Money 101  >  Money Myths

"I need a lot of money to start investing."

POSTED ON August 08, 2019

The myth

Emergency fund? Check. Paid your credit card bill in full? Check. You have an extra P10,000 and you want to start investing, but when you look at the options available to you, they all seem to cost a lot of money. 

Conventional advice when it comes to investing is to consider real estate or owning a business. Both can seem prohibitive because of the initial cost to buy land, a house, or put up a business. Even if you considered a corporate bond, the minimum initial investment is usually around half a million pesos upwards. Ouch!

While there are other investment options you could explore, these most common ways can make it seem like you need a lot of money when investing. 

Why people believe it

Investing in things like real estate is not only common practice, it’s common advice. Buying a house or owning a business is what people like our parents did as part of their investment strategy, and it is what is recommended by many today. This advice is not wrong, but it should not stop you from  also looking at more affordable investment options, particularly if you’re just starting out. 

Risks of believing this myth

If you believe this myth, you may miss out on other opportunities to grow your money. You could consider options like stocks or a UITF, where the initial minimum requirement is lower. There are UITF feeder funds you can invest in for as low as P5,000 or you could try your hand at investing in the stock market. There are also other ways to invest, like through a paluwagan or a company provident fund, that you could explore, if these are available to you.

The point is to not get stuck thinking that investing always requires a large amount of money. You can start small and build from there. 

Verdict: False