“The key to getting ahead is getting started.” Many successful entrepreneurs and businessmen give this advice to youngsters for them to be motivated. Moreover, this is how things should really start; when you’re young. Why is this an important topic? Because this type of technique and skill is not taught in school. There are kids who are lucky and has the money while there are those who aren’t. Nevertheless, in this article, we will be detailing some of the best investments millennials can make.
Have a bit of savings and don’t have the idea where to put it? Do you just let it sit in the bank?
Although putting your money in the bank dictates security, it won’t work to multiply itself. Yes, it’s safer than letting it rest at home but your chances of making it grow and multiply two, threefold? It won’t.
Youngsters, even not Filipinos, should now start to invest because in our generation, investments will be the key to success.
Micro-lending or peer-to-peer lending
Minimum investment: $25 (Php1, 250.00)
What is micro-lending or P2P lending?
Peer-to-peer lending is the lending and borrowing of money. It helps both the borrower – by getting financing – and the lender – by investing. This is an attractive bait to both parties because it automatically eliminates the middleman – which are the banks. Most often, an online company will collect possible lenders and borrowers and let them transact independently.
Why are people patronizing P2P lending than banks?
Obviously, you don’t have to go through the very long and exhausting process of bank loans. In P2P lending, rates are a lot cheaper and more affordable. Furthermore, the interest rates are a lot more reasonable. In the investor’s side, earning money even through a not-so-lucrative manner is the way to go.
Some of the known lending businesses are:
Tips before investing in this industry:
1. Start slow and safely. You don’t have to invest millions altogether; you can start by investing the minimum amount which is $25 (Php1, 250.00)
2. Do your research before following through the investment process. No soldier goes to a war unarmed, right? Make sure you know a thing or two about the investment first before actually going with it.
3. Have a “PLAN B.” You’ll never know when an investment defaults or flops. Always have a backup plan in case scenarios like these happen. Know your risk tolerance or your attitude towards losing money; save yourself from shelling out everything that you have.
4. Reinvesting is sometimes the best move. Study the pattern and follow your gut. You don’t have to cash out everything whenever it’s possible; try to reinvest your earnings to get more than what you expect.
Real Estate (Foreclosed Properties)
Minimum investment: Php10, 000 – Php15, 000
If you’re more of a “big time” kind of entrepreneur, real estate is the perfect solution for you. If you yearn to own a piece of land or a house, looking at this type of investment might be the best course of action you should take. Noting the amount of money you need to shell out? Don’t worry because foreclosed properties are existent and you can buy them for as low as Php11, 000.00.
In addition to foreclosed properties, there are also inexpensive investment mortgages that only cost Php2, 000 – Php3, 000 a month.
Tips in investing on foreclosed properties/real estate investments:
1. Know where to look. Not all banks and corporations have affordable and prime foreclosed properties. Research on where you can get the best deals long-term. Be worry-free when you speak to agents and people who handle the property because they should be knowledgeable of it in terms of land capacity, quality, and its costs.
2. Ensure that your financing is ready and legitimate. Having an approved bank loan pulls sellers more effectively. This becomes a leverage against other potential buyers/investors.
3. If you are decided with the property you’re eyeing on, inspect the property thoroughly. You don’t want to be buying a land that causes a ton of problems, right?
4. Have knowledge on fees and taxes you should pay as regards to the land. Some people might take advantage of your ripeness in investing. Do your homework and know what fees and taxes you should pay; don’t say “YES” to everything they say.
5. Attending a few too many seminars could go a long way. You’ll be more knowledgeable in the real estate industry and you would have techniques and skills you can use in many aspects not just investing.
6. Branch out and add more people to your network. “No man is an island,” remember? By this, you would be able to know if other properties are on sale, or what lands/properties are open for investments.
7. Know what you want. You don’t want to be buying land just for “the sake of.” Have a goal; ask yourself “where do I see five to ten years from now in this industry?”
Small Businesses
Being successful doesn’t necessarily mean you need to own a worldly-known corporation. If you have a small business, that’s a good stepping stone. A lot of people are afraid that their small business idea will fail but hey, isn’t trying a bit scarier? If you have few thousands of savings, try and think of how you can earn “everyday” income; that should be the start.
There are a lot of things you can do if you have somewhere between Php5, 000 – Php10, 000. You just have to know what you’ll enjoy spending time with and what you think you’ll love doing.
Tips on starting small businesses:
1. Find what you’ll be interested in. It’s like “finding your passion” but sometimes, even our passions fail. This is why it’s important to find the “thing we’ll be interested in” so no matter what happens, you won’t give up. Even if it fails, even if it will take a long time to grow, you’ll still be attached to it.
2. Take note of your funding. You will need funding for your operation and for your capital. You should be prepared in every aspect of cost if you’re to enter this industry.
3. Build your network. It’s important to have other people involved in your business. May it be for investing, for marketing, or just friends. However, it’s also essential not to be too involved with other people because it can mess up your business plan.
4. Research, research, research. Don’t dive in the realms of business without the knowledge on how to run it, fund it, and how to play with it.
5. Consult experts. Your local convenience store owner? The chef of a famous karinderya in your block? Those people know how to run a business. Talk to them, ask them techniques on how to run a certain type of business.
6. Build a website. Marketing your small business just by the classic means might not be as effective as spreading it using the internet. Try it first by creating a Facebook page, a Twitter account, or an Instagram feed. If you sense success there, then you should be able to convert it to a real website.
Stocks
As complex as it may seem, stocks really are a wonder. Although a lot of people are afraid to try stocks because of lack of knowledge, studying it may be worth your while. With all honesty, stocks isn’t really that difficult. Why should you study and invest time and effort in it? Because it can make your money grow exponentially.
So what is it exactly?
Buying stocks is like buying your share of a certain company; shares that you won’t be able to buy under normal circumstances, according to Marvin Germo, author of Stock Smarts. “The stock market gives you the opportunity to buy in companies, like partnering with SM, GMA, Jollibee,” Germo said.
Stock market investing tips:
1. Before heading onto the real deal, study everything first. Being too confident in the stock market can be too risky. Try observing first and studying how they play the game.
2. “Buy Low, Sell High” this technique is the key to stock investing success. Buy stocks at their lowest and sell them when they’re at their peak.
3. Do not expect too much. Even if the industry is lucrative, you cannot expect to have your money doubled overnight. Of course, just like any other business, it would still require perseverance, time, and patience. As per a professional stocks investor, expecting that your money will double in a year can lead to heartbreak and tons of frustration. If you opt to invest in this kind of business, think of it long-term; maybe 5, 10 years, that’ll be the safest and least expectation you can have.
Read: How to Invest or Buy Stocks in Philippines Stock Market
Cryptocurrency
Minimum investment: $500 – $1, 000
What is it really?
Cryptocurrency is something that would sound funny and new to our grandfathers. It was founded 9 years ago and it’s rocking today. To give you an idea, cryptocurrency is one way or is considered as “virtual financing” or “virtual bank.” Basically, it’s virtual currency that people of the internet use to trade. One reason why people choose this over regular banking is because its safety from the government. Since it’s encrypted or guarded, the government won’t be able to see it or to have access to it.
Bitcoin
Bitcoin is not just the cryptocurrency existent. However, Bitcoin is the most popular of them all. This abstract wonder made millions of people rich and also, broke. Although bitcoin is the most popular of them all, it’s the most expensive one; there are other cryptocurrencies more affordable and cheaper than bitcoin – you may want to look and try to invest on them.
Because of its ideal protection and safety, the Central Bank of the Philippines issued a warning about cryptocurrency. However, they said that it’s not subject under any regulation.
Read: Where to buy Bitcoins in the Philippines
Tips on investing in cryptocurrency
1. Be educated. Investing in something blind is something that you shouldn’t ever do; it’s like gambling without knowing what the game is. Just like other investments, you should be knowledgeable enough in that field before putting any money in it.
2. Think of it like you’re investing in stocks. Study the pattern, know what the trend is, and you shouldn’t have any headaches; analysis is the key to success in this market.
3. Even if cryptocurrency is virtual, you can use it to solve real-life problems. Utilize it as a tool that can help you engage and solve problems in business, finances, personal, and other sorts of problems. It’s not just something that can help you earn money, it’s also something that can aid you in other dilemmas.
4. You can trade it for real money. Yes, although the industry itself does not recommend this action, you can always sell your currency in exchange for real money. There are people who might be looking for cryptocurrency to buy certain goods they can easily buy online than in the real world.
Investments are something you should consider especially if you’re young. Why? Time is your only opponent in this profession; the longer you wait, the more difficult it becomes. Of course, these are not the only options or investments you can make. These are just some of the best investments that millennials can invest to while they’re still young.
Other investing tips
1. Risk is one of your enemies at first but it’ll certainly become your friend along the way. Of course, not everyone is comfortable in taking risks, especially if money is what they’re risking. Do not be afraid, it’s a natural part of investing; even everything.
2. Diversification is key. Staying in one type of business or investment can be good at first but not everything stays strong forever, right? Diversify; all businesses and investments mentioned in this article? Try each of them, try and invest in each of them and you will see what diversification is. Remember, putting all your money in one card can lead to bankruptcy.
3. If you’re not going to start today, when are you planning to start? Starting to invest is never a question; the decision is still in your hands. It’s just our recommendation to start early, actually every business people’s suggestion because starting early like in your 20’s can make you a millionaire just in your 30’s.
Business and investments are never an easy topic. It’s not as difficult as it may seem as well. You just have to learn the correct taste and the correct mix of it. You’ll be surprised as to how successful investments can be if you have the correct attitude, emotion, and strategy. It’s just a mix of those three.