Have you asked yourself these questions before investing yet?
You’ve just finished reading these Investing Quotes so now you’re all fired up.
You want to make your money grow and work for you.
You don’t want to just get stuck earning a measly 1% interest in the bank!
You want to start now.
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| But! Ask yourself these questions before investing first. |
Why?
Because you know that the earlier you start, the cheaper it is for you to reach your target amount!
– A 25-year old invests P26,645/year for 10 years. He gets 2.2 Million at age 55.
– A 35-year old invests P31,220/year for 10 years. He only gets 900,000+ at age 55.
* Assuming 10% average annual return, using Sun Maxilink Prime, a VUL (life insurance + investment) solution
Now, before you start asking “Which is the best investment for me?” or “How much is the minimum to invest?”, stop and keep calm first. Chill.
Don’t rush your decisions just yet. Before you figure out where you want to be, first, know where you are right now.
Why do you need to do this?
It’s because there’s no such thing as the best investment for everyone! In the same way that there’s no best food for everyone, your investment solution varies according to you.
– A 35-year old invests P31,220/year for 10 years. He only gets 900,000+ at age 55.
* Assuming 10% average annual return, using Sun Maxilink Prime, a VUL (life insurance + investment) solution
Now, before you start asking “Which is the best investment for me?” or “How much is the minimum to invest?”, stop and keep calm first. Chill.
Don’t rush your decisions just yet. Before you figure out where you want to be, first, know where you are right now.
Why do you need to do this?
It’s because there’s no such thing as the best investment for everyone! In the same way that there’s no best food for everyone, your investment solution varies according to you.
 |
| There’s no such thing as the best investment in the same way that there’s no such thing as the best Pokemon. |
In fact, there are lots of investment options today. You only need to choose now!
How do you choose? You ask yourself these four questions before investing. Ready?
1. What’s my investment goal?
Seriously. Before you even start anything, ask yourself first, what’s your reason for investing?
What do you want to reach?
Investing because you want to send your babies to college in the future? Your goal is education fund.
Investing because you want to enjoy a comfortable and luxurious life when you stop working? Your goal is retirement.
Investing because you want to travel the world when you’re 40? Your goal is vacation.
Investing because you want to live in a home that you personally purchased? Your goal is a house.
Want to know how to find out your emotional cause for investing? This article entitled “The First Thing You Should Focus On Starting Your Journey To Financial Freedom” should help you.
In figuring out your investment goal, ask yourself what your purpose for investing is. Make sure it’s important to you.
2. How much is my investment goal?
Every goal has a specific price tag attached to it. Don’t just think about the present value. Think of the future value also.
For college education, how much will your children’s tuition fee be?
Yes, it may only be P100,000 per school year for now – but did you know that the average increase in tuition is 8.5%/year?
If this is the case, that P100,000 per school year would be P226,000 in 10 years from now!
For your retirement, how much do you need to spend yearly to ensure that you’ll be comfortable?
Yes, it may only be P240,000 per year for now – but did you know the inflation rate of the country at February 2014 is at 4.10%?
If this is the case, that P240,000 per year would be P536,000 in 20 years from now!
3. How many years do I have to prepare for it?
Be realistic. How long are you willing to prepare and invest for your investment goal?
Categorize your goals according to their time horizon:
2. How much is my investment goal?
Every goal has a specific price tag attached to it. Don’t just think about the present value. Think of the future value also.
For college education, how much will your children’s tuition fee be?
Yes, it may only be P100,000 per school year for now – but did you know that the average increase in tuition is 8.5%/year?
If this is the case, that P100,000 per school year would be P226,000 in 10 years from now!
For your retirement, how much do you need to spend yearly to ensure that you’ll be comfortable?
Yes, it may only be P240,000 per year for now – but did you know the inflation rate of the country at February 2014 is at 4.10%?
If this is the case, that P240,000 per year would be P536,000 in 20 years from now!
3. How many years do I have to prepare for it?
Be realistic. How long are you willing to prepare and invest for your investment goal?
Categorize your goals according to their time horizon:
1. Super Short-term (one year or less)
2. Short-term (1-5 years)
3. Medium-term (6-9 years)
4. Long-term (10 years or more)
The more time you have to invest for it, the greater the investing risk you can afford to take.
4. How risky can you be?
4. How risky can you be?
There is a risk-return trade-off.
The riskier your investment is, the higher the potential return you get.
The more conservative your investment is, the lower the potential return you get.
The riskier your investment is, the higher the potential return you get.
The more conservative your investment is, the lower the potential return you get.
Why do riskier investments give potentially higher returns? It’s because these returns should compensate for the risk, the value of inflation, and the length of time that you’re investing.
It’s the same with life – you can’t have everything!
If you want your money to be more accessible, you have to sacrifice getting high returns.
If you want your money to grow more and get higher returns, you have to sacrifice that you can’t touch it for a while.
It’s just fair that way. (Actually, it’s not fair if you just keep your money in the bank. There, you lose more money and you also get exposed to risks! Yikes.)
You can fill out this questionnaire to know how risky you can be. Then, you can contact me and let’s talk about it. 🙂
It’s the same with life – you can’t have everything!
If you want your money to be more accessible, you have to sacrifice getting high returns.
If you want your money to grow more and get higher returns, you have to sacrifice that you can’t touch it for a while.
It’s just fair that way. (Actually, it’s not fair if you just keep your money in the bank. There, you lose more money and you also get exposed to risks! Yikes.)
You can fill out this questionnaire to know how risky you can be. Then, you can contact me and let’s talk about it. 🙂
After asking yourself all these questions, the bonus one that you can ask yourself is this:
“How much am I willing to invest regularly for this?”
Set aside a regular amount for investing. Your future self will thank you for it.
In the end, it doesn’t really matter how comprehensive your answers are to these questions. Do you know what really matters?
It’s if you acted on any of your answers at all!
Ask yourself these questions. Answer them accordingly. And then ACT on your answers.
Your future is in your hands, you know. You just have to start preparing for it now.
“How much am I willing to invest regularly for this?”
Set aside a regular amount for investing. Your future self will thank you for it.
In the end, it doesn’t really matter how comprehensive your answers are to these questions. Do you know what really matters?
It’s if you acted on any of your answers at all!
Ask yourself these questions. Answer them accordingly. And then ACT on your answers.
Your future is in your hands, you know. You just have to start preparing for it now.
Images c/0 OnceUSave.com, Mashable.com and tasplan.com.au
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Let me help you. Simply fill out this form.
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Want to get started managing your money/budgeting/investing? Contact me, your trusted financial advisor, through the following:
Email: liannemarthamlaroya@gmail.com
Twitter: @MsLianneLaroya
Mobile: 0916 737 8741
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Live wisely,
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