What to Do with 1 Million Pesos?

by Gily Tenorio on July 2, 2012

in Personal Finance


Sometimes, owning a big amount of money makes you clueless on what to do with it or where to use it. That’s why many instant millionaires spend so much of their money that they become poor again after several months or years have passed. They are not prepared with the big responsibility of owning a big amount of money.

Let’s imagine for example, you were given by your parents an inheritance amounting to P1 million in cold cash. So the question is, what will you do with that big amount of money? Here are some of my suggestions if you don’t have any idea what to do.

1.Apply for a savings account

One million pesos in pure cash is hard to keep in your house because it is a lot of money. The first important thing that you should do is to keep it safe while you can easily access your money. You can only do this by opening a savings account.

With your own bank account, you can protect your own money from theft and the money you put in the bank is insured by PDIC up to P500,000. You may also withdraw your money anytime you want so you can still use it to buy for something.

You can see in this post the requirements you must have prior opening a savings account. There are many banks in the Philippines that you can choose. Here’s the list.

2. Invest some portion in mutual funds or UITF

I would suggest to invest some amount of your P1 million in mutual funds. Perhaps, you can put 20% on bond fund which is the least risky since it is a type of mutual fund invested in time deposit, government bonds, and other fixed-income instruments.

On the other hand, if you are aggressive and want to try some piece of stock market, you can invest in equity fund. This kind of mutual fund is invested in stocks of companies listed in the stock market. When you invest in equity mutual fund, you are indirectly investing in the stock market.

Unit Investment Trust Fund is almost the same as mutual funds. I think the differences between UITF and mutual funds are the fund performance and the company managing the fund.

UITF is managed by a bank with the authorization from the Bangko Sentral ng Pilipinas (BSP)to administer and provide trust fund investment to its customer. Obviously, not all banks can offer UITF especially those small and rural banks.

On the other hand, mutual funds are managed by an investment company with supervision of Securities and Exchange Commission. Thus, all mutual fund companies should be legitimate before they can offer their services to potential customers.

3. Put some money on time deposit

Time deposit is still the popular way to invest money among Filipinos. Many people know that it is safe because the earning is guaranteed by the bank and the principal is insured by PDIC.

Even though the return of time deposit is not high compared with other investments like stocks and mutual funds, many people are still choosing to invest in time deposit because of guarantee and security. For example, if you have one million pesos invested in time deposit that earns 1.5% per 30 days, it can give you almost P15,000 per month of return.

You need to diversify where you put your money. Don’t put it in just one basket, as much as possible invest it in different ways. Some of those ways are mentioned in this post.

4. Start a small business

When I say small business, the capital could range from P100,000 and below. Maybe you can start your own sari-sari store if your house is located in a good location where there are many people that will buy.

P 1 Millipn

Some food carts also cost less than P100K so perhaps you can make your own. Be sure to study which food will be the best to sell. There are many copycats out there so it will be better to sell a different kind of food.

Another business that I think good to have is the cellphone reloading business. Here you need again a foot traffic of people. It is better to put it in the marketplace or near schools.

5. Sell stuffs online

Online selling and shopping are becoming popular and accepted by many people today. Many products and services are now being sold in the Internet through free classified ad websites like eBay, Craigslist, and Sulit.

There are some advantages of selling products and services online. One would be you don’t need a physical store to operate. However, you need a computer with an Internet connection so you can post your ads at the comfort of your own home.

Second, you don’t need any manpower because you can do it alone. Unless, you’re selling many products, I think doing business online can be done by yourself.

I’m noticing many people now are selling online especially in Sulit. I have experienced selling low-price gadgets in eBay way back in 2006. It is a good experience and it’s my first time earning money through selling online.

6. Buy the gadgets or things you want

I put this tip on the last five so you could still have enough money in your savings account, time deposit or mutual funds. If you still have left over money, you can buy the gadget you want. This tip is just recommendation, you may do what you want with your money.

7. Study in the school again

Finishing a degree in college is another good way on where to spend some of your money. This tip will not only be applicable to those who didn’t complete college but also for those people who want to learn new skills like computer-related skills, cooking or photography.

8. See a doctor for check up or dentist for dental check

Being healthy is one of the priorities that you should also focus on. It is good to see a doctor and dentist for check-up so you will know the state of your health.

9. Go for a vacation

You can spend some portion of your 1 million pesos by having a vacation to the place you want. There are many beautiful places in the Philippines that you can spend your vacation with.

Please consider first our country when you want to go for a vacation to help our tourism and our fellow Pinoys who are relying on tourists for their income. This coming August, my wife and I will be going to Boracay! I am very excited to go there because it is our first time to visit that place.

10. Donate to your church or charity you like

I believe that when you give, it is the start you will receive. You can donate or give some amount of your money to your church or to the charity you are supporting. It is like planting a seed, you just plant the seed and you’ll just wait until it become full grown and after that, the harvest.

Final Word

One million pesos seems to be a big amount of money to other people but for some people it may be just a small amount. Anyhow, it is still a sufficient amount of money that you must use and invest properly.

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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!


Image Source: cheftonio

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