10 versus 100th : How to invest P100,000.00

If somebody gives you P 100,000.00, what will you do with your new found wealth? Sounds like a third world-ish genie granting a wish but I’m pretty sure we can easily come up with a list of 100,000 things to do. For men, a new set of wheel and tires, an LCD TV, a digital SLR camera, a notebook computer, your own set of tools. For women, a new handbag, a set of make up kit, a sofa set, a baking oven, beauty sessions. The list is endless. And then there’s this boring option called investment. This article will focus on how to invest P100,000.00 and eventually, you can use the interest earned for your caprices!

1. Type: TIME DEPOSIT
Where: All Types of banks – Universal, Commercial, Thrift, Rural banks.
Period: As short as 15 days, 30days to as long as 5 years. Withholding Tax is 20%. Tax becomes free if period is 5 years and 1 day.
Interest Rate: range is 2% to 4% per annum or per year
Minimum Investment: P5,000.00
Risk Involved: Low
Investor Participation: Low
References: www.psbank.com.ph

2. Type: COOPERATIVE
Where: There are over 10000 cooperatives in the Phils. You can check out the list in http://www.cda.gov.ph/.
Period: Usually, dividend is declared first quarter of the year.
Interest Rate: Depends on the performance of the coop. May be as low as 3% or as high as 23%. Sempco declared 23% in the 1Q of Y2007.
Minimum Investment: P10,000.00
Risk Involved: Low
Investor Participation: Low
References: http://www.cda.gov.ph/; www.kskcoop.com

3. Type: DOUBLE YOUR MONEY
Where: Cooperatives and Rural Banks
Period: Usually 5 to 6 years.
Interest Rate: 16.67% per annum
Minimum Investment: P250,000.00
Risk Involved: Moderate. The reality is, universal and commercial banks are “more stable” compared to rural banks however life would be pretty mundane if we don’t take calculated risks sometimes.
Investor Participation: Low
References: www.firstcountryfinancial.com

4. Type: STOCKS
Where: Stock Brokers or on line stocks broker sites
Period: Holding period can be as short as one day but ideally, hold period is one year.
Interest Rate: Depends on a lot of factors like the company invested and the period of investment
Minimum Investment: P10,000.00
Risk Involved: High
Investor Participation: Low if passive, high if active.
References: www.citiseconline.com

5. Type: MUTUAL FUND
Where: Financial Consultants
Period: minimum of 1 month
Interest Rate: 7 to 20%
Minimum Investment: P10,000.00
Risk Involved: Moderate to High
Investor Participation: Low if passive, high if active.
References: http://www.sunlifefunds.com//mutualfunds; www.philamfunds.com

6. Type: UNIT INVESTMENT TRUST FUND
Where: Banks
Period: minimum of 1 month
Interest Rate: 7 to 20%
Minimum Investment: P5,000.00
Risk Involved: Moderate to High
Investor Participation: Low if passive, high if active.
References: www.bdo.com.ph/investment

7. Type: GOVERNMENT SECURITIES (Treasury Bills and Treasury Bonds)
Where: Banks
Period: minimum of 1 month
Interest Rate: 3 to 14%
Minimum Investment: P5,000.00
Risk Involved: Moderate to High
Investor Participation: Low if passive, high if active.
References: www.bdo.com.ph/investment

8. Type: BUSINESS – FOOD FRANCHISE
Where: There are a dozen food franchises in the range of P30,000 to P60,000.
Period: ROI is dependent on a lot of factors like sales, location, etc.
Interest Rate: You can actually double your money in under 6 months. In the same manner, you can loose your money in half the time.
Minimum Investment: P30,000.00 to P60,000.00
Risk Involved: High
Investor Participation: Low if capitalist, high if industrialist.
References: www.entreprenuer.com.ph

9. Type: BUSINESS – DIRECT LENDING
Where: Ask your neighbor
Period: Usually 1 month to 6 months.
Interest Rate: As low as 2% per month to as high as 10% per month.
Minimum Investment: P10,000.00
Risk Involved: High
Investor Participation: Low if capitalist, high if industrialist.
References:

10. Type: BUSINESS - TRADING
Where: Depends on a person’s passion.
Period: Depends on the “harvest period”
Interest Rate: Depends on a lot of factors but can easily double your money in less than 6 months.
Minimum Investment: P5,000.00
Risk Involved: High
Investor Participation: Low if capitalist, high if industrialist.
References: www.entreprenuer.com.ph

BONUS: Type: BUSINESS – REAL ESTATE
Where: Depends on your preferred location
Period: Depends on your resources.
Interest Rate: From 10% to 20% depending on monthly rental rate
Minimum Investment: At least P60,000.00 (for the first year)
Risk Involved: High
Investor Participation: High
References: http://www.camella.com.ph/; www.theorientalplace.com

There’s no perfect investment for any individual. It all depends on your need, your want, your resources, time you can spare and how you’ll justify your choice of investment.