By Hazel Vidal | Golden Haven Memorial Park Sariaya | March 2021
Money is an essential commodity everyone needs on a daily basis. Over time, it has gained even more intrinsic value as people tried to build their wealth for future needs. May it be through a dayjob, self-employment or entrepreneurship, it is simply mindblowing how people managed to find inventive and innovative ways to increase their cash flows.
In today's modern society, however, where employers take a particularly keen interest on someone’s college degree and skill ceiling, where establishing your own business demands rigorous experience and proven expertise, one must take a deeper look at the prospect of investing. It is another great way to build one’s financial wealth without putting up too much effort.
Investing, according to Investopedia, is the act of allocating resources, usually money, with the expectation of generating an income or profit.
There are different types of investment options available for anyone to try, the most prominent of which are: (1) Stocks, (2) Mutual Funds, (3) Bonds, and (4) Real-Estate Property.
Historically, the stock market has delivered generous returns to investors over time. Still, it is very much volatile, presenting investors the possibility of both profits and loss, of both risk and return. On the other hand, a mutual fund offers more diversification by bundling many company stocks into just one investment. As appealing as that is, it has its own set of drawbacks one must take into account which include high fees, tax inefficiency, poor trade execution, and the ever-present potential of managerial abuse.
Then there are bonds which are also known as fixed-income instruments. Governments or companies use them to raise money by borrowing from investors. These are essential investments available for those who follow an income investing philosophy, hoping to live off from the money generated by their portfolio. But this route is subject to interest rate risk which can be astoundingly significant especially in an environment not very conducive to such terms. When interest rates are at historic lows, they have nowhere to go but up. When rates do spike up, the net asset value of the bond fund can decline significantly.
Lastly, there is real estate investing. This refers to a property purchase as an investment to generate income rather than using it for residential purposes. Generally speaking, it is a great option. One can generate a steady stream of passive income and an excellent long-term investment choice if the market value of the property increases over time, a factor which is inherent in the industry.
Why Real-Estate remains the best investment option during the COVID-19 Pandemic?
Billionaire Andrew Carnegie famously said that 90% of millionaires got their wealth by investing in real estate. As experts say, even amidst the Pandemic, real-estate investment is still the best investment available today – and here's why:
Real estate properties are tangible investments with real, natural market values. It is one of those properties that scarcely loses its worth. Due to the current market instability, other investment options can plummet down rock bottom overnight if one is not careful enough. The chance of this happening on real estate investments is very low, making it a safe investment for anyone.
It also remains as one of the top choices when it comes to investment here in the Philippines. People know that while there are other options out there, it takes a stupid amount of time to generate returns favorable to the investor. It is relatively easy to stream passive income in real estate, and the current pandemic further proves this point.
Moreover, markets all over the world have moved quickly to the buyer's favor. Due to the low market activity caused by the COVID-19 Pandemic, most banks radically lowered their interest rates. This means that the prevailing low-interest rates significantly increased the buying power of anyone interested in real estate investment.
And on top of that, most people are still on a transition phase in preparation for a post-pandemic reality. Real estate developers offer their properties for a much lower price. And if you are eager to place yourself on an advantageous position, now is the best time to do so.
Richest Man – Real Estate Tycoon
Real estate investment has always been, and will always be, a great option -- even way before when COVID 19 struck. Most of the richest Filipino figures we probably know by name achieved their financial wealth and success through this method.
When Forbes Magazine came up with its most recent list of the country's wealthiest people on September 2018, the person to top them all was none other than Manny Villar – a visionary whose primary business interests lie on real estate and property development. According to Forbes, the real estate tycoon more than tripled his net worth in one year to $5 billion. He replaced tycoon John Gokongwei, Jr. who is also primarily engaged in real estate.
Golden Haven, a chain of top-class memorial parks in the Philippines, is one of these companies that significantly contributed to Villar's net worth. The firm's share price recorded a mind-blowing 1,300 percent increase during the earlier part of the previous year.
The Philippines' wealthiest people found in the list, in one way or another, have significant investments in real estate under their belts — whether it be housing, condominiums, retail, commercial, or leisure and entertainment. It remains as one of the most common avenues that the country's wealthiest individuals pursued and strode upon.
However, this option demands a significant amount of capital to begin with. Buying a piece of land can be quite expensive, and frankly, costly for anyone who works on a tight budget. Not to mention the ongoing maintenance costs that come along with it.
But…
Did you know that it's possible to invest in real estate with lower capital requirements?
Apart from housing, subdivisions, apartments, or condominiums, another option available for interested investors is the purchase of a memorial lot. Like other real estate properties, memorial lots appreciates their value on a regular basis. One of the significant advantages of investing on a memorial lot is its low capital requirement. Anyone can start an investment with the price range of Php 60,000 - Php80,000, and its initial capital requirement is ranges from Php 900 – Php 2,000 only.
Investing is just as important as building wealth and achieving financial security. It allows us to grow our net worth and generate an additional income stream if needed ahead of retirement.
As I sit here thinking, my fingers wrapped around my pen, about where I should invest my money, I heard a gentle whisper, "What does an expert say?"