Investment products suit people depending on their needs and lifestyle. Below are the available investment options for everyone:
Special Savings and Time Deposits
These are always available in your banks. They vary in amount to invest but there are banks that offers as low as Php 10,000.00 with a special rate already. Normally, interest income would vary from 1% to 4%. Generally, these are safe investment instruments since these are bank products and are therefore covered by PDIC. Special savings vary depending on the bank and the amounts. Remember, PDIC has a deposit-insurance ceiling of Php 500,000.00 per depositor.
Unit Investment Trust Funds (UITF) / Mutual Funds
Nowadays, these two type of investments are generally similar. They differ as to who manages the funds. Banks normally offer UITFs while mutual funds are offered by investment companies but are at the same time partnered with a bank.
They are generally categorized into three types:
- Bond fund - invested in government securities, treasury bills, bonds, notes. Risk is very low since they are backed-up by government. You earn from the stipulated interest rate from the bond usually ranging from 5% - 8% annually. Low risk, low income.
- Balanced fund - invested in stocks, government securities, treasury bills, bonds, notes. About 50% of the fund is invested in stocks and the rest are managed like the bond fund. Simply put, this is the middle category. Potential income could go higher than the bond fund but risk of loss of capital equally applies.
- Equity fund - invested heavily on stocks and a few bonds. High risk, high income. Good for people who are aggressive and willing to take risks in hope of bigger income.
There are variations of funds. You just have to check out the fund prospectus so you will know where the product is actually invested. Ask your favorite bank or investment company if they have product similar to of the above-mentioned items.
Stocks
Investments are managed by stockbrokers notably Citiseconline.com and BPITrade.com. Your money is specifically invested to your chosen companies. The potential for income is endless and so as the loss of capital. My strategy at the moment is to invest only in blue-chip companies for the long term.
Life Insurance
You basically pay premiums and your beneficiaries will get an amount when you die. Not the investment you wish to earn from right? However, this is a must.
Pension, Educational and Memorial Plans
I don't really know where to invest in companies offering these types of products. I still have a phobia on this.
Healthcare and Hospitalization Plans
A good instrument in ensuring your medical bills are managed wisely. But, if you feel that you're healthy and has a lifestyle free from bad habits, then by all means, enjoy the one offered by the government.
Real Estate Investments
If you already have sufficient courage in investing, real estate investments are good passive income source. The way they do it is that you buy a property loaned from a bank and analyzed if rental income could cover the amortization the property needs to pay every month. Sounds easy? I don't know in actuals yet. I have yet to invest on my first property for renting.
Another strategy for people who have huge savings is to buy a foreclosed property, have it renovated, then sell it out. You may need a million or two for starting.
Business and Other Investment Opportunities
Of course, the best investment you could do is to run a business. The potential to be rich is there but not everyone has the capacity, the drive, the perseverance, and patience to run one. You may also resort to franchising but you must take a good look whether a company is really a franchising business or a seller of a business and products.
These are basic information for you to start thinking whether one investment product fits you. There are already tons of information available and feeding you more will only complicate your mind already made-up to invest.
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