What’s the first thing i should do?
Both De La Paz and Que are adamant that before you even start investing, you need pay off debt and build your emergency savings fund. Que says, “First, prepare—this includes building an emergency fund, learning cash management, and budgeting.” There’s no point, after all, in investing money when you’re still in the red. All you’ll be doing is setting investments on a rickety foundation that could mean more financial trouble in
cosmopolitan the future—the opposite of what you want. “Make a budget, create a plan,” emphasizes Que. “Budgets play a significant role in helping anyone pay off debt, put together their nest egg, and make the most of their hard-earned income.”
What’s the first investment i should put my money in?
Once you actually start investing, it’s always best to err on the safe side, which means starting small, starting close to home, and finding a trusted financial adviser. As with everything, there are no hard and fast rules that say you should put X amount in A,B, or C, but there are certain guidelines to keep in mind. “It really depends on how much capital you have for investing. The norm is to start small,” says De La Paz, adding, “The first thing one should invest in is insurance—healthcare—and getting an insurance policy in your 20s is cheaper.” After
MARCH 2016 you’ve gotten yourself covered, you can move on to mutual funds (essentially, money you invest in a bank or other entity which is handled—along with other investors’ money— by managers and put into stocks and bonds with large companies). Typically, getting older implies you’ll be earning more, which means you might have more money to invest in the big stuff like property or even a business. Once you’re a few years into your money-making investments and feel financially comfortable (i.e. no longer worrying about monthly payments), then you can consider looking the former and even using them as a passive source of income.
this all sounds great, but i can’t afford it!
Actually, you can. Pinays in their 20s usually fall into the trap of thinking that investing is something they should put off, or that they’re not making enough to survive as it is, much less invest. De La Paz and Que, however, believe that that this is nothing more than a myth. “Investing is really about discipline and dedication. It doesn’t matter how small the amount is when we start to save and invest – but it matters that we do it now and that we do it regularly,” says Que. “It’s not how much money you make, but how much money you save.” De La Paz says, “If a person has a smart phone, or can afford to go out, then she has money she can invest. If she doesn’t have substantial savings, or all her income goes to basic necessities, then she should start expanding her means. I don’t believe in living within your means, I expand my means. Time to be creative—how else can you earn?” She adds, “Anyone can invest. For those who don’t make enough, think about why you want to be financially free, then find ways to make enough and achieve this goal.”