In my previous blogs which tackles emergency fund, I’d shared the importance of it and also some simple tips to easily have it.

Second Step: 5 simple steps to prepare your emergency fund!

1. Set your emergency fund goal.
2. Make a budget.
3. Provide an account that will be entirely only for emergency purposes.
4. Record your every cash-in and cash-out.
5. Stick to your plan!

Sharing is Caring: How I Achieved my P60K Emergency Fund in Three Months!

1. Take it as your first priority!
2. Be strong enough to secure it and use it only for EMERGENCY PURPOSES!
3. Learn to SAY NO! Just because you have the means, it doesn’t mean you can lend it any time.

Now if you were able to achieve your emergency fund goal, maybe you’re currently thinking what will be your next target. I’d been there and it took me months for me to come up with a decision. Thankfully I had this one seminar when I was in college wherein it tackles different steps for anyone to meet their financial freedom.

One of the things I learned back then that until now serves like guide to me is this statement of one of the speakers.

“Don’t work for money, let money work for you.”

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Upon hearing that, I’m so clueless back then since I really can’t understand what does that mean. I remember that by that time, I started to watch different financial videos in Youtube for me to somehow get it. There I discovered a lot of millionaires & billionaires that are happily sharing their experience on how they were able to made it all happen.

From Mr. Warren Buffet, Bill Gates, Jack Ma, Robert Kiyosaki and a lot of influential people up until this day, I was able to understand how money really works.

For us to be able to maximize the growth of our money, we should not keep it in a place where it will not grow such as banks with low interest rates, piggy banks and even in our wallet. If we think that we’re saving money by keeping it, actually we are losing its opportunity to earn profit.

We should look for somewhere that it can gain interest so even if we are working, we’re gaining profits from that money as well.

It will always be a slow process because time is the key in saving and investing. The earlier you started, the earlier you’ll have the profits. Most of the investment companies today, the maturity period of one’s investment is minimum 10 years, so like what I said in my previous blogs,

Time, patience and consistency is the key!

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“Every pound is a seedling.
Invest your seedlings to create a tree.
Re-invest your seedlings to grow a forest.”
― George Choy, STEALTH MILLIONAIRE: How to Save Money and Manage Your Money Like the Rich

Now, if you are currently in a quest of choosing where to keep your savings, here are three good suggestions that you can consider to have. This suggestions are based on what I did upon completing my emergency fund goal.

I wanted to share you these options so you can easily choose the best one that is fit for you.

1. Insurance

This is one of the best decision that I’d done upon having my first job. It took me one year and seven months to have it since I built my emergency fund first before this. Now a lot of you may know it already but some are still clueless what insurance is.

Insurance is a legal contract between two parties- the insurance company (insurer) and the individual (insured), wherein the insurance company promises to compensate for financial losses due to insured contingencies in return for the premiums paid by the insured individual.

In simple words, insurance is a risk transfer mechanism, where you transfer your risk to the insurance company and get the cover for financial loss that you may face due to unforeseen events.

If you’ll come across with some financial advisors who are continuously seeking individuals just to listen to them, this shows how eager they are to let everyone know the importance of insurance. They know very well how insurance works and the benefits that a person can have just by simply having one.

I know a lot of people are skeptical if it involves money. I’m the same even until now. But like what the saying goes “Knowledge is power.”, we need to know first everything before engaging to something that we’re not sure of.

Now if you don’t have any idea where to start, you can simply check these videos and blogs for you to have the gist of what insurance is:

4 Na Katotohanan sa Likod ng Life Insurance (na ‘di Alam ng Marami)

What Is Insurance?

What Is Insurance And Why Is It So Important?

LIFE INSURANCE 101: What you need to know! 💵 (Philippines) | Tita Talks 🍵

LIFE INSURANCE FOR BEGINNERS | INSURANCE 101 PHILIPPINES | What you need to know

“Fun is like life insurance; the older you get, the more it costs.“
Frank McKinney Hubbard,
better known by his pen name “Kin” Hubbard

Though there’s a different types of insurance tailored to what you really need, it still goes down to the same benefits which are:

1. It will give you a security and protection for any unforeseen events.
2. Serves as a medical support to the insured individuals.
3. Serves as a long term savings, that can be used for future purposes.
4. It will give your family a sense of financial security.
5. It will give you a sense of inner peace knowing that you are financially secured.

Unlike investing where you have a choice to do it by your own, insurance company is the one who will do everything for you. As far as I experienced, these are things that you need to undergo before having an insurance policy:

STEP 1: Seminar about what insurance is.

STEP 2: A counselling with a financial advisor to know your priorities (health, security, retirement etc.)

STEP 3: Making a policy out of the results of the counselling.

STEP 4: Coming up in a decision on how much you can give and the payment method you’re comfortable to have (annually, semi-annually, quarterly and monthly).

STEP 5: Signing of papers, documentation for your tailored policy and initial payment of your insurance policy.

STEP 6: Receive of the hard copy of your insurance policy which comprises with all the detailed information of it.

If you’re still in doubt whether you wanted to have one or not, maybe you can choose another option which will be tackled next. Just a reminder that everything takes time so by working on it earlier, the earlier you’ll have gain the benefits out of it.

2. Insurance + Investment

A lot of insurance companies now is offering two benefits in one policy. This is what they called “Insurance + Investment” which is tailored to the current generation wherein people wanted to maximized the growth of their money and at the same time to be secured.

What you need in this option is patience since they usually offer a ten-year fixed payment for it. It means that you need to pay for fixed years so that you’ll be able to have the benefits of it after your saving’s matures.

Once you’re already familiar with insurance and investment, you’ll surely know what holding period is. By the name itself, this is the time where in you should not have any withdrawals to your savings.

Since investments is categorized as a long term financial goal, you should be aware that you need time and patience in this savings. If you tend to withdraw and spend most of the time, then you should have allotted savings account for your expenses because you can’t easily withdraw from here.

Unlike only insurance, this option offers another way for your money to grow. What Insurance company do is they pools around the savings of all the insured people and invest it in stocks which will convert your savings to NAVpu (Net Assets Value per Unit).

If you’re not into to this, don’t worry because you’re insurance company will do everything for you. All you need to do is to secure your payment and have an online account so you can easily check the current status of your fund.

If you’ll see fluctuations of your fund, it’s only natural since the market changes every single day. Like what I said, this is a long term financial option so you won’t be able to see right away the growth of your money.

Here are some tips if ever you wanted to have an investment!

1. Start early, Like what I stated above, the earlier you start, the earlier you’ll have your benefits of investing. The longer the period that you’re consistently investing, the higher the returns of your fund will be.
2. Save more. The earlier and the more amount you save can guarantee a higher return after the maturity period of your fund. Though it’s not necessarily to give a high starting amount, as long as you can confidently pay for it then go and do it.
3. Be consistent. Consistency is always the key in investing. As long as you make it sure that you’re paying in time and without having any withdrawals, you can be at ease that your fund will grow.
4. Choose and investment that is fit for you. Never ever invest into something that you don’t understand. So if ever you plan having an investment, ask yourself first the main reason and check your current cash in if you can provide consistently for it.
5. Choose a hassle free payment method. If you’re currently working right now, for sure it will be a hassle for you to pay for it by visiting their branches. So what you can do is to simply enroll in payment methods that will be ideal for you (Auto-debit, online payments etc.)

Now, if you still think that you are not yet ready for an investment due to some financial reasons, you can still try to talk to some financial advisors that can help you with your specific concern. You can also check these top five investment company in the Philippines so that you can have an idea what do they offer.

1. Sun Life: Life Insurance, Investment & Group Benefits
2. Philam Life: Leading Insurance Company in the Philippines
3. Manulife: Insurance & Investment Solutions for you
4. Pru Life UK: Investment-linked and Health Insurance
5. AXA Philippines: Life Insurance and Investment

 “Compound interest is the eighth wonder of the world. He who understands it, earns it. He who doesn’t, pays it.” –Albert Einstein

3. High Interest Savings Bank

Unlike the first two options which are both for long term financial goal, this option can be categorized to “medium term goal”.

As the name implies, medium term financial goals are those savings options that has a maximum of 5-7 years holding period. Unlike the insurance and investment where you need time to grow your money, there are some banks offers a high interest rate compare to a common savings account.

In my blog Top 5 Passive Income I’m Considering, I’d mentioned there one of the passive income I’m considering which is the PAG IBIG MP2. In this option, this account is one of the examples that you can choose from since it only have a maximum Five-years holding period.

This is one of the best options since the interest rates of Pag-ibig MP2 is higher than any other banks. Since it’s given that Pag-ibig funds deals with real estate, you can see that any amount funded here will never depreciate. Another advantage of this is it’s insured by the government so you don’t need to worry about losing your money if there’s any challenges that this government agency face.

You can also check this blog, if ever you wanted to have more choices of savings account which offers high interest rates per annum.

Best savings accounts in the Philippines

This blog will give you a detailed information of each savings account and the pros and cons of having a savings account.

Summary

It’s very important to live your life to the fullest, but you also need to consider that one of the key to enjoy life is to feel a sense of security and protection in the future. Like what I always mentioned in this blog, there’s no such thing as over. As you set your goals right now, make it sure that you’ll work for it no matter what happen. Don’t let it settle in just a piece of paper but slowly make it happen.

“Financial freedom can only be achieved by a conscious choice. It’s not an accident. It’s not just merely by thinking, it’s through grinding and doing what is necessary to get to that goal.”
― David Angway

You still have time and the right time is now. Don’t let your own limitation restrict you on doing something that you want. Get rid of all the excuses and turn all your NO to a YES.

Do something right now that your future self will thank you for it.

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