One common queries that some people ask me since the start
of this New Year is “What is the best investment to invest into this year?”
Through PISO Ni Juan, I would like to share my thoughts
about some investment opportunities you can lay your resources for modest
income.
The three main sources of good investment income can be from
the following;
- Business or Entrepreneurship
- Real Estate Assets
- Portfolio or Paper Assets
BUSINESS OR ENTREPRENEURSHIP
Business involves the trading of goods, services or both to
satisfy consumers’ needs. Business is not for everyone, though. I have known
some highly successful professionals in the corporate world yet when they
decided to start their own business ventures, all their capital and efforts
went into scrap.
One of the major reasons a business fail is due to high
overhead and operation costs especially during the startup period. Due to
strong market competition, a start-up business should maintain low operations
cost in order to compete in the market.
Having said this, the following businesses are good to
consider.
Online Retail Shop
Online Retail Shops are almost zero in overhead costs. You
can set up this business initially from your home. You can sell goods virtually
like RTWs, electronics, books, jewelries and appliances without maintaining an
inventory since these goods are mostly pre-order in nature where a customer pay in advance for the goods.
Once the payment is complete, the online shop will order the goods from the
wholesaler; pay the goods through an online payment facility and drop-ship the
goods directly to the customer.
Most Online Retail Shops in the Philippines utilizes existing
merchant platforms and social networks to market their goods like Multiply,
Facebook, Sulit, OLX, Buy and Sell Philippines and other free ads internet
sites.
Internet Services
With every business today going online, the demand of
certain professional services is rising fast. Among these professional services
are related to web design and development, search engine optimization, web site
content editing and article writing. If you have the skills and knowledge to
fill these market demands, you might consider opening a business offering such
services.
REAL ESTATE ASSETS
Real Estate is one of the best sources of income whether it
is your primary source or your source of passive income. If you wanted to be
successful in this type of venture you must have good skills on the following:
- Property evaluation and appraisal skills
- Construction costs estimates
- Marketing skills to promote your real estate portfolio on sale
The three ways to monetize in Real Estate are the following:
Rehabbing And Selling
Rehabbing is the process of buying homes usually foreclosed properties,
repairing or remodeling the property and selling the property to a motivated
buyer at a higher price. This type of real estate business demands considerable
amount of time and money. However, the investment returns is very high.
Flipping
Flipping is the method of buying a property usually at low
cost and quickly reselling it as-is to another buyer for a profit . This
selling process involves the so-called assignment or the transfer of rights
over the property held by the seller as the assignor to the buyer which will be
the assignee. This method of real estate
selling practice is growing fast among the Philippine real estate selling community.
Property Renting
Renting is the practice of buying homes or properties for
the purpose of renting to tenants. Being the owner of the property, you will
profit from the rental fees of your property’s tenants.
PORTFOLIO OR PAPER ASSETS
Portfolio or paper assets are best for investors who don’t
have time to manage a business. These paper assets can be shares of stocks of PSE
listed companies, units of participation of a unit investment trust fund or
shares of a mutual fund.
Stock Market
To invest in stock shares, you need to have an online
trading account before you can buy shares of stocks of PSE-listed companies.
You buy your shares portfolio through your online trading platform and sell
them at a future time to gain profit.
One of the best methods used in long term
stocks investing is the Peso Cost Averaging method. Peso Cost Averaging limits
the risks brought by the stock market volatility by buying shares in uniform
cost at regular interval whatever the market condition is.
Unit Investment Trust Funds
UITFs are collective investments of numerous investors pooled
together with the intention of achieving a certain investment objective. Investing in UITF involves buying units from a
trust fund managed and distributed by banks. You profit from UITFs by buying
units of participation today and redeem at a later time when the value of the
fund’s units is higher.
Mutual Funds
Same with UITF, mutual fund is professionally managed investment
vehicle consists of pooled investments from numerous investors for the purpose
of investing in securities to meet certain investment objectives. It is managed
and distributed typically by insurance and investment firms and some banks.
There are two ways to profit from mutual funds. You profit
by buying shares of participation today and sell your shares at a future time
when the share’s price is higher or when you receive dividends issued by the mutual
fund company.