Question: Hi Randell! Good morning! After browsing the net for Filipino personal finance tips, I learned about you. And after reading your articles, I’m very much driven to start investing. I’m already in my 30s and wishing I started earlier. But I can’t dwell on that anymore, so I’m ready to start now. As you keep saying, “the best time to invest was Tuesday, the next best time to invest is today.” With that, I know I should start investing, but where? With the multiple investments available, I don’t know where to start. It’d be great if you could help me on this. Thank you very much and God bless! — Carlo via Facebook

Answer: Hi Carlo! Thank you for messaging me. I’m sharing your query here in my website because I’m sure many Filipinos can relate to your situation. Many hold off saving for retirement because of the mentality that there are still many years left to save, but as you learned, the best time to invest was yesterday, and the next best time is now. Don’t wait until you’re nearing retirement because investments are meant to be long-term. With that in mind, now we know that we should go for investment vehicles that are more for the long term. So what are these investments?

Property

Real estate is probably the favorite investment of Filipinos. While less than 5 percent of the Philippine population invests in stocks, bonds, and mutual funds, 7 in 10 Filipinos own or co-own their homes, according to the Bangko Sentral ng Pilipinas’ (BSP) Consumer Finance Survey.

Real estate is an advisable investment for retirement because the value of property appreciates through the years. Real estate property isn’t like a time deposit which gives you interest after a year (or less). You won’t make much by selling your property just after 6 or 12 months.

Stocks

Another investment vehicle is stock investing. Stocks are advisable for the long-term because they are risky. This means that the prices of stocks go up and down over a set time period, and you can lose money. One way to decrease your risk and avoid losses is to hold your stocks for the long-term, which makes stocks perfect for retirement. I recommend people to keep their stocks for a minimum of 10 years.

Seeing as you are in your 30s, you have about another 25 more years before you reach retirement age. That’s 20 years more than my suggested 10 years to spread your risk.

Pooled funds

I purposely put ‘pooled funds’ after ‘stocks’ because they are closely related. If you want to buy stocks of SM, Ayala, or Jollibee, you would have to buy them individually through a stock broker or your online trading platform. With pooled funds, be it a mutual fund or a UITF, you get a group of stocks in one basket or fund. The pooled fund can have SM, Ayala, and Jollibee stocks, depending which equities the fund manager buys. The fund manager does the investing for you. He picks what stocks go into the pooled fund; all you have to do is make an investment deposit and keep track of your investments once or twice a year. It’s also important to know that there are different kinds of pooled funds, there are funds consisted entirely of stocks, others of bonds, while some funds offer a combination of different securities. For the purpose of retirement, and since you have about 25 years until retirement, a stock or equity-based pooled fund is best for a retirement which is still far away.

VUL

Variable Universal Life Insurance or VUL is a life insurance product that has an investment component similar to a mutual fund or UITF. It is similar to a pooled fund except that it has an insurance component for protection purposes. If you need to build investment values AND you need to benefit of life insurance, this is a convenient instrument for you. However, if you already have enough insurance coverage and you need pure investments only, consider other investments instead.

Cryptocurrency

Some cryptocurrencies particularly the ones with large capitalization like Bitcoin, Etherium, Cardano, etc. can give you potentially very good capital growth that can come in very handy when you retire. However, since these investments are extremely volatile are relatively new instruments, cryptos are not for everyone. If you understand how crypto works and you have a very high appetite for risks, you may consider adding them to your portfolio. Even if you claim to have very high risk tolerance and you understand how cryptos work, I would recommend you limit your exposure to them to about 10 to 15% only to be prudent.

With these investments to choose from, you have a clearer idea of where to put your money for retirement. Now the only thing that’s left is to talk to a real estate broker (for property) head to the bank (for UITF pooled funds), a brokerage firm (for stocks and mutual funds), a financial advisor (for VUL) or open a crypto trading account on-line to fill out your application and open an investment account.

Just remember that there is no such thing as a perfect investment so it is best to diversify.

“Go to the ant, O sluggard; consider her ways, and be wise. Without having any chief, officer, or ruler, she prepares her bread in summer and gathers her food in harvest.” – Proverbs 6:6-8 ESV

Question: Hi Randell! Good morning! After browsing the net for Filipino personal finance tips, I learned about you. And after reading your articles, I’m very much driven to start investing. I’m already in my 30s and wishing I started earlier. But I can’t dwell on that anymore, so I’m ready to start now. As you keep saying, “the best time to invest was Tuesday, the next best time to invest is today.” With that, I know I should start investing, but where? With the multiple investments available, I don’t know where to start. It’d be great if you could help me on this. Thank you very much and God bless! — Carlo via Facebook

Answer: Hi Carlo! Thank you for messaging me. I’m sharing your query here in my column because I’m sure many Filipinos can relate to your situation. Many hold off saving for retirement because of the mentality that there are still many years left to save, but as you learned, the best time to invest was Tuesday, and the next best time is now. Don’t wait until you’re nearing retirement because investments are meant to be long-term. With that in mind, now we know that we should go for investment vehicles that are more for the long term. So what are these investments?

Property

Real estate is probably the favorite investment of Filipinos. While less than 1 percent of the Philippine population invests in stocks, bonds, and mutual funds, 7 in 10 Filipinos own their homes, according to the Bangko Sentral ng Pilipinas’ (BSP) 2012 Consumer Finance Survey.

Real estate is an advisable investment for retirement because the value of property appreciates through the years. Real estate property isn’t like a time deposit which gives you interest after a year (or less). You won’t make much by selling your property just after 6 or 12 months.

Stocks

Another investment vehicle is stock investing. Stocks are advisable for the long-term because they are risky. This means that the prices of stocks go up and down over a set time period, and you can lose money. One way to decrease your risk and avoid losses is to hold your stocks for the long-term, which makes stocks perfect for retirement. I recommend people to keep their stocks for a minimum of 10 years.

Seeing as you are in your 30s, you have about another 25 more years before you reach retirement age. That’s 20 years more than my suggested 10 years to spread your risk.

Pooled funds

I purposely put ‘pooled funds’ after ‘stocks’ because they are closely related. If you want to buy stocks of SM, Ayala, or Jollibee, you would have to buy them individually through a stock broker or your online trading platform. With pooled funds, be it a mutual fund or a UITF, you get a group of stocks in one basket or fund. The pooled fund can have SM, Ayala, and Jollibee stocks, depending which equities the fund manager buys. The fund manager does the investing for you. He picks what stocks go into the pooled fund; all you have to do is make an investment deposit and keep track of your investments once or twice a year. It’s also important to know that there are different kinds of pooled funds, there are funds consisted entirely of stocks, others of bonds, while some funds offer a combination of different securities. For the purpose of retirement, and for Carlo who has about 25 years until retirement, a stock or equity-based pooled fund is best for a retirement which is still far away.

With three investments to choose from, you have a clearer idea of where to put your money for retirement. Now the only thing that’s left is to head to the bank (for UITF pooled funds) or a brokerage firm (for stocks and mutual funds) to fill out your application and open an investment account.

However, there is no such thing as a  so you will need to diversify.

Want a copy of my books? You can order directly from us. Just e-mail [email protected]

Q: Hi Randell, I’m a regular employee in my late 20s. Having read your articles, I know it’s important to save for retirement early, but I also want to support my family (my parents and my younger siblings) financially. Is it possible to do both? –Inez, via Facebook

A: I’m glad that you’re looking out for your financial future while still being concerned about your family’s. In such a close-knit family culture like the one we have here in the Philippines, it’s natural to want to help out. But oftentimes, in their desire to help, a lot of people ignore their own financial health – and that’s not good. Here are a few steps to take if you want to support your family and save for your own future:

1. Put the mask on yourself first. If you’ve been on any flight (and you actually pay attention to the flight attendants’ pre-flight instructions), you know that when the oxygen masks drop, you’re supposed to put the mask on yourself first before you help put the mask on others. It’s the same for your finances; before you can help anyone else, help yourself first. Do you have an emergency fund? Is a portion of your salary going towards retirement already? Are you free from high-interest debt like credit cards? Then you can step up and contribute to your family. If not, take care of your own finances first.

2. Get insurance. Your contributions are vital to your family, so it makes sense to protect yourself with life insurance in case you’re unable to work. If you budget concerns and investments is not yet a priority, look at term life insurance plans, which provide coverage for serious illnesses and death for a certain period of time. You may also consider health insurance or HMOs if health is a major concern for you.

3. Know your family’s financial situation inside and out. Knowing your family’s financial capabilities will help you keep better control of your own finances. What do they need help with? How much do they need to pay whom? This may not be an easy conversation to have, but it’s important so that you don’t overextend yourself, and they don’t become reliant on you at the expense of your own future. When you know how much money they truly need, you can measure it against what you can provide as assistance, and you can provide for them while saving for yourself.

4. Set boundaries. Exactly what monetary help does your family need? How much will they need from you monthly, and for how long? What is the maximum you can provide for them? What are their financial goals? Setting these markers down will ensure that you stay on your financial track while still being able to help your family. When you help, make sure it is not encouraging the habit of dependency and entitlement.

5. Teach them good financial habits. Like the old saying about teaching a man how to fish, teaching your family good financial habits will be much more help to them in the long run that simply giving them money. Help them set a budget so they can meet their expenses, or assist them with finding money-making opportunities so that they can sustain themselves with minimal help from you. This way, they can have their own sources of income other than just you – freeing your finances up so you can save more, build your wealth, and be in a better position to help them out if more financial setbacks arise.

Discussing family finances is not the easiest thing to do, but it’s very important if you want to help your family while still helping yourself. Improve your finances and get yourself on solid ground before you commit your resources to helping out. It’s important to be there for your family, and by following the steps above, you can ensure a good future for yourself while getting your loved ones on better financial footing.

What does the bible say about these things?

We should honor our parents — “Honor your father and your mother, that your days may be long in the land that the LORD your God is giving you. (Exodus 20:12, ESV). It was further reinforced in Ephesians 6:2 —“Honor your father and mother” (this is the first commandment with a promise).

However, the bible is likewise clear about the obligations of a parent — Here for the third time I am ready to come to you. And I will not be a burden, for I seek not what is yours but you. For children are not obligated to save up for their parents, but parents for their children. (2 Corinthians 12:14, ESV).

Seek wisdom with these things… be in faith and be a good steward of your finances lest you your children may end up having the same burden as you have for your parents.

A good man leaves an inheritance to his children’s children, but the sinner’s wealth is laid up for the righteous. (Proverbs 13:22, ESV)