As you might have noticed from reading the news, the Philippine economy is on a roll these days. There are more investors, more potential jobs, and of course, more money going around. Today’s young professional crowd has more money to spend, and more things to spend it on.
What are the things we usually spend it on? Of course, we have the essentials for daily living, or what Maslow calls physiological needs. We also have our utilities, what allows us to have a comfortable lifestyle. Then we have our wants- luxuries like the latest gadget or trips to Boracay. What do we do with the money left over? Place it a bank? Hide it in the sock drawer?
Here’s a better idea: make it work for you.
Filipinos usually view the word “investment” as a scary word that involves a lot of money. Investments are something that entrepreneurs or those who already have high paying jobs do to make even more money. And while that’s true in a sense, that shouldn’t preclude you from investing even at a younger age.
Let’s list down a few benefits of investing. Check them out yourself to see if they’re worth it:
1) Passive Income
Admit it. Unless you’re one of the rare creatures that love their work, you probably dream of the day when we can finally take our money and retire to a secluded beach. You’d even be content just spending your days how you choose to. Unfortunately, there’s something called bills that prevent you from leaving your job, packing up and exploring the world.
If you invest wisely, you’ll able to earn through interest. In fact, if you start early enough, your small investment can grow very large thanks to the power of compound interest.
2) Beat inflation
Did you know that your money is losing value every day? What you can buy now for twenty pesos might cost double the amount just a few years from now. This continuing rise in the prices of goods and services is called inflation.
Now imagine storing away 1 million pesos in your cabinet so that you can use it for your children’s education. How would it feel if, fifteen years down the road, you find out that tuition fees have ballooned to such high amounts that your 1 million is no longer enough to put your children through college?
If what you earn from your investments beat the inflation rate, then you won’t have to worry about that situation.
3) Retire in comfort
In an ideal world a regular Juan dela Cruz employee works for maybe forty years and retires happily and comfortable in their mid-sixties. Unfortunately, we aren’t living in an ideal world, with most employees reaching retirement age with little to show for it. Retiring is expensive, and not everyone will be able to enjoy it.
This links in directly with passive income, as investments can give you an opportunity to earn money even when you stop working. Basically, you’re retired, but your money still works.
Invest early, Invest often
Delaying gratification can be difficult, especially when there are so many things to spend money on. But take a small amount from each pay check(starting from the next one); place it in a legitimate investment vehicle like bonds, mutual funds or stocks – and someday, you’ll be thankful that you did.
Contributed by Bwayan Jordison
Bwayan Jordison, is a Gamer, Toy Collector. He is also a part time contributor and Forex Trader at Metisetrade Inc., write articles to help and educate everyone about Foreign Exchange.