Filipinos are becoming more financially conscious. More people are investing and putting their money to good use. While some people succeed in their investing journey, a lot fail. Some fail because they either invested in the wrong option, or they are not yet prepared to invest.
Risks are always present in any investment. You cannot guarantee that you can choose the right option every time, but you can make sure that you are financially prepared when you start to invest.
Experts don’t agree with this, some say that you should start early for you to maximize the best growth. But if you start investing without being prepared, you may just end up prematurely withdrawing your investment.
Here are some ways you can prepare, before investing.
Credit Card
Pay off all your debts and stop using your credit card. Using cash is one way of saving and one way of ensuring you don’t waste money on interests.
Emergency Fund
Your emergency fund is meant to help you continue living with the same means for a few months even after an emergency. It is ideally an equivalent of 3-6 or even 12 months of your monthly expenses. Sudden trip or eating out is not an emergency, this fund should be allocated to real emergencies only. Like if you lose your job, your emergency fund should assist you while you look for another job.
Insurance
Life and disability insurance are important factors to secure before you start investing. Without insurance, just a few visits to the hospital can wipe out your bank account. Let’s face it, everybody is bound to visit a hospital once in a while. This insurance will ensure you that your money for investing will not be withdrawn even when something happens.
BNP Tip
When you have successfully completed these three preparations, then it is time to look at your investing options. We suggest you look at Mutual Funds, Unit Investment Trust Fund (UITF) and Variable Unit-linked Life Insurance (VUL) and their differences to start.
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