Reader Mail #23: No Nonsense Answers To Investing Questions

Updated: April 1, 2013

Welcome to another edition of Reader Mail, the special article series on this blog where I answer questions from readers.

For today, I’ll be tackling several questions about investments, most of which have been sent to me multiple times by different people over the past few weeks.

Honestly, I’ve been flooded by such inquiries lately, and I’m poorly behind answering all of them.

Not that I’m complaining, I’m actually glad that many are getting interested on investing – it’s a good sign that people are starting to think more seriously about their finances today.

So for those still waiting for my reply, thank you for your patience; and I hope some of your questions get answered below.

How do I start investing in the stock market?

First, look for a stock broker and open an account. I’m with COL Financial (formely Citiseconline), but any stock broker is fine as long as they’re duly licensed and registered with the SEC and the Philippine Stock Exchange.

When you open an account, make sure you tell your stock broker that your plan is to invest in the stock market and not trade it. There’s a huge difference between investing and trading.

Of course, if you don’t know anything about the stock market, then learn it first before opening an account.

You can start by reading this series: How To Invest In The Stock Market

Is insurance an investment?

No, an insurance is not an investment, unless you’re talking about VUL’s or Whole Life Insurance or any type of insurance that promises to give you some form of return in the future.

Term-life insurance, short-term health insurance, auto insurance, fire insurance, business insurance and all others – they’re a form of protection and not an investment. Among those, term-life insurance and short-term health insurance are what’s important and something you should consider getting before you start investing.

Moreover, VUL’s and similar products are second-tier investments – meaning, they’re not as great as other investments and you should only get them because:

  1. You’re “too lazy” to look for better investments.
  2. You already have funds and stock investments.
  3. You want to help a friend who’s selling you that type of insurance.

Lastly, the better solution is to do BTID – buy term, invest the difference. I’ll write a post about this soon.

What’s the best mutual fund company in the Philippines?

Don’t look for the best performing mutual fund company – because there’s none really.

Why? Because all of them invests in the same market (generally speaking), so in the end – all of them would have very close performance ratings.

Instead, look for the best mutual fund that will help you achieve your financial goals. Attend my investing workshop and you’ll learn how to exactly do this (I know, it’s a shameless plug πŸ˜› )

The same argument goes for Unit Investment Trust Funds (UITFs).

What’s the best investment to fund my retirement?

The stock market and equity funds are always great options – but that depends on how old you are and when you plan to retire. However, the thing that I don’t like about them is that they’re just for capital growth.

So if you ask me, the “best” investment for retirement is actually real estate AND/OR long-term businesses. Rental properties and business ventures will give you passive income that can cover your expenses when you finally retire.

Ask yourself, 10 years from now, would you like to have 20 million pesos cash? Or own several businesses and rental properties worth 10 million pesos but passively earns P200,000 per month for you? Think about it.

Personally, I choose both! That’s why I invest in the stock market, but spend most of my time putting up businesses.

This ends another edition of Reader Mail. Thank you everyone for sending emails. Please don’t forget to subscribe to Ready To Be Rich so you’ll be updated if a new article is posted here. Cheers!

Photo credits: bug_girl_mi and hungrytiger11


  1. nice topics, i think ur being bombarded with almost same questions. I suggest new visitors to check old posts instead of asking the same questions. there’s a whole lot of articles, very important articles here. Sir Fitz your blog is really addicting!

  2. Hi!Fritz,u think 35 yrs. old is already a late age?? coz Im planning a long-term investment in stocks.. Im considering it as my retirement savings/fund…probably wanted to retire at age 55. thanks in advance

  3. @oli, thank you for the comment. Indeed, I hope new visitors can really take the time to read through the archives. πŸ˜€

    @charcoalmagante, no you are NOT YET late and can still do long-term investment in stocks

  4. I agree that insurance per se is NOT an investment, and that there ARE ACTUALLY insurance companies that offer unit-linked/variable insurance where you can have cash values and/or dividends…but I think the “reasons” youve mentioned about getting these investments seem OUTRIGHT OFFENSIVE.

    You’re “too lazyÒ€ to look for better investments.
    You already have funds and stock investments.
    You want to help a friend who’s selling you that type of insurance.



  5. Hi Fitz! Im 20 years old and turning 21 this year. I am really interested of investing my savings into any investments vehicle. I have read some of your blogs and honestly until right now, Im still confused. I dont know where to invest. πŸ˜€

    Will I go for insurance, or in Mutual Funds?

    I am the breadwinner of the family. I graduated last year and currently working in a BPO. Dyou have any suggestions? Im just really having a hard time to decide and choose. πŸ˜€

  6. Is 23 years old too young to be investing in stocks? (I read Bo Sanchez’ “My Maids Invest in the Stock Market” Haha!) My aunt thinks I’m too fast for my age! Help? πŸ™‚

    Two of my friends (same age) have VULs now and I think even if accdg to you VUL is not that great, at least their (financial) life has a direction now! Mine is lost. Lol. Am I too young??? THANK YOU for your reply! You now have a new avid reader of your blog! πŸ™‚

  7. Hi Gidd,

    No, you are not too young to be investing in stocks.

    But my personal suggestion, build your emergency fund first. After that, you can now set up your financial goals and invest in wherever you want.

    Stocks are long-term investments – great for “saving up” for big-ticket items such as your dream house, future business capital or even your retirement fund.

    Ask your friends how much they’re paying for their VUL’s and invest the same amount in stocks or even an equity fund – I guarantee that your investment will have higher value than the value of their VUL after 10 years.

    Lastly, listen to investing advise from people who have been successful at it. Look around you – do you personally know someone who’s doing very well financially? Someone who’s been able to build passive income and grow their money through investing?

    If you find that person – ask him or her to be your mentor. Successful people like teaching others their secrets to wealth.

    Hope I was able to help. πŸ˜€

  8. Wow! Thanks for the very very quick response! I thought I’ll be waiting for days! πŸ˜› One friend is paying her VUL monthly at 2k, while the other friend pays quarterly at 7k. I also recently learned about Save Up by BPI and I think it’s a good baby step for me.. I regret that I didn’t not bother thinking about these things right in my first job. Three years in the corporate world now and no actual savings yet! πŸ™ Unfortunately, the only person in my circle now who somehow knows about mutual funds is my discouraging aunt. :/

    I have uhm like 10 tabs open now in Mozilla– all of them are your blog posts haha! Thanks!

  9. Hi java. The market value is how much it is selling at current (or end of day). It’s not really computed, stock traders and investors simply affect the price action to go either up or down.

  10. Hello to everyone here at the comment section. I’ve been 5 yrs now in the stock market. I start to open an account for stocks, then got my life insurance, MP2, and then mutual fund. Sad to say, only my mutual fund is running good so far, except mp2 which is govt guaranteed. I know 5yrs is just a start for long term investing.

    It’s good to read about the experience they share on this comment section and I want to know if what happen investing journey especially to Mr./Ms. Gidd who share about 10 years ago.

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