Investing is one of the most powerful tools for building wealth and achieving financial freedom—but it’s not something you jump into blindly. Before putting your hard-earned money into any investment, you need to take a step back and assess where you are and what you’re trying to achieve.

Too often, I meet people who ask, “Sir Randell, anong magandang investment ngayon?” My answer is always the same: It depends. There’s no such thing as a one-size-fits-all investment. What works for one person may not be suitable for another. That’s why it’s important to consider these three essential things before you start investing:

1. Know Your Investment Objective

This is the “why” behind your investment. Are you investing to build retirement funds? Buy a house? Fund your child’s education? Or maybe you’re looking to generate passive income?

Your investment objective will guide what kind of investment vehicles are appropriate for you. For example:

• If your goal is capital preservation, you’ll want safer instruments like bonds or time deposits.
• If you’re aiming for capital growth, you may consider equity funds or stocks.
• If you’re building passive income, real estate or dividend-paying stocks may be better options.

Without a clear objective, you’ll end up chasing trends and getting confused—or worse, you may fall for scams. Always invest with purpose, not pressure.

2. Determine Your Time Frame

Your investment horizon—how long you plan to keep your money invested—greatly affects your strategy.

• Short-term goals (1–3 years): These usually require more stable, low-risk investments like money market funds or short-term bonds. You can’t afford to lose capital here.
• Medium-term goals (3–7 years): A balanced approach might be better—maybe a mix of fixed income and equity.
• Long-term goals (7+ years): You can afford to take more risk for the potential of higher returns, which makes equity investments more viable.

Remember: Time is your ally. The longer your time frame, the more room you have to ride out market volatility. One of the biggest mistakes people make is panicking during downturns and pulling out too early. A long-term mindset helps you stay the course.

3. Assess Your Risk Appetite

Risk appetite refers to how much risk you’re willing—and able—to take. This isn’t just about emotions; it also considers your financial situation, income stability, and life stage.

Ask yourself:

• Will I lose sleep if my investment goes down 20%?
• Do I have an emergency fund in place?
• How stable is my cash flow?

If you’re naturally conservative, forcing yourself into high-risk investments just because someone else is doing it will only lead to stress. On the other hand, if you have the capacity and mindset to take on more risk, you can pursue more aggressive strategies—as long as they are aligned with your goals and time frame.

Bonus: Don’t Forget Diversification and Asset Allocation

Whatever your objective, time frame, and risk appetite, never put all your eggs in one basket.

Diversification means spreading your investments across different asset classes (stocks, bonds, real estate, etc.) so that no single investment can sink your entire portfolio.

Asset allocation is about how you divide your money between these asset classes, based on your goals and risk profile. For example:

• A conservative portfolio might be 70% bonds, 20% stocks, 10% cash.
• A moderate portfolio could be 50% stocks, 40% bonds, 10% cash.
• An aggressive portfolio might be 80% stocks and 20% bonds.

Proper diversification and asset allocation are what help you manage risk while still aiming for decent returns. This is not just theory—it’s something I always apply in my own investing and teach others to do.

Reminder…

Before you invest in any product, take the time to reflect on these three questions:

1. Why am I investing? (Objective)
2. When will I need this money? (Time Frame)
3. How much risk can I take? (Risk Appetite)

If you can clearly answer these, you’re in a much better position to build a strong, sustainable investment plan. Don’t rush. Investing is not about finding the next big thing—it’s about being faithful, consistent, and wise with what you have been given.

As the Bible says in Proverbs 21:5 (ESV):

“The plans of the diligent lead surely to abundance, but everyone who is hasty comes only to poverty.”

Plan well, invest wisely, and stay faithful.