First paycheck, now what? Lifestyle Asia phones a friend—investment banker Jacob Macatangay—for a beginner’s guide to investing smart.
Being an adult means having access to adult money. Every time your paycheck hits your bank account, a surge of happiness runs through you—you can finally buy that bag you’ve been eyeing for days or try that viral restaurant you’ve been seeing on TikTok. Earning your own money for the first time is liberating, especially knowing you’re spending what you’ve worked hard for. But money isn’t just about spending (sadly); it’s also about saving and investing.
I’m in my early 20s and still don’t know much about saving or investing. I’m sure I’m not alone—many young adults feel uncertain when it comes to managing their money. To help break things down, Lifestyle Asia reached out to Jacob Macatangay, a young investment banker, to decode and simplify the world of investing.
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Ask The Expert
Jacob Macatangay is an Associate at Deloitte Philippines’ Corporate Finance Advisory practice. In this role, he advises on mergers and acquisitions (M&A), capital raising, debt restructuring, and other strategic alternatives for companies across the Philippines and Asia-Pacific.
Over the past two years, he has gained exposure to a wide range of industries, including pharmaceuticals, manufacturing, semiconductors and electronics, mining, real estate, renewable energy, and financial services. Most recently, he was part of the team that successfully closed a strategic cross-border transaction involving the sale of a minority stake in a leading Philippine pharmaceutical company to a Japanese investor.
If I’m just starting, what’s the very first thing I should do before I even think about investing?
Jacob: Before you even think about investing, the very first thing you should do is research what you want to invest in. It’s crucial to understand where you’re putting your money. You need to know at least what kind of asset you plan to invest in so you can manage it accordingly, because things won’t always go as expected. When you invest, you should always anticipate some risk.
It’s important to try to understand your potential investments, and there are many ways to do this. While there are a lot of resources online, it’s also helpful to connect with a mentor who can guide you, as investing isn’t always easy for a newcomer. Ultimately, the best thing you can do is learn about where your money is going.
Is there really a “right age” to start investing, or can I start whenever?
Jacob: In theory, there isn’t a “right age” to start investing. While some assets may have restrictions (for example, you may need to show a stable income), these requirements often vary depending on the intermediary you use. Banks, for instance, might have an age limit, but other avenues allow you to start much earlier.
Investing is becoming increasingly accessible. Many digital banks now allow students to invest. For example, I was able to access the stock market when I was 18, early in my career. Even if you’re younger, it’s often possible to start, depending on the platform you choose. There aren’t many skills required for investing where age matters; it’s something you can learn on the side without formal education.
The right age to start is when you reach a level of maturity where you understand that losses are a part of investing. Knowing that you won’t always win is the most important part of this journey. There is no specific age for this realization; as long as you have that maturity, you’re good to go.
What’s the easiest way to explain the stock market to someone who only knows it from TikTok memes?
Jacob: An easy way to explain the stock market is to think of it as any other market. The key difference is that instead of buying physical goods, you’re buying shares of a company. When you go to a market to buy fruit, there are buyers and sellers. You, the purchaser, look for vendors, and a transaction happens only if you both agree on a price.
The stock market works the same way. When you buy shares, you’re looking for someone who is selling them. A deal is only made when you and the seller agree on a price. The stock market may sound complicated because you’re dealing with something less tangible than everyday items, but it’s fundamentally the same. As you get more into it, you’ll realize it’s just like buying everyday stuff; you’re just receiving ownership in companies in return.
Do I need a lot of money to invest, or can I start with just a small amount?
Jacob: The short answer is no, you don’t need a lot of money to start. The first thing to understand is that investing isn’t just about the stock market. While there isn’t a strict minimum for the stock market, you’ll want to invest an amount that makes sense for you, since your returns will be proportional to the size of your investment. Some securities outside of the stock market may have thresholds. For instance, banks often require a minimum amount of funds.
However, even the simplest investments, like a time deposit or leaving money in a savings account, are valid. Many modern digital banks, like GCash, GoTime, and Maya, don’t have a minimum maintaining balance, so you can earn a return on any amount you deposit. While it’s more efficient to invest as much as you can to earn a higher return, there is no strict minimum.
The amount you invest should depend on your risk tolerance. The key principle is to only invest what you can afford to lose because some investments will inevitably carry risk.
What’s one beginner mistake you see people our age make when it comes to money?
Jacob: There are plenty of beginner mistakes, and that’s completely normal. The most critical mistake I’ve noticed is being too afraid of risk. When you invest, you should always expect some losses. I’ve seen this mistake firsthand early in my own investing journey. When you take your first loss, it’s easy to feel discouraged and think that investing isn’t for you.
A big mistake that new investors make is letting themselves be fazed by losses. Even the best investors, like Warren Buffett, have experienced huge losses that shaped them. Many people are too afraid to face these risks, but higher returns are often expected with higher risk. To get any returns, a certain level of risk is required.
It’s crucial for new investors to become comfortable with this. Acknowledging that you won’t always win and that losses are part of the process is vital because it will shape you as an investor. You’ll learn from your mistakes, and you can’t do that if you quit after a setback.
Related to this, some people invest more than they can afford to lose. As I mentioned, the key principle is to only invest an amount that you’re comfortable losing. This way, if you do lose, you’ll still have a chance to try again. You should never invest your life savings in something risky. You must learn to manage your risk to ensure you’re still protected if things go wrong.
How do I know the difference between a good risk and a bad risk?
Jacob: A good way to think about this is to quantify your potential returns versus your potential risks. Ask yourself, “If I expect to earn 20% on this investment, how much could I realistically lose if it doesn’t go well?” A good risk is one where the potential reward significantly outweighs the potential risk.
A bad risk, on the other hand, is one you don’t fully understand. You’re just riding the hype without knowing how the asset works, so you can’t properly anticipate your potential gains versus losses. This is more common with complex, sophisticated securities, but less so with safer options like savings accounts or bonds. It becomes more important to distinguish as you start dabbling with more volatile assets.
Ultimately, it’s about quantifying what you could potentially gain versus what you could lose. This is a challenge in itself, as you can easily overestimate or underestimate the risk, which is why you must stay committed to investing. You won’t get it right every time, and you’ll become a better investor as you go.
Everyone talks about crypto and “the next big thing”—how do you figure out what’s hype versus what’s smart?
Jacob: Something can be hyped because it has genuine value or because it’s getting artificial attention. It can be hard to filter out what truly has value, but a good approach is to block out the noise and do your own research.
You need to objectively understand the hyped asset. With cryptocurrency, for example, there are ways to learn about a specific token. If you’re just riding the hype, like with meme coins, and you don’t understand how they work or their economics, you’re essentially gambling. You’re speculating and putting money in without a clear understanding.
It’s hard to perfectly define what is or isn’t hype, but a good way to think about it is whether your decision is based on excessive speculation or grounded in reason. While investing always involves a margin of error, there’s a fine line between speculating and making an educated guess. Avoiding excessive speculation will help you determine what’s truly hype.
Crypto is a good example of a hyped asset. However, it’s been around for years, so it must have some inherent value. Start by determining if there is value, then delve into why, instead of just investing because others are. I’ve made the mistake of putting money into hyped assets without thinking and suffered for it.
It’s crucial to filter out what other people are saying and form your own opinion on why an asset might be valuable.
If I want to start today, what’s one simple, concrete step you’d recommend?
Jacob: The only way to truly learn a skill is to put it into practice. More than theory, you have to be able to apply it. The first step you should take is to accumulate capital that you can actually use to invest.
Once you have that, start investing, but be smart about it. Choose an asset that fits your investment style. If you’re less aggressive, start with something more stable that provides fewer returns but is less risky. However, if you’re on the more aggressive side, it’s okay to start with riskier investments to begin learning.
If you want to go for the stock market, by all means, do it. The only way to get a good feel for how investing works is to actually do it. That said, make sure the amount you invest is appropriate for your skill level.
If you’re a beginner, don’t invest a hefty sum. Invest an amount you can afford to lose. Think of it like a luxury purchase you’d enjoy. Instead of buying something, use that money to invest. You can treat your first investment as a “luxury purchase,” where you’re okay with losing that money. This way, if you do incur a loss, you’ve already expected it, which helps you manage the psychological side of investing.
This mindset can prevent you from getting too discouraged if you face a loss. It’s critical to understand the amount you’re willing to give up. If it doesn’t go well, that’s just an expected part of the journey. Ultimately, theory can only take you so far; to get a good feel for how it works, you must put your money out there.
Real talk: How do you personally invest your own money? (optional, just answer if you’re comfortable)
Jacob: I would say I am a moderately aggressive investor. I start by doing research, which for me means hunting for specific assets that fit my criteria. It’s like matchmaking; some assets are better for certain types of investors. If you’re conservative, you might go for bonds or fixed time deposits. But since I’m looking for higher returns and am okay with potential short-term or long-term losses, I seek out assets that align with that expectation. This is why I invest in the stock market and in funds.
Most importantly, I believe in diversification. You should never put all your eggs in one basket. Even as a moderately aggressive investor, I still seek out assets with lower returns but less risk. I don’t put all my money in the stock market; I make sure that a portion of my overall capital is protected by investing in things like bonds, which carry very little risk of capital loss. Also, I keep money in savings accounts or money market funds, which are considered safer.
Diversification helps me hedge my investments. If I lose money in one asset class, I have others to rely on. It’s rare for all asset classes to perform poorly at the same time, because when one isn’t doing well, the money is often just being siphoned somewhere else. However, in a challenging economy, you shouldn’t expect high returns. I always keep this in mind when deciding where to put my money.
Essentially, I seek out assets that are perfect for me but also ensure I’m partially protected by diversifying where I place my investments.
