AskHi, I’m just starting to save money from my salary this 2013, I predict that if I save 25% of my salary per month which amounts to 9,989, I can save 119,875 in a year plus the bonuses, 13th month and slvl conversion then it would reach up to 200,000. Do you think that I still need to wait for 1 year to start investing? Or should I target a specific amount in order to start investing? For example, I have to raise 30k and start investing. if that’s the case it would only take me 3 months to have my first investment. And what kind of investment should I take given that I’m just a beginner?
I would really appreciate your advice regarding this.
Thanks
Tags: finance, investing, investment, savings
4 Responses to “How much do I need to start having an investment?”
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Technically speaking, 10K will already allow you to invest in various UITFs and mutual funds.
It seems you’re trying to save but without a specific purpose yet. Good news: you don’t need a specific reason to save. Just go ahead and save. Or, if you don’t have an emergency fund yet, you can save until you have 3-6 months worth of your expenses saved up.
But for investing, you don’t need to wait for anything either. But it is advisable to have a goal first. Is it for retirement? a car? house? new gadget? It’s important because higher-return investments carry higher risks. So if you don’t need the extra money, why take the extra risk?
Being a beginner I would suggest starting with low-risk (but unfortunately low-return) investments like Time Deposits and money-market UITFs. Let your money grow while you decide what your financial goal is.
Equity funds, stock trading, stock investing, and forex are some of the riskier investments you can make. But it’s best to read up on them before trying them. Fitz has great articles on all of them, so just browse his site and you should be up to speed in no time.
Thanks for your Idea Carlos, at last someone answered my question. Well, what I’m thinking right now is just to invest it in stock market using peso cost averaging. Do you think is it advisable instead of putting it in bank saving?
In terms of potential returns, stock market investing has better potential than placing the money in the bank either as a savings account or a time deposit. However, commensurate to the potential returns are the risks involved with stock investing. Like what experts say, the higher the reward, the higher the risk. The high reward potential is predicated on the higher risk that an investor is willing to take.
With that being said, my suggestion is it’s going to be of great benefit to do more research on the various investment vehicles around. Don’t be in a rush. Education is the most crucial step. It could be worth the wait rather than investing in a vehicle you are not yet comfortable or familiar with.
The fact that you already have a projected savings is a good start. Just stick with your plan and once you have already assessed which investment/s you’d like to put your money on based on your investment objectives, then go for it.
Hi Cj,
I suggest that you start first with protecting your income. This will ensure that your income will not be affected that much should anything unplanned necessary expenses happen. look into life and health insurance. These are money savers should you need them.
Now you can save. It is very important to have a purpose when saving or else you’ll end up with consumptive savings. Have you ever tried saving money and suddenly spend it all on impulse… save and spend… save and spend… Sometimes even borrow money to spend?
Emergency fund is something you should not ignore. Save enough for your emergency fund because not everything can be covered by your protection money. Put it in a savings account for accessibility should you need it immediately. But remember it’s for emergency don’t be tempted to use it for anything unnecessary.
Then invest. Saving is crucial part towards financial independence but it may not be enough due to inflation. we need to invest to keep up with inflation, beat it, or even become another source of income. Investment depends on your goals, it can be short term, medium term, or long term. You can choose from low-risk, moderate-risk, or high risk depending on your risk appetite. Just accept the fact that investments are not guaranteed. check on UITF, mutual funds, and stock market.
1. Protect your income
2. Save
3. Invest
Hope i made sense.