17 Best Investments for Millennials in the Philippines [Under 100K]

Last Updated on – Jan 25, 2021 @ 7:33 am

Got a 100k and don’t know what to do with it? Well, you’re lucky because we’re giving you the 17 best ways to invest and grow that money!

Our first advice: Don’t let it just sit in the bank. With low-interest rates ranging from 0.5 to 1.5%, you’re better off investing it elsewhere.

Even if you don’t have a lot of cash saved up, there are still many ways to let your money work for you.

For many young Filipino professionals and entrepreneurs, most especially in this era, it’s conventional wisdom to consider investments early. The time to think about investing is NOW. 

If you want a more secure and brighter future for yourself, you shouldn’t put investing on hold.

What is an Investment?

Buyers identify an investment as a purchased item or asset that would grow its value in the future and can be sold at a higher price. It can also be viewed as a property that enables its owners to generate passive income and create wealth over time.


What is Investing?

Investing is using your money as capital to buy assets that can produce more money for you in the future.

It’s basically letting your money do the work for you.


What are the Types of Investments?

Stocks, bonds, annuities, commodities, real estate—I bet we all scratched our heads the first time we tried to know more about these financial terms. If you’re anything like me, you also probably got overwhelmed with all the technical jargon and got buried with a ton of information that didn’t make sense.

This guide aims to shed light on the different types of investments available out there to help you achieve your financial goals. Learning about them will open ways and ideas for multiplying your money quickly.

Here’s our quick rundown of the different types of investments:

1. Bank Products

Perhaps the most popular and common of all investments, bank products come in different options.

The money you deposited are federally insured to up to a certain limit and can be easily withdrawn. Some examples are savings accounts, certificates of deposit (CDs), money market, and federal insurance.

2. Bonds

Bonds are loans offered by an investor to governments and corporations. In exchange, the borrower must pay the interest on the borrowed money at a predetermined schedule (annual or semiannual) and will need to return the principal on an agreed upon maturity date.

3. Stocks

Put simply, stocks pertain to units of ownership in a corporation. This means that if you own or invest in stocks of a company, you become one of its “owners”.

4. Investment funds

Investment funds come or are sourced from different investors. A mutual fund is one of the most common types of investment fund.

5. Annuity

Annuities promise to pay you a regular or fixed-interval income either immediately or in the future. You must first pay for the annuity in one lump-sum or through a series of payments also known as premiums.

6. College fund

College fees are notoriously expensive, and many people opt to invest in college funds to save money for the future. Depending on the location, earnings from this fund are not subjected to Federal and State taxes, as long as the funds are strictly used for college expenses.

7. Business capital

Simply put, business capital is money that you put into a business to gain active or passive earnings or income.

8. Retirement fund

Retirement funds come in handy as a way to have continuous cash flow. While still able, workers can save money and receive pension upon retirement.

9. Commodity Futures

This agreement or contract allows a person to buy or sell a specified amount of a commodity at a fixed price and future date. This helps protect buyers by negating risks caused by fluctuations in price of the commodity in the future.

10. Security Futures

Similar to commodity futures, security futures lets you purchase and sell a fixed amount of shares of a particular stock at a specified price and future date.

11. Insurance

Insurance protects you against potential financial loss, damage or harm. The insured or policyholder pays premiums to buy a policy that states the terms and conditions in which the insurer is required to pay.

12. Real estate

Real estate investment generates income or profit through purchasing, leasing, managing or selling a piece of realty property for a higher price than it was acquired when the property’s value appreciates over time.

13. Alternative and Complex Products

Alternative and Complex products offer optional investment vehicles outside of traditional stock and bond investments. Some examples of this include notes with principal protection and risky high-yield bonds that have low credit ratings. Most are risky but provide high rates of return.

Related: 8 Best Online Investment Sites & Platforms in the Philippines


What is Compound Interest?

Compound interest is the resulting interest based on your initial deposit/investment plus the accumulated interest gathered from the number of periods it was compounded (“compounding schedule” — e.g, daily, weekly, monthly, annually, etc.,).

And that’s why it’s also called “Interest on interest”, since it piles on top of both the principal and its earnings. 

In comparison, simple interest is calculated only on the principal amount, which does not include everything the money gained so far.

Compound interest requires three things to work its magic: money, interest (earnings), and time.

To explain this better, let’s do a quick analogy. 

Imagine a snowball rolling down a hill.

As it rolls down, it continuously picks up snow, making it grow bigger. 

With each revolution, the more snow it absorbs. 

And the longer it rolls down, the bigger it gets.

Now imagine that money is represented by the initial snowball before it rolled down the hill (principal)

The accumulated earnings is represented by the amount of snow it gathers as it rolls.

And time, of course, is represented by the time it takes to reach the bottom of the hill (investment timeline) and the frequency of the snowball completing one full revolution (compounding schedule).

Compound interest occurs when that initial snowball starts rolling down and begins absorbing snow with each revolution. 

Each revolution results in the snowball having a wider surface area (bigger snowball = wider surface) which means it will absorb even more snow on the next revolution.

This is similar to how “interest on interest” works, since the compounding will be based on the new size of the snowball (principal + earnings) and not just on the original snowball.

And the longer it takes for it to roll down the hill, the bigger it will get.


Why is it important to start investing now?

The answer is simple:

When it comes to compound interest, it’s not about how much money you’re investing, it’s about how much time you’re allowing that money to grow. 

Let’s say that when you were 20 years old, you wanted to save for retirement. You decided to put 500 pesos per month on an account (or an investment) that gives an average annual interest rate of 7%.

At age 60, you retired. And you also stopped the deposits into your savings account.

Here’s what you were able to save in the past 40 years:

Initial depositPhp 500
Total Monthly depositsPhp 240,000
Total InterestPhp 964,798
Total SavingsPhp 1,205,298

And to illustrate how crucial the length of time of investment is in compound interest, let’s modify our scenario a bit.

Instead of saving at 20 years old, you started at age 35.

How does a 15-year difference affect your overall savings results?

Initial depositPhp 500
Total Monthly depositsPhp 150,000
Total InterestPhp 231,708
Total SavingsPhp 382,208

As you can see, the difference is huge. 

As a kicker, even if you tripled your monthly deposits to Php1500 when you started at 35, you still won’t get as much versus if you started 15 years earlier. 

The total earnings is still significantly lower compared to the results of when you started at 20 years old.

That’s the power of compounding.

The moral of the story? 

Start saving and investing early. In time, the value of your interest will be bigger than what you’re putting in. And when that happens, your money will experience exponential growth.


How Much Money is Needed to Start Investing?

The short answer: Not much.

If you’re just starting out as an investor, you don’t need five or six-digit figures from the get-go. Anyone, even college students and fresh graduates, can start investing with as little as ₱25 to ₱5,000.

The actual initial investment depends on where you’re putting money in, and the bank or investment company that will handle your funds.

Here are the required initial funds for the common investment options in the Philippines:

Investment VehicleMinimum Initial InvestmentMinimum Additional Placement
Mutual funds₱100 to ₱5,000₱100 to ₱1,000
Stocks₱5,000 to ₱1 million₱1,000
Time deposit₱1,000 to ₱100,000N/A
Unit Investment Trust Fund (UITF)₱25 to ₱10 million₱50 to ₱1 million


How to Start Investing with Little Money

The advantage of growing your money through investments is that you can start small.

There’s no excuse from getting started even if you’re a breadwinner with a lot of bills to pay, as you can increase the amount you invest later on when you’re more financially capable.

But it’s important to note that you should never begin an investment journey without a solid strategy.

Take these initial steps to invest even with a small amount of money.

1. Determine how much you can afford to invest.

This step is crucial if you plan to invest regularly in the long term.

You don’t want to invest a certain amount initially and then stop it altogether after a few months because you could no longer afford the monthly, quarterly or yearly investments.

Before you start off, set a realistic and reasonable amount to invest, considering your income, expenses and savings.

2. Save up for your emergency fund.

A common mistake many first-time investors make is jumping right into investing without having an emergency fund.

When a financial emergency happens (like the hospitalization of a family member or the need for home repairs after a typhoon) without emergency funds stashed away, you’ll have no choice but to withdraw your funds or sell stocks prematurely.

Ideally, you need to build an emergency fund equal to six to 12 months’ worth of living expenses, before starting to invest.

Make the process easier by putting away a small amount every week or payday.

The Philippine Stock Exchange (PSE) recommends putting the emergency fund in short-term, liquid investments such as savings accounts and time deposits.

You can invest the rest of your savings in medium-term or long-term instruments, depending on your financial goals.

3. Put your money in low initial investment vehicles.

Look for investment opportunities that allow you to begin investing with a minimal amount.

The best investment vehicles for this purpose are mutual funds and UITFs. When you put your money in these instruments, you can invest in a diversified portfolio of bonds and stocks with just a single transaction.Here are your options in the Philippines with initial investments ranging from ₱25 to ₱1,000.

Mutual Funds
Fund NameMinimum Initial InvestmentMinimum Additional Placement
Sun Life Prosperity Money Market Fund₱100₱100
Philam Managed Income Fund₱1,000₱500
Philam Bond Fund₱1,000₱500
Sun Life Prosperity Bond Fund₱1,000₱1,000
Sun Life Prosperity GS Fund₱1,000₱1,000
ATRAM Philippine Balanced Fund₱1,000₱600
Philam Fund₱1,000₱500
Sun Life Prosperity Balanced Fund₱1,000₱1,000
ATRAM Alpha Opportunity Fund₱1,000₱ 600
ATRAM Philippine Equity Opportunity Fund₱1,000₱600
Sun Life Prosperity Equity Fund₱1,000₱1,000
PAMI Equity Index Fund₱1,000₱500
Sun Life Prosperity Philippine Stock Index Fund₱1,000₱1,000

UITFs
Fund NameMinimum Initial InvestmentMinimum Additional Placement
Unlad Kawani Money Market Fund₱25₱25
ATRAM Peso Money Market Fund₱50₱50
ATRAM Total Return Peso Bond Fund₱50₱50
ATRAM Philippine Equity Smart Index Fund₱1,000₱1,000
ATRAM Global Dividend Feeder Fund₱1,000₱1,000
ATRAM Asia Equity Opportunity Feeder Fund₱1,000₱1,000
ATRAM Global Technology Feeder Fund₱1,000₱1,000
BDO PERA Short Term Fund₱1,000₱1,000
BDO Merit Fund₱1,000₱1,000
BDO PERA Bond Index Fund₱1,000₱1,000
BDO Institutional Equity Fund₱1,000₱1,000
BDO PERA Equity Index Fund₱1,000₱1,000


17 Best Investment Vehicles for Filipinos

Here are the 17 best investments in the Philippines that every hard-working Pinoy should consider.

InvestmentMinimum CapitalAverage ReturnsRisk Level
Social Trading₱5,00010-70% per yearMedium
Exchange Traded Fund (ETF)₱5,0006–11% per yearMedium
Pag-IBIG MP2₱5004.58%–8.11% per yearLow
Bonds₱5,0004.7–6.3% per yearLow
Insurance (VUL)₱2,000/month7.8–16.6% per yearMedium
P2P Lending₱1,00010–15%High
Stocks₱5,00010.8% per yearHigh
Mutual Funds and UITF₱1,0002–5% per yearMedium
Small Business₱5,000HighHigh
Real Estate (Foreclosed)₱10,000–₱15,000HighHigh
REIT₱5,00010% per yearMedium
Cryptocurrencies₱100-2% (2018)High
Blogging/Website Flipping₱2,000 – ₱10,000HighMedium
Forex Trading₱5,0001–10% per monthHigh
Angel Investing₱50,00027% in 3.5 yearsHigh
Personal Equity and Retirement Account (PERA)₱10,000/year5%–15% per yearLow
New SkillsTime and effortHighLow

1. Social Trading

Minimum Investment: $100 (eToro)

What is Social Trading?

Social trading is a type of investing in which traders interact with each other through an online trading platform. 

Think of it as the social media of the online trading world. Social trading works like a newsfeed where traders follow one another, share trading ideas and information, comment on each others’ posts, and view and analyze experts’ trades in real-time. It’s a good way to learn how to trade.

Ideal for beginners, social trading helps people make sound investment decisions with the help of professionals. This way, inexperienced traders learn faster even with little knowledge of the financial markets such as stocks, indices, forex, and cryptocurrencies.

What is Copy Trading and How is it Different from Social Trading?

Often used interchangeably with social trading, copy trading is a related term but is a different thing altogether. Although copy trading is a type of social trading, it involves directly and automatically copying the trades and strategies of experienced traders to replicate them in your own portfolio. 

Any market movement of traders you’re following gets copied, such that when they open a new trade, you also open a new trade. If they make a profit or lose money, you’ll achieve the same results, too.

How to Start Investing Through Social Trading

Look for online trading platforms that offer a social trading feature. Among the most recommended platforms are eToro’s CopyTrader, AvaTrade’s AvaSocial, and FXTM Invest

Open a trading account with your chosen platform and follow the instructions on social trading.

If you’re particularly interested in copy trading, it typically involves choosing a trader whose trades you’d like to replicate, entering the amount you’d like to invest, and clicking the Copy button. This will automatically duplicate the trader’s position. 

Learn More: Ultimate Guide to Social Trading in the Philippines


2. ETF

Minimum Investment: ₱2,000 to ₱5,000, depends on the minimum board lot and market price

What is ETF and how does it work?

ETF stands for Exchange Traded Fund. It’s a type of fund that owns assets like stocks, bonds, foreign currencies, gold bars, futures and others—similar to mutual funds (MFs).

Ownership is divided into shares too. But unlike MFs, these shares can be traded anytime in the market within the trading hours, making them easy to buy and sell.

ETFs are said to have lower operating costs compared to MFs since it’s more “passive” in its investing strategy. In most cases, ETFs merely “mimic” popular indexes (Index ETF) or industries and sectors (Sector ETF). Comparatively, fund managers handle MFs.

How to Invest in ETF in the Philippines

As of this writing, only one type of ETF is available in the Philippines: The First Metro Philippine Equity Exchange Traded Fund (FMETF) by First Metro Asset Management Inc. 

Buying and selling ETF is a similar affair with stocks. To start investing, you need to open a trading account with an accredited stockbroker like COL Financial, First Metro Securities, BDO Nomura, Philstocks, and BPI Trade, among others.

There’s a long list of accredited stockbrokers in the Philippines so opening a trading account is fairly easy.Once you have an active account, you may begin buying and selling ETFs via your preferred broker’s trading platform.

Read Next: How to Invest in ETF in the Philippines


3. Modified Pag-IBIG 2 (MP2) Savings

Minimum Investment: ₱500

What is Pag-IBIG MP2?

The Modified Pag-IBIG 2 (MP2) is a savings program available to existing and former Pag-IBIG Fund members with at least an equivalent of 24 monthly savings. They may leverage higher dividend earnings versus that of the regular Pag-IBIG Savings program. 

For as little as ₱500, you can take part in a program that lets your money earn as much as 8.11% in dividends (their highest ever recorded dividend rate).

Their 3-year average is a solid 6.96%, way better than what you could get from bank savings accounts or other investment vehicles. You can withdraw your earnings annually or get the lump sum dividend when the fund matures (5 years).

How to Invest in Pag-IBIG MP2?

Enrolling under the Pag-IBIG MP2 program couldn’t be easier. Simply get a copy and complete the MP2 Savings Application form and submit it with copies of a valid ID and passbook or ATM card of your nominated bank.

You can get the MP2 Savings Application form from your nearest Pag-IBIG Fund branch or download it from here.

Or you can visit this page and complete the required fields.

Learn More: How to Invest in Pag-IBIG MP2


4. Bonds

Minimum Investment: ₱5,000

What are Bonds and how do they work?

Bonds work similarly to loans, except in terms of who borrows the money. 

Say a company needs ₱1 million to expand its operations. They have two options: they can either borrow from banks (loans) or they can issue bonds. 

With loans, banks will provide the company with a lump sum that they’ll have to pay based on the interest rate and other terms that the banks have set. In most cases, the company will be asked to pay in monthly terms, with the interest embedded in each payment.

With bonds, it’s like doing a reverse loan.

Instead of the company approaching the lender (bank), they will print a bond (contract) that might state, “In five years, our company will pay the owner of this bond ₱50,000”.

Since they need ₱1 million, they decide to print 20 pieces of these ₱50,000 bonds and issue them to institutional investors and the public. Aside from receiving the promised ₱50,000 face value back after five years, bondholders will also receive “coupon payments”.

For example, let’s say that the ₱50,000 bond in our example features a 5% annual interest rate.

Each year, the company will have to pay the bond owner ₱2,500 for five years. In total, the bondholder would get ₱12,500 in earnings after the bond matures (₱2,500 x five years).

But it doesn’t stop there. Since bonds are classified as IOUs (debt instruments) and can be circulated publicly, they can be traded—like stocks.

It’s possible that a bond can be sold at a higher price than its face value if the net present value of the principal and interest payments have increased.

But if the bond owner decides to hold on to it until it matures, he or she gets back the original investment (making it a good way of preserving capital) plus earnings from interest (passive income).

Different Types of Bonds

Bonds are generally classified into two: by maturity or by the issuer.

  • Maturity-based bonds – Classified according to the length of time it will mature
    • Treasury Bills (T-bills) – Mature in less than one year (short term). The most common tenors (length of maturity) for T-bills are 91 days, 181 days, and 364 days.
    • Treasury Bonds (T-bonds) – Matures in more than one year. The most common maturity lengths for T-bonds are 2-year, 5-year, 7-year, 10-year, 20-year, and 30-year bonds.
  • Issuer-based bonds – Classified according to who issued it
    • Treasury Securities – Issued by the Bureau of Treasury
    • Government Bonds – Released by various government agencies like Home Development Mutual Fund (HDMF or Pag-IBIG), Government National Mortgage Association (GNMA), Federal National Mortgage Association, and others.
    • Municipal Bonds – Distributed by the local government units (LGUs)
    • Corporate Bonds – Supplied by public and private companies

How to Invest in Bonds in the Philippines

For corporate bonds, some banks advise the general public through their official website or mailing list. Information and requirements for investing in bonds are typically posted on their website.

Some will have you complete a quick online questionnaire to get your details and contact info. Afterward, a representative from the bank will call/email you to discuss the details and next steps.

For Government bonds like T-bonds, you can visit the Bureau of Treasury website for updates and listings for any upcoming public offerings.

You can also reach out to banks and check if they have any government bond offerings.

Like with corporate bonds, they’ll provide you with details and instructions along with the paperwork to complete should you wish to proceed with the investment.

Learn More:


5. Insurance (VUL)

Minimum Investment: ₱2,000 to ₱3,000

Life insurance is something every young professional should consider.

Having an insurance is necessary if you’re thinking about getting a house or a car. But more importantly, insurance is a must if you want to ensure that yours and your family’s lives are secured.

Did you know:Only 47% of the Philippines’ population have life insurance, while US have 59% of its population insured.

What is VUL?

People should look into having their own VUL insurance. According to Investopedia, a VUL is a form of cash-value life insurance that offers both a death benefit and an investment feature.

This type of insurance gets bundled with an investment component. You’re insured, but you can also have the option to invest your money. It’s ideal because you get the best of both worlds.

Aside from that, there are other benefits to VUL that differentiate it from other traditional insurance policies, such as flexible premiums.

Any excess amount you add to the premium will go to your accumulated funds. In case of a financial emergency, on the other hand, you can choose to only pay the charges without the plan lapsing.

Speaking of financial emergencies, one great feature of VUL is its liquidity. You can still access your funds in times of need. Unlike traditional policies, this is treated as a withdrawal and not a loan.

Meaning the amount withdrawn does not incur interests. Although it is encouraged that whatever amount was withdrawn should be immediately reinvested to keep on track with your financial goals.

Tips on getting VUL/life insurance

  • The need: Ask yourself—will someone be negatively affected financially by my untimely death? Mind you, it’s not about being sad about someone’s passing. Rather, it’s about the financial liabilities that you may be leaving after you pass. 
  • The amount: How much you need depends on several variables, such as current liabilities and dependents. If you’re thinking about retirement, ask yourself what your projected retirement fund will be. Will it only cover the replacement of your actual income or will it include expenses for leisure? That’s something to think about when getting your plan.
  • The plan: Call different insurance agent and ask for quotations or get them to send you proposals through e-mail. This way, you can pick and choose what would be the ideal plan for you. Most insurance agents now have tools that generate quick client policy proposal.
  • The overheads: A lot of the agents you will encounter will push for additional insurance or add-ons because of targeted quotas which will mostly just benefit them and the insurance company. Stick to your basic life insurance. It is, however, advisable to get a critical illness add-on. You never know if or when you’ll get a serious health problem.
  • The advisor: Get an independent financial planner. Agents tend to be biased about plans because of their quotas. It’s advisable to get an independent financial adviser who is paid to advise you and not to reach quotas based on plans and add-ons. It’s not necessary to do this, but if you have extra cash to spend on a financial planner, get one.
  • The timing: Obtain your insurance now. The younger you are, the cheaper the plans are. There’s no time like today to get a plan.
  • The stability: Of course, you must make sure that the insurance plan you’re getting is from a reliable and stable company. Call the insurance company or the insurance commission, and search the web. Look for reviews and research the company. Make sure they are legit.

Read Next: Best Life Insurance Plans in the Philippines (VUL & Traditional)


6. Micro-Lending & Peer-to-Peer Lending

Minimum Investment: $25 (₱1,250)

Another investment option young professionals and investors can get into is microlending and peer-to-peer lending.

What is P2P Lending?

Peer-to-peer lending is the borrowing and lending of money through a platform without going through traditional means like the bank or other financial institutions.

What happens is, usually, an online company will bring together borrowers who need financing and lenders who would like to invest their money and earn through interest rates.

People are attracted to P2P because it cuts out the middleman (the bank) and provides better deals for both the borrower and the lender.

Because rates are a lot flexible compared to banks, borrowers can get relatively cheaper interest rates while the lender can still profit from a decent amount of interest rate.

Popular P2P Lending platforms in the Philippines:

Tips on investing in P2P lending

Here are some tips to consider according to Paula Pant, from Student Loan Hero.

  • Research before you invest. This should be a no-brainer, but it is something you must keep in mind. Research about the loan history of the company you’re going to choose to invest in. Look into things such as the percentage of borrowers who default (unable to pay back) and how they screen the borrowers. Also, ask about the average returns of investors in the past and how they handle late payments.
  • Know your risk tolerance. “Think carefully about how much risk you are prepared to take, bearing in mind that you could lose the whole of your investment in a loan if it defaults,” wrote Graeme Marshall, CEO of FundingKnight.
  • Go slow. – You don’t have to invest largely in one borrower. Take advantage of the fact that you can start investing at only $25.
  • Diversify your loans. As what was mentioned earlier, you don’t have to go big with just one borrower. Diversify your loans. As the saying goes, don’t put all your eggs in one basket.
  • Reinvest your returns. You don’t have to cash out your returns once you can. Consider reinvesting them into new loans.

Read Next: How to Invest in Peer-to-Peer Lending in the Philippines [Complete Guide]


7. Stocks

Minimum Investment: ₱5,000 (First Metro and COL Financial)

People may stay away from stocks because of having no knowledge about it. Most even just prefer to let their money be stagnant and stay in a bank.

But knowledge can be acquired, so it shouldn’t stop you from investing in stocks considering it could make your money grow exponentially.

Investing in stocks allows you to buy shares of companies, you won’t be able to buy under normal circumstances, said Marvin Germo, author of Stock Smarts.

“The stock market gives you the opportunity to buy in companies, like partnering with SM, GMA, Jollibee,” he said.

Tips on investing in Philippine Stock Market

  • Learn everything you can. Being too confident in the stock market can also be too risky. Absorb from the books and experts first. Do your research, discover the terminologies and all the tricks, buy books, and attend seminars. If you can, get a mentor. Do everything you can to be knowledgeable on the stock market.
  • Know your risk profile. Are you cautious or are you a risk taker? Your personality should reflect the stocks you buy. According to Marvin Germo, there are stocks that are volatile, with a great potential to go up but also a great potential to go down. Some are just steady but when the market goes down, the impact to the company won’t be as bad. Consider what type of stock would fit your level of comfortability.
  • Buy low, sell high. Buy stocks only when the price is below the “Buy Below Price”. The Buy Below Price is a level at which capital appreciation potential is already attractive relative to the fair value estimate. Any price below this is considered optimal to buy.
  • Don’t expect money to double soon. According to an investor interviewed by Rappler, you shouldn’t expect our money to double within a year. In fact, you should be prepared to hold on to our equity investments for a longer period.

Want to get started with stock trading and investing? Check out our Beginner’s Guide to Stock Trading and Investing.


8. Mutual funds & UITF

Minimum Investment: ₱1,000

What are Mutual Funds and UITF?

A Philippine Mutual Fund is an investment company registered with the Securities and Exchange Commission (SEC), which pools money from many investors creating a massive fund under a common objective.

This fund is then invested in specific types of securities to achieve the stated objective.

The Unit Investment Trust Fund (UITF), on the other hand, has similar functions of a mutual fund. The main difference is that the fund is managed by a bank instead of a mutual fund company.

This type of investment is ideal for young and new investors because you’re investing your money to experts who would know what to do to make your money grow.

There are four main types of mutual funds and UITFs offered:

  • Money market funds – Short-term debt instruments (one year or less).
  • Bond funds – Long-term debt instruments offered by governments or corporations.
  • Balanced funds – A mix of shares of stock and bonds.
  • Stock or equity funds – Primarily shares of stock.

Tips on Investing in Mutual Funds

  • Go with competent fund managers. You’re basically entrusting your hard-earned money to a third-party company. So, you must ensure that the fund managers they have are competent enough to bring growth, not losses. A good way to know is to look at the consistency of the fund performance at least in the last five years.
  • Add regularly. Although you can start at a low price of ₱5,000 and there is no required regular addition, it is advisable to add regularly and use it as kind of your piggy bank for your long term goals.
  • Assess risks. All investments have their risks, so it’s important to do risk assessments. Online brokers who offer mutual funds usually have their risk assessment questionnaire which will help you decide which type of mutual fund is best for you.
  • Set goals and objectives. Like with any other investment, you must know why you’re investing. Is this for your retirement, leisure, or capital for your future business endeavors? Be clear on where you want this to go to make the best decisions. Newbies may become disheartened when they see losses even if they still haven’t reached the end of their time frame. As with stocks, you must be patient enough to see your investments grow.

Useful Resources:


9. Small Business

Minimum Investment: ₱5,000

Having a small business is another investment that you shouldn’t pass up. A lot of people might not be inclined to try this out because of the fear of failure. But why should that stop you?

Failure is just a part of life and taking risks is important, if you want to make your money grow.

But if you’re still apprehensive, you could always start small. With just ₱5,000, you can get into the food business. You can go with street foods, gotohan or mamihan.

If you’re the type of person who likes karaoke, with just a bit more money (around ₱25,000), you can do karaoke rentals. There are several options for those who want to start a small business for under ₱100,000.You can also check out our massive list of small business ideas.

Tips on starting a small business in the Philippines

  • Find your passion. A lot of people wonder what they should sell. Finding your passion can be important because it will help you push through with your business even if the going gets tough. For instance, if you have the passion for fashion, selling clothes would be ideal for you.
  • Do market research. The thing about most Filipinos is that, when they think about starting a business, all they think about are the basics, such as where to get capital and what product to sell. Those may be the main things, but market research is always important in any type of investment. You have to know your products, services, your competitors, your demographics, and trends in the industry.
  • Secure funding. Your funding will cover two types: pre-operating fund to cover for equipment, stock, deposits, permits, etc., and working capital, which may cover salaries, rent, utilities, supplies, and other contingencies. It’s advisable to secure funding for at least six months of operation.
  • Build a website. We live in the age of the internet and social media. So, having a website is essential these days. Your website is the digital address of your business. And it’s also basically your digital store. Having a website or at least a social media account can provide you with a digital presence and also social media marketing opportunities.
  • Network with other people. The more there are of people who know about your business, the better the business will be. Online presence is crucial. Word of mouth is also great, but you get a wider audience through social media. Connect with people both online and offline. Attending seminars and business conventions is also a way to network.
  • Consult experts. Getting a mentor or at least some form of advice through experts is always important. You will learn from the experiences of those who have made it. If you can’t find a mentor in person, find mentors in books or go online. Watch seminars on YouTube or search for business articles written by experts.

Related: How to start a business in the Philippines


10. Real Estate (foreclosed properties)

Minimum Investment: ₱10,000 to ₱15,000

For those who would like to own houses through installment, there are cheap mortgages that would only cost ₱2,000 to ₱3,000 a month.

Another investment to of course consider is real estate. If you’re thinking about owning a property but you’re wary about how much you want to spend, you may consider buying foreclosed properties to get a cheaper deal. For as low as ₱11,000 you can own a foreclosed land.

Tips on Buying Foreclosed Properties

According to Lamudi.com, here are some tips for buying Foreclosed Properties:

  • Know where to look. To find foreclosed properties, go to banks, lending institutions, SPAV companies or companies formed under the Special Purpose Vehicle Act of 2002 to help banks shed their nonperforming assets, and government financial institutions like the Social Security System (SSS), Home Development Mutual Fund (Pag-IBIG Fund), and National Housing Authority (NHA).
  • Get your financing ready. When you already have a housing loan approved by the bank, sellers will take you more seriously. And so, you’ll get more negotiating leverage compared to other buyers.
  • Attend property auctions. Attending these auctions will be a great way to discover properties not usually on online listings.
  • Inspect the property. You shouldn’t ever buy anything without properly inspecting it. You must see for yourself if it’s worth your money.
  • Know your fees and taxes. Other than the down payment and the property’s selling price, there are also fees and taxes charged to the buyer. For example, buyers must take care of notarial fee, registration fee, transfer tax, and documentary stamps tax. If you’re buying a condo or townhouse units, the buyer will also be required to pay monthly association dues.

Tips on Real Estate Investing

  • Be goal-oriented. Ask yourself what you want to achieve in real estate investing. This way, you can have a vision of what you want to get from investing, and it will also keep you determined. If you think real estate can be the easy money you’ve been searching for, well, nothing in this world can really be called easy money. There will be challenges but having a vision and determination can keep you in track.
  • Learn as much as you can about real estate. You need to familiarize yourself with the ins and outs of real estate transactions in the Philippines. Do research on the subject.
  • Attend seminars. You’d have to learn a lot about real estate—one of the best ways to do that is to attend seminars and conventions on real estate. Not only can you learn from experts, but you can also check out potential properties.
  • Join or start your real estate investors club. This is a great way to network and find out more from fellow investors.

Learn More: Ultimate Guide to Real Estate Investing in the Philippines


11. REIT

Minimum Investment: PHP 5,000

What is a REIT?

A real estate investment trust (REIT) is a company that owns or operates income-generating commercial properties such as office buildings, hotels, and shopping malls. REITs earn money through the rent collected from tenants that occupy their properties.

Investing in REITs allow small investors to make money in real estate without having to buy or manage any physical property. All you have to do to get started is to open a stock brokerage account and use the broker’s trading platform to buy and sell stocks issued by REITs.

Tips on REIT Investing

  • Consider your investment goal, risk appetite, and time horizon. Just like investing in other assets such as bonds and stocks, you have to carefully take these factors into account when deciding whether you should invest in REITs or not.
  • Do your research. Gather as much information as you can on the REIT company’s cash flow profile, revenue growth, occupancy rates, track record, and management team, among other details.
  • Consider the property’s location. How high is the potential of a property’s value to increase over time? That depends a lot on its location. If there are any development plans, then chances are high that the property will have a higher value in the future.
  • Analyze industry trends. This will help you determine the best type of REIT to invest in. For example, malls and hotels have been badly hit by the pandemic, as more people do online shopping at home and put off their travel plans. Investing in REITs that mostly own these types of real estate can be riskier than others because of lower demand.
  • Decide how much of your portfolio must be invested in REITs. The goal, of course, is to diversify your investment portfolio. For beginners, experts recommend investing 5% to 20% of one’s portfolio in REITs.

Learn More: How to Invest in REITs in the Philippines


12. Cryptocurrency

Minimum Investment: $20 – $1,000 (Depending on the Cryptocurrency)

What are Cryptocurrency?

If you’ve never heard of Bitcoins or cryptocurrency, don’t worry. It may be an unchartered territory for many people but it’s basically a simple concept.

Cryptocurrency is simply digital or virtual currency that people on the internet use to trade. It uses cryptography for security to ensure the safety of the traders. Its most appealing feature is the security from the government that it offers. Because your currency is encrypted, the government can’t monitor it.

Bitcoin is the most well-known type, but there are other types of cryptocurrencies that are actually cheaper and might be more ideal for you.

Now you may try to avoid this because of the sketchy ways cryptocurrency can be used. But Bitcoins and cryptocurrency are legal depending on where you are and what you plan to do with it.

The Central Bank of the Philippines has issued a warning on virtual currencies but has stated that they are not subject to any regulation.

Tips on Cryptocurrencies Investing

  • Educate yourself. As with all types of investments, you must be knowledgeable on where you’re putting your money. Coinpursuit and Slicefeeds.com are just some of the sites you can check out.
  • Treat it as you would the stock market. Analyze trends and patterns on weekly charts. Learning about fundamental data is key in your methodology to find a decent investment opportunity. You can also check out our guide on how to research altcoins.
  • Invest in fund management platforms. As aforementioned, cryptocurrency can be treated like stocks where fund managers can handle your investment. You can even invest in mutual funds.
  • Use it to solve problems. Find opportunities to use cryptocurrency to solve problems, such as providing an alternative to traditional banking services. Some people cannot get access to traditional banking services whether due to geographical reasons or other circumstances. You can use this opportunity to provide access to products and services people cannot otherwise acquire.
  • Do crypto to money. Don’t forget that Cryptocurrency can be exchanged for money. You can use this to trade with people who need cryptocurrency for products and services that physical money cannot buy.

Check out our Beginner’s guide to Cryptocurrency Investing.


13. Buy a website (for passive income)

Minimum Investment: $200 – $1000 (depending on the bid)

Buying a website is something you should definitely consider. If you don’t want to go through the hassle of building a website and gather an audience for that site, then buying a readymade one that’s already profiting is definitely advisable.

It’s a great and easy way to acquire a passive income. You can check out Flippa.com to look for websites being auctioned.

Tips on Buying a Website

  • Know the history. You must know about the site’s history before buying it. Know about its net worth, how old the site is, and if it is legit. Just because it’s saying it’ll earn you $10,000 a month doesn’t mean it really will. Usually, older sites are the most trustworthy ones.
  • Be familiar with the platform. Is it WordPress, Joomla, or something else? This will make it easier for you to know the experts who can operate the platform.
  • Understand the demographics. Find a site that targets the demographic you want to reach.
  • Look at traffic quality. The more site visitors, the more money you’ll earn.
  • Check the maintenance costs. How much will this site cost to maintain? How many staff do you need to run the site? These are things you must consider.
  • Confirm the price. An average site would cost around $2,500—keep this in mind when you’re weighing whether a site is legitimate or not. There are sites that cost lower, but this can be considered a red flag.

14. Forex Trading

Minimum Investment: $100 (₱5,000)

According to FXCM, forex, also known as foreign exchange, FX or currency trading, is a decentralized global market where all the world’s currencies trade.

The forex market is the largest, most liquid market in the world with an average daily trading volume exceeding $5 trillion. So, it would really be advisable to dip your toes into foreign exchange trading if you want to grow your investments.

Tips on Forex Trading

  • Choose a broker wisely. Choose a broker that will allow you to do the analysis you require. You must know each broker’s policies and how he or she goes about making a market.
  • Choose a methodology and be consistent in application. Remember that fundamentals drive the trend in the long term, whereas chart patterns may offer trading opportunities in the short term. Whichever methodology you choose, remember to be consistent.
  • Choose your entry and exit time carefully. You might get confused because of conflicting information regarding the trends and based on charts in different time frames. What may seem as a buying opportunity on a weekly chart can in reality show a sell signal on the intraday.
  • Perform weekend analysis. At the end of the week, when the markets are closed, review and analyze weekly charts to look for patterns or news that could affect your trade.
  • Practice makes perfect. Like with any practical skill, trading is something you learn and improve on as you go along. You won’t be an expert on your first try but with constant practice you can be successful in the forex trading business.

Learn More: How to Invest in Forex in the Philippines


15. Angel Investing (Venture Capital & Private Equity)

Minimum Investment: ₱50,000

What is an Angel Investor?

Let’s break it down real simple: Say you want to launch your own food delivery business but don’t have the capital to begin with. After hearing about your plans, your uncle offers the necessary funding.

In exchange, he just wants the capital paid back plus 10% gain. Payable in three years. Happily, you accept his offer. “Thanks, tito! You’re an angel!”

Your tito is an angel indeed—an angel investor, to be exact. Often called informal investors, they are affluent folks who provide capital funding to start-ups in exchange for some gain or equity in the business.

What is Venture Capital?

Continuing with our scenario earlier, the money you received from your uncle is called venture capital. If you’re familiar with the tech industry, you hear about this a lot. Uber, Twitter, Airbnb, and a host of other big-name companies all received venture capital to kickstart their business.

In return, their success brought sky-high gains to their investors.

What is Private Equity?

It refers to monies or funds not included in a publicly listed exchange (e.g. the stock market). Funding injected by investors into a company in exchange of 100% ownership or control of the company is what makes private equity different from venture capital.Read our Ultimate Guide: How to Invest in Venture Capital and Private Equity Funds in the Philippines

Read our Ultimate Guide: How to Invest in Venture Capital & Private Equity Funds in the Philippines

How to Become an Angel Investor and/or Venture Capitalist in the Philippines

Join a network of Angel Investors

This site stands as a middleman between entrepreneurs needing funding and investors. Once you’re registered as an investor, you can proceed to choosing among the list of business proposals that you deem most worthy (and profitable) of your investment.

Start small

Most people don’t know this, but you don’t need to be uber-rich to be an angel investor or venture capitalist. If we’ll use our scenario earlier, your food delivery business might only need ₱100,000 to get everything up and running. It really depends on how big the project is and how much capital it requires.

There are a ton of established businesses in the country that are looking to expand, which you can easily fund for as low as ₱50,000.

Tips on Angel Investing

1. Have a deep understanding of what it takes to run a business

As an investor, your main job is to provide funding. However, the success of your picks will highly depend on how well you understand the nature of their business.

Most successful angel investors and venture capitalists are stringent in their selection process, often going through several rounds of in-person meetings and reviews. This helps in making sure they are not betting their money on a high-risk venture.

2. Connect with Angel Investors and VCs in the country

It wouldn’t hurt to try asking for an hour of their time to get a primer on the whole thing. A simple gesture of taking them out for lunch to pick their brains may work surprisingly well in some situations.

Most of these people are kind enough to share their knowledge. And if they can’t meet you face-to-face, online correspondence is still highly valuable.

3. Invest in something you’re familiar with

When we invest in something, it’s usually on something we truly believe in, or very familiar with.

Why? Because it takes out a lot of the guesswork figuring out stuff from the beginning. Your existing knowledge about the product or service allows you to ask the right questions.

It also gives you better insight on the future and success of the venture.

4. Don’t go all in

In just a single investment, that is. As cliché as sounds, “spreading your eggs in several baskets” also applies in venture capital.

Not only will it allow you to lessen the risk, it also opens your pool of money to more promising investments (negates opportunity-loss).

5. Develop an investment game plan

World-renowned investor Ray Dalio operates on a set of core “Principles” (the title of his book) that serves as his checklist to guide him on decisions—both in life and investing.

As an angel investor or VC, it’s a good idea to come up with a solid plan that answers important questions like: What’s my expected ROI and when will I hit it? How much capital am I willing to invest during the course of the start-up? What type of involvement does this company require from me?

6. Try investing with a partner

Or better yet, several others. Investing is risky. In fact, most venture capitalists in the US fail.

If you’re just starting out, it might be a good idea to team up with others, so you won’t have to shoulder the whole start-up capital.

Sure, it will reduce your potential gains but at least you’ve significantly reduced the risk.

How do Angel Investors make money?

After putting in significant funding into a business, angel investors recoup their investments (and more) once the company starts seeing success. For example, an app or Software as a Service-type of company may begin growing its user base and starts getting paid for their offering.

This influx of revenue will naturally result to growth and increased chances of getting really massive (Uber, Airbnb to name a few).

While it’s mostly a hit-or-miss situation in the VC industry, the potential returns are enormous when you chance upon a real winner. It is said in the US, the average industry standard assumption for getting a winning portfolio is 10 investments.

Out of the 10, six will most probably be losers, 2-3 might break even or give slight gains, and (hopefully) your last one hits home run. The winning pick should be big enough (10 times your minimum investment) to make the whole thing profitable.


16. PERA: Peronal Equity & Retirement Account

Minimum Investment: ₱5,000 to ₱10,000 per year

Established through Republic Act 9505, the Personal Equity and Retirement Account (PERA) is a voluntary retirement investment program.

It takes after the 401(k) and Individual Retirement Account (IRA) in the United States.

This long-term saving program aims to serve as an additional source of funds upon retirement apart from GSIS or SSS pensions or any form of retirement benefits from an employer.

What is PERA and how it works

PERA is a purely voluntary retirement savings program that allows the contributor to earn tax incentives from the amount he or she invested.

Those who choose to sign up for the program have to make certain contributions every year until they reach 55 years of age.

Upon retirement, they’ll reap everything they invested, not to mention all other proceeds earned from the contributors’ PERA account.

Some benefits of PERA include not being required to pay tax from all income earned from PERA when the contributor retires or die and 5% income tax credit until the contributor turns 55 years old, among others.

With the 5% income tax credit, you’ll get 5% off your annual taxable income allowing you to save more money in the long run.

Contributors can withdraw from PERA once they reach 55 years of age, given they have made contributions to PERA for a minimum of five years.

In case of death, the funds invested by contributors in their PERA account will be distributed to their respective heirs. Or if they have declared beneficiaries, the proceeds will go to them at this point.

How to Invest in PERA

If you are a Filipino citizen residing in the Philippines or abroad, is at least 18 years of age, have a tax identification number (TIN), and is making an income, you can invest in PERA by following the simple steps below:

  1. Find an administrator to manage your account. You can either choose between BDO or BPI. Remember, you can only have an administrator, so choose wisely!
  2. Assign a custodian to receive your funds. Make sure the person or entity is officially recognized by the Central Bank of the Philippines.
  3. Select the PERA investment product you wish to invest in. You may choose from stocks, UITF, government securities, mutual funds, insurance products, and other accredited products.

Early Withdrawals

If, in the future, you wish to distribute funds but have not yet reached the required age, you can still do so—but not without penalties. Remember that there are only two qualified cases of distribution for PERA funds: death and retirement.

Distribution of funds that do not meet these requirements will result to having to compensate the government for the total tax incentives you got, including the 5% income tax credit, waived income tax for employer’s contribution, and waived taxes on the total investment income.

However, there are a few exceptions to this rule, such as:

  • When a contributor needs to claim it after being considered “permanently totally disabled”.
  • When a contributor needs it for payment of hospitalization for more than 30 days due to an illness or accident.
  • When the proceeds will be transferred to an eligible PERA investment product or administrator not more than two working days from the date of withdrawal.

Supporting documents such as certifications might be needed for the first two exceptions so make sure you secure them from the proper authorities before presenting your case.

Read Next: PERA: How to Invest in Personal Equity & Retirement Account


17. Invest in New Skills

Minimum Investment: Only your time and effort

Investing in new skills, and yourself, is something that people tend to forget. But it is very important whether you want to invest in business or not.

You don’t have to go to a formal school to learn new skills. If you have the money, you can take courses or even get a post-grad degree.

For those who don’t have the money for expensive degrees, here are other alternatives you can consider:

  • Online Courses – Take online courses which are usually cheaper and may sometimes even be free. Look up starting your business, choosing the right investment, financial planning, blogging, SEO, marketing—just about anything under the sun. There are varied courses to choose from and you can take advantage of the services offered online. Skillshare is a great website to take classes from, and you can get coupons to get free classes for a couple of months.
  • Seminars and Workshops – There are seminars and workshops you can attend, some for as low as ₱1,000. As was mentioned above, you can take seminars for investments in real estate and stock markets, to name a few. It will also be a great way to meet peers who are interested in the same endeavors.
  • Books – Books are investments. If you want solid knowledge on any subject matter, then buying a book on it is always a wise decision. The trick to reading a book if you’re busy is to look at the table of contents and to just pick chapters that would seem more applicable for you. This way you can focus on what’s essential.
  • YouTube – You can learn any skill for free from watching thousands of videos on any given subject, may it be Bitcoin, Forex, or stocks. You name it, the site has it. The wealth of information you can access is just within your smartphone.

Also Read: The 20 most important technical and soft skills to earn 6 figures


How to Choose the Best Investments in the Philippines

Filipinos are known to be risk-averse when it comes to investing. You’re probably one of those who are wondering what kinds of investments give the best return.

The best investment yields high returns with minimal risk.

But are there really low-risk, high-return investments in the Philippines?

This may sound impossible, but you can find them if you know where to look.

The key is to check low-risk investments such as money market funds and bond funds (through mutual funds or UITFs) with the highest returns.

Money market funds and bond funds are both invested in low-risk, fixed-income securities. Time deposits and government T-bills comprise money market funds, while corporate and government bonds comprise bond funds.

To view the best-performing investments, visit the Philippine Investment Funds Association (PIFA) website for mutual funds and the Unit Investment Trust Fund Philippines website for UITFs.

How to Invest your Money Wisely

1. Diversify, diversify, diversify

With the multitude of options provided in this article, it will be foolish to choose only one and invest all of your money in it. As what has been said earlier, putting all your eggs in one basket will be a bad idea.

Pick two or more investment options. This way, if one fails, you can still rely on the other. More importantly, if all will become successful, you’ll generate more income.

2. Don’t worry, just grow your money

Worrying too much and panicking won’t help you or your investment grow. Sometimes relaxing and taking some rest to reorganize your mind and your priorities are important, too.

Do not panic–sell!

If you think too much about failure, you’re already failing. Just sit back, relax, and let matters take its course.

3. No regrets, it’s just cash

If one investment fails don’t dwell on it too much. Especially if it’s in stocks, forex, or cryptocurrency. Expect that there will be losses. But keep a positive mindset.

And it’s very vital to only invest the money you’re willing to lose.

4. No day, but today

There’s no better time to start an investment but now. If you decide to start investing at a younger age, you can become a millionaire not in your 60s but in your 40s or even 30s. So, don’t just sit there, invest now!


About jasonacidre

Jason Acidre is the Co-founder of Avaris, a digital marketing agency. He's also the author of Kaiserthesage, a popular online marketing blog.

Reader Interactions

Comments

    • Keil says

      I made a comparison matrix of popular VUL policies in the market (Sunlife, Axa, Manulife, Insular Life, Bpi-Philam/Philam Life, Prulife). But first…..

      Among VUL, mutual funds, UITF, and direct stock trading, only VUL offers simultaneous life protection, growth of money thru investing, and the many supplementary benefits (cash assistance when hospitalized, or upon diagnosis of critical illness, etc.)

      With regards to investment, it would also be prudent for starting investors to enter pooled funds instead of direct stock trading unless he has large capital to invest in blue chip stocks, and has the time and diligence to track market movement from time to time, since one can really maximize earnings by trading.

      With regards fund performance among pooled funds (VUL, mutual funds, and UITF), best fund managers in the country are employed in Life Insurance Companies, which offer VUL products, hence annualized returns are higher in VUL by historical performance. And among several VUL products, there are actually few funds that really stand-out. And these funds are available only in select few Insurance Companies.

      If you are interested in availing VUL policy, I suggest you get as many proposals from different Insurance Companies as possible. DO NOT compare the products by the illustrated projected fund values through the years. As stated, these are PROJECTIONS, and all are mandated by Insurance Commission to show projected earning rates at Low (4%), Medium (8%), and High (10%). Different companies also offer different protection coverage periods. Some guarantees up to 99 or 100 years old, some are only up to 80 to 88 years old, so one may be swayed to get a “less expensive” policy, but this is not actually case and when you do the math, he/she is actually paying more for relatively shorter coverage, and this is not only for the life coverage but includes also for supplementary benefits (critical illness, accidental death benefits, etc.)

      Lastly, keep in mind that when Financial Planners present to you a VUL policy which would require limited-term pay (5-yr/7-yr/10-yr), it is NOT guaranteed that you will only pay up to this period. VUL is investment-linked, and all will depend on the actual fund performance. Same goes with regular pay- it is NOT true also that you will pay continuously, so look for a premium holiday feature (with no premium holiday charges).

      If you are interested to learn more, I was able to make a comparison matrix of all VUL products, and these cover 2-groups – Investment-Oriented and Protection-Oriented Products. I had 19 criterias as basis of for my evaluation when choosing which company gives more value to the premium (investment) that I pay, as one will be suprised that some companies charge more than other companies (and this does not include yet the hidden charges- you will only realize that it is hidden when you understand complex terminologies in the VUL policy).

      Example of my criterias are: fund performance (annualized ROI/assets), market capitalization, pricing policy (single or dual), protection coverages, premium and monthly deduction charges, rules on policy lapsation, effect on short-term non-payments, etc… I also made an analysis about the pros and cons of regular pay and limited-term pay. Actually, a lot of Insurance Agents offer limited-term pay since it requires higher minimum, and with higher premium the more commission.

      If you want to umderstand more, you can contact me. This is my email: emg12316@gmail.com and my number 0917-5662845

  1. Freeman says

    A lot of young professional’s money will get slaughtered in the first 9 of the 10 tips mentioned. Due your due diligence before making an article like this. To the yappies, follow the advice at your own peril.

    • Neil says

      Now is the best time to invest in stocks. Taking advantage of the market crashing from the corona virus! Stocks are at all time low hat will obviously bounce back. It’s a no brainer!

    • Keil says

      I made a comparison matrix of popular VUL policies in the market (Sunlife, Axa, Manulife, Insular Life, Bpi-Philam/Philam Life, Prulife). But first…..

      Among VUL, mutual funds, UITF, and direct stock trading, only VUL offers simultaneous life protection, growth of money thru investing, and the many supplementary benefits (cash assistance when hospitalized, or upon diagnosis of critical illness, etc.)

      With regards to investment, it would also be prudent for starting investors to enter pooled funds instead of direct stock trading unless he has large capital to invest in blue chip stocks, and has the time and diligence to track market movement from time to time, since one can really maximize earnings by trading.

      With regards fund performance among pooled funds (VUL, mutual funds, and UITF), best fund managers in the country are employed in Life Insurance Companies, which offer VUL products, hence annualized returns are higher in VUL by historical performance. And among several VUL products, there are actually few funds that really stand-out. And these funds are available only in select few Insurance Companies.

      If you are interested in availing VUL policy, I suggest you get as many proposals from different Insurance Companies as possible. DO NOT compare the products by the illustrated projected fund values through the years. As stated, these are PROJECTIONS, and all are mandated by Insurance Commission to show projected earning rates at Low (4%), Medium (8%), and High (10%). Different companies also offer different protection coverage periods. Some guarantees up to 99 or 100 years old, some are only up to 80 to 88 years old, so one may be swayed to get a “less expensive” policy, but this is not actually case and when you do the math, he/she is actually paying more for relatively shorter coverage, and this is not only for the life coverage but includes also for supplementary benefits (critical illness, accidental death benefits, etc.)

      Lastly, keep in mind that when Financial Planners present to you a VUL policy which would require limited-term pay (5-yr/7-yr/10-yr), it is NOT guaranteed that you will only pay up to this period. VUL is investment-linked, and all will depend on the actual fund performance. Same goes with regular pay- it is NOT true also that you will pay continuously, so look for a premium holiday feature (with no premium holiday charges).

      If you are interested to learn more, I was able to make a comparison matrix of all VUL products, and these cover 2-groups – Investment-Oriented and Protection-Oriented Products. I had 19 criterias as basis of for my evaluation when choosing which company gives more value to the premium (investment) that I pay, as one will be suprised that some companies charge more than other companies (and this does not include yet the hidden charges- you will only realize that it is hidden when you understand complex terminologies in the VUL policy).

      Example of my criterias are: fund performance (annualized ROI/assets), market capitalization, pricing policy (single or dual), protection coverages, premium and monthly deduction charges, rules on policy lapsation, effect on short-term non-payments, etc… I also made an analysis about the pros and cons of regular pay and limited-term pay. Actually, a lot of Insurance Agents offer limited-term pay since it requires higher minimum, and with higher premium the more commission.

      If you want to umderstand more, you can contact me. This is my email: emg12316@gmail.com and my number 0917-5662845

  2. marjorie anne mena says

    Good day! I am Marjorie Anne Mena, licensed Property Specialist from Avida Land Corp., A subsidiary of Ayala Land Inc., known to be the best in Business District Development.

    We have lots of great condominium projects within Metro Manila, exclusive, secure, and organized residential and office community respectively, with residential, retail, medical, business, and lifestyle options or what we called “mmixed-used community”.

    If you are interested to invest in Real Estate business, I am willing to help you get your own, now!

    You may reach me thru these:
    Globe 0936-444-8514
    Smart 0921-393-1923
    Email: menamarjorie11@gmail.com

  3. Keil says

    For reference to fund performance of different investment vehicles (VUL, Mutual Funds, and UITF), you may refer to this link:

    https://www.entrepreneur.com.ph/news-and-events/entrepreneur-ph-guide-to-investment-funds-2017-a36-20170217-lfrm

    One needs to understand the difference of Annualized and Absolute Return. It would be straightforward to make a comparison of different funds and distinguish which funds are superior or perform better if the inception dates and time duration of subject funds are the same.

    Unfortunately in reality, investment funds have different inception dates. You can actually verify inception dates from Fund Fact Sheets. In the example given from this article, all three (3) funds have the same inception dates, and the author used the equity fund of one insurance company. But you will identify in the link I posted earlier that there are actually VUL Funds that perform better than their counterparts, and these VUL Funds are even superior than Mutual and UITF fund counterparts

    Without knowledge of how investments perform, an investor could be committed to an inferior investment and never even know it. An Annualized Return figures the investment’s average annual return or how much the investment has grown on a yearly basis for a specified period of time, while the Absolute Return measures the overall return for the entire period you’ve held the investment since inception date.

    For example, a 5-Year Annualized Return at Year 2018 will tell you how much return your investment has generated on a yearly basis from Year 2013 up to Year 2018 (5-year duration). On the other hand, an Annualized Return Since Inception will tell you the average annual return of your investment since the inception date, hence if the fund’s inception date is Year 2009, that would be average annual return for nine (9) years. Therefore, Annualized Returns are very useful when you want to compare two different funds or investment vehicles (of the same category) where time duration and/or inception dates are different.

    Each Insurance and Investment Company will show you numbers in the way they look attractive to them to sell it to you. But in my experience, annualized returns (with consideration of Assets Under Management) are the most effective way to calculate the returns and compare fund performance of different Variable Life (VUL)-investment linked products.

    If you want to understand more, you can contact me. This is my email: emg12316@gmail.com and my number 0917-5662845

    Thanks

    Reply

  4. Keil says

    If you have any questions, you may email me at: emg12316@gmail.com or you may text/call me at: 0917-5662845. Just to share a little background of myself, I currently have one (1) Investment-Oriented VUL Product, one (1) Protection-Oriented VUL Product, and two (2) Certificate of Participation for UITF.

    I wrote in my previous post that there are VUL Funds offered by select few Insurance Companies that have shown superior fund performance over their Mutual Fund and UITF counterparts. At this point, I would like to explain another important benefit of VUL Product- The Total Disability Waiver.

    1. Note that Variable Life Policies are investment-linked products, which means that so long as the Fund Value/Account Value/Full Withdrawal Value is not zero (0) and is sufficient to cover the monthly deductions, the plan will not terminate, and the insured person is covered with minimum guaranteed benefits. The minimum guaranteed benefits in most VUL Policies are presented in Item Nos. 2/3/4 below. Is it possible to have a Fund Value less than zero (0) or negative during the early years into the policy? The answer is YES and No. If a VUL Product has no Contract Debt Feature, it is possible that Fund Value will become negative in the early years of the policy, and Policy Owner will then be required to make a top-up payment. However, some VUL Products provide Contract Debt Feature, and this will prevent the Fund Value to be negative during the early years of the policy. Therefore, always look for the Contract/Policy Debt Feature in a VUL Product.

    2. What is the 1st minimum guaranteed benefit per Item No.1? This would be the death benefit of the policy. This represents the “Face Amount” or “Benefit Amount” of the policy that will be paid out on a tax-free basis to whoever the Owner and/or Irrevocable Beneficiary of the policy is. This is equal to 500% of the basic monthly premium or the Policy Face Amount whichever is higher.

    3. What is the 2nd minimum guaranteed benefit per Item No. 1? This would be the accidental death benefits. In most VUL Policies, this is a built-in feature in the product already. However, there is one Protection-Oriented VUL Product that I know that offers accidental death benefits as an optional rider only, which means the rider can be detached, and therefore savings on the overall Rider Premium. The Additional Death Benefit provides additional coverage of up to 100% of the Face Amount or Benefit Amount if death is due to accident.

    4. What is the 3rd minimum guaranteed benefit per Item No. 1? This would be the Total Disability Waiver. This is a built-in feature in VUL Policies without charge. This waiver of premium rider pays all Basic (Life insurance and Investment Allocation) and Rider (Supplementary Benefits) Premiums due if the insured person becomes disabled and unable to perform work.

    5. The waiver of premium benefits the less well-off policy owners the most, because they would least be able to cope with paying for all future premiums if they become completely disabled, and this include the premium that is allocated to investment (cash value). This can provide the insured person with potential passive source of income (thru partial withdrawals in the policy) if the insured person becomes injured and/or disabled, hence unable to work or perform the key income producing duties. Passive income comes from earnings that one receives with little or no work required. For this case, passive income would refer to investment earnings.

    6. A Term Life Insurance Policy (referred to as TERM in BTID or “Buy TERM and Invest the Difference”) is a type of insurance plan that offers financial security to the family of the insured upon Insured’s death. When the insured person dies within the period covered, his beneficiaries get paid. If nothing happens to the insured person within the term, he/she does not get anything. While optional riders can be attached to a Term Life Insurance Policy for more comprehensive coverage (similar to VUL riders), it would not still be able to level the coverage of Total Disability Waiver Benefit for VUL Product as premiums do not earn cash value. Note that in a VUL Policy, the waiver of premium includes the amount that is allocated for investment, which cannot be applied in a Term Insurance Policy.

    7. In relation to Item No. 6, this is one of the reasons why VUL Products continus to be more appealing and valuable to people. A total disability or being unable to work due to injury (i.e. when a classical musician permanently injures his arm) will inevitably decrease a person’s income. When insured person becomes disabled, it makes much more difficult for him/her to save money and will impact the retirement plans. With less savings, and less ability to add money to savings, a total disability will have a significant and negative impact on a person’s net worth, which is the amount that he/she is able to save for retirement, and the amount that he/she will be able to pass along to his/her beneficiaries.

    Thank you.

    • Keil says

      In continuation on the previous post..

      If you have any questions, you may email me at: emg12316@gmail.com or you may text/call me at: 0917-5662845. Just to share a little background of myself, I currently have one (1) Investment-Oriented VUL Product, one (1) Protection-Oriented VUL Product, and two (2) Certificate of Participation for UITF.

      At this point, I would like to address a popular misconception that a VUL Policy is more expensive, and yet offers inferior benefits on the life insurance and investments of the insured person compared to BTID (Buy Term and Invest the Difference).

      8. In a VUL Policy, every time one pays a premium, a certain percentage of the premium goes toward premium expense charges and the balance goes towards the Cost of Insurance and Cash Value (investment portion). Premium expense charges include administrative fees, commissions, and the life insurance company’s overhead.

      9. In my own opinion, I see nothing wrong with giving sales commissions to Financial Advisers or Insurance Agents, especially if they are really providing holistic and personalized service to their clients. This include regular updates on the fund performance and giving recommendations when to make fund switches or apply changes to the fund allocations in the policy. Note that same with Mutual Funds and UITF, one can really maximize the returns of his/her investments by making strategic fund switches and changes in fund allocations. Oftentimes, the facilities offering Mutual Fund and UITF Products provide only transactional service, which means that after an investor gives his/her investment, Mutual Fund and UITF Brokers/Agents may not bother to do periodic monitoring and reporting of fund performance to the investor.

      10. In relation to No. 9, Financial Advisers or Insurance Agents, at their own expense, had to pass two (2) rigorous licensing exams and register with an official regulating body- in the Philippines it would be the Insurance Commission. Afterwards, they had to do several prospecting, and if successful, set meeting with their prospect Clients. Note that the Insurance Company does not pay its Financial Advisers and Insurance Agents with a daily or monthly allowance. Financial Advisers or Insurance Agents will have to spend their own money for business-related expenses (phone bills when calling the client, transportation expenses when meeting the client, internet usage when drafting and sending product proposals online, miscellaneous expenses such us purchase of coupon bonds and printing of product proposals, etc.), not to mention the challenges they face when chasing tough potential clients.

      11. When one is a VUL Insurance Agent, he/she needs to understand how the VUL system works. I have mentioned in my previous post that VUL Policies are complex insurance products. There are a lot of factors that need to be look at when a prospect client would want to make comparison of various VUL Products offered from different insurance companies (i.e. market capitalization, assets under management, annualized and absolute returns, equities, long-term/shirt-term bond pools, etc.). The responsibility of VUL Insurance Agent is to make the client understand the features of the policy and give reliable recommendations, hence diligent study of finance and wealth management is required for a VUL Insurance Agent.

      A VUL Insurance Agent is no different with Licensed Doctors, Lawyers, or Engineers who charge their clients with consultancy and/or service fee. If we are willing to pay Teachers, PUV Drivers, and several others for the services rendered, I don’t see the point of discriminating VUL Insurance Agents and Financial Planners. I am a Mechanical Engineer by profession, and I don’t see myself providing free consultancy services to my Clients on mechanical design.

      12. The next question would be, are VUL Insurance Agents receiving big commission for every case closed? The answer is NO. The range of sales commission in most VUL Products (Single and Regular Pay) is between 2% to 30% of the annual premium payment for the 1st year, while for the remaining paying period for the premium charges, the range would be somewhere between 2% to 10%. The sales commission is only a part of the premium charges. Therefore, if the annual premium for a VUL Policy is Php 25,000.00, the maximum sales commission during 1st policy year is Php 7,500.00. If you look at the big picture, wherein your investment has the potential to grow 400% after 20 years (at 10% projected earning rate), the Php 7,500.00 sales commission is actually not a big deal anymore.

      13. Note that different Insurance Companies offer different paying period for the premium-charges. Investment-Oriented VUL Policies have less premium charges and shorter paying period on premium charge, compared with those of Protection-Oriented VUL Policies. Note that VUL can be classified as either investment-oriented or protection-oriented. There are insurance companies that may require paying period on the premium-charges up to the maturity of the plan (lifetime), some could compress the paying period between 2-years to 4-years but at relatively higher premium charge rate, while others could present very low premium charge rate on the product proposal but actually have ‘additional monthly deductions’. Regardless of the paying period, it is worth mentioning that payment of premium charges is only temporary (short-term). What most BTID advocates may not be aware of is that there is actually one VUL Product offered by an Insurance Company that charges very minimal premium rate, and that would be 75% of annual premium for the 1st policy year only, which means that from 2nd policy year onwards, 100% of the premium will go toward the cost of insurance and investment (cash value). I can attest to this because this is the current plan that I own.

      14. Another thing that BTID Advocates may not be aware also is that for Pure Investment Vehicles, such as Mutual Fund and UITF, there are also Premium or Administrative Charges, although they are called differently. Example, for a mutual fund there would be Shareholder Fees- these are Sales Charge on Purchases (similar with commission you pay to a broker) and Deferred Sales Charge, Redemption Fees, Exchange Fees, Account Fees, Purchase Fees. There are also Annual Fund Operating Expenses, and these include the Management Fees, Distribution Fees, and other Expenses. And as long as the investment stays in the fund, the payment of Shareholder Fees and Annual Fund Operating Expenses will continue, unlike with most VUL Products where payment period of premium charges is short-term only.

      15. Perhaps one interesting feature of VUL is that it uses a Single-Pricing Method. On the other hand, Pure Investment Vehicles use Dual-Pricing Method. For funds operating a single pricing policy, the Net Asset Value Per Unit (NAVPU) is the same when you buy the fund or sell it. As a result, there will be no additional fund management charges during fund switching and/or changing of investment allocations.

      For funds that implement dual pricing, the price at which you buy the units, is known as the Offer Price, and the price at which you sell the units, is known as the Bid Price. A Bid-Offer Spread is the amount by which the Offer price exceeds the Bid price for an asset in the market. The Bid-Offer Spread is supposed to account for the difference between buying and selling prices that the fund manager pays when buying and selling units in the fund. A Bid-Offer Spread includes profit margin for the fund manager/s, and this is on top of the Shareholder Fees and Fund Operating Expenses. As a result, there will also be additional charges during fund switching and/or changing of investment allocations.

      For investors who put investments in multiple fund allocations and do strategic fund switches from periodically to maximize growth of investment, the single-pricing would be more attractive due to less overall deductions from the Fund Value. Also, most Mutual Funds are close-ended pool fund, compared with VUL and UITF that are open-ended pool funds. With close-ended pool fund, it is more difficult to make fund switches to take advantage of the movement of asset prices resulting from changing financial climate.

      16. What most BTID Advocates may not understand also is that a VUL works similarly as a BTID, except that the former offers more coverage for death benefits and living benefits (thru optional riders as I explained above). Why is this so? The Cost of Insurance (per Item No. 17) in a VUL Policy is the premium that one would pay for the life insurance portion of a Term Life Insurance Policy, while the investment allocation is the lump sum or premium that one would pay to a Pure Investment Vehicle (Mutual Fund, UITF, direct stock trading) for BTID. I was fortunate to have had the opportunity and time to gather different VUL and Term Insurance Policies, and according to my evaluation, the Cost of Insurance (plus Accidental Death Benefit and Total Disability Waiver) for VUL and Term Life are just the same, while in some cases, the Costs of Insurance of certain VUL Products are lower than their term insurance counterparts. Most BTID Advocates confuse the Premium/Administrative Charges of a VUL Product with the Cost of Insurance.

      17. In relation to the Cost of Insurance, while most Insurance Companies determine the Cost of Insurance based on the Insured’s gender, health, age, and death benefit amount, there is one Insurance Company that offers temporary Cost of Insurance for their VUL Policies. This is possible since the computation of the Cost of Insurance is based on the Net Amount at Risk (NAAR) to pay the death benefit. For example, if the death benefit amount is Php 1,000,000.00, and the Fund Value is already at Php 1,000,001, there will be no more Cost of Insurance as far as referred VUL Product is concerned. In the same way, when the Fund Value is at Php 999,999.00, the Cost of Insurance will be computed based on the NAAR which is valued at Php 1.00 only. Per my evaluation of the comparison matrix, all other Insurance Companies charge continuous Cost of Insurance.

      18. Kudos to this engineer who made actual computations on investment returns for BTID and VUL. However, as I was familiar with the terminologies used in product proposals of different Insurance Companies, I am sure that the VUL product proposals used in the particular study came from a certain Insurance Company that charge high premium rates in comparison to its counterparts (the company requires 10-year payment of premium charges and 5-years of other monthly charges on-top). Therefore, think about how soon the investment returns of BTID will be overtaken by that of Protection-Oriented VUL Policies which charge low premium rates and shorter premium-charge paying period (<3 years).

      Check this article: http://investingengineer.com/choose-right-insurance-product/

      19. We have established, per Item Nos. 16 and 17, that because of temporary Cost of Insurance, one specific VUL Product will be less expensive than BTID. To arrive at a more general conclusion to include other VUL Products that charge continuous Cost of Insurance, we should look at the bigger picture.

      Often, accidents and sicknesses do not lead to instant death. In most cases you just need to stay in the hospital for treatment, but it can cost a lot of money. Unfortunately, the Life Insurance will not pay the insured anything if he/she is just hospitalized. Unexpected emergencies could take a huge toll on one’s life savings or if none, can give us a lot of financial problems. That’s why one needs to be covered by healthcare insurance. VUL Products address healthcare concerns thru optional riders (i.e., critical illness benefit, hospital income benefits, etc.). These riders pay lump-sum benefits to the insured for medical expenses. Compared with healthcare plans from HMOs (medicard, maxicare, insular, etc.), optional riders can be added to a VUL Policy Plan at much lower additional premium.

      Thank you.

  5. France Edolmo says

    Hi I am France Edolmo
    A licensed Finance Planner, I can assist you to all your questions regarding any type of investments, for OFW’s I can support you thru e-mails or any type of social media, for persons working or living in Metro Manila and near provinces I can give a 1 on 1 , free coaching. All your questions and concerns will be answered. This our way me and my team to help people save and invest money in the right and proper way, Inflation runs in average of 5% annually while bank interest is .5% to 1% only, imagine how much money you are losing every year.
    You can reach me thru the following contact details:
    09971776945 – Globe
    09301525768 – Smart
    edolmofrance18@gmail.com – email

  6. JEN says

    This article is very useful. My partner and I are starting to invest in real estate. We’re still learning about it. 😊

  7. Daryll Joyce H. Pua says

    Hey there! I’m a Property Specialist (MEGAWORLD-FORT BONIFACIO). We have pre-selling luxury condominium projects in Fort Bonifacio & inside Entertainment City, near Okada Manila. Please let me know if you are interested to talk more and inquire more about these projects. I’d be happy to answer any and all questions you may have. Glad to be of service to you at my number +63-917-687-0127 [PH] (Mobile. Whatsapp. Viber. — Call/Chat) for quicker and easier exchange. Email: dpua.megaworld@gmail.com

  8. Nikki Dela Cruz says

    Hi! My name is Nikki Dela Cruz and I’m a financial advisor from Sun Life.
    If you are interested in knowing more about the benefits of obtaining a VUL product, you can contact me at 09178294016. I give FREE financial consultations 🙂
    If you want a free proposal, just fill this up: http://bit.ly/2y2JZn5
    Thank you!

  9. anton says

    and i am now planning on my next moves, i so love the article very much. hmmmmm let me get a cup of a coffee

  10. Denis says

    Thank you very much Sir jasonacidre for the information about you duscuss. I gain more knowledge about the different business we want to put up in the future. More power.

    Denis

  11. France says

    Hi if you are reading this my name is France, Im into a banking and investments. I work as Financial/ investments advisor and broker for BPI asset management and trust pati kay Security Bank Equities. I can help you start your investment fund or for diversification para nag eearn ng interest yung savings mo kesa tulog lang sa banko. I give away FREE consultation. Send me a message or an email here (edolmofrance18@gmail.com) or like and message me at my page https://www.facebook.com/wealthcoachfrance/ for all concerns about investments.
    Thank you and GOD Bless.

  12. says

    It is really good that even in a young age, millennials or the youths should know how to use their money wisely. There’s a lot of things to try out and to work on. Thank you for sharing this.

    • Adrian Baroña says

      Hi Good Day My Name is Adrian Baroña I am 3rd year College Student um, as of now I have no enough money to invest in different investments in the Philippones. But I am Saving Money too – for now I just Seeking knowledge about it because when I Ready to invest this is risk only for me not risky because I have knowledge to for investments that putting my “Money” 😁

      That’s All Thanks 👌

  13. Joshua E Antiquera says

    How to invest directly to the company that i want to invest? do this all company has near office in every town in the Philippines?

  14. Chase says

    This is such a wonderfully made article. Kudos! I hope more Filipinos can read this and start working on their financial goals as well. Thank you!

Leave a Reply

Your email address will not be published. Required fields are marked *