4 Important factors to consider before investing

Kabayan,4 FACTORS

You probably heard that investing will make money work for you. Now you are curious how to get started and see if this really works. And then eventually will help you achieve your financial freedom. 

In fact, there are many ways to invest. These are investment in stocks, mutual funds, real estates, business, foreign exchange and other investments options available in the market. You know what, investing is really plain and simple. It’s just a matter of educating yourself, taking some courage, and pushing yourself to make a move in your first investment.

Here are our four recommended factors to consider before investing.

Step 1: Know your Current Status

Understanding your status is the first step before you dive into the deep of investment pool. You have to understand that personal status has impact to your finances. What do I mean? Try to look around you. I mean, are you a gambler, hard drinker, smoker, womanizer, and etc. These kinds of personal status would not help you in any way to achieve your financial freedom. Have more insight about yourself to understand your financial status because investing now a day doesn’t require you to have huge sum of money to start but requires you a significant amount of discipline.

Step 2: Know the basics of investing

Simply stated you have to know kinds of investment vehicles such as stocks; mutual fund, variable unit link, foreign exchange, real estate, and other investment vehicles that will help you achieve financial freedom. Study one investment at a time but of course you don’t have to know everything, you just need to learn the basics so that you can move forward. Reading articles/blogs, and books will help you to know the basic. Don’t forget to understand the cost of your investment but it won’t matter at the end if you already gaining more than the cost.

Again, one investment at a time and know the basics.

Step 3: Goal setting

You already knew your status and the basics of investing. It’s time for you to set your goal. A goal could mean your purpose or reason of investing like protection, safety, income, capital appreciation, and other reasons that you can consider. Just remember that your goal must be SMART – Specific, Measurable, Attainable, Realistic, and Time bound. With your smart goal, you have to consider factors like age, status in life, personal investment preference, etc. Example of goals are:

  • To buy a house and lot in 10 years
  • Children’s education upon reaching high school
  • Php 8 million for retirement
  • Family vacation at Hongkong Disneyland by year 2019
  • Build a restaurant business by year 2025


Step 4: Understand the Investment Risk

Before you decide which investment is for you, you have to know the risk you are willing to take. Know your RISK APPETITE. Your risk would vary on what kind of investment you’ll choose, your age, financial target, and goals. The more aggressive you are for profit, the higher investment risk you must be willing to take.

That’s our simple investment guide for you Kabayan. Never go into the details if you are not planning to be an expert. Never let your fear or greed control you. You should know by now that any investments have its own high and low but will give you good return.

One more thing is to keep reviewing your portfolio. You financial journey will not stop once you established your portfolio; it will further drive you forward.


The Cristobal

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