The Only Low-Risk Investment with 100% Guaranteed Returns

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.

You’re probably one of those who are wondering what kinds of investments give the best return. And you are probably thinking that the best investment yields high returns with minimal risk. But are there really low-risk, high-return investments in the Philippines?

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” - The best definition of the term is from Warren Buffet’s Teacher/Mentor, Benjamin Graham. 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.

Recommended Read: Personal Equity & Retirement (Pera), tax-exempt retirement planning for Filipinos

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. A bond fund or balanced fund at best for those with higher risk appetites. You don’t want to be stressed in your retirement years, I’m sure most just want to enjoy life at that point.

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 (If you are a family head, bread-winner, or have children). But nobody really wants to lose money or at least everybody knows how it feels to not have money.

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".

You cannot dictate or expect the market to behave you want to. This was simply impossible. Such an 'investment' does not exist. There will be penalties (for pooled funds: MF, UTIF), there is going to be expenses (sales, capital gain tax per trade/transaction), the growth target is possible but it is not without risk and also requires studying various stocks, and this is also difficult to achieve especially in today's market.

When the financial markets become unsettled, investors naturally look for lower risk investments. The market is the market. You cannot predict it, no one can. Especially that we are already in a recession and possibly approaching a depression.

A low-risk investment?

Let's be honest, the returns on totally safe investments are dismal these days. Also, what does low risk mean? Low risk means that there is a reduced chance of losing your principal, but one that may be offset by a higher return than you will get from investments that are completely risk-free.

Then what is the only low-risk investment with 100% guaranteed returns?

You have probably heard of this before. It is Investing in yourself, and I'm referring to 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 JOBs!

Recommended Read: The new OFW: Online Filipino Workers (1)

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

- Work from Home: Social distancing, away from health-risk hot zones
- Other benefits: Flexible schedules, insurance, leaves, allowances and the like
- Above average wage: depending on type of work: technical & IT roles are in high demand
- PH Government benefits: There’s a lot of foreign firms hiring Filipino freelancers these days and can cover these
- (Before the pandemic), you could in theory work from anywhere around the world provided that you have your laptop and a stable internet connection ;)

Now if you feel you are not ready for the online world, having a regular 9-5 job works too. You just have to find the high-paying industry. And as mentioned already it is still the BPO, digital & IT sectors.

Demand wise, BPM/Os are still there. If you are not that technical, you can consider digital jobs. In multi-national companies you can get private HMO, insurance, stock options, and even a provident/retirement fund.

In fact, I can tell you that most jobs in the future will have a digital aspect due to Data Science and Analytics. We work with data all the time, whether you are in marketing, HR, operations, we all have done some data management work without realizing it. This can be something to invest in for the future.

IT jobs on the other hand have one of the highest wages not just in the Philippines but around the world. And if  you specialize in a particular language (whether it is new or old), software, ERP platform, you will get a rather decent pay especially if you are mid to senior level.

Recommended Read: Have you considered a location independent business? 

IT Salary Range

For developers, this is the data from 2018:

• Python: Mid - 52K, Sr - 112K
• Ruby on rails: Mid - 50K, Sr - 132K
• Java: Mid - 56K, Sr - 103K
• .NET/ASP.NET: Mid - 54K, Sr - 106K
• PHP: Mid - 44K, Sr - 100K
• Oracle: Mid - 47K, Sr - 87K
• HTML/CSS: Mid - 47K, Sr - 83K
• Javascript/JQuery: Mid - 50K, Sr - 100K
• iOS: Mid - 44K, Sr - 77K
• Android: Mid - 38K, Sr - 71K

General IT related jobs as of 2019:

• IT Tech Support: Mid - 55K, Sr - 87K
• UI/UX Specialist: Mid - 33K, Sr - 58K
• Business Analyst: Mid - 44K, Sr - 60K
• Network Engineer: Mid - 30K, Sr - 81K
• Full stack developer: Mid - 35K, Sr - 80K
• Front-end developer: Mid - 38K, Sr - 60K
• Back-end developer: Mid - 35K, Sr - 102K
• System Administrator: Mid - 38K, Sr - 75K
• Software QA Engineer: Mid - 43K, Sr - 83K
• Technical Project Manager: Mid - 75K, Sr - 145K
• IT Security/Network & System Security: Mid - 38K, Sr - 99K

This does not cover all the software and the like specialties out there (like Microsoft, AWS, Salesforce, SAP, Netsuite, COBOL..etc..) but it gives you enough of an idea about the salary ranges in the IT sector. And that is just the range in the Philippines, what more for outside the country?

Note: The currency used is Philippine Peso with exchange rate of $1 - Php50. If you want to get an idea of salaries for different jobs and industries, you can visit glassdoor.com or indeed.com or payscale.com. IT job salary range from ictjob.ph

Recommended Read: The Future of Work in PHL

With a JOB, your principal investment is simply your experience, saliva and yourself, no cash-out! The returns can be satisfactory, with benefits or perhaps even more, depending on your target job and industry. What makes the return guaranteed? Well, your monthly salary and benefits! :D

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! Invest in yourself now, for it is never a losing proposition.

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