Did you know that Warren Buffet, the richest man in 2008, bought his first stock at the age of 11? Later after selling his share and got his earnings, he wished he bought earlier.
Albert Einstein called compound interest the eight wonder of the world and mankind's greatest invention, because it is the mightiest force ever unleashed for the amassing of wealth. For instance:
Age 4%
Money doubles every 18 years
29 100,000
47 200,000
65 400,000
Age 8%
Money doubles every 9 years
29 100,000
38 200,000
47 400,000
56 800,000
65 1,600,000
Age 12%
Money doubles every 6 years
29 100,000
35 200,000
41 400,000
47 800,000
53 1,600,000
59 3,200,000
65 6,400,000
As shown above, time is your ally in financial wealth. Invest in individual stocks or mutual funds. Start now, don't further delay!
If you want to stop working before 60 or if you want to relax after your retirement from work and enjoy the fruits of your labor then it is not too late. You can start now and plan a better future for you and your children. You may consider saving for your child's college fund. Nowadays it is difficult to trust pre-need products to prepare for college education. Several pre-need companies closed shop or were unable to produce what they promised.
Before you proceed in stock investment, do your research. Know the difference between Mutual Funds and Individual Stocks to make a better well-informed decision that will suit your need and your profile. Here's a good right up you can read through: http://money.cnn.com/2009/05/28/pf/expert/stocks_funds.moneymag/index.htm
Individual stocks are for people with a bigger appetite for risk and as for anything with high risk, the returns can also be big. If you prefer Individual Stocks, you can start investing for as low as PHP5,000 through citiseconline (https://www.citiseconline.com.ph/final2/b_home_new/home.asp). I know a number of people using citiseconline. Some people have earned 40% return of money within a years time so this will also be good for short-term financial goals.
Mutual funds normally has lower returns compared to individual stocks but risk is lower because of diversified portfolio. Mutual funds is the answer to your long term financial goals (e.g. educational fund, retirement). It normally takes 5 years to reap good return of investment.
For Mutual Funds, I currently transact with Philequity Management Inc. Find out more about the company and view the historical NAVPS and learn more about investing in their site - http://www.philequity.net/. You can also start for as low as PHP5k and the succeeding for as low as PHP1k. I recommend money cost averaging strategy. This is to systematically purchase shares to offset investment risk in fluctuating market. A constant amount is invested at a specific time interval. As the price of the given product fluctuates, the same money amount invested will purchase more number of shares when the price is low and less number of shares when its price is high. See illustration below:
Montly Contribution Price Per Share #of Shares Accumulated
Month 1 P100 P100 1
Month 2 P100 P50 2
Month 3 P100 P25 4
Month 4 P100 P20 5
Month 5 P100 P25 4
Month 6 P100 P50 2
Total Contribution Average Price Total # of Shares Accumulated
P600 P270/6=P45 18
18 Shares
x P50 Last Share Price
------------------------------------
P900 Total Value after 6 months
P900 Total Value after 6 months
- P600 Total Contribution
-------------------------------------
P300 Gain after 6 months
50% over 6 months or 8.33/month
Remember to do your research because stocks/mutual funds involve risk. Once you have figured your appetite for risk then make a decision what best suits you. Best of luck with your investment!
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