Investment options for the young professional

MANILA, Philippines (UPDATED) – When you’ve reached that point in your life when you want to prepare for the future, you will be faced with different options. These days, young people in their early to mid 20s are encouraged to invest their hard earned cash to reap its benefits sooner rather than later. After all, starting young has its benefits when it comes to investing: more time.  

Investing is a big decision and requires a lot of thinking, research and risk taking. You also have to consider many factors to make sure that the investment you are making is done at the right time and that it’s a sensible decision to make today.

It can get pretty intimidating especially since you’re now using your own money, but it is good practice because ultimately, you have to be the one responsible for your future. If you have no clue on what to invest in, here are possible investments for young professionals:

Life insurance

Accidents, family or personal emergencies, sudden illnesses and other unforeseen situations can happen even when you’re not financially prepared. This is where life insurance comes in. It serves as your back up fund, so to speak, to be able to pay off medical bills or whatnot in case of emergencies. This also provides financial security for yourself when you retire or for your family when you pass on. 

Traditional life insurance will require an individual or the policy owner to regularly pay a certain amount for a fixed number of years. In return, the insurance company will provide insurance coverage worth a specific amount, depending on the insurance plan, for the policy owner or another family member. In case of death, the insurance company will pay the chosen beneficiary a specific sum.  

Also, there are now insurance products that will not only cover you in case of emergencies, but will also grow your money with time. These are investment-linked life insurance policies that are more appealing to customers who are looking to build their wealth while they are being secured from unpredictable situations. 

Real estate 

Young professionals nowadays are looking at condominiums that suit their needs and financial standing. There are reasonably priced condominiums available in the market that cater to individuals who want to make their first investment in real estate. Perhaps they are attracted to investing in real estate because of the financial advantages of owning a condo unit such as its income generation by renting it out or selling it after its value has appreciated over time. The other, is of course, the feeling of independence at being able to take care of yourself and having your own personal space.

With the right location, space, and financial schemes to help you get your dream home, you can enjoy what you’ve worked hard for. And who knows, you can even start a family in the near future now that you’re secure with your very own home.  

Still, it will take a lot of time, research and even advice from licensed real estate agents to help you along the way. So get to know the available financial schemes (READ: Easy financing schemes for homebuyers) in the Philippines and get some tips on what to look for when you’re out on the search for your first ever unit (READ: 10 things homebuyers should have on their checklist).

Stocks

Investing in stocks is risky business, but done correctly, it can definitely make your money grow faster than leaving it in your savings account. Investing in stocks is not something you learn overnight and you can’t earn a million bucks all in one go. First timers may feel like they will gain much more than what they invest after a while, but that’s not usually the case. As they say, you win some and you lose some. 

Be smart: learn the market before you start to invest and be familiar with the metrics used such as yield, dividend, book value and so on. You can also talk to a financial advisor and ask him or her everything you want to know about stocks. Consider your financial background before deciding on what stocks you should invest in. 

A business or an ownership stake

Starting your own business will be a dream come true, and it takes hard work, dedication and perseverance to succeed. If you invest on a business, you have to make sure that you not only have enough money for it (and a stable day job to pay off your loan from the bank – if you are borrowing for capital) but you also have the time to set aside. If you’re serious about this, you need a lot of patience and research on the needs of your target market.

If you plan on buying an ownership stake, you still have to take care of your investment one way or another. You’d want to look back and say that the risk was worth it. Again, you should study the market and the business itself to ensure that your business is here to stay. 

Investing at such a young age is a good move. You have time to explore options available and really get into researching the strategies behind each one. There is only one main goal when you invest and that’s to secure your future, but remember to study the available options and determine which investment is the right fit for your long-term plans to make a wise investment. – Rappler.com