Secure Your Family’s Future: Investment for Young Parents

Updated: May 25, 2022

Starting a family is no joke. Everything costs a lot of money, from giving birth to raising kids and sending them to school. Household expenses also keep piling up. Can you relate?

You’re in that life stage when you’re earning a high income, yet you’re struggling with the increasing costs of supporting your family. You know what? It will get more expensive in the future.

Thinking of ways to invest in your family’s future? Investment options run aplenty for Filipino couples who are building a family. Choose ones that won’t require too much of your time and money.

Consider these long-term investment vehicles for young parents and starting families in the Philippines.

Best investment options for your child’s college education

Education in the Philippines doesn’t come cheap. By the time your child will go to college a couple of years from now, you’ll have to fork out close to Php1 million to over Php4 million in tuition fees for four years.

With college tuition getting more expensive by each year, it’s only practical to prepare for your child’s education 15 to 18 years ahead.

For that, you can invest today in an educational plan, mutual fund, and unit investment trust fund (UITF) to ensure sufficient funds for your child’s school expenses in the future.

Education plan

Getting an education plan is like forcing yourself to save today to earn a bigger amount in the future, which you can use for expenses as huge as college tuition.

Not to be confused with traditional plans from pre-need companies of the past, today’s educational plans from top insurance companies in the Philippines invest in professionally managed funds consisting of bonds and stocks.

A noteworthy educational plan is Manulife’s GradMaker. This mobile app allows busy parents to invest in their children’s education and monitor their investment with just a few smartphone taps.

Why it’s a good investment vehicle for young parents:

  • Low minimum investment – Invest for as low as Php10,000
  • Potential higher returns – It yields profits higher than the rates of inflation and regular bank savings accounts
  • Life insurance coverage – In case of death, your dependents will get financial protection
  • No lock-in period and no monthly amortization – It’s a one-time payment, so you can invest at your own pace and time
  • Quick and easy investing – Just download the app to start investing
  • Liquidity – Funds can be easily withdrawn anytime

Mutual funds and UITFs

For long-term financial goals like building your children’s college fund, investing in mutual funds or UITFs is a great option.

These two investment vehicles work the same way: your money gets pooled with funds from other investors. Professional fund managers invest the pooled funds in bonds, balanced funds, money market funds, and stocks.

The major difference is that brokerage firms offer mutual funds, while banks offer UITFs.

If your child will enter college over 10 years from now, you can choose to maximize your investments with equity mutual funds where pooled funds are invested mostly in the stocks of publicly listed companies.

Why they’re good investment vehicles for young parents:

  • Low minimum investment – Invest for as low as Php5,000 for mutual funds and Php1,000 for UITFs
  • Professionally-managed funds – No need to study and monitor the stock market because full-time fund managers will do that for you
  • Ideal for all risk appetites – Mutual funds and UITFs cater to low, medium, and high-risk investors

Best investment options for retirement

It isn’t too early to plan for your own needs in the future, even if you have to prioritize your children’s needs now. You don’t want to be a financial burden in your twilight years. Set aside a portion of your income for your retirement fund.

Two of the best investment options for young Filipino parents and couples who want to prepare for retirement are Exchange Traded Funds (ETFs) and Personal Equity Retirement Account (PERA).

Exchange Traded Funds (ETF)
Similar to mutual funds, ETFs are managed investment funds. What makes them different, though, is that ETFs are traded like regular stocks in the Philippine stock market.

Investing in ETFs means you’re owning shares from the top 30 companies in the stock market, including Ayala, Jollibee, and SM. To date, the First Metro Philippine Equity Exchange Traded Fund (FMETF) is the only available ETF in the Philippines.

To start buying and selling ETF shares, open an account through an online brokerage firm such as COL Financial and First Metro Securities.

Why they’re good investment vehicles for young parents:

  • Diversification – Investing in ETFs spreads out the risk of your overall investment portfolio
  • Lower investment cost – They’re cheaper than mutual funds because ETFs charge lower management fees
  • Higher income – You’re essentially investing in top companies in the Philippines that will still be profitable even in your retirement years

Personal Equity Retirement Account (PERA)
Created via Republic Act 9505, PERA is a voluntary savings plan to encourage Filipinos to invest for their retirement. PERA contributions are invested in various instruments such as bonds, mutual funds, and government securities.

To date, only BDO and BPI are the authorized PERA administrators. This means you can open a PERA account only with either of these banks.

Why it’s a good investment vehicle for young parents:

  • Tax exemption – Your PERA earnings will be exempt from taxes on investment income
  • More time to grow your retirement fund – You can withdraw your earnings when you hit 55, which is 25 to 30 years from now
  • Not subject to estate tax – In case of death, your PERA earnings will be paid to your beneficiaries without estate tax and probate, a legal process that delays the release of funds

Investing is like parenting: both can be learned through experience and hard work. Before you begin your investment journey for your family’s future, keep your financial goals in mind and weigh your options carefully.

This article was contributed by Jason Garcia. He is a writer, blogger, business manager, investor, but most importantly, a dad. He has been writing articles advising readers on how to secure and invest in homes and businesses.

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  1. Thanks for the tip! My 4-year old son will start his school life as a kinder this school year. I’ll look deeper into this GradMaker.

  2. Hello Sir Fitz,

    When it comes to investment, usually its for the long term, for retirement. But what about investing for short term goals like taking a trip abroad, a getaway with a significant other, etc., without going into trading, studying technical analysis, if you get my point.



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