Most Filipinos do not see the need to have investments. It’s just not in our psyche, according to investment expert Raffy Ayuste Jr.
If we look at government data, 75% of the Filipino adult population or 54 million Filipinos have not invested in anything at all. The top reason cited is work instability, but for others, investing is simply seen as something costly to do or an unnecessary expense. Some also say they’re content with their savings.
But keeping money in a savings account may not be enough if you want to reach your financial goals quicker. Ayuste said: “Even if you keep your money under the pillow, it will lose its value because of inflation. For instance, your P5,000 today will buy you less groceries next year because of the increase in prices.”
Ayuste, the Trust Officer at BDO Unibank, debunks some of the popular investing myths and shares why these only hinder you from taking the first step to growing your wealth.
Myth: You need a big sum of money to start investing.
There are several investment options that Filipinos can put their money into, but it’s the initial cash outlay that turns most of them off. “We think of bonds and stocks as requiring thousands, if not hundreds of thousands of pesos, to start investing,” he said.
The key here is to find the investment option that fits your budget so you can start right away and just build it up as you go along. BDO developed a program called BDO Easy Investment Plan or EIP, which makes investing affordable for Filipinos.
To sign up for the BDO EIP, you can start with as little as P1,000 every month. That’s the equivalent of 6 cups of coffee from your favorite cafe. Instead of spending that money on a cup of joe, you can choose to grow it with BDO EIP.
That is only the minimum amount to start your investment journey. You can adjust your regular investment amount anytime and go higher than P1,000 if you want to build it faster.
Myth: Investing is complicated.
There’s no denying that investment jargon can be tricky to understand. However, Ayuste said, you shouldn’t be intimidated by them. The key is to associate the terms with simple explanations.
You will encounter a lot of jargon when you invest in bonds and equities. Such are: coupons (interest rate), government securities (bonds issued by a government), treasury bills or T-bills (short-term bonds issued by a government), and stocks, which are also called equities and shares (a form of ownership in a company).
He shared, “Investing in bonds and equities is made simple through – here comes a jargon – the Unit Investment Trust Funds or UITF, which is simply the pooling of money from many investors so that someone in the bank, called the fund manager, can manage the money collectively.”
UITFs are great investments for people who do not have the time and expertise to invest their money directly in individual bonds or equities.
When you invest in UITFs, you let the fund managers do the research, actual investments, and fund management. They will help you reap the benefits of investing in a diversified pool of assets that are expertly selected so you can get good returns in the long run.
With BDO EIP, even rookie investors can regularly invest in a variety of UITFs without hassle. If you are unsure of where to invest first, you can start with building your emergency fund. Opt for a low-risk investment fund, like the BDO Short Term Fund, which has the potential to give
better returns than a regular savings account.
“When you start your BDO EIP, you can build your portfolio – another big word that makes you sound like you have hundreds of thousands or millions in investments – by identifying how much you want to invest, when and how often you want to be debited for your investment – which can be once or twice a month – and which UITF you want to place your money in,” explained Ayuste.
Myth: You need a lot of time to study and understand investing.
Before starting anything, it’s always wise to know what you’re getting into. You should understand the basics of investing, such as knowing the types of UITF, which ones fit your financial goals, including your time horizon or how long you want to invest before cashing out, as well as the risks and rewards that come along with each fund.
Investing doesn’t have to be time-consuming. Through BDO EIP, you have access to a wide range of UITFs. All you have to do is spare a few minutes of your time to choose which UITF aligns with your goal and then leave the work to the professionals. You’ll never miss an investment opportunity because the BDO fund managers are the ones managing your investment portfolio.
“That should give you the confidence that someone capable is tasked with watching over your investments on a daily basis,” said Ayuste.
Myth: Investing is for older adults only.
This goes hand in hand with the misconception that investing requires a lot of money; thus, it’s more ideal for people who have been in the workforce or have been earning money for a long time to invest.
Ayuste said this is a false assumption, as the truth is that Filipinos should start investing as early as possible or, at the very least, upon receiving their first paycheck. “This will provide the discipline to invest on a regular basis and gain basic investment knowledge as well,” he explained. “It’s a lifelong skill that they can use from their first paycheck to their last one at retirement and beyond.”
When you sign up for BDO EIP, you can kick-start your investment for as low as P1,000 a month with the UITF of your choice. The program will make it easy for you to regularly and consistently invest in funds, as this works on an automatic debit arrangement from your BDO savings or checking account.
BDO fund managers also oversee your investments, so there’s no need to worry about them. As for reaping the rewards, you can easily track your investments online.
“The BDO EIP is a discipline and a habit that is worthwhile for today and in the future,” Ayuste added. – Rappler.com
Jumpstart your investment journey with BDO Easy Investment Plan here.