Investment Planning For The New Year


“My experience indicates that most people who’ve accumulated a great deal of wealth haven’t had that as their goal at all. Wealth is only a by-product, not the original motivation.” —Michael Milken

Investing is more than just about making money. I am a firm believer of investing for a purpose. A lot of times clients ask, “When is the best time to invest?” There are a lot more important questions and here are seven that should be considered when doing investment planning:

Am I ready to invest? Everyone can invest but to have a worry-free journey, one must make sure the financial foundation is strong enough for investing to be sustainable. For example, investing is not recommended for someone who cannot fully pay credit card debt on the due date or those without a healthy cash flow. It is also recommended that breadwinners get insurance first before they think about investing. This way, in case the breadwinner dies too soon, beneficiaries can still continue working on the investment goal.

Why am I investing? There are usually two aspects to it when we talk about financial goals: the reward aspect and the monetary aspect. In this question we focus on the reward aspect of our financial goal. Is it for gracious retirement or the children’s education? Is it to maintain our health when we grow old or is it for a dream house or dream travel plan? These rewarding dreams make goals exciting and more meaningful.

How much is my investment goal? Chance are that these dreams/goals have a monetary equivalent. How much is needed for retirement? How much to build the dream house or send the kids to the best school you can afford? How much to travel the world? We need to know the monetary equivalent for us to achieve rewarding goals, otherwise we would be blindly investing, not knowing where we are headed.

Which investment instrument? Investments are not limited to stocks, pooled funds or bonds. A business, for example, is one instrument that can give very high returns. Investing in real estate can also be a good hedge against inflation and can also provide passive income. Whichever investments you choose, the important thing to understand is the amount of risk one is able to tolerate. One who is risk averse can feel anxiety when investing in a high-risk investment, while someone who has high risk tolerance can be frustrated with investments giving low returns.

How much do I need to invest? Answering this question now allows us to build the action plan for investment planning. This is important because it tells us what we need to do to achieve our goals. However, the answer to this question will be dependent on the type of investment instrument we choose, the amount of time we have and the monetary equivalent of our goal. Without any one of those, it will be difficult to determine the amount we need to regularly invest.

For how long should I continually invest? Much like the previous question, the answer depends on the type of investment instrument, the monetary equivalent of the goal and time. One has to understand, though, that the closer it is to the goal’s “deadline”, the higher the cash outlay needed.

How much return/yield do I need to achieve my investment goal? Returns and yields may vary depending on the chosen investment instrument. Businesses can potentially give you returns between 30 percent to 100 percent. While investing in the stock market can give 10-15 percent return per annum, pooled funds’(mutual funds, UITFs and VULs’ investment component) yields can be between 6-12 percent, depending on the type of fund, while bonds can provide 4-6 percent.

Investing may be about wanting to make money but to live a more meaningful life, I believe we need to look beyond the money and set meaningful goals. Take some time to figure out the answers to the questions above. And if you insist on an answer to the question “When’s the best time to invest?”, this is my cliché answer: The best time to invest was actually yesterday, but since we let that pass, today’s the next best time because tomorrow might just be too late.


Jeremy Jessley Tan, RFP, is a Registered Financial Planner of RFP Philippines. To learn more about personal financial planning, attend the 67th RFP program this January. To inquire, email or text <name><e-mail><RFP> at 0917-9689774.


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