We Opened Our 9 Year Old Son a Mutual Fund
One of my goals in life is to be an inspiration to other people especially those who think that they are poor and will not be able to achieve anything in life. I was born poor and without a dad as early as 9 year old but I have a BIG dream that slowly I’m putting into reality. I agree with Bill Gates that “it is not your fault if you are born poor, but if you die poor, it is.”
I made some mistakes in my financial life, and I’m hoping that my nieces and nephews will learn from it. I wrote an article last year about starting to save or better invest young because time is really GOLD. The younger you learn how to handle your finances well or invest, the more interest and money you’ll have as time goes by.
Last year, my husband and I opened a VUL account from SunLife and I’m so happy that this year I was able to open a mutual fund naman for my son. Since he’s still a minor, it’s called a Trust Fund, he’ll get that money when he reaches 18.
He got money gifts from his ninong, uncle and aunt last December and I decided to use it to open an account. I’m glad that as of now you can open a mutual fund for as low as 5,000 pesos initial investment.
Our financial advisor gave us a lot of options to choose from. I was surprised to know that there are actually different kinds of mutual funds.
What is a Mutual Fund?
A Mutual Fund is an investment company that pools together money from different investors and invests them in various securities depending on the investment objective of the fund. The mutual fund company issues shares to the public that represents their holdings in the fund.
What are the different types of Mutual Funds available?
There are four basic types of mutual funds currently available in the market categorized according to the investment objective of the fund or the investments that the fund is primarily invested in.
- Money Market Funds invest purely in short-term (one year or less) debt instruments.
- Bond Funds invest in long-term debt instruments of governments or corporations.
- Balanced Funds invest both in shares of stock and debt instruments.
- Stock Funds / Equity Funds invest primarily in shares of stock.
How I chose the fund where my son money goes? We were asked to answer a form. In that form, there’s a corresponding number and your answer will determine if you are a conservative, moderate or risk taker investor. In every area there is a corresponding type of fund you can choose from. We are in the moderate area according to the form.
I’ve chosen the Sun Life of Canada Prosperity Philippine Index Fund, Inc.
The Sun Life Prosperity Philippine Stock Index Fund is made for investors who would like to invest in the Philippine stock market, but don’t have the time and means to do so? With the Sun Life Prosperity Philippine Stock Index (PSI) Fund, you are given access to the country’s biggest names, without consuming much time and putting in huge amounts of money. If you are looking for a worry-free investment in a broad diversified portfolio, the Sun Life Prosperity Philippine Stock Index Fund may just be the right fit for you.
I chose this because it has the smallest rate per share as of now and I’m hoping that in the long term it will get bigger.
You can choose from these selections:
But I have the capacity naman daw to change the type of fund, four times in a year. As you can see, I can top up a minimum amount of only 1,000 pesos in any time that I like (optional).
If you dream of a passive income for yourself or for your loved ones, I suggest to put your money in a trusted instrument. If you don’t like monitoring it often just like the stock market, putting it in a mutual fund is the best instrument for you. Make sure to look for a reliable company to handle your money. I still believe in not putting your eggs in one basket so its better that you have a variety of investments.
Talk to your financial advisor to help you decide.