Finance Friday: The First Step in Investment

I've been reading and talking about investments for a year now. I still fondly remember how I first stumbled upon the wonders of stock investments early January this year. Since then, it was as if a light bulb turned on. Why aren't we all doing this? I was so sure I would invest in stocks, but I felt as if it wasn't yet the right time.

I spent the first six months of this year doing pure research. Yes, all I did was read, read, and read. You see, before you take any big step, you should know a lot about it. Don't follow blindly. It might seem like a good step, but without arming yourself with knowledge, you're bound to fail.

I also read a lot of Christian books to abound in God's wisdom and to remind myself that yes, prosperity is God's plan for us, but we are called to prosper not to hoard riches but to be a blessing to others.

Then, we (Job and I) spent the next six months of the year forming our emergency funds. Based on the research I have done, it is unwise to invest all of your money without setting aside funds that you can dip into in case of emergencies. Without having emergency funds, it is very likely that you will withdraw from your investment, which impairs the power of compound interest, and this defeats the purpose of long-term investment. Thus, there is a need to set aside an emergency fund before investing.

Tip: If you don't know what the terms "stock," "emergency funds," "compound interests," and "long-term investment" mean, do yourself a favor and postpone investing. If you don't know the value of saving and living within (below is better!) your means, postpone investing. If you believe that banks are the only way to go, postpone investing.

First, do your research. Again, I studied personal finance and investments for almost a year, and I'm not done yet. Also, know that investing is not "easy money." As mentioned in Proverbs 13:11, "Dishonest money dwindles away, but he who gathers money little by little makes it grow."

I would add that if you are not tithing regularly, then you should postpone investing. However, I'm saying this from a Christian point of view. Tithing really helps in developing the character, and I believe God designed this to prepare us to be a blessing to others when we prosper.

Anyway, this month, we knew we were prepared to take the first step in investment. COL Financial is a highly-recommended company where ordinary individuals, like you and me, can easily invest in stocks even without huge amounts of money at hand. In fact, you can easily open an account with just P5,000, a far cry from what people used to need to invest.

So this is it! We're finally beginning the journey toward financial independence and a financially-independent retirement hehe. Before we end this post, let's review what you need to do before you invest:

Tithe and give regularly.
Study, study, study.
Establish an adequate emergency fund.
Know what you are investing for.
Be committed.

Matthew 25:14-30
The Parable of the Bags of Gold

14 “Again, it will be like a man going on a journey, who called his servants and entrusted his wealth to them. 15 To one he gave five bags of gold, to another two bags, and to another one bag,[a] each according to his ability. Then he went on his journey. 16 The man who had received five bags of gold went at once and put his money to work and gained five bags more. 17 So also, the one with two bags of gold gained two more. 18 But the man who had received one bag went off, dug a hole in the ground and hid his master’s money.

19 “After a long time the master of those servants returned and settled accounts with them. 20 The man who had received five bags of gold brought the other five. ‘Master,’ he said, ‘you entrusted me with five bags of gold. See, I have gained five more.’

21 “His master replied, ‘Well done, good and faithful servant! You have been faithful with a few things; I will put you in charge of many things. Come and share your master’s happiness!’

22 “The man with two bags of gold also came. ‘Master,’ he said, ‘you entrusted me with two bags of gold; see, I have gained two more.’

23 “His master replied, ‘Well done, good and faithful servant! You have been faithful with a few things; I will put you in charge of many things. Come and share your master’s happiness!’

24 “Then the man who had received one bag of gold came. ‘Master,’ he said, ‘I knew that you are a hard man, harvesting where you have not sown and gathering where you have not scattered seed. 25 So I was afraid and went out and hid your gold in the ground. See, here is what belongs to you.’

26 “His master replied, ‘You wicked, lazy servant! So you knew that I harvest where I have not sown and gather where I have not scattered seed? 27 Well then, you should have put my money on deposit with the bankers, so that when I returned I would have received it back with interest.

28 “‘So take the bag of gold from him and give it to the one who has ten bags. 29 For whoever has will be given more, and they will have an abundance. Whoever does not have, even what they have will be taken from them. 30 And throw that worthless servant outside, into the darkness, where there will be weeping and gnashing of teeth.’

I'm looking forward to growing in Christian financial wisdom in the coming year!