Saturday, March 23, 2013

Short Answers to Unanswered Questions: Advice for a College Student and Insurance Questions


Dear Investor Juan.

I am Michael, a 2nd year college student and I am planning to invest some of my savings in a bank. What should I do then?

I am still ignorant about these finance stuff but I am really eager to know how to invest.

Thank you for helping me out. 


Dear Michael,

It's hard to answer your question without knowing specifics, but given that you're a second-year college student, I assume that:

1) You're still living with your parents
2) You don't have a job and your income just comes from allowance

Honestly, at your age and given the above assumptions, it would be best to just save and accumulate as much cash as you can--and yes, a simple savings account will do. Don't worry about not getting high
interest on your savings, that will come in due time, like when you get a job and have more disposable income.

As soon as you get a job after graduating, you can refer to these posts from a while back about getting started with investing:

I hope I was able to help. Good luck!


Dear  Investor Juan

I would like to ask your advice regarding HMO’s /Health Insurance. I have read a few articles regarding about it but I am still confused.

When is it necessary to have a health care plan / insurance? Isn't it enough to have a Life Insurance as well as Philhealth? Or would you advice to put the money on some investment instead?

Thank you very much. Your blog has been a lot help in straitening out my financial plan.

God Bless


Dear rocloyd,

When is it necessary to have a health care plan/insurance? In my opinion, we should be covered our entire lives, if possible. Work compensation packages usually include a decent health insurance
coverage, so you don't really have to worry about it if you're employed full time. If you're unemployed or underemployed, however, you have to make sure that you're covered with PhilHealth at least.

Life insurance is also usually a standard non-cash employment benefit. The need for it differs with a person's circumstances, however. For example, a person with a family would need it more than, say, someone who is single and is living independently.

And yes, to make it clear, I strongly suggest that you make sure you're adequately covered first (and have an emergency fund on top of that) before you invest in "risky" assets (such as stocks and
investment funds). Why? In a nutshell, because most likely you can only borrow at a higher interest rate than the return that you can earn from investments, so in case of emergencies and other situations
that require a significant amount of cash, you'd want debt to be your last resort.

I hope that makes sense. Good luck!

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