3 Investing Tips for Beginners

When you’re no longer living from paycheck to paycheck, it’s time to think about what to do with your extra funds. Many say that you should invest your money, but how do you get started?

Before you dive into learning all about the different kinds of investments available, it’s important to start with the right mindset.

Here are three things you need to think about before you decide to get into investing.
 

Differentiate between savings and investment. 

While both savings and investment require you to set aside some funds, the purpose of each may be very different.

Savings are usually money that you set aside to meet short-term goals, such as saving for a vacation or a big purchase. You could also save for seasonal expenses like tuition fees or your car’s maintenance and repairs. Even an emergency fund is a form of savings since it’s on standby for an unforeseen yet specific need.

Investment is money you set aside not to spend eventually, but to grow. You usually have a more long-term goal in mind, such as your retirement. And unlike savings where your funds are on standby, investing means putting your money into something that ties up those funds. It can be complicated to pull out an investment, so you have to be ready for the fact that those funds will not be available for use. 
 

Get comfortable with risk. 

All investments come with some degree of risk. So, if you ever come across an opportunity that promises low risk and high reward in a short span of time, be wary as this could be a scam.

Since investments are more long-term, consider that risks in investments are usually because of the uncertainty of the future. Interest rates change over time, the value of real estate or fine art may fluctuate depending on the economy, and businesses can succeed or fail.

There are also different risks that are specific to the type of investment, but all you need to remember as a beginner is when it comes to investments, you must be ready to risk your money as you may not get the expected returns. 
 

Decide how much you want to invest. 

From an investment perspective, deciding how much to invest is the same as deciding how much you are willing to risk. So just because you have extra funds doesn’t mean you have to pour all of it into investments, especially if you’re uncomfortable doing so.

If you want to get started with little money, you can use it as capital to start or support a business that can offer you some return on your investment. Many banks offer mutual funds or Unit Investment Trust Funds (UITFs) where they pool resources from many different investors, put these in various investments, and divide the returns accordingly.

But if you’re willing to invest a considerable amount, consider keeping your money in a Salmon Time Deposit account at the Rural Bank of Sta. Rosa (Laguna) where an investment of over PHP500,000 can grow by 8.88% per annum. This means that an investment of one million pesos can give you PHP88,800* by the end of the year! Reinvesting that money into the same-time deposit account allows it to keep growing because of the high interest rates, making it a good investment with your retirement in mind. 

Learn more about opening a Salmon Time Deposit account here.
 
*Interest earnings are subject to withholding 20% tax.
"Salmon Time Deposit” is a product of the Rural Bank of Sta. Rosa (Laguna)

Rural Bank of Sta. Rosa (Laguna), Inc. is regulated by the Bangko Sentral ng Pilipinas (Email: [email protected]). Deposits are insured by PDIC up to PHP500,000 per depositor.

For concerns, please visit any of our offices or contact us via

For Head Office: 0955-271-1615 / (049) 534-1126 / email: [email protected]/ mail: F Gomez Street, Poblacion Malusak, City of Sta Rosa, Laguna

For Bacoor Branch: 0955-861-7848 / (046) 434 - 6197 / email:[email protected]/ mail: Evangelista St., Poblacion, Daang Bukid, Bacoor City, Cavite