Financial Planning Pyramid | Stage 2

Previously, I discussed the Stage 1 of the Financial Planning Pyramid. This is the foundation of your Financial Plan. Click here if you haven't read my blog about Stage 1, Wealth Protection.

So, are you ready to take your financial planning to the next level??

STAGE 2: WEALTH ACCUMULATION

After you established your Financial Plan foundation, you can start building your wealth and diversifying them. This is specially for the events that you are in control. For example, you want to set up a fund for your child's education or for your retirement. Or maybe you want to have a travel fund in the future. All of these are events you can control. It's a matter of when will you start setting it up & where will you invest your hard-earned money?

There are A LOT of ways on where you can invest your hard-earned money. Let's discuss briefly some avenues of investment.

1. Variable Universal Life (VUL)

- VUL is a combination of insurance and investment. It's like hitting 2 birds with 1 stone. You get the security and protection you need for you and for your family AND at the same time you can start building your retirement fund or your child's education fund with a VUL investment. One advantage of this is that professional fund managers are in charge of your investments. These are experts so your investments are properly managed. VUL makes your investing journey easier because of its 2-in-1 function. My advice is talk to your trusted Financial Advisor for a best plan for you; a great Financial Advisor would help you with your financial needs and analyze them with you.

2. Unit Investment Trust Fund (UITF) / Mutual Funds (MF)

- These 2 are different kinds of investment but are practically the same. The concept in UITF and MF is that investors' money are being pooled together to be invested in a pooled fund. A fund can either be an equity fund (stocks), fixed instruments fund (government securities and/or bonds), or balance fund (mix of equity and fixed instrument). The main difference between the two is that UITF are being offered by banks and some insurance companies, while MF is being offered by private companies. With UITF and MF, you can easily start an investment with low capital.

3. Stock Market

- What I meant here is an investment directly to the stock market via online stock broker. Maybe you probably heard of COL Financial, Philstocks? These are some examples of an online stock broker. In here, you will be the one to manage your own stock investments. It is your call on where, when, or how much to invest. My advice is to take this kind of investment if you've probably had enough research and knowledge about the stock market. You may send me a message here to help you know more about this.

4. Bond Investments

- These are fixed income investments which are offered by either the government (Retail Treasury Bonds) or by corporations (corporate bonds). Although, they are basically being offered in banks for the government or company. They relatively have low risk, thus giving you low risk in losing money but gives you lower return as well compared to equity investments. These kind of investment is for conservative investors who prefer to earn in fixed income.

**Please please take note that all types of investment shared here gives a certain amount of investment risk. Investment risk is the probability of occurrence of losses relative to the expected return on any particular investment.

❓❓❓Would you want to work for money every single day of your life? Of course you do not want that, right? That is why we have this Stage 2, Wealth Accumulation. This is to help you get out of the rat race by letting money work for you. BUILD. INVEST. DIVERSIFY.

Maybe for some, "accumulating wealth" gives you like a materialistic kind of life. But I disagree with this. As what Randell Tiongson says,

"Money is a great tool but it is not the end goal. Wealth and the ability to create wealth comes from the Lord, and IT IS NOT FOR OUR OWN PURPOSE but for His."

So we accumulate wealth not FOR US but to be with same mission with Christ to give intentionally to those who needs it the most. ❤️

#HelpingYourLifeBloom

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