Risk Appetite

I am amazed at how I have outgrown my fear for losing money over failed investments. The first time I went into business and failed, I became averse to risk that I stopped going into another business and put my money instead in banks. For quite sometime I have been lodging my money in savings accounts that earn a very minimal interest. I did not even bother think of having it deposited instead in a time deposit to give me a higher yield. I was content that my savings are safe in the banks.

Until I read Bo Sanchez' "8 Secrets of the Truly Rich" which made me think more positively and claim the riches God has prepared for me. The book gives practical tips on how to change your perspective about money and where to invest your money. In my online research about the venues where I could park some of my money, I chanced upon www.pinoymoneytalk.com where I learned and keep learning a lot about financial freedom. So in November last year, I began investing on a mutual fund (MF) based on the information I got from the cited website.

Then, early this year, my entrepreneurial spirit was once again revived by a particular issue of Entrepreneur Magazine which featured hot ideas on franchising. I brought up the idea to my wife and the ever supportive wife that she is, she allowed me to renew my consolidated loan in Government Service Insurance System (GSIS) to fund the new business venture I was eyeing. Aside from the loan, we also set aside part of our Christmas bonus and my monetized leaves for the prospect franchise venture.

For some providential reason, that investment did not push through. Instead, I placed part of the raised money in another MF and in unit investment trust fund or UITF (One of my entries in January entitled "Do you Know Where To Invest Your Money?" tackled about the differences between MF and UITF). I am happy and thankful to God that the net asset values (NAVs) of all my MF and UITF investments have been rising steadily so far. Although there is no guarantee that it will always be that way,  I am ready for any fluctuations in the NAVs of my investments. Anyway, it's only until I redeem my investments will I realize the paper gain or paper loss of it, depending on the value of my share the day I will pull it out.

But of course, I have also learned not to put all eggs in one basket so I diversified my investments to spread out the risk. That's when I started doing capital venture or being an angel investor wherein I place some money in the business of other people who are looking for additional capital in return for interest. Now, this is the test of my appetite for risk because I do not know these people from Adam and I just base my investment decision on the threads I follow in the pinoymoneytalk forum.

To date, two of the checks issued to me by two separate business owners whom I invested on were cleared. And I have since invested in four businesses expecting for a continued and hassle-free passive income. Higher risk for higher return. But life is too short not to take chances. If my money gets burned, the due diligence I conducted notwithstanding, I have to face it squarely. But I know it won't happen. I'm sure of it.