Stock Market Jumpstarter A Beginner’s Guide for Investing in the Stock Market by J3 PatiÑo

Stock Market Jumpstarter A Beginner’s Guide for Investing in the Stock Market by J3 PatiÑo

Part 1: The Basics of Investing and the Stock Market
On Investing
Investing in its simplest terms is this: Making your money work so that it makes more money for 
you. The great thing about investing is that it’s money that’s working. Unlike people, money doesn’t 
get tired, it doesn’t get sick, and it doesn’t get burned out. All money needs is a good master who 
knows how to invest.
In this section, my goal is to show you why you should be investing in something (even if that 
something isn’t necessarily the stock market).
1. Why should I invest my money?
The biggest enemy we are all fighting is inflation. Inflation is the general increase of the prices of
goods year after year after year. Inflation hits everything from our basic necessities and our comforts in 
life. Nothing and no one is exempted.
When my mom was still a college student, her allowance was only P5.00 per day. She told me that 
the UP Ikot jeep cost only 35 centavos. A complete meal was only P1.00. At three meals per day, she 
would be able to set aside P1.00 per day for her monthly dorm fee of P30.00
My father, on the other hand lived on P1.00 per day when he was still in elementary. He said that 
for 50 centavos, you could already buy a piece of pan de coco. And that’s what he bought every day.
Today, it would be extremely difficult to survive on P5.00 a day. With P1.00 you can only buy a 
piece of candy, not a complete meal. And for 50 centavos, you can get a photocopy of a piece of 
paper, not a piece of bread.
Whether we like it or not, the prices of food, transportation, rent, electricity and other necessities 
will continue to increase. And in the same way, the things that a peso can buy will decrease. If this 
guide is still being read in the next 20 years, one peso of that day might be equivalent to one centavo
of today! This is an inescapable truth.
Inflation Pushes You Away from your Dreams
Inflation doesn’t only affect our current lifestyle. It also affects our dreams for the future.
Imagine that you’re in a marathon, and at the end of it you get to choose your dream car, home 
and vacation. It doesn’t matter if you come in first or last place. You get the prize as long as you finish.
You’ve been running for quite a while now. You feel your muscles are already getting tired. You 
see other runners in the front, and some are running along your side. From time to time you see a 
runner on the side of the road lying down and resting.
All of a sudden, a fellow runner taps you on the shoulder. You look at him and he signals you to 
look down on the ground. You look down, and see that your shoes are untied. As you’re tying your 
shoes, you notice that the ground you’re on is moving backwards.
Puzzled, you feel the soil, and take a closer look at it. It really is moving backwards! It’s slow, but it’s 
moving backwards. You take a look around to see if the ground was like that everywhere. You take a 
few steps away from where you were and check the ground repeatedly. After several checks, you 
realize that you’ve wasted a lot of time looking at the ground. So you jump back on your feet and start 
running again. You’ll just push yourself harder towards the finish line.

This is inflation. It moves us financially backwards little by little. We know it exists, but we ignore it. 
We just keep on working hard for our dreams, but what we don’t realize is that inflation is pushing us 
back further and further away from it. If your dreams cost P1 million now, it will cost P1.2 million in five 
years. In ten years it will cost PhP1.6 million, and in 20 years, it will nearly triple to PhP2.8 million.
The good news is that we can fight inflation. This is by learning how to invest.
Fight Inflation by Investing
Inflation continuously divides people into2 types: those who can invest above inflation, and those 
who can’t. Those who can invest above inflation will be able to accumulate wealth and become rich,
while those who can’t will create poverty and become poor. It is unfortunate that very few Filipinos 
know how to invest above inflation. This is one explanation why so many Filipinos are poor.

2. What would happen if I don’t invest?
Inflation is an invisible enemy, so you won’t notice the impact today or tomorrow. After all, a 5% 
increase per year, is just a 0.4% increase per month, and a 0.01% increase per day. It’s impossible to 
notice on a day to day basis.
The full impact of failing to fight inflation will be realized when you decide to retire. If you do not 
have enough money for your retirement, you’ll spend the last of your days being financially 
constrained, and a financial burden to the ones you love most.
Imagine that you’re 65 years old and no longer working. Who will pay for your food, water, 
electricity, medicines, and doctor’s fees? Are you sure your pension will be able to cover for all of that? 
If we follow Filipino culture, it would be the kids who will support the parents once they retire. If your 
children are just starting to build their own family, you’ll be competing for resources against your own 
grandchildren! Is this something that you would like? Is this something you think your kids would like? 
(I know the picture I’m painting here is very grim. That’s because from an economic standpoint, that’s 
how it really is.)

Stock Market Jumpstarter A Beginner’s Guide for Investing in the Stock Market by J3 PatiÑo