Are You Ready To Invest?

Updated: July 11, 2011

Everyone wants to invest.

But not everyone is ready to lose money.

While investing is a great way to secure a future, one must keep in mind that providing for the present is actually more important.

Because how can you reach your financial goals, if you’re not moving towards the right direction today, right?

And thus the question…

How do you know if you are ready to invest?

The answer is given below, through a simple flowchart I’ve made.

Go ahead and test yourself, then please read my notes after to learn more.

Do you spend less than what you earn every month?
Living below your means is a basic requirement if one wants to invest. If you can’t properly manage your money, then you won’t be able to properly manage your investments as well.

Can you survive 6 months without a job?
Build your emergency fund first before investing. You never know when you’ll suddenly need money, and the last thing you should do when this happens is selling your investments at a loss.

Are you happy with your job?
If your work does not give you self-fulfillment, then you’re at risk of squandering your money in short-term and superficial joys. It’s better to focus your time on finding your passion first, then focus your time on finding good investments later on.

In conclusion… as I’ve said before – I believe that it’s always a good time to invest – yes, I do.

But I also believe that one should not invest in portfolio and paper assets if one is not yet ready; or you might end up losing money later on.

So if you’ve found yourself moving on an endless loop in the flowchart above, then don’t worry… you’re still ready to invest – ready to invest on yourself.

Read more books, attend seminars, practice your skills, subscribe to Ready To Be Rich – just be hungry for knowledge and empower yourself so that someday, you can come back to this page and follow the flowchart again, and be able to congratulate yourself for a job well done.

So you like flowcharts, right? Then check out Your Ultimate Guide To Buying Any Gadget


  1. I’m still not yet ready to invest as I still have a lot of payables. But I’m spending less every month until I can pay off all my loans. I’m excited as I venture into new businesses that only take my time and my skills as my main investments though.

    Thanks for these tips, Fitz! I’m sharing some of my extreme money saving tips in my latest post. 😀

  2. I have less expenses, I have extra income, but I do not have savings. I am NOT happy with my work. I have money invested in PH stocks. I am NOT ready to invest. But what the heck, life is for the living =)

  3. Dude I would say this is a WoW super duper wow flowchart!
    just exatcly what I needed. I think what I need now is to find a new job!!!

    I thought I was ready but I can survive without a job for even a year but my savings is not enough. Hmmm question though what do you mean Invest? I mean invest what, where? stocks? mutual fund? business? etc.?

    Thanks I will save a copy of this flowchart I will print it and post it on my wall!!!


  4. thanks for sharing your insights about investing. you’re right that not all are ready to invest, some are just too fearful while others are too much in a rush. but i also believe it’s all a matter of personal choice if one can live with all the risk of having (and not having) investments! by the way, maybe you can share with us something about investing in gold since it’s what i often hear at the moment. is it really advisable to invest in gold? and what is the right way to do it here in the phils? i hope you can write something about it one day coz i cannot find any article on the web that applies here in our country.

    Regards! 🙂

  5. Awesome flowcharts Fritz! Simple and concise! Direct to the point. I think you miss the question – Are you contented with your lifestyle and earnings?

  6. […] Investing has become significant over the years. You, as a hard-working individual, want to secure your future. You may know people who have decided to put their money in a savings account with a low interest rate. But experience has taught you to be sensible and you have learned that keeping your money in a bank is not the wisest decision to make your money grow. So what do you do? You try to invest. Investing should not be an impulse decision. First, you need to know if you’re ready. Here are some tips which will help you prepare for investing: […]

  7. Hmmm. the flowchart looks good and practical. Very insightful. After reviewing my spreadsheet for the year 2012, despite of having loans and credit card balances (my bad debts) and paying for my real estate (condo) investments (my good debts i suppose), i am still able to spare more than 6 mos emergency funds and started to venture into Mutual Funds. Plus i still have a bit of savings for leisure (ultimate tour in the future) and son’s educational funds. And i love my job if not i wont be having the money to pay for the above.
    And lastly, i do a bit of sidelines as a broker. so thanks Fritz for making me realize im in the right track!

  8. Hi fritz! Thanks for the very informative post again 🙂
    Looking at minimum amounts required for stock market investing or uitf investing, I thought I was ready to invest. But I was still in doubt. This chart is a great guide to follow and look back to once in a while so I can make sure I am REALLY ready to invest when the time comes. But do you think taking the tests given by banks to gauge what kind of investor personality one has would help too?

  9. @JR
    – put it in low-risk investments like fixed-income or money market fund (or any low-risk UITF) or low-risk mutual funds, this will serve as your “second emergency fund”; and will extend your survival for one year because I advise you also put in around 6 months worth of your expenses there
    – after that, then it’s basically your choice, depending on your investment goals, but I suggest you go for moderate and high-risk investments, you can go for the stock market, forex, equity funds, or even start your own business (which is in itself, an investment)

    Yes, they’re very good in determining your investor personality, just be sure to answer it as honest as you can.

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