Tuesday, July 9, 2013

Commandments to Follow Before Investing

I want to share with you the "commandments" I followed before dipping my toes into the world of investing.

  • Thou shall not invest without a goal

  • Thou shall not invest without at least 3 months of emergency fund

  • Thou shall not invest without any kind of health protection 

  • Thou shall not invest without studying. The knowledge that you gain in books and/or seminars is priceless.

  • Thou shall not invest on a borrowed money

  • Thou shall not invest without knowing your risk tolerance by asking yourself,"if my X amount of money invested is down by 50 percent tomorrow, how would I feel?"

  • Thou shall not invest without psychologically parting yourself with your money. You might not see your money ever again
  • Thou shall understand that in investing, high risk equals high returns. Go out from you comfort zone once in a while

  • Thou shall not invest without fully understanding that market goes up and down. You might have a heart attack when your portfolio is all red and bloody

  • Thou shall not invest without knowing what the company you want to put your money is selling. Get to know the management as well

And when you become an investor and you already grasp what if feels like inside the world of investing:

  • Thou shall not be too proud, the market will eventually humble you

  • Thou shall share your knowledge to anyone who is willing to listen. We will help Philippines get out from the "third world country" label

After all is said and done, thou shall trust the hardcore studying that you did early on and let time and compounding interest be your allies. 

Happy investing!


  1. All very sound pieces of advice.

    Whenever someone asks me about investing, I always tell him/her to take the time to increase his/her knowledge about it by studying and reading blogs/books, and not to just part with money because it's the in thing to do now.

    1. hello kabayan!im working here in saudi arabia but i already submitted my resignation to the company and maybe i still have few more weeks or a month before my employer will send me home.

      I've been working here in KSA for 14years and im burnout that is why i quitted my job.I do have some savings back in the philippines it is almost a million pesos and i dont know where to invest this,im 38yrs.old do you think im too old for stock investing?

    2. Hey kabayan, thanks for dropping by. 38 years old isn't old for stock investing at all. Before investing, do you have emergency fund set aside? The reason I'm asking that question is you don't want to pull out your money invested prematurely when an emergency, like accidents , comes up.

      Second, ask yourself why you want to invest. Is it for retirement? Is it for a house? You need to formulate a goal.

      Third, please consider too that when you invest, think long term. 5-10 years perhaps longer? It's up to what your goal is. The longer you stay, the better your "potential" returns.

      Local book the I recommend you to read: My Maid Invest in a Stock Market and why Should you too by Bo Sanchez.

      Invest with knowledge first before jumping into this world, kabayan and let me know if you have any question:)

    3. An honest and straightforward answer is no,i dont have emergency fund but thanks for the tip and as for my goal in investing maybe for my retirement.Im still hoping that i will become rich someday and maybe i will jump into extreme frugality when i reached home.

      I have read some of the topics that you had tackle about stock investing and they're very informative,infact it has answered several of my questions about stock investing and money matters and i will keep on reading.So,thank you very much Pinas for Good your a big help to me.

  2. Very sound advice. I dont invest though I might, because of my motorcycle collection.

    But whenever I do, I guess I will follow my commandment in the ring as well, STRIKE FIRST. I hope it transitions well to investing/stocks.

  3. Great list. I'm not yet ready to invest in stocks. Thanks for the reminder. :)


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