A very convenient way to tap-up your Unit Investment Trust
Fund investment automatically and in regular basis is the auto-debit
facilities created by few banks for their investors. The said auto debit facilities
allow investors to invest regularly with a pre-determined amount without the
hassle of going to the bank and sign forms for additional units of
participation.
Among the existing automatic investment plans or programs offered
by few banks were the following:
- BPI Regular Subscription Plan (BPI RSP)
- BDO Easy Investment Plan (BDO EIP)
- PNB Auto Invest Plan (PNB AIP)
Some investors may still prefer to deposit their money allotted
for investment by initially depositing it in their savings account. When they
have already reached their target amount, they would asked their bank to debit it
manually from their settlement account and buy additional units of fund
participation.
While this traditional method let you have personal control
about when and how much amount of money will go into your investments, it has
several disadvantages like the following:
- It is time consuming signing papers for additional units of participation when you have the means of having your money invested automatically on a regular basis.
- Because no pressure to deposit your money on the programmed date, you may procrastinate to invest on a later time. This scenario may like pulling the gas pedal to decelerate when you are supposed to speed up and zoom.
- You are losing the growth potentials of your money because you missed investing in a regular period. Time is the most trusted ally of compounding interest. A time lost is an opportunity lost forever.
On the other hand, having an auto debit facility linked with
your UITF investments have the following advantages:
1. You will be oblige to set aside the amount that goes into
your investment first and foremost, before you spend the rest for your cost of
living expenses.
It is a bad habit of majority of Juan de la Cruz spending their monthly take-home pay first for the cost of living expenses. Any amount that will be left, you may say will be allotted for the savings account later on. In the end, nothing was left. Bagkus kulang pa nga ang sweldo para sa mga gastusin!
On the lighter side, one of the good habits of some
Filipinos is their diligence to pay their credit through an installment basis.
Check how diligent we are in paying our credit card’s
“minimum amount due”, our personal loan monthly payment or our appliance’s easy
installment plan? Can you imagine how many hours people were patiently standing
there in a queue in your nearest BDO branch just to pay their payables just to
avoid penalties?
For your regular subscription, automatic or easy investment
plan, you may also feel compelled to deposit your investment amount regularly.
You may feel the same burden when you were paying your payables, but will feel
the ease from within because it is an investment that will grow definitely for
you and your family’s future.
b. Investing through regular periods is like doing the Peso
Cost Averaging (PCA) method of investing.
One of the best methods of investing in paper asset is the
Peso Cost Averaging strategy. Through investing in a regular basis, you will be
unmindful of the volatility and uncontrollable fluctuations of the market price,
since at the end, your buying prices
will “average” into lower prices compared with the current prices over a long
term period of time.
c. It is like saving and investing at the same time.
I may say it is like saving since you are allotting a
portion of your salary on a regular basis to go into your investments. The
remaining portion of which will go to your living expenses. It is an investment
since you expect your money to grow over time through the returns given the
performance of the fund you invested into.