Where to Invest Your P5000

by Gily Tenorio on February 8, 2013

in Investment, Mutual Funds

P5000 Mutual FundLast time, I published an article about the best investment you can have for your P10,000. Today, I would like to discuss on how and where you can invest your P5,000. Yes, you read it right. For as low as P5,000, you can start investing in legitimate way. Perhaps you’re wondering how. Read on to learn more.

I just want to say that you should learn first basic personal finance before you attempt investing. Some of the lessons you may need to learn is how to save money, basics of banking and how savings account works, interest rate and other things. The bottom line is you should know how to properly spend and save your money.

I’m not a professional financial adviser, I only like helping people by sharing my knowledge about personal finance and investing. I also write about how to make extra money from blogging and online ventures and other stuffs like OFW matters since I’m a 5-year old OFW.

There are lots of things that can hinder you from taking your first step like intimidation and fear of losing money. Actually, I will say to you straight that there’s no guarantee that you can earn from investing. If you know an investment that gives 100% guarantee, 100% it is a scam.

Mutual funds, UITF, ETF and stocks have no guarantee of profit. However, all of these things are legitimate investments available in the Philippines. Private individuals like you can invest in these opportunities with extreme care and study.

If you are afraid about losing money, you should study first these things before you put in your money so that you know how it works. Education and learning is the key to drive away fear and intimidation.

Where to Invest Your P5,000?

Investing is much easier these days compared ten or twenty years ago. However, investing should be done after you became disciplined on saving money. It is always better to save first and then invest some portion of your saved money.

Savings account and time deposit are not good places to put all your money because it earns very low profit or return for you. Normally, you can only earn 0.25 to 3% per year on SA and TD while inflation plays around 2-3% per year which means you almost earn nothing.

On the other hand, some investments like mutual funds and UITF can give you double digit return especially when the economy is doing good like last year 2012. However, you should always do your own study and research whether these types of investments are the right one for you.

No one could decide for yourself where to invest your money except you alone unless you paid a professional financial adviser who will decide where to put your money. Anyhow, there are several options that you can do with your money. You may invest it in mutual funds, UITF, stocks, business, insurance, bank or other opportunities like networking.

If you don’t have big amount of money, mutual funds is the best to go. The minimum investment for mutual funds starts at P5,000 to P10,000 depending on which company you are going to open an account. In case of First Metro Asset Management, Inc. (FAMI), you can open an account for as low as P5,000.

I have published several articles about investing in FAMI and related topics about  mutual funds, you may visit the link here to learn more. It is not technical so I guess you will easily understand those articles.

How to Do It?

Before you could invest, you need to be prepared and disciplined first on spending and saving your money. I assumed you have started saving and you have extra money that you can use for  investing.

In order to invest in mutual funds, you should study first which one is the right for your goal. There are three types of mutual funds: equity, balanced and fixed-income fund.

Currently, I have equity and fixed-income fund. You may see this post to help you out what  are these all about. You may also read the prospectus of the fund where all details about the company are given, though it is very long to read.

After you choose the company you want to invest, you must prepare all the opening forms, documents and valid ID before opening a mutual fund account. It is not difficult to open an account because you can do it by visiting their office or you can send the documents via LBC or registered mail.

Final Thoughts

Maybe you’re thinking where to begin. Knowledge plus action is the key if you want to learn investing in mutual funds. Though you can also attend seminars about investing but it will cost you some amount of money.

I would suggest you start reading blogs like this of mine and be conscious of what you are doing. Take some time to study how mutual fund works and how could you profit from it.

In addition, if you have questions, I invite you to leave your comment below. I will answer your questions to the best of my knowledge. Hope to see you around!

About the Author:

GilGil Tenorio is a blogger, a husband, a father, and an active Christian. He likes playing guitar, C.S. Lewis, Plants and Zombies and NBA. Follow him at Facebook, Google+, YouTube and Twitter. Thanks!

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{ 2 comments… read them below or add one }

john March 1, 2013 at 14:23

hi Gil!

diba pag down ang stock market, down din ang equity fund?
its directly proportional.. right?

ask ko lang. which is better?

– buy big shares in Equity fund when the market is down VS. the cost averaging strategy?

among these, alin ang mas smarter way to get more gains?

tnx!

Reply

Gil March 5, 2013 at 21:40

Hi John,

You’re right. I would suggest cost averaging because it is very hard to “time” the market when it is down. However, if you have big spare money, you may try to invest one time during a down market.

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