INVESTING is a journey. It is not about getting rich quick but having discipline, patience, strategies and a combination of ideas, analysis and data. As we always teach to our countrymen, there’s no single investment approach that works for everyone.
If we will illustrate it through a basketball league, I think it will be a good practical example.
Nowadays, there are a lot of platforms that we can invest in because of the growth in technology.
Just to enumerate some of it, stock market, crypto currency, online gaming platforms, real estate, business and many more.
Oftentimes we can be swayed by the trend, hype or even stories of other people’s successes but end up being frustrated whenever there are unforeseen events such as the pandemic, investment risk fluctuations, unmet expectation and wrong information.
If you’re playing or interested about basketball, let’s take a look at investing as a basketball league.
The levels of leagues vary depending if you’re in a community, municipality, city or nationwide game.
If you are just starting to play basketball, you need to learn the basics. Dribbling, passing, rules, shooting, team work, exercise, coaching and many more. Winning is just a by-product of the hard work behind the scenes.
If we will relate this to financial planning on a generate note, we cannot expect overnight results to match all our financial goals right? Yes there will be winning games, but there will also be challenges along the way, sometimes our analysis is right, sometimes it might not turned out to good results.
This is the reason why one of the investments that we should take first is investing in ourselves through knowledge, seeking mentors, coaches who are experienced in a particular platform to guide us.
The question for us to answer is this, do I know the basics already so I can advance in my journey?
We can compare dribbling, passing and shooting to budgeting, savings, and insurance. Afterwards we can now proceed to investing. This time we can go to the next level of financial planning league. May it be through stock market, real estate or crypto currencies? Make sure that you understand first the rules and regulations because there are also inherent risks involve in investing.
Just like what happened to the Milwaukee Bucks, before becoming the 2021 NBA Champion, it took them a lot of challenges, hard work, sacrifices, team work and, most of all, prayers. In investing, we cannot take control of everything, this is the reason why setting parameters is important.
Here are some of the aspects that you should consider in investing:
1. Invest in a platform that you understand.
This season, a lot of financial platforms may it be digital or traditional one entered the market. We have the stock market, crypt currencies, online gaming platforms, forex, mutual funds and many more.
We always remind our countrymen to make sure to invest in a platform that suites your goals and skills. Not all investment platforms are suited to all of us.
2. Know your goals.
Having goals in mind will allow us to tailor fir the financial solutions to our problems. Someone who’s investing in the long term will have a different platform for someone investing in the short term.
Since the timeline vary, you should know also the right platform where you can place your money; may it be a conservative, moderate or aggressive investment.
3. Diversify your investments.
Once you have identified the platforms that suites your needs, you need to allocate your resources in different basket to avoid too much exposure in risks. Since there’s no perfect investment, diversification can help us maximize returns and minimize losses.
Consult a professional first to have a guided decision and decide based on your verified conclusion.
Try to ask yourself these questions:
1. Can I afford to lose this amount of money in case my plan didn’t work out?
Investing may not be always beneficial for us depending on the season of the economy. Like at this season, knowing the cycle of the market will give us a wider perspective if we should place investments or not.
Always invest an amount that you are comfortable with which will not affect your day-to-day needs.
2. Why am I investing in the first place?
Establishing your deep “why” will give you motivation, during tough times or it will allow you to be consistent even in breakthroughs too.
Since there’s clarity of goals, you can press on and have a guiding path towards a better future.
Karlo Biglang-awa is a registered financial planner of RFP Philippines. To learn more about personal-financial planning, attend the 91st RFP program this August 2021. To inquire, e-mail [email protected] or text at 0917-6248110.