Money Tips

Investing 101: Making your money work for you can be fun!

When you talk about investing, this sounds like a serious and brain draining activity to many. This also is normally associated to wealthy people and those masters in numbers. I too had this thinking before that investing is not for me since I’m not into mind grinding activities outside of work. However, I recently found out that investing can also be engaging and fun for everyone here in the Philippines.

Here are some practical to-do’s to jumpstart investing as shared by Remarie Suzette Ablan-Ayson, Vice President and Department Head of Wealth Management at BPI Asset Management and Trust Group

Identify your short-term, medium-term and long-term life goals.

“You can always dream of a good life, but not know the ways to achieve it. It can be quite overwhelming at first but the trick is to segment your goals in the short-term and long- term,” Ayson explains. “Write down all of your goals and then classify. For example, do you want to buy a car in three years? That is a medium-term goal. Meanwhile, saving for early retirement is a long-term goal.”

Conduct a financial health check.

Like taking care of your physical well-being, it is a good habit to check your financial health as well. This means sorting out your available funds according to emergency funds, current income, and investible funds.

“This is important for you, so you can set aside funds for unexpected situations, such as accidents or personal emergencies,” Ayson advises. “Know your cash flow, and recognize the potential of your untapped resources, or what could be your future investments.”
One must see the value that investment funds can supply your income and eventually aid you in your financial goals and needs.

Learn about investments—and have fun.

One of the ways to refine your goals is to gain more knowledge and know-how on investment, which can be aided by consulting with an investment counselor.
“An investment counselor can help you further tailor-fit your investments according to your profile and be updated on what’s new in the finance and banking industry,” Ayson advises.

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One of the ways for any individual to have access to investment counselors is through BPI Asset Management’s Financial Wellness seminars, where the importance of investing is explained through interactive ways.

Recently, BPI introduced the Race on Investments (ROI) board game, a first in the banking industry.

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“We recognize that every Filipino is unique and has a distinct manner of learning. Thus, we have innovated once again and created a new tool in educating clients through the Race on Investments board game,” Ayson said.

“Through the board game, we take the discussion on investments beyond pure concepts and allow individuals to see for themselves how investments can work in real life, within the context of a game,” Ayson added.

Know the qualities of a good investment. Determine the investment that is right for you.

Now after knowing what investment is better for your personality, how do you know exactly what is a good investment? Here are some characteristics of a good investment.

One, it can beat inflation. Prices naturally increase over time. In fact, over a three-year period, prices can go up by almost 3%.

“Unfortunately, we don’t live in a world where all things are equal, as economists have always dreamed of. A good investment can beat inflation by increasing not decreasing your money’s worth over time,” Ayson explains.

Second, risk is compensated with reward. “This depends how you assess yourself, if you are averse to risks or comfortable with it,” Ayson points out.

BPI has three types of funds to cater to each profile as well as your goals. For example, the BPI Short-Term Fund is classified as a short-term, low risk, and low reward type of fund. It is invested mostly in time deposit and term deposit facility of the Bangko Sentral ng Pilipinas.

Meanwhile, if you are looking to achieve financial goals in three years, the Odyssey Medium Term Bond Fund is a good choice. The fund is invested mostly in Philippine government and corporate bonds.

Lastly, the BPI Philippine Equity Index Fund is a long-term, high risk, and high reward type of fund. Addressing your retirement and long-term needs, this type of fund has a larger yield compared to other funds because it is invested in shares issued by Philippine companies in the Philippine Stocks Exchange Index (PSEi).

Third, it can help you achieve your life goals according to your plan. “To get your money’s worth, the key is to know how these types of investments work and more importantly, how these can work for you,” Ayson says.

Diversify your investments.

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Knowing the type of investments is one thing, but putting your actual hard-earned money into them is another matter. The key to getting the most out of your investment is diversification into the three types of funds.

“You may have a preferred fund based on your risk profile but it is ideal that you place sufficient amounts in each type. This will give you the largest returns, as much as 5% in five years for a P100,000 initial investment—much higher compared to just parking it in your savings account or putting everything in one entire fund,” Ayson explains.

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From boardroom to board game:
Race on Investments (ROI), a first in the banking industry.

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Race on Investments (ROI) board game developed by Bank of the Philippine Islands to simulate real-life situations, showing the risks and rewards for each decision made by players in the game.

The game’s objective is to teach players how investing can help them achieve their life goals. The game provides the player a map with three tracks: milestones, savings, and investment.

Milestones show the significant events in a player’s life that can increase his income (for ex., job promotion, higher learning). Savings shows the player where he could keep his cash, while Investment shows the player’s journey towards life goals.

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I was able to play this game and true indeed that it simulates a true to life situations. It gives you an idea on how investing would be like and how each decision will affect your investments. Unfortunately, I lost in the game. I focused on conservative investing and kept most of my funds in savings. Thus, missed the chance to for larger amount of earnings.

Truly, that investing without anyone to guide you is such a scary and heart breaking at times. But, with the right guidance from the right people, investing can sure be fun and rewarding. BPI understands this frustration of would-investors like me. That’s why BPI offers the best investment councelors that are readily available to guide you in your investment journey.

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The lucky person who won the game challenge has won herself 10k investment money! Congratulations!

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Here are my realizations from the game.

Start Investing Early

It is an advantage that you start early. This gives you more opportunities to increase your earnings as you put your hard-earned money into investments.

Saving is good but investing is more rewarding.

The more you put in funds to invest, the larger the return will be.

Diversify.

This allows you to maximize your potential to earn without too much risk.

The world of investment might be intimidating at first, but we can all learn that this is not entirely true. Through learning your different investment options, you wouldn’t have to depend on a single source of income for when you want to travel, buy a car, or save for retirement.

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