It seems like everywhere I go, a favorite question people ask me is “Aya, what is a good investment?”
At the end of this blog, I hope that you will be convinced that you should never ask this question again. Why? because it’s the wrong question to ask.
Para kang pumunta sa drugstore at nagtanong “Ano ba ang magandang gamot?”
Binigyan ka ng eye drops (magandang gamot, helps with sore eyes) eh, masakit ang ulo mo. Iyon ba ang kailangan mo? Paano kung may lagnat ka at Viagra ang ibigay sayo? A lot of people need it. Magandang gamot lang naman ang hiningi mo diba?
Investing is the same thing. There are so many investments available. Each one has their own strengths and weakness, how will you choose which one is for you? As I have learned, there is no ONE super investment that will answer everything. There is only a particularly suited investment for each purpose.
Did you buy it or was it sold to you?
A lot of people end up owning investments that are not right for them because of asking the “good investment” question.
Magkaiba yung bumili ka ng investment product at nabentahan ka ng investment product.
Take a look at this, pag pumunta ka sa stock broker, bebentahan ka ng stocks. Pag pumunta ka sa insurance agent, bebentahan ka ng mutual funds o insurance. Magagandang investments, oo. Pero alin dyan ang pinaka-bagay sayo?
A common scenario is people end up buying a product based on who the best salesperson is. Please don’t do that. Hindi dahil maganda ang presentation at pananalita ay maganda/bagay rin ang investment product nila.
Know what you want to accomplish, ask the right questions, and find the product that suits your need.
Set Your Financial Goal
Learn to compare investment products based on what you want to accomplish. Don’t make the mistake of investing without any goal aside from making more money. Although it is a valid reason, you should at least know how much money you need to make and/or when you need that money.
Investing is a journey and if you do not know where you want to go, you will be lost moving forward. If you are a long term investor, your judgment will be clouded by the whining and noise of fearful people during uncertain times. That is why it is very important to set your financial goal or your magic number.
(Read more about getting your magic number here: What is Your Magic Number?)
Your Investment Options
After knowing what you want to accomplish, the next step is to look for the investment that will best suit your needs. This is where financial education takes place. Aral muna bago invest!
Get to know your different options like stocks, mutual funds, real state, etc. This is the reason why we came up with the TV show and our seminars to help you understand these investments and equip you with skills to choose which one is best for you.
(Missed our first season? Watch it for free here)
There also plenty of other sites and books out there which can also help you.
After learning these things, I hope you will not ask “What is a good investment?” anymore. Instead, you should be asking specific questions like…
What is a good investment for my retirement in 20 years?
What is a good investment for my children’s education fund?
What is a good investment that will give me yearly income?
What is a good investment that will help my family pay the estate taxes when I’m gone?
These are just some examples of the questions you should be asking. And remember, the key in asking these intelligent questions is to know what you need, and when you need it.
Now it’s my turn to ask you, what are your reasons for investing?