Where to Invest P100,000
Okay, let's say you have a hundred grand to spare. You have no financial obligations like credit card debt or immediate financial needs like travel. Where do you invest P100,000?
And I don't mean investing in yourself or in a business. I'm talking about financial instruments. Regulated, legitimate investment vehicles from financial institutions.
Well, here are some options:
Special savings deposits. You can place the money in a special savings account that earns a much higher interest than a regular savings account. Most commercial, savings, and rural banks offer this. Shop around.
Time deposits. The favorite instrument of Filipino savers. You can choose to place the money in 30-, 60-, and 90-day time deposits. Again, most banks have this.
Stocks. You can buy shares of publicly-listed stocks and ride the current bull run. Just call up your friendly neighborhood broker.
T-bills. If you want relative safety, place your money in short-term government securities like Treasury bills (T-bills). Dealers like commercial banks offer this.
RTBs. You can also invest in longer-term government securities like Fixed Rate Treasury Notes (FXTNs). Alternately, you can invest in Retail Treasury Bonds (RTBs), which require much smaller amounts.
UITFs. Replacing Common Trust Funds (CTFs), Unit Investment Trust (UITFs) are an improved version, as market prices are updated daily. A lot of commercial banks with trust departments offer this.
Mutual funds. Similar to UITFs but more regulated, mutual funds pool money from thousands of investors. There are different types depending on your investment objectives. Only a few investment companies offer this.
Foreign currency. You can exchange your P100,000 into dollars. Now that the peso is appreciating, and the dollar is relatively cheap, it's a good time to buy. Alternately, check out the euro since it's going stronger than the dollar. Banks and forex brokers let you do this.
Insurance plans. Whole life insurance plans have a savings component. A variation is the variable (also called unit-linked) insurance plan, which gives you greated control on how your premiums are invested. A few life insurance companies offer this.
Endowment plans. These are insurance products but don't provide lifetime coverage. They are often positioned as investment products because the emphasis is on the returns. A lot of life insurance companies offer this.
Pension plans. You can buy a pre-need pension plan, that is, if you're undeterred by the negative news on certain pre-need companies.
These are just some options for you. Now, which is best? Well, it depends. On what? Your objective, your risk appetite, your time frame. Beyond that, each has its pros and cons. Next issue, we'll talk about the factors to consider when investing.
