• Beyond Cash Savings: A Family Investment Guide

    A guide to investment options and planning family financials.
    by Willeth Luarca-Laus .
  • couple with moneyWe aspire to provide well for our family’s needs and wants: our motivation for working hard. We do our best to manage our earnings so we can pay for everyday expenditures and maybe have something to spend for occasional treats.

    Having long-term goals such as retirement plans, your kids’ education, buying a house and lot, or pursuing a dream vacation abroad also require wise money decisions. Moreover, emergency situations can happen anytime. When a family member gets sick or loses a job, we cannot be caught empty-handed.

    But is it enough to place your hard-earned income in a savings account? Marvin Fausto, senior vice-president for Equitable-PCI Trust Banking, says, “For those who do not have any kind of savings, opening a savings or time deposit account is a good way to start. Once you start saving, that’s the time you start investing.” The downside is, your money can hardly earn from it. If you’re saving up a huge amount, it would be missing on the high potential investment. Take your savings a notch higher and put your money in a wise investment.


    Taking The First Step
    Fausto says it is best to make a self-assessment before setting your foot down on any investment: What are your financial objectives? How much money are you willing to set aside? How long do you want to keep your money there? How much risk are you willing to take? Your answers to these questions will be your starting point in choosing the kind of investment you would venture in.
    Do your homework.

    Research what the investment is all about and what possible returns you stand to gain. Ask financial experts and investment agents about the risks involved, and conduct a background check of the bank or institution offering the investment.

    What Makes A Good Investment?

    Fausto defines a good investment as “safe and high-yielding.” He emphasizes though that the definitions of “safe” and “high-yielding” depend on the investor. Some can afford a lot of risks but still consider it safe, while others deem a 10% return a high enough mark.

    Fausto also stresses the principle in investing: “If you want to make your money earn, then you should be ready to take risks. Every investment comes with risks. If you do not want any risk, then you should not invest.”

    Rene Cruz, 32, a barangay official who has been married for 10 years now and has one child, confesses he was apprehensive to invest because he was afraid to take risks to begin with. He was eventually encouraged to put his money in an investing firm, only to learn in the end that the investing firm was not legitimate. The risk Cruz took cost him half a million pesos.  

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    Cruz realized he was bound to lose when he decided to go into something he didn’t fully understand. “But I learned a lot from it. Because of that experience, I worked harder to learn the ropes of trading and investing. It gave me the guts to invest again, too,” Cruz reckons.

    To avoid costly mistakes such as Cruz’s, Fausto advises first-time investors to take it one step at a time. Study all the options first before taking the plunge. Bad investments stem from not knowing what you are getting your hard-earned money into.

     

    Click here to read more about stocks and bonds.

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