4 investing tips you can learn from Pacquiao’s boxing career

MANILA, Philippines – Manny Pacquiao’s boxing career isn’t just about self development and inspiration. It can be related to personal finance as well.

Filipinos are incredibly knowledgeable about Manny, but when it comes to money, they’re not. Manny and money converge in the 4 points below:

1. In investing, you can afford to be aggressive when you’re younger.

When Manny was still a teenager, he left his family and went to Manila via a ship. In Manila, he trained diligently, hoping to become the next boxing superstar. He stepped into the ring at the age of 16 and fought against Edmund Ignacio. He won his first ever professional fight and he’s been winning majority of his professional fights ever since.

At a young age, Manny knew – but took – the risk of losing everything for boxing.

Investing is the same: when you’re younger, you can invest directly in the stock market or indirectly through mutual funds or VULs invested in equity funds. Yes, there’s a risk and you might lose something, but since you’re looking at investing for the long-term, that potential for loss is minimal. You can still manage to get back on your feet and recover because you have less responsibilities at this point and more time left.

2. Investing a small amount regularly is better than investing a large amount irregularly.

Manny Pacquiao says he runs 10 miles every morning and does 2,000 sit-ups every day. 

Those years of consistent training paid off in the end. Manny exercises every single day. He works harder when a boxing fight is just around the corner. This way, his body is always prepared. Imagine if Manny timed his training and only exercised a month before his boxing fight. He’d have a hard time conditioning his body!

In relation to investing, don’t time the stock market. Invest regularly (you can even invest more when the market is down).

3. All investments carry risks. Figure out what works for you and diversify.

Manny’s always fighting the odds. He always faces the possibility of losing the fight and losing his reputation. So he does everything in his power to mitigate that risk. He trains under an experienced coach, he chooses his fights well and he studies his opponent.

It’s the same with investing – there’s always a possibility of losing money if your time horizon, goal and risk appetite do not match. For example, if you’re 25 and you’re planning to invest for 20 years for your retirement, don’t just put your money in bonds. Also, if you’re 65 and you’re planning to invest for 3 years to produce regular income, don’t put your money in stocks.

For you to properly manage the risks, make sure that your time horizon, goal and risk appetite are compatible with each other. Here’s a rough guide for your reference.

4. Investing is like growing a tree. You plant the seed and take care of it accordingly so that you will enjoy the fruits of your labor in your harvesting years.

Manny planted the seeds when he was still a teenager. He went on a difficult journey towards professional boxing. When he went to Manila, he worked at a construction site and found solace at a 24-hour boxing gym. Manny barely made enough money to buy a daily bowl of rice. Ultimately, he had no one else to depend on. But he still pushed through.

As an investor, you’re likely to encounter hardships along the way. (One hardship that you may experience right now is the so-called “bubble” – here’s an article to help you understand this better.)

At the end of the day, it all boils down to 4 things:

Passion + Patience + Perseverance = Profit.

You don’t need to be a worldwide boxer to succeed in investing. Success is not a matter of talent or knowledge – it’s a matter of persistence. – Rappler.com

Lianne Martha Laroya is a financial advisor. She’s also the founder of The Wise Living, a website dedicated to educate you on money management and early investing without boring you to tears. Get your FREE copy of her basic personal finance book for 20-somethings. Connect with her on Twitter @MsLianneLaroya“