and Airbnb's host fee, which is 3 percent for payment processing," you can expect return of investment in a few months' time. For more inspiration, you can read Julia's story here.