As a Filipino, the idea of investing is always challenging for many. We can hear stories about people involved in a scam because many wanted instant money with fewer efforts.

We talked about financial literacy last time, and I shared about how it is about using our money wisely, not just making more and more money.

In today’s blog, I’ll share some investing tips that I apply to myself that you may also copy (if you like to). I’ve learned most of these things from talking to my friends and the popular Reddit community.

Here’s my 5-step investing rule that you should consider:

1. Pay your debts.

Before even considering to make more money, make sure you don’t owe anyone money. Yes, there may be some scenarios that we can consider, but, in general, don’t even consider owing money from others to gamble in your investments. Most of the time, it will turn out bad, and things will only get worse from there.

2. Minimize your expenses.

Most people survive each money with almost zero money and no budget tracking in place. For people who are spending a lot of extra on unnecessary stuff, it’s time to simplify your lifestyle. Consider some cheaper alternatives to your usual luxury.

3. Build an emergency fund.

This will protect your investment from unnecessary withdrawal. An emergency fund is one of the best things you should have before considering investing in higher-risk opportunities. In general, an emergency fund may consist of 3-6 months’ worth of monthly expenses. If you don’t even know that number, track your daily expenses. Make sure to put this money in a high-interest bank account that you can easily withdraw when you need cash.

4. Set your financial goals.

Having a milestone for your financial efforts will motivate you to focus on reaching those goals. As you already have your financial goals in mind, you can then find financial instruments available to explore ways to achieve that goal. 

5. Invest in educating yourself.

This is where you’ll need more educational tips from sound financial advisors. Friendly tip: the financial advisors that will help you get into your financial goals is likely not to sell life insurance the first time you meet with them.

I’m actively educating myself on the following financial instruments that you also consider at your own risk:

  • Health Insurance
  • Stock Market
  • Mutual Funds
  • Life Insurance
  • Cooperatives

That’s it! 🙂 

Investing is a continuous learning process. It’s always about knowing how much risk you’re willing to take and how closer you are to your goals.

I hope you learned something new today. If you have friends who needed to know this, please let them know.