A risk free investment

Fraud in the Philippines is currently on the rise despite the health crisis plaguing our community and the world. An example of which was my article last week about crypto or ethereum based investment schemes. Filipinos and foreigners alike are not safe on both sides of the fence whether as a suspect or victim, this can even include business owners and to put it bluntly everyone will be affected.

I’ve said this before and I’ll say it again, before we begin we must first understand. Ask anyone or even yourself “What is an investment?” If you can’t answer, then here it is.

Definition of terms

Defining “Investment” - Benjamin Graham, along with David Dodd, attempted a precise definition of investing and speculation in their book Security Analysis (1934). “An investment operation is one which, upon thorough analysis, promises safety of principal and a satisfactory return.”

The keywords there are “safety of principal” and “satisfactory return”. Anything outside that is gambling, a fraudulent scheme, a CON or SCAM.

What is a get-rich-quick-scheme? - A get-rich-quick scheme is a plan to obtain high rates of return for a small investment. The term “get rich quick” has been used to describe shady investments since at least the early 20th century.

Most schemes create an impression that participants can obtain this high rate of return with little risk, and with little skill, effort, or time.

Different strategies for different ages

If you are about to retire or retired already, the safest course of action generally is to invest in totally risk-free investments, such as money market funds, certificates of deposit, and government treasury securities.

For the younger ones, you’ve got plenty of options, you can go crazy investing in whatever since you can still afford to lose money provided you don’t have any major life responsibilities.

Most people are have a misplaced understanding about investments. When I used to do financial consulting, I had a client that had this particular “criteria” (well most people I talk to):

“Iggs, I’m looking for an investment with zero risk that guarantees my principal and at least I can cash it out whenever I want with no penalties.  And oh yeah, I want it to grow between 8-10% minimum”.

This does not exist and in today’s market? Difficult even for the skilled ones. No one can predict the market.

A risk free investment?

So what is it? Investing in yourself, skills in particular. But let’s take it further, these days the only thing that can give you safe and relatively high returns are pandemic proof in-demand digital JOB!

Okay, it is not completely without risk but do consider becoming an OFW2.0 - Online Filipino Worker! Here’s what you get from an online job (well it depends on the client but this is still possible):

• Work from Home - Social distancing, away from hot zones

• Government benefits - There’s a lot of foreign firms hiring Filipino freelancers these days

• Above average wage - depending on type of work, technical & IT is in high demand.

You may think I’m trolling but I’m serious. If your priority right now is to survive then consider this option. Cash is king for businesses, same for workers. There are plenty of start-ups who engage in consulting or services while still building their app/platform/software to save or bootstrap money.

You have nothing to lose and all to gain!