Mutual Funds Philippines

Let’s say you are the hero, Jack, from the fairy tale story Jack and the Beanstalk. You arrived at the heavenly castle and the angry giant wasn’t angry at you… He was waiting for you. And in fact, he was selling his goose. I mean geese. You are faced with a dilemma on which goose to pick and carry back home. Can you spot the real golden goose of the legend?

Goose #1: The Nickel Pooper Goose
Price: P3,000.00

The giant is selling his goose for P3,000. This goose poops out P50 pesos per year for as long as the goose stays healthy. And you can buy as many goose of this same type as you like. The only drawback is, they can only lay P50 egg every year.

Goose #2: The Home Run Goose
Price: P15.00

The second goose lays a golden bar. A golden bar is worth P50,000. But the drawback is, he can only lays an egg once a month for the chance of 0.001%. And whatever the outcome is, be it lays an egg or not, the goose will die. But you can buy as many goose as you like.

Which goose do you think is the real golden goose? The Nickel Pooper or the Home Run Goose?

This simple analogy is the same as saying mutual funds vs lottery. Mutual funds is like the Nickel Pooper Goose. It pays you small amounts every year, it costs a lot to invest, but it will pay you for life. The Home Run goose is the lottery. The chance of losing your money is almost certain in every goose you buy. Though the returns may blind you because of the small investment, the prize is huge, but the chance of actually realizing that reward is close to none.

This is where people tend to misinterpret investing, risk and returns. People will say that lottery only costs a little bit for that much return. But if these small pennies are kept and bought the more stable Nickle Pooper, they are more secure thru their retirement than chasing a home run in lottery.

Many people will also be tempted to investment scams because they are offered ridiculous returns on their investments. There are no such thing as get rich quick. The fastest way to getting rich is to get rich slowly. People who claims to make you rich quick is only after one thing, your money. Be smart. Go for the slow, sure returns rather fast and furious.

Go for mutual funds that offer consistent, stable returns that compounds its interest. Buy more Nickel Pooper Goose every month and you’ll be amazed at how many of these small pooping goose will add up! The trick in investing is to invest consistently, only thru that strategy, you’ll be able to use the power of compound interest. If you want to retire early, for your family, for the kids’ college funds or that beach house you dreamed about, this is the only sure way to riches. Get rich slowly. Happy Investing!