This strategy is what I currently do. This a bit personal, I share this because I believe this strategy would benefit you.
This strategy goes like this.
Why start to budget though? Well. If you don’t budget you will have unnecessary spending that will damage your day-to-day activity.
Look. Without budgeting your money, you won’t have control over how much you can invest, how much you can save, and how much you can spend daily.
Hopefully, my point gets into you by now.
It’s more important to grow your income than cut your expenses.
I believe in it too except that budgeting should come first because what you can control on a small scale will also apply on a larger scale.
Remember, You are starting from scratch. You should use whatever you can for the meantime. Your strategy can change when you do need to change your strategy.
We ourselves are income-generating machines. When we stop working, income stop coming. Except of course if you are already rich and money is working for you.
Do you know that every one of us can hire our money to work for us?
The only question is how? How can money work for us?
Money can work for us in many ways. The most popular financial instrument in making money is paper assets like mutual funds, stocks, and real estate.
There are a lot of option you can have depending on what you know and how much money you can spend.
Basically, everything that gives money in your pocket counts.
We are good at making money ourselves by working but building up our investment portfolio as we make our money work for us is not that hard.
Imagine this, there will come a time we will stop working. Will your company take care of you when you retire?
Once you are retired, can SSS benefits cover everything you need?
Basically, you will grow old and stop working and your retirement money would not last long due to your income source stops flowing.
You should prepare for your future and your family’s future.
You can only use what you currently have. You have your work and you are earning salary through your work.
Saving at least 20% of your salary will have a greater impact on your future when you invested it in financial instruments that can give you good and better returns.
What investment vehicles that should be? It’s definitely up to you. What kind of investment vehicle can give you a good night’s sleep? An investment that you believe in, an investment you have faith in.
Invest in what you know. Not because someone you know direct you to invest in some investment there in. Your money is always at risk, so learn to play with risk. Only risk money you can afford lose.
I have 3 Rules for Success: Rule 1: Fail Quickly Rule 2: Fail Many Rule 3: Fail Tiny
Same goes with your investment, fail quickly, fail many, fail tiny. You will learn a lot as you fail. Failure is part of the winning strategy, you change your strategy each time you fail and do better each time.
Learn to diversify. What’s that?
To simplify diversification, you have an egg that will serve as your money and you have a basket that will serve as your investment vehicle.
The more basket you have. The risk of losing money is lessened a lot.
The more basket you have the more egg you can invest in. The more investment you have the more money you can get especially if your investment gives you passive income.
What is passive income? It is money that goes to your pocket without you working for it.
It can be in a form of interest-bearing instruments like stock and mutual funds through dividends. There are a lot more instruments like real estate as a rental fee and more. I can only talk about what I know and that is dividend investing.
My strategy in investing
Same as you are, I lack in capital. I’m just starting up in building my base.
Having a small base has its good side too. When starting with little money to invest you got to look for a lot of ways how you can multiply your money, how your money can work for you without spending a lot of time.
In this way, I can work my day time job while my money also works for me. As years go by my investment will grow and a day will come when it will surpass my day job salary.
Where did I invest the money I save you ask?
I invest in.
There are different types of coop and I can only discuss what I know about our company cooperative.
Our company gives us their employees a privilege to join and borrow money.
They offer a loan that bears a 3% interest every month. That is a better option compare to bumbay who offers 10-20% interest rate.
We can invest a maximum of 24,000 pesos in our coop, and we pay it throughout the year. Basically, we pay 2,000 pesos per month.
How much interest or dividend did we get in a year? It varies, depends upon how much money they accumulate from the borrowers.
From my experience, It is ranging from 2,000-3,400 pesos for the maximum investment of 24,000 pesos. Wow, that’s 8-14% increase of my money already without me working for it.
Can you see my point? What if you have a lot of investments that bears such money without you working for it? Think about it.
Instead of spending your money or borrowing money and paying it with interest, why not consider investing your money and earn money in return?
Here’s another investment I’m in.
Stock investing is a common type of investment vehicle, many people lost money in stock because they are trading. I invest my money in it for the long term I’m happy when the stock price goes down because it will be sold in sale.
Imagine a sale goes to a mall. What would you do? You would buy more that’s for sure it’s on sale. That’s what would I do too.
I only bought stocks that pay out dividend. The more stock I have, the more dividends I get.
That’s a simple strategy that I do, It will work for me. It’s my personal choice.
Personal finance is all personal, what works for me does not necessarily mean it will work for you.
Choose an investment that will work for you.
Here’s another investment vehicle I’m in.
I go with the mutual fund that gives dividends each year. I just want to have that feeling of receiving some cash from my investment before I reinvest it into different investment vehicles.
Remember I’m on this for the long run. The more money machine I have the better, the more investment I have the better. That means more money flowing into my pocket each time dividends are distributed.
Here’s another investment I do.
This is a traditional investing or old school type of investing but it works. You can gain money by taking care of cattle for a year or more and you can sell it for 50% increase in price or more depending on its size and how old your cattle.
You can see my post on cattle investing and see how it works here.
There you have it. That’s all the investment vehicles I currently use. More types of investment will be available to me as I grow my capital and my knowledge.
The more you know the more you earn. The more you know the more option you have. The more options you have, the more you can utilize what you currently have.
Learn how money can work for you. It’s either you work for money or money will work for you in the end. You decide.
If you also have a way to make money without spending much time. You can say it to the comment section. We will talk it out.