How to start investing even if you have a small salary


Many of us back in the Philippines might be shock if you told them that you are investing in stocks.

Most people think that you need lots of money to start investing. Let say maybe in their head the minimum is Php 250,000. But in reality its not the amount that makes investing hard, it’s the discipline to put aside money for investing. Just like in my previous post the question is how much money do you have now?

So how will you start investing even if you don’t have that much? I have a motto before that I always read when doing something. It goes like this “Start small, Think BIG!” In reality everything starts small. Maybe you saved 20 pesos last week or maybe you got a bonus this year of let say 5000 pesos. Are those amount big?Yup your right it’s small. But if you really save this amount instead of planning to spend it by buying a new phone or buying a new pair of pants in the long run it will accumulate. 

Try to re-examine your spending. What are expenses that in  reality are not needed. You only get to spend because maybe your friends  has this coffee after work habit, or maybe you have conditioned your stomach to eat a burger before going home because of the traffic in Pasig. Try to see were your money goes and you’ll realize you have been a spender. From there little by little cut it down and shift it to savings. In a short span of time you would have save money enough to open an account at an online stock broker. 

Another thing is you must have the discipline in investing. One effective way is to look at investing as one of your bills. I believe your paying something right now right?Maybe you borrowed money for your car or your house or it so happens that you overused your credit card ending into a credit card debt. And every paycheck you have always made sure that you pay at least the minimum payment in order to avoid penalties right? Why not think of investing like that only in a positive way. 

They call this concept paying yourself first. Here is what you do. Before paying any of those bills and before thinking where will you spend your paycheck first think of an amount to put in your savings that will be invested maybe weekly or monthly. Think of this amount as payment to yourself, a treat. Make sure that when you segregate this amount you will not think of it anymore or maybe think in the back of your mind that in case you got short you can pull this out. Remember this is your treat to yourself so don’t touch.
When you have reached a certain amount that you have set to invest go ahead and invest it. Buy the best stocks. Remember as well the concept of cost averaging. The stock might be high but there are times that the price is low does buying on a regular basis will lower your average cost and when the price is right, again remember to compute if you are more than break even, you can sell your stock at a profit. 

Remember to pay yourself first, accumulate, invest regularly to  lower average cost, and take profits when the price is right.
About the blogger

Louis Delos Angeles is a Certified Public Accountant, blogger behind Investing in Philippines, and author of Investing in Stocks: Preparing for the future small amount at a time. Check him out in Google+ Learn more about Louis and his financial freedom advocacy here.

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2 comments for “How to start investing even if you have a small salary

  1. September 4, 2010 at 6:45 am

    It is great help and the most effective advice that you have given over here. Generally people thinks to invest their money if they have more so that they can save it. But through the above article they can understand that we can invest our few moneys as well.

  2. September 4, 2010 at 7:01 am

    Yes if only people know how to set aside even just a little, in the long run that small bits when put together makes a big chunk. And if they have learn the secret of investing I believe they can be millionaires in those small amounts one has set aside… thanks for the comment

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