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3 Types Of Investments To Look Into If You're Only A Beginner

Investment consultant and financial coach Yani Moya shares what you should know.
PHOTO: SHUTTERSTOCK
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At 25, I'd like to believe I'm not that bad with money, but at the same time, I'm not *totally* financially literate either. I've still got a long way to go, but I'm glad I'm giving more attention to my finances nowadays. Ever since I got a job and started earning on my own, one of the things I was always so curious about was investing in stocks. I've always thought about ways to grow my money, and based on what I usually see and hear from my friends and family, investing in stocks is the way to go. But what do these words *actually* mean and how do they work? In an email interview with Cosmopolitan Philippines, licensed finanial coach and investment consultant Yani Moya shared her thoughts. 

According to Coach Yani, in simplest terms, "Investing is basically growing your savings by acquiring assets or shares." When you invest, the ultimate goal is to generate income from profit, interest, dividends, or gains. Stocks, aka equities, are shares of a company that a person owns. "If you have stocks of a company, it means you are a 'shareholder' or 'part-owner' of that certain company," she explained.

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What are the different types of investments for beginners?

  1. Pooled fund

    This is basically money of individual investors shared in one portfolio. To invest in pooled funds, you can do it through banks, insurance companies, or mutual fund companies. These platforms hire professional fund managers who are in charge of growing the investments in the stock market.

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  2. Pag-IBIG MP2

    This is the savings program of Pag-IBIG where active members can start earning guaranteed dividends. The average annual dividends rate of MP2 is around 7.65 percent. The actual rate is announced every year and is dependent on the institution's financial performance. It starts at P500 each month and their application is all online now.

    @coachyanimoya

    Reply to @chichiri46 more details about MP2! :). ##moneytok ##financetok ##finance101 ##tiktokskwela ##learnontiktokph ##yourfinancialcoach

    ? original sound - Your Financial Coach Yani Moya - Yani Moya on IG

  3. Index Funds

    These follow the index or the top 30 companies in the Philippine stock market. To invest in index funds, just choose a stockbroker in the country (ex. COL Financial, AB Capital, Philstocks, etc.).

If you're investing in stocks for the first time, here are some tips from Coach Yani:

  1. First, be very clear on the purpose of your investment. Why do you want to invest? Answering this question will help you identify what type of investment is best suitable for you. From there, the next steps will be easier for you to determine.

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  2. Set investment goals and know your timeline. Are you investing for your early retirement or your dream business? Perhaps it's for your child's education? Try listing down the end goal/s using the SMART method. Check if they're specific, measurable, achievable, relevant, and time-bound. 

  3. Identify your risk appetite. This refers to the amount of risk an investor is willing to accept to achieve their objectives. According to an article published by Money Advice Service, "Saving and investing involves a variety of risks, for example: the risk that an institution will fall (default risk), the risk your money will not keep up with rising prices (inflation risk), the risk that comes with share prices going up and down (volatility risk), and the risk that you could have earned better returns elsewhere (interest-rate risk)."

    Don't just invest because you feel like there's a hype to it or because a friend said so. Knowing your risk appetite will allow you to find the best type of investment for you.

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    @coachyanimoya

    Reply to @chskpnds risk rating/appetite ???? ##moneytok ##financetok ##finance101 ##yourfinancialcoach ##learnontiktokph ##tiktokskwela

    ? original sound - Your Financial Coach Yani Moya - Yani Moya on IG

  4. Only invest in money that you're willing to lose. Investing is not guaranteed. While it's important to build wealth, you should also be critical with where you put your hard-earned money or savings.

  5. Learn to diversify your investments. Just like the saying, "Don't put all your eggs in one basket," don't get too excited by putting all your money in one type of investment. Make sure you spread them out in different investment vehicles so that you don't depend on just one.

  6. Invest consistently. If you want to maximize your profit, create a habit around setting aside money monthly intended for your investments. Investing is not a one-time event. Even the richest men in the world like Jeff Bezos and Elon Musk consistently invest to create more wealth.

  7. Be logical. Never be an emotional investor. This is key to winning in investing,

  8. Make sure that your financial foundations or protection assets are intact—this includes your emergency fund, medical card, life insurance, health fund, critical illness coverage, retirement fund, etc..

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  9. Connect with a licensed financial or investment consultant to help you get started the right way. With their expertise, these professionals will guide you to achieving your goals faster.

  10. Don't just save to save, save to invest. The best time to start investing was yesterday and the second best time is NOW. Never time the market and start taking bold, calculated risks. More than anything, check all aspects of your personal finance life first. How healthy is your current financial status and your relationship with money? Are you assessing your current liabilities? How stable are your financial foundations? Remember, there's no such thing as rich-quick. If you want to thrive through your investments, it will take time, energy, effort, and knowledge.

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