Investing is not only for the rich people, it is even for simple employees like you. However, most people want to know how much money they need to start investing?
Way back in 2010 I have started to invest some of my saved money in stocks and mutual funds (MF). Prior to that year, I studied and read as many articles I can in order to learn how stocks and mutual funds work. I also started this blog during that time to continue my learning and immerse myself in learning finance and investing.
I have learned that you don’t need a big amount of money to start investing. In particular, I’m very much interested during that time to invest in mutual fund because of the low initial deposit for opening a new account and it doesn’t require technical knowledge on finance.
How Much Money Do I Need to Start?
Most people think that investing requires a big amount of money but in reality, it is not true. As an example, one good example of investing with low capital is through mutual fund. Another one is through UITF or unit investment trust fund.
Actually, for as low as P5,000, you can start investing in mutual funds or UITF. In order to begin investing, you have to open an account with the investment company or through your local bank. Most major Philippine banks are now offering investment opportunities through UITF and mutual fund. Of course, you can still invest in time deposit (TD) but the return you can get from funds is much higher than TD.
When I opened my FAMI mutual fund account in 2010, I have used only P10,000 during opening of my account. If you’re working for many years, I think that amount is not really that big.
At first, I’m skeptical on investing in mutual funds because I don’t know how it works and whether it is legitimate. As I study and learn about personal finance and investing, I finally decided to open an account in the hope that my money will grow faster than putting it all in the bank.
During that time, I opened 2 FAMI mutual fund accounts: SALEF and SALBF. These are two types of mutual funds that FAMI is offering to all investors out there. You can see my post here about different kinds of mutual funds.
Add Little by Little
If you have no big amount of money, there will be no problem about it. Just like what I said before, for as low as P5,000 ($125), you can begin investing in Philippine mutual funds.
In case in the future, you earn more money or you get some bonus from your company, you can add more mutual funds by buying more shares. There is an easy way to add FAMI mutual funds: it is through Metrobank Direct Internet banking. Learn more here by reading this article.
If you are a BPI Express Online user, you can also buy BPI mutual funds via online transactions. This option will be convenient for those people who are living or working outside the Philippines. You can open a BPI savings account first and then enroll that bank account in Express Online.
Investing is not just for the rich. You and I can also start investing in opportunities like MF. Most companies require only P5,000 or P10,000 to open a mutual fund account in them.
The ideal strategy before starting to invest is you must continually save money from you salary or businesses. In this way, you can have sufficient money that you can use and at the same time, you’ll learn discipline in using and spending your money.
Mutual fund companies like FAMI and BPI has several options of opening an account. You could visit directly their office to open an account or you may do it via online application via their website.
Another way is by sending the required documents and application form through a registered mail. In this way, you don’t have to procrastinate, start right now to invest!
If you have questions and want to know more about investing in mutual funds and other ways, just leave your comment below. I’ll be happy to answer it.
Image Credit: FreeDigitalPhotos.net