Making Your Money Work

On my flight back here in SG I overheard my fellow Pinoys talking about looking for other means to earn aside from the fixed income or salary that they get from their jobs. I politely asked them if I could say something about it because not telling what I know is like a disservice on helping others even a little on financial literacy. I mentioned to them about mutual funds which could be another option to savings.

I guess many of us have savings or even time deposits in a bank. We are all aware of how little the interests are. It would be luck if we'd get 2% per annum. I myself have an account which gives me about 500 pesos interest but deducts a hundred due to tax. Funny isn't it? Almost insane. That's why hubby and I diversified our money and invested it in mutual funds.

What is mutual funds? In how I understand it, it is a pool of money from people which the fund manager or financial expert invests it to bonds, stocks, money markets, treasury bonds, and others. Basically, you entrust your money to the company and hoping that it would earn interest as the market performs.

I have invested in AXA Honeypot in 2008. AXA Honeypot is a Lump Sum mutual fund where in you invest a certain amount of money up front and looks into a 3 to 5 years investment. I am so glad that even without doing anything, despite the financial crisis the past years, my money has earned me about 50% to date! You can never have that in any bank. Back then I was a little apprehensive of letting go of that money thinking that AXA might also close down like other investing or insurance company. But, since it has partnership with Metrobank I took the big risk.

When we have seen how I could make my money work for us, hubby and I looked for other mutual fund companies. We now have Philam Strategic Growth Fund, PhilEquity Fund and the latest, FAMI - First Metro Asset Management, Inc.

It is not really hard to understand mutual funds and there are a lot of sites where you can learn the benefit of investing in mutual funds. If you have your regular job and stock trading is not for you then this is the best option you can get. You can have professional management of your hard earned money. So, you can go about your day without having to check on the stocks/bonds/market performance or the financial news.

Now, you shouldn't get so excited and rush to invest all your hard earned money. One of the major thing before investing is knowing yourself. Ask yourself how much are you willing to pay yourself? Is lump sum investment for you or Peso Cost Averaging? How long are you willing to invest? 3 years? 5 years? or until you retire? You have to be specific. It is also important that you have an emergency fund before you put your money in the pot. This would help you feel more secured knowing you still have other pockets to dig into.

It is equally important to check on the company you want to entrust your money to. Study the performance of the company and the fund managers. It would be the best choice if the company have continuous positive performance for the last five years. Before we got into other mutual fund companies, I searched the 'top mutual funds in the Philippines'. Google gladly provided me with several blogs and official sites that lists the top mutual funds in the Philippines and the percent yields for the past 3 to 5 years. This is how I got to know about FAMI with Mr. Gus Cosio as the fund manager.

In our family of ten, only my brother and I are into this kind of investing. I am glad that before my parents left for work in Riyadh I was able to convince them to save up in mutual funds. I really hope all of us, and our children, would be able to open up an account in mutual funds to make money work faster. To not let all the money waste sleeping in the banks or worse spend them all without saving up for the future.

helpful sites:

Ready To Be Rich

Millionaire Acts

Investment Philippines