A Beginner's Guide To Investing In Anything and Everything, Part 2

Updated: April 15, 2008

This is the last part of this article, to read the first part, click here: A Beginner’s Guide To Investing In Anything and Everything, Part 1.

You now have your emergency fund and determined your investment objectives. Likewise, your budget is ready and your acceptable level of risk has been defined. You are moving closer to choosing the investment instrument that’s just right for you. Personally, I believe that there is one more criteria that needs to be settled before you choose the instrument to invest in.

Step 5: How much time can you commit to your investment?
This is a common misconception among beginners, they think that after investing their money, they could just sit back, relax and wait for the money to grow. Investments, in general, do not immediately translate to passive income. Your active participation is required for it to become stable and profitable.

Therefore, you should determine how much of your time you can devote to studying and monitoring your investments. Remember that businesses experience lean and peak seasons and the money market fluctuates, if you are out of the loop when these things happen, chances are you won’t see your money back. Keep this in mind when you finally choose your investment.

Step 6: Is everything clear now why you’re investing?
After fulfilling the requirements that was asked in the previous steps, it’s now time to develop your personal investing mission statement. Write it down and read it before you make investment decisions. This helps you focus on your objectives and avoid being sidetracked into less optimum investments. Below are sample statements that could guide you:

I have P20,000 just sitting in my savings account which I want to invest for some extra income. I’m planning to use this money next year to pay for my vacation trip abroad so I’m only willing to invest in short-term, low-risk investments. I’m busy at work so I can commit only a few minutes a day to track my investments.

I want to finally quit my job so I need an investment that will help me accomplish that. I currently have P50,000 which I’m willing to invest in long-term and medium-risk investments. I’m hoping to leave the corporate world within two years, so I need my investment to give returns that can cover my expenses by that time. I’m willing to commit at least two hours everyday to study and monitor my investments.

It’s best that you write a draft of your mission statement and revise it for the next few days as you reevaluate and rethink your objectives and investment criteria.


Step 7: Is there an investment that can help you fulfill your mission?
We now come to the most important part of your journey to investing. Finally choosing the right investment instrument for you. By now, you probably have some candidates in mind but to give you more options, here’s a few more you can consider:

  • Low Risk Investments: Bonds, Cash Deposits, Insurance, Mutual Funds, Treasury Bills
  • Medium Risk Investments: Business Ventures, Multi-level Marketing, Mutual Funds, Real Estate, Stocks
  • High Risk Investments: Business Ventures, Forex, Real Estate, Stocks

Why do some of the items repeat? Because the risk level of an investment can depend on its nature and your holding period. For example, doing short-term, speculative investing in the stock market is high risk but making a long-term investment in blue-chip stocks will give you low to moderate levels of risk. Do take note that the simplified enumeration above is incomplete. There are subtypes and alternative investments that exist which I encourage you to discover and learn.

Do your homework and find out everything about your chosen investment. If you can find an expert to guide you, the better. Remember that the less you know about an investment, the higher the risk of you losing money. Furthermore, the more control and power you have over it, the lower is the likely risk.

Step 8: Should you diversify your portfolio?

Most people would advise you to do so because spreading your investments in products with various levels of risks will hedge against losses. But if it’s your first time to invest, I advise you to choose just one and have fun with that first. You can always invest more when you are more adept about investing. Lastly, I advise you to do your transactions only with reputable investment firms and financial institutions. Be wary of fake brokers, fly-by-night firms and investment scams.

One last reminder before you start investing:

If you find yourself short of capital to invest in your preferred product, or you can’t find an investment that can fulfill your mission, then perhaps you should consider investing in knowledge. Put your money in books, training seminars and programs that will help you increase your financial literacy. This is a low-risk, high-profit investment you can immediately do today.

When you subscribe to Ready To Be Rich, you are actually investing in a zero-risk, high-yield investment. Join my reader’s list and invest in your mind.

Photo courtesy of scottwills.


  1. actually I was thinking the same. After I gobble my earnings from ka pepe I want to invest it on something which will somehow generate even more money. I really am thinking of a good sideline business while I am home (excluding sari-sari store, barbecuhan, carinderia or anything that falls into that category).

  2. I would recommend that you start a business that is in line with your passion and interests. You’re a hobby photographer, right? Maybe you can start from that. I have a friend who turned his love of photography and digital editing into a good sideline income shooting and creating setcards for aspiring models.

  3. great article fitz! now if only i can decide where EXACTLY to put my extra money. it’s just sitting in the bank earning centavos, gahhh! o_O

  4. @rose
    Yes, you can. Investing can help pay off your standing debts.

    Whenever you receive income, pay yourself first. This will build your emergency fund and eventually, give you extra money for investing.

    Second, set aside the money for your debt payments.

    And lastly, limit your expenses so that you won’t go over budget and be able to live with what’s left of your income after doing the two steps above.

    Is your situation similar to my first example above? Then I suggest you invest in low-risk investments. Go to your bank and ask about high-interest deposit accounts or try to learn about government bonds / treasury bills.

  5. Good article. I prefer online entrepreneurship; it safe and a good place to start.

    Thanks for stopping by my site too. Much appreciated.

  6. Yes, I prefer entrepreneurship also – both online and offline. Thanks for visiting Kenny and keep up the good work on your blog.

  7. Hi Fitz! articles are really good! clear and concise… just want to have an advice… currently working at the moment want to have investment through banks… cash investment around 10T particularly for BPI equity Fund …. here is the link http://www.mybpimag.com/index.php?option=com_content&view=article&id=364&Itemid=406..do you have an concise idea about this … which is suitable for me because really want to have involvement in investments … for BPI Investments …
    which do you think the best for me ….. which do you recommend for me investing with BPI or BDO…. … from your article investment needs time but im busy with my work as an agent .. wanted to have more income.. thanks a million…

  8. @Jaycee
    Invest in a bank where you already have a relationship with. If you already have an account with BPI, then I’d recommend you invest there. If you have an account in another bank, then go to your branch and ask for their wealth management officer and tell him/her that you want to learn more about their investment products.

    Moreover, as far as I know, all these banks will give you an assessment test which will determine which investment product would suit you best. I advise you take that and answer as honestly as you can – it is your best tool to determine where you should invest.

  9. Hi fitz! =) So happy to have read this article. It’s an eye-opener for people like me who has been wanting to improve on saving up and investing for the future but never got to really doing it. It’s insightful and refreshing…and not to ‘preachy’ (which for me is an added bonus!).

    More power!

  10. Hello,

    This blog is so great! thanks for giving us this information but I still have a question, do you think it is better to invest in mutual funds than to time deposit? thanks in advance. 🙂

  11. Hi Paul. That depends on your investment objective.

    For capital preservation in the short term, this means you don’t want to lose the money and you’re going to use it within 3 years or less, TD’s are better.

    For capital appreciation in the long term, this means you want the money to grow and you are willing to wait more than 3 years, then mutual funds are better.

  12. Hi Sir Fitz

    Good Day
    Is 4.5% to 5% per annum for 1 and 1/2 year a good choice for investing? lets say i have 60000 pesos?

  13. Hi jeremy.

    In regards to your post, i dont think its a good investment.
    Thats just my opinion. As for me, i have a rule in choosing
    Investments. It must be above inflation rate, w/c is now around

  14. hi guys!

    i really do wanna learn bout investing and making my money grow as much as possible. im starting to have a family of my own so right now i dont want to lose the money thats all i have and im not sure really what to do with it. can you guys give me an idea on where i can invest my 200k? thanks in advance

  15. Hi Sir Fitz,

    I really love this article because it was very inspiring and informative. It such a big help for me to learn on how to invest and handling your money wisely.

    Thank you.

  16. Hi Fritz! Thanks for your blog posts! I’ve just opened a BDO EIP account under fixed income. I am set to contribute 1k per month and I am looking for two more places to invest the same amount: 1k each. Was thinking of opening an equity fund with BDO also for 1k/mo for retirement (I am 24 yrs old), but don’t know where else to put my other 1k per month. Would you suggest that I split it up and distribute it to the two EIPs with BDO or get a mutual fund from a different company?
    Also, my goal with the fixed income is for my marriage hopefully two-three years from now. Is putting “initial marrying fund” in BDO’s Fixed Income OK? Should I shift it to BDO’s Balanced Fund? I understand Equities are great for retirement given the long time frame I have until I reach 60y/o. Hope you can give me some advice! :))

  17. where to invest my money sir fitz? i want easy return of investment coz im scared of long term investments. money is ready but i dont know where to put it. as a trial, i saved P10,000 but where to start. i was thinking of buying stocks that give dividends to its stockholders but i dont know how il do that or investing in funds. help!

    thanks in advance sir fitz! more power.

  18. Hai salamat about to open my BPI equity fund. Mas challenging hehe.. Hi risk high reward. Im 27 and single so risky is the nem of the GEM…hehe

  19. kfshrc:
    Hi Fitz! I read lots of your article regarding finances. Altho I got brilliant ideas out of it, I still wanted to seek your advice regarding investing. I’m about to retire from my job as an ofw and got some money to be invested. I would say I’m a conservative type and ready to take your most solicited advice. Let’s say i got 2M ready, which investment is opt for me?

    Thank you.

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