Many readers have been asking this question that is why I decided to create a post and share my views here. What investment is right and best for me? I’m aggressive and want to invest long term, do you think I’ll be successful with stocks? Do you think Mutual Fund is better than stocks? What about UITF or ETF? And many more related questions…
What Investment is Right for Me?
A simple question with simple ways to answer, too. You’ll be able to know the answers if you know these 3 things:
- Your Financial Status
- Your Risk Tolerance
- Your Goal or Objective
Before I tell you why, let me remind you that only YOU can answer that question. Not your broker, not your fund manager, not your banker, not your adviser, not Beyonce and not me, Because only YOU know those 3 things and you cannot lie to YOU. 🙂
Know and assess your Financial Status. How old are you and what have you reached so far? Are you financially stable already? Perhaps you’re single and earning 30K a month and happy about it. Maybe you’re married and you have a family already and looking forward for happy and satisfied retirement. Or maybe you’re 25 and already earning 6-figure income because you learned these things at 21. Or maybe you just got your first job and wanting to be independent, travel the world and be financially free.
Why should you asses your financial status? Because opening investments requires money and you must have other source of income other than investments. There is never a certainty with investments so you must have other ‘backups’ in case you lost some.
It will help you decide how much you can afford to invest in your status right now.
Know and evaluate your Risk Tolerance. How much risk are you willing to take? Are you conservative or aggressive? Are you brave enough to see the market crash and lose some money? Perhaps, you can sleep soundly at night without worrying about how the market could go or maybe you are already happy and contented with the gains you get from time deposits.
Why should you know your risk tolerance? Because sometimes you have to lose some before you gain some.
Goal or Objective
Have a Goal or Objective. It is your mission, the finished product, the end result of your investment. Do not say, “my goal is long term.” Have a target. Know your number. Say “my goal is 10 years and I must have 10 million pesos or more.” Maybe it’s only 3 years and you’re going to use the money for a new business.
Why should you have a goal? Because you’re already lost without it.
You make investments because you want more money and you want to work less, quit your job early, do your passion, travel with your loved ones or family, help others, and cross out your bucket list.
Happy investing, everyone!