Monday, June 24, 2013

Financial Wealth Calculator

Last night while browsing the website for The Church of Jesus Christ of latter-Day Saints, I went to check the page for provident living.

As I said before, or church is not just all about aleluiah! We are taught in terms of spiritual and temporal matters, and I was happy to find that there is  financial calculator on our church's website, in which I feel I ought to share.

This is for anyone who'd like to know how much they need to save, invest and paying off debt. I'm glad that there are help we can get in order for us to be financially self reliant. Here is the link:

Check it out! With careful planning, you can map out your financial future with your family and be happy!

Friday, June 21, 2013

Five (5) Tips to Successful Online Marketing

It's been a while I haven't blogged since after finding out about my pregnancy. Once again, 2nd pregnancy is taking it's toll but it's not as bad as the 1st. At least that is something to be glad about.

Also, another thing to be glad about is a guest post. this is coming from a friend who makes money from home. His name is Christian George Acevedo, Also a blogger himself likes to share to the online income earners wannabees the secrets to a successful online marketing.

Presenting his guest post:

5 Tips to Successful Internet Marketing – Best Approaches to Running an Online Business Empire
Do you want to know the difference between struggling online entrepreneurs and those that are enjoying success with their online business empire? If yes, the simple answer is effective internet marketing. If you are planning to enter the online business industry as well, keep in mind these 5 tips to successful internet marketing.

1. Focus on One Effective Strategy at a Time
Don’t try to do everything at once. One of the main reasons why many online entrepreneurs are struggling is because they try to implement as much strategies as they can at the same time. What you should do in order to avoid this from happening to you is to focus on one effective internet marketing strategy at a time. Make the strategy work for you before moving on.

2. Test Everything and Track Every Aspect of your Business
Another great approach to running an online business empire is to make sure that you know every aspect, whether big or small, about your business. How does this work? Keep track of your campaigns. Find out which are working and which are failing. Put money into those that are working and spend less on those that are failing.

3. Be Proactive
Keep it a point to test new things constantly in order to develop and make improvements in your business. Do not just wait for good things to come, you should make them happen. Being proactive is a crucial part of running any business, may it be physical or a web-based one. Do not let failures keep you down. Think of these as a way for you to know what to avoid the next time you plan on implementing a new campaign or strategy for your online business empire.

4. Continuously Generate Leads
Another reason why many online entrepreneurs are having a hard time is because they focus solely on making profits rather than creating good working relationships with consumers. While being profitable is one of your priorities, there are a lot of situations wherein it is better for you to generate leads. Cultivate and improve your relationship with your clients. This way, you will be able to keep their loyalty, which they are highly likely to extend to their family or their friends.

5. Feed Consumers with what they Need and Want
Last, but not the least, is to always make it a point to give consumers what they want and what they need. They will not take notice of you and your business if you are providing something that they are not interested in or that they will not really have any use for. Fresh, useful, pertinent, relevant, and unique information will make them interested in you. And when you more that meet the demands of your clientele, it’s very easy to build your online business empire.
About the guest blogger:
Christian George Acevedo has been writing online since 2008. Currently, he is blogging for, the website of a renowned Canadian online marketer, who has already built numerous companies and earned a fortune at a young age.

Monday, June 10, 2013

Mighty Change of Mind: A Personal Finance Paradigm Shift

This may be a late update but, I just want to jot down the success of our Saturday's activity, June 9, 2013:
Our guest speaker being Mr. Tom Tandog, an Associate Financial Planner and Senor Marketing Director for IMG - Wealth Academy. Part of the lecture was also conducted by Bong Sanchez, President for The Academy for Creating Enterprise, Angeles Stake Chapter. 

From there, we learn about how to change our mindset about money. Now, why is this important? It is because many people though that getting rich can only happen if you get to be lucky in terms of heirloom or hitting a lottery jackpot, other think its investing but they don't know how and where to invest their money. This often leads to being scammed. During the said event we were taught the right way of budgeting which leads to proper saving and investing of our money in legal entities that can guarantee us our return on investments. 

The program was also in line with the letter of the First Presidency for this year, regarding sound investments:

Everything in the announcement agenda has been covered during the seminar, including some introductions to legal publicly listed investments such as bonds, mutual funds, insurances and stocks. What a great way to be taught and refreshed on what were suppose to do in order to achieve self sufficiency and reliance the way our Father in Heaven wants us be. It's one of the ways to build Zion.

Friday, June 7, 2013

"Carpe Diem!" But, What if Your Opportunity Isn't Available to you?

What if something that you've wanted all your life seems to be too far away from you grasp? What do you do?

I once read a story about a little girl who was about  to start pre-school. Her mother, who always believed her daughter is a smart little girl took her to an exclusive pre-school where she believed can provide the best education for her with all the other smart little kids.

As part of the enrollment procedure, a school administrator would have to interview the little girl before they can decide whether the little girl is qualified to be one of the school's pupil.

During the interview the little girl was shown different colors of crayons on the table and was asked to pick the color she likes and write her name on a sheet of paper provided her.

After the interview was over, the school administrator had to tell the little girl's mother that her daughter isn't qualified to get into pre-school yet. and that they'll have to wait the next year and be interview again to make sure that the little girl is ready for school.

The little girl's mother felt disappointed. On their way home she asked the little girl what happened and why she did not pass to qualify into pre-school.

The little girl told her  that she was made to write her name on a piece of paper, using the crayons on the table. The mother said, "Well, I'm confident that you can do that because you know how to write and spell your name. Why, didn't you do it?

The little girl replied; "My favorite color is pink. Color pink is not among the crayons so I didn't do it!"


My take:

In our lives, It is of course a wonderful gift to have the things we want the most; but sometimes the things we aspire the most are the things that are mostly out of our reach.

Sometimes we blame other people or circumstances. Sometimes we use excuses:
"If only my parents can afford to send me to school..."
"If only I hadn't been sick, then I would have gotten the lead role for the play...
"I wanted to be a doctor but my financial budget can only cover for a two year course...
And on, and on....

Things happen not of course for just no reason at all. It may either be because of our circumstance or our lack of opportunity taking. In the story the girl knows how to write her name, but she was not able to pass the opportunity to start school just because the color she wanted to write it with is not available. Remember Maria from the Sound of Music, when she was sent from out of the Abbey to be a Nanny, said she, "When the Lord closes the door, somewhere he opens the window"

Do we really see which window is being opened for us? It is our responsibility to look around and find out the windows of opportunity. It is the time to practice the virtue of being flexible in many things, and make the most of our time if ever we don't get what we want. We ought to consider a better alternative. It may be heartbreaking at first, but one simply can't quit. Those who do, will never get another chance. 

Take for example in Entrepreneurship. Many people would agree that the only way to be financially free in life is to do business. But many fall into a trap in what we call the "entrepreneurial seizure." Why? because, the truth about doing business is that it's not easy and that some business take time to grow before an entrepreneur could say that he was already able to get his return of investments. Sometimes it even takes years. So the aspiring entrepreneur who once was an employee quits his entrepreneurial dream and goes back to the corporate world working for somebody else.

If we want to be successful, this is the best time to act and be not acted upon. We may encounter different circumstances in our lives, but how we act on our circumstances can bring us success, only if we are able to see that one closed door means another opened window.One can't just stand and let an opportunity pass him by just because what he wanted isn't the way that it looks with what's in front of us. Success does take a lot of work at the start. 

I hope the story inspired you as it did to me and may we all make the most of what life throws us. So, seize the day! You'll never know! 

Thursday, May 23, 2013

Emergency Funds and Invest-able Funds

It's school time once again, and many parents are spending for their children's education. I've just finished watching the late night news and I saw that the schools are getting ready for the upcoming school opening. With this also comes the stores and kiosk that are selling books and school supplies at an affordable cost. Parents are trying to look for wallet friendly buys for their kids. 

That is a good thing. With the economy that is going on about our country, it is important to be economical and practical. Though many of us would say that it's important to save on the stuff that we buy. It is also important to consider saving the money that is left of us after all the important expenditures.

Though, tuition, books and school supplies are important things to buy this season. It is also important that we realize to turn the rest of the money we used to buy into two different kinds of Funds we need in our lives. That is to put money into our Emergency Fund, and Invest-able Funds.

What is the difference between the two funds? Here let me explain:

Emergency Fund - This is the money that you put aside to be used for emergency purposes. This is your "I'm in need" piggy bank. Ideally it should contain an amount of your three to six month salary. Why? Financial experts suggest this so that if something inevitable happens, i.e. loosing a job, it is a known information that the usual time frame for a person to be able to find or get a new job would be in about three months. 

Where should we put our emergency funds you may ask? Well, you can make a bank account savings for it. Piggy bank is fine only when you don't intend to earn from your savings, but always try to remember the adage that, 'a penny saved is a penny earned.' The bank will only give you 1% interest (current bank interest rates nowadays) but at least your money can grow from there. Also remember to circulate your funds in your bank. Some banks charge fees for dormant accounts. So this means, even if you have already reached your goal amount for your emergency fund you keep putting in more money for some cash on hand for future purposes. 

Invest-able Funds - These are funds that is a portion of your money you decide to put away for investment. If you feel that you are a person who is not into business. You don't have to pressure knowing how to build one of your own, although it would a  brilliant idea. In order to secure your future, you can at least learn how to make money work for you instead of working so hard for it. We'll you'll work a little hard for it at first of course, but once your emergency fund is set you can make more money by investing them in financial vehicles that can provide you better returns for your hard earned money. This way, you'll have less worry when you get older. 

Both emergency and invest-able funds have it's own social and psychological cost. It is because it will require you to have a lot of discipline in yourself in order for you to save and invest money. Notice how our generation is hand cuffed to consumerism. This is the main reason why people who can't afford to buy the things they want are drowned in consumer debt. Sometimes it's the covetousness in us. 

As was mentioned in the scripture, I can also relate that disciplining ourselves to save and invest our money needs some 'bridling of our passions.' If being a shopaholic is your passion then, let saving be your passion now. No need to covet our neighbor's lovely things. You'll thank yourself one day for being able to satisfy the demands of delayed gratification. 

Saturday, May 18, 2013

After College and Office, Now What?

If I look at my resume, I would see that in the span of 11 years, I have been through different Employers and I could say, I would only stay at a workplace from maybe 3 to 6 months. I would say the longest I've been in a company would have to be around 1 year and 6 months at Convergy's. I just don't have the grit to stay in an office.

Sometimes, I feel that being in a office makes me feel really stupid. It's crazy, but it's the way I am. Sometimes or a lot of times colleagues  make me feel like, I don't know what I'm doing. At first I thought something is wrong with me. Well of course as un-perfect as I am. But one thing I know is that, amazingly I still survive after leaving the corporate slavery world. This is I guess, because  I never really stop doing something every time I'm out of job, or just resigned. I just have to be doing something else.

I remember when I was working at the ICT group, I got suspended from work for some stupid reason. It wasn't because I failed to try to do well. Who wouldn't want to do well for their office job just to stay afloat as an employee? It felt devastating during that time. Instead of wallowing at home, the timing was just right for me then to attend a one week Academy for Creating Enterprise Training. I belong to the executive batch which made my office suspension a lot easier to deal with. While at ACE, I learned a lot about Entrepreneurship. The last day of our class was our ACE graduation. Who wouldn't feel so special about this? I just turned my misery into a happy occasion.

Now that I work  from home as a self employed individual and a mom. I like it better. Funny as it may seem but I even have extra blessings in my pocket than I did when I was working for someone else's company. I also like the fact that I was able to do other things. Something always comes up and I was never content. I got more time for myself learning the things I really want to learn about.

Something that I've been learning a lot lately dwells more on the topic of personal finance and investments.

My journey to this so called financial independence started back in 2008 while I was working at Convergy's. It was in response to a friend's invitation to attend a lecture about The Law of Building Wealth and Decreasing Responsibility. I like their concept, so I did join with them in the International Marketing Group. To cut the story short, I am not an active participant to the IMG group. But because I do believe in the concept to strongly. I apply the principles I learned. I took my husband one time with me to attend to two of their lecture series in Makati.

My progress with IMG was slow on the business side. Living now in Pampanga, I am grateful to have bumped into a small business opportunity which helped a lot in my Entrepreneurial path. I am learning a lot working working on the business than working for a business. It is not always easy but I can sense that I'm growing more this way than the other way. 

Two years ago, I opened an account with COL Financial formerly citiseconline. They are now the country's largest online brokerage for stocks trading and investment. So far, I have positive experiences with them. It took me a year to attend their investor seminars. 

The First one I attended was a seminar entitled Investing in the Stock Market Today, conducted by Mr. Aya Laraya, RFP and an Investment Advocate. He is also the host for the show Pesos and Sense The lecture was an eye opener. It's amazing how he can simply explain what stocks are and how to invest in it. Too bad I didn't have my camera that time, I didn't even know he'll be the speaker so I didn't get the chance to have a picture with him.

After attending the lecture with Aya Laraya. I booked for another one the following month. The Fundamental Analysis by Charles William Ang, Research Analyst of COL Financial. I wasn't really happy about my attendance on this one because I slept late the night before going to the seminar, so I was feeling sleepy the entire time. I stayed anyways, the entire time trying to stay awake. I don't want to waste my travel time from Pampanga to Manila. I least I was able to hear lectures about the Fair Value and Book Value of a company and why it is an important consideration when picking stocks. Luckily, I brought my camera that time so I was able to take a picture of him while he was discussing. (I placed his photo with the other two below, I hope this is OK)

The last one I attended was the Primer to Technical Analysis, conducted by Juanis Barredo, VP for Sales and Chief Technical Analyst of COL. I really enjoyed this one! We were taught how to read the charts that will help us decide when to buy, hold or sell the stocks we own and are eyeing on. As he (Juanis) promised, I was even sent yesterday an email of the whole module!

And just last night, I cannot sleep. So I opened my laptop and checked on my dropbox folder. There are e-book files I was able to open, I went to look for a good read. I found this college book looking item. It was entitled. Financial Management Principles and Applications, by Keown, Petty, Martin and Scott, Jr. It was really late when I decided I have to stop doing what I'm doing and head to bed.

After I get to finish this book, who knows what I'll be doing next? Always, I'm at a start!

Tuesday, May 14, 2013

What's going on Pinoys?

It's been a while I haven't blogged. I guess my excuse is just being busy about being busy. Anyway, a lot of things has happened in the course of the few days. One of the hot topics all over the place is the recent Election 2013 for the Philippines. This is where the people of the republic have the power and are privileged to choose the leaders that will help run this beloved country of ours. 

But just watching and keeping up with the news since last night. It is somewhat devastating. Months before the 2013 Philippine election I've already seen all sorts of endorsements everywhere. From wall posts, to jingle campaigns, and online on social media.

Being a person who likes to look into the social media and the internet for all sorts of stuffs. I can see who among the senatorial candidate is the most disliked, for a lot reason. Now that the election is over and the counting of votes is on the process. Looking at my Facebook page, I can see clearly the disgust of my thinking class friends. It goes from wall post, after wall post, after wall post. People that are running for office are making their ranks in the polls according to the news.

Many are devastated that after all their campaign to inform the public to vote wisely and choose a candidate that suits best in the public office; it seems that it wasn't heard by the majority of the people at all! Could it be that some of our fellowmen intentionally wanted them there? or could it be that once again their votes were bought. It is not a wonder anymore why the Philippines is one of the most corrupt country, in Asia. It is a sad thing. 

It has always been a long time warning:

Hwag ipaglibili ang boto!
Think and Vote wisely!

I was happy that before the said election yesterday, It was pronounced over and over again. On tv, on the radio, newspapers, and in social media. It has been shared, twitted, and re-twitted over and over again. In many different ways,  Coming from the country's leaders, celebrity endorsers, by our friends and even our next of kin. But what happens after? Galit nanaman ang thinking class and those who were able to receive money out of it are just getting their days food and, the next days... who knows they may be back to poverty again. Above all this, we still wonder why the economy is bad. Why are we all still in poverty? Sickening isn't it? 

Amidst all these, I still feel hope. It's because there is still the thinking public. It's not a matter who is rich and isn't anymore. I'm grateful for those who were on the look out for their fellowmen. It doesn't take an election candidate to do that. In their own way, sharing such important information about individuals who did run for office played a big part as to who should and  shouldn't be in the public office. It's just sad that those we don't want there are soon to be secured in their place.

I just hope that in the next coming elections, three years more and so on, will be different. Unless we make changes amongst ourselves, then we can truly say that we don't deserve who and what we did and didn't vote for. It's time we put our hearts and principles to where our mouths are. 

Monday, May 6, 2013

Awesome Heber J. Grant Story

Heber J. Grant

President Grant tells the following experience in his own words regarding how the Lord blesses us when we keep his commandments and rely on his divine help.
“‘I remember as a young man I had $50.00 in my pocket on one occasion which I intended to deposit in the bank. When I went on Thursday morning to fast meeting—the fast meeting used to be held on Thursdays instead of Sundays—and the bishop made an appeal for a donation, I walked up and handed him the $50.00. He took five of it and put it in the drawer and gave the $45.00 back to me and said that was my full share.
“‘I said, “Bishop Woolley, by what right do you rob me of putting the Lord in my debt? Didn’t you preach here today that the Lord rewards fourfold? My mother is a widow, and she needs $200.00.”
“‘He said, “My boy, do you believe that if I take this other $45.00, you will get your $200.00 quicker?”
“‘I said: “Certainly.”
“‘Well, he took it.
“‘While walking from fast meeting to the place where I worked, an idea popped into my head. I sent a telegram to a man asking him how many bonds of a certain kind he would buy at a specified price within forty-eight hours. … He wired back that he wanted as many as I could get. My profit on that transaction was $218.50.
“‘The next day I walked down to the bishop and said: “Bishop, I made $218.50 after paying that $50.00 donation the other day and so I owe $21.85 in tithing. I will have to dig up the difference between $21.85 and $18.50. The Lord did not quite give me the tithing in addition to a four to one increase”’” (Presidents of the Church [Religion 345 student manual], pp. 176–77).
Notes from the blogger:
Our Relief Society lesson last Sunday was about Temporal and Spiritual Self Reliance, I believe this story is one perfect example.

Wednesday, May 1, 2013

Invest What you Can Afford Using an Hourglass

The other week, I promised a friend that I will blog about how to do money cost averaging. So here it is now! 

If we've ever heard of the term buy low sell high, traders do this strategy with their stocks. But one can never really tell the timing of the highs and lows of stocks prices. This is the reason why it has become so risky, to the point that you could loose money. 

While it is true, there is a way to invest in the stock market without losing too much. That is investing for a longer time period. You have to make sure your investment hourglass is working for you and not against you.We call it the money cost averaging strategy.

How does money cost averaging differ from trading? Well, in money cost averaging, you invest a fixed amount of money whether the prices go up and down. This is the way to make the most of your investment hourglass, no matter what age, or experience you may have about stocks.

I'm going to make an illustration. Refer to the three graphs below. Which do you think makes more profit from among them?

Investment A is on top left, Investment B on top right and Investment C below the two.
If you look at the graph above, it would seem that Investment A earns more profits because the trend of the market prices goes up. But we will dissect each graph and see how much each investment really profits; whether the market is trending up, or down, or not so much movement like the graph on investment B.

Here are the formula(s):

To calculate the shares = Investment Amount 
                                           Price Per Share

Lets start with Investment A:

Let's assume that Mr. Investor invests Php 1,000 every month with his investment trending up in prices, month by month.

     Month 1: 1,000/5       = 200 shares
     Month 2: 1,000/12.50 =   80 shares     
     Month 3: 1,000/15     =   66 shares
     Month 4: 1,000/20     =   50 shares
     Month 5: 1,000/25     =   40 shares
     Total shares:                436 shares in 5 months

If Mr. Investor will have accumulated 436 shares in five months. If he decides to sell his investments from  month 1 to Month 5 with shares at valued at Php 25/share. His gross income would be Php 10,900.

How much profit did he make?

           Php 10,900 - gross income from his shares
        -  Php   5,000 - investment amount from Month 1-5
           Php   5,900 - profit from his shares!

Investment B:

Assuming that Mr. Investor invests Php 1,000 every month with his investment that doesn't fluctuate too much in prices.

     Month 1: 1,000/15     =   66 shares
     Month 2: 1,000/10     = 100 shares     
     Month 3: 1,000/18     =   55 shares
     Month 4: 1,000/15     =   66 shares
     Month 5: 1,000/20     =   50 shares
     Total shares:                337 shares in 5 months

337 shares in five months. If he decides to sell his investments from  month 1 to Month 5 with shares at valued at Php 20/share. His gross income would be Php 6,740.

For the profit;

           Php   6,740 - gross income from his shares

        -  Php   5,000 - investment amount from Month 1-5
           Php   1,740 - profit from his shares

Lets see what investment C has to offer:

Assuming that Mr. Investor invests Php 1,000 every month with his investment that doesn't fluctuate too much in prices.

     Month 1: 1,000/12.50 =   80 shares
     Month 2: 1,000/10     = 100 shares    
     Month 3: 1,000/5       = 200 shares
     Month 4: 1,000/8       = 125 shares
     Month 5: 1,000/20     =   40 shares
     Total shares:                545 shares in 5 months

If he decides to sell his investments from  month 1 to Month 5 with shares at valued at Php 25/share. His gross income would be Php 13,625.

For the profit;

           Php 13,625 - gross income from his shares
        -  Php   5,000 - investment amount from Month 1-5
           Php   8,625 - profit from his shares!

That's more than the profit gained by Investment A and B!

The reason why stock prices go up and down every day has certain factors. It could either be politics, economy,business performance of the company, and events that happens around the world.

No matter what happens to the stock prices, just buy anyway. All you have to do is just to select which company you want o invest in (make sure it's a good reputable one), and decide how much you want to invest and how often at an interval basis. The trick is to have a medium term to long term investment hourglass (5, 10, 20 years). This way, you can invest in the stock market even if you don't have all the time in the world to monitor it, and still make profit, whether the prices go up or down.

Monday, April 29, 2013

Financial Checklist

I don't want to be mean, but I am, maybe... and judgmental even... And this may not be a very nice post. If you don't want to transgress, stop reading now, but if you want to keep reading, you may proceed at your own risk.  

I remember some months ago, my hubby was browsing his Facebook page and he was looking at some photos of a friend of his who is a what we call, "a rich man's daughter. " I've been introduced to this friend some time ago as well. According to my husband's story, he's known this friend for a long time and the way he would tell stories about her is that she is a free spirited, happy go lucky girl. Someone who can get any boy that she wants and buy anything her money could buy. 

Anyway, back to that conversation while my husband was browsing FB... he called me, and showed his friend's picture at a beautiful place abroad. He said, "This friend of mine! is FINANCIALLY SAFE!"  

Smiling, I just said, "Really? How safe?"

How could she be financially safe when all she does is spend money? I get what he meant, as you can see she is a business tycoon's daughter. But for reals, let's elaborate. On top of this post, is a picture I stole from an FB  group called Journey to Your Financial Independence. The reason why it's there is because, when I saw it posted, It reminded me of my husband's friend. "How financially safe is she really?" 

With her kind of attitude and lifestyle. It'll be easy to gauge how financially safe she is by doing a checklist based on the picture above; and according to my husband's story of her. One by one: (bottom ladder step first)

Step 1: Work and Earn --> Check, well yah maybe, AFAIK (as far as I know) she just resigned from her job, because she is pregnant now and she just got married.

Step 2: Make a budget --> "Budget? What budget???"

Step 3: Record Expenditures --> "Sky is the limit!"

Step 4: Have a Bank Account --> We'll she probably has, one that daddy has been chipping money in, and her hubby's too!

Step 5: Carry life insurance --> One that her office provides for her, while she was employed or maybe daddy is the insurance provider. So, check on this one!

Step 6: Own you home --> Well, getting there, since the girl just got married, they're going to get a housing loan one day, in the meantime, almost is the same as never.

Step 7: Make a Will  --> Daddy has a will! or did he already make it? In time, she's gonna be like the Hilton heiress, watch out world!

Step 8: Invest Carefully --> Her dad owns some hotels! (oops, I hope I will not be too obvious), businesses! and her mommy has too! that's investment enough. I've never really heard from my husband that she mentioned about some shares of stocks or something great, though maybe she may have.

Step 9: Pay bills promptly --> check-ish! (Don't forget the savvy cellphone should never loose credit calls, it raises her status quo).

Step 10: Share with others --> Check! Her money or not, when it comes to her friends, she is all out. No matter how much money she spends so long as she is admired, and people should be happy or at least pretend to be happy while with her.

Question, how financially safe is she really? You decide! Now that I'm about to finish this blog, I have to be sure to make my life in order and focus on my priorities. Otherwise it would be embarrassing if I will not have any progress because of the consequence of judging her, and loosing my own focus. Time for self measurement!

As for me, I just don't believe that a person is financially safe if they don't live according to the basic financial principle that the truly rich have. Money takes time to earn, yet very easy to spend and loose. It drives me nuts, to know that some people are as vain as can be without being punished for it. Or if they are, they're not recognizing it. Not that I want these people to be cursed. I felt pity more that admiration. Maybe, it's just the stingy personality in me that questions, "When will they ever learn?" Now, let  me get back to myself, thank you.

To the those whom we consider as YOLO (you only live once) Open your eyes! There are ways to learn, and we ought to start to learn. To save, budget and invest. It's the only sure way to be financially safe. 

Thursday, April 25, 2013

Stock Market - It is Gambling! It's not Gambling!

"Stock market?"
"Wait we're not allowed to get into stocks. It's gambling! Isn't it right?"
As an LDS living in the Philippines, this is what I usually hear when some of my fellow church members would hear about engagement in the stock market of another. 

When I first heard about the stock market it wasn't explained to me like it was explained in the first paragraph above. It was explained to me this way by my grandpa: When I buy shares of stocks of a company, I become part owner of that company. And that the company I am a part owner of, can give me dividends that will serve as profits. When the time comes, I may sell your shares of stocks and make more money. I can buy more stocks also to get more shares. That way I will be contributing investments to the company that I buy. I will allow the funds I contribute be taken care of by the company's bigger boss(Board of Directors etc...) and it's employees. The business runs without me having to be actually there. I become an investor!

As I grew up I began to attend a company seminars that teaches more about stocks and other financial stuff. I began to realize that I want to study more and invest more stocks for my future and children's future. Very excited, I went to my dad and told him about the idea. He laughed and said that I can't join the stock market because it's gambling. 

Though it may seem like it, I don't mean to put my dad in a bad light here, he's been a good dad to me. His idea of things sometimes is more dominated by fear than by really trying to understand the all the logic behind it. Just my thought...
Anyway, let's get back to the topic. Is stock market really gambling or not? My answer is, it depends! 

First off, let's make this simple. Investing is the word used by businessman and entrepreneurs when they are trying to build a company that they'd want to stand through time. So when a person invest, that simply means that it has to be long term and not a fly by night activity, or a one time event. There is home work to be done, such as proper company research, and forecast about a company's projects etc... 

Let's define gambling. Gambler is the word we use for people who are just trying to make their bets through luck. This usually happens in a casino or when we... say, buy a lottery ticket.You go into a casino, to try your luck, you can either win or not, the same thing with lottery. Though you don't know if the numbers you pick will win, you still try your luck, and speculate on choosing what numbers might win. In short, if you are just speculating, then you are gambling.

Now, wanna get into stocks? Let's place some guidelines: 

1. When we want to invest in the stock market, we make sure we do our homework. Also, we must remember that businesses needs to take time to grow.

2. Time and not timing is our ally there. If we withdraw too soon then that is our loss. If you want to invest and consider yourself an investor, make it long term.

3. Sometimes, some investors forget the real essence of investing into the stock market. They would get into the stock market today and then tomorrow they sell their shares, and never come back, and consider themselves investors already. They made one trade and then never again, and then they'd tell you that stock market is gambling! 

4. If investing is our goal, we do not buy businesses that we do not understand. This way we can keep constant investment to companies that we can benefit from for a long time. 

Just because it's high yield and doesn't mean it's gambling. Simple as that! Otherwise, go gamble and good luck with that!

Wednesday, April 24, 2013

Questions to Ask Your Fiance Before Settling Down

There is no divorce in the Philippine law, but couples do fight about money and also one of the reason for a couples separation (legal or illegal). 

Getting engaged is such an exciting time in a couple's lives. Besides planning for their wedding reception, where to live, how many kids or in-law visits; couples should importantly discuss a very personal topic before getting hitched. That is the topic of "finances." 

Look to the left, with the statistics like that in America, we can say that there is a greater need for financial planning between engaged couples to lessen heartaches and quarrels in their married life in the future.

An article my friend sent on my email talks about this issue which inspired this blog. Lauren Gadkowski, a financial planner in Covington was quoted saying: "Talking about money doesn't mean you are going to fight about money. But if you don't talk about money, then that's where the problems begin."

The author of the article, Jeff Opdyke, said that there are 9 important questions that a a couple should ask one another before getting married. I will place them below and write my simplified insights:

1. What are your financial assets and liabilities? --> This may seem a big question, but to couples who are practicing an all honesty relationship, this should be easy to answer. It always helps to disclose everything about your financial status. It's OK to say you have none when you really have none because a person with aspirations and goals will one day have more assets than he has liabilities.

2. How do you use debt? --> Ah... now here, there are a lot of young people that I know of who has more credit card debt than educational loan. Knowing such things about your partner will help you gauge if your are marrying a person with the right priority or not.

3. What is your money history? --> Are you marrying someone who comes from a family of spenders or savers? Determining this before marriage will really help you know what certain money adjustments you will have to make when you are already married.

4. Do we need a pre nup? --> Trust issue is the main issue in a pre nup. Some people think getting a prenuptial agreement between both parties is an insult. Jokingly, I would consider pre nups like a term insurance policy. If something goes wrong in a marriage and both parties would consider separating, then one or both of them would benefit from the pre nup's protection.

5. What are your financial aspirations? --> Short term plan, medium term plan, and the long term plan. How much money would you want to have in your bank account in the next five years? Would you want to retire comfortably or you can't retire at all because your lifestyle can't afford it?

6. What are your career expectations? --> You will know from your partner whether there will only be a single income earner in your family or both of you will have to participate in bringing more income at home.

7. How do you propose we divide financial duties? --> Discuss with your partner what your strength's are, both of you can decide who will handle and budget the money that comes into your family and where to allocate it. In my case, my husband gives me all of his salary, I in turn give him his allowance. The caution he provides me is this: "You have all my money, but if you make any debt that is not in our plan, do not take it out of our joint account! Whatever your debt is, it's yours to pay."...Understood Sir!

8. Will we operate from one checkbook or three? --> If you operate in one checkbook, all your saving and expenditures will be coming in and out of one source. If you have three, you can set aside a joint account considered as an emergency fund while each of the spouses will have a separate account for each of their discretionary purchases.

9. Do you have a basic understanding of money? --> People that are in love are always on a dreamy state. But getting in the bonds of matrimony will make you wake up. One day or the next you will live a a world which will either make you sad all the way through or happy for eternity. If you have an understanding how certain financial vehicles work, like insurances, checking accounts, and credit card, you have an advantage. Storms of life will come, whether that be an accident, illness or disability. Will your attitude and knowledge about money help in creating happy family relationships in spite of all these, or would it ruin it? 

There is a notion that says, "Love will conquer all, even the smallest indifference." Though this statement may be true; I say, "There are only four things that can happen if you don't discuss important matters such as finances in your engaged bliss. You can, a.) talk about it when you already are stuck for good anyway, there's still room for improvement; b.) complain how bad your spouse is in managing your finances throughout your marriage; c.) get a divorce or annulment; or d.) suffer in silence throughout your marriage."

Whatever your decision is, remember that in relationships money is not important but saving it can secure your future. I say "best of luck!" to our financial decisions in life; And if you're already getting married soon and reading this, "best wishes!" 

Monday, April 22, 2013

Wonderful World of Legit Investments

When I was young I love to watch The Wonderful World of Disney, now that I'm older, I'm more interest to learn the "Wonderful World of Legit Investments."

After posting my new blog yesterday. I got an email from a friend inquiring from me about investing in the stock market. I gave her a brief description about what it is and a simple 'how to start.'

Her inquiries made me decided to blog about the different kinds of investments where we can put our hard earned money in. Again, I am not talking about scams, or MLM. Speaking of scam, it is still a sad thing to remember the victims of Aman Futures Group in the Visayas and Mindanao area of the Philippines. Some families used up all their hard earned savings to put in an investment only to loose them all! Some of them even loaned some money thinking they will make more only to get them into debt that is very hard to come out of. 

Following Sunday after the news, the LDS church in the Philippines received a letter coming from our area authorities. We are encouraged to bank on our financial learning so that we will not be a victim of fraudulent financial activities, and that (quote) "Consideration should also be given to investing wisely with responsible and established financial institutions." Also, we need to know how much risk we can handle when it comes to money. Are we afraid of losing to much money (Conservative) or are we OK to lose a lot of money so long as our gains are more than what we've lost (Aggressive).

Investment is a passive kind of income. It's is how you can make your money work for you; But we need to make sure we are investing our money in a legitimate company before we break our piggy bank and avoid  being sorry at the end. 

The following are the different kinds of investments that are brought by a responsible and established financial institution:

Bonds (Low Risk)
If you are not a high risk person, investing in bonds is for you. Bonds are securities founded on debt. Purchasing a bond is like lending your money to a company or the government. They will in turn promise to pay you the interest for however much you lent them and then pay you back all the money you lent them.

However, one who invest in bonds cannot exactly say that there is safety nor stability in it. It is because the risk is very low, and therefore the Rate of Return is also low.

Stocks (High Risk)
Purchasing Stocks makes you a part owner of a certain company listed in the stock market. It has it's perks of entitlement. As a stock holder, or a shareholder , you'll have the opportunity to vote at meetings for the shareholders and receive profits that the company might have (dividends).

While bonds can produce steady income stream, stocks is the opposite. It is volatile. Though it can  provide high returns, it can put an investor at a high risk of loosing some or all of his invested money. The fluctuation of value in the stock prices are very rapid and there are two ways to earn. 1. Is if the stock you bough increased in value 2. we mentioned earlier, through a dividend. (Some companies don't pay any dividends at all).

Mutual Funds (Medium Risk)
If your risk appetite is set to medium, mutual funds will be beneficial for you. This is a collection of stocks and bonds. Buying a mutual fund, means that you with the other mutual fund investors are pooling money that will let you pay a professional to manage or select the securities for you.

Depending on the mutual fund company, they may pick securities that are mainly focused on certain financial vehicles whether it be large or small stocks, government or company bonds. These certain bonds may be coming from our country's industry, or abroad.

If you feel you are the person who does not have the time to learn about the stock market, go with mutual funds. This way you can let the real experts take charge instead of you having to face the risk of losing everything you've got.  

Now that you have the idea, the responsibility is in your hands. While different kinds of investments do have their own risk factor, we need to determine our appetite for risk. This way, we can avoid the pitfalls of being pushed to limits more than we can handle. Hope this blog will help you make sound decisions about where to invest your hard earned money.

Why We Need to Invest

April 22, 2013, PSE rejoiced with the new all time high of the Philippines index on the stock market. Seven minutes prior to market closing, the index went up to 2.35% to 7,120.48. 

Disclaimer: I am not a fund manager but I am happy with that news. Why? because it simply means that more and more people are making themselves equipped in financial literacy and have started their way to their own financial independence by investing. One of them is yours truly. Of course, the old timers too who have been around a long time, these foreign and local investors have been blessed by their winning stocks today.
Now on to my blog... All of us can be investors too! It is a myth to say that only the rich can be investors and can join the stock market bandwagon.There are broker companies nowadays that offers as low as Php 5,000.00 to invest in the stock market; But why do we really need to invest?

I'll tell you why... We need to invest so we can combat "inflation." If we are aware, every month news on tv, internet and the newspapers would announce the current inflation rate but most Filipinos don't even seem to bother, all you'll hear is the complaint about the rise in commodities. You might ask, well what is inflation anyway, and why is it important?

Saving in a bank will give you only 1.0% while you need to beat the 3.4% inflation as illustrated in the chart above

According to investopedia, inflation is a sustained increase in the commodities  year by year over time. It has been a common knowledge whether we like it or not.We can always complain to the government about that but actually the government can do nothing about it. That being said, there are three options we can do:

a. You can lessen your spending.
b. Raise the amount of  your salary or  
c. Invest your money in a legit financial vehicle.

If you ask me, "A" is possible. "B" could be possible, if your boss is feeling generous  or you can go overtime at work (unpleasant) but "C" is the best way to go! 

In order to beat inflation, we need to earn that absolute minimum of however much the inflation rate from year to year. What is the best investment vehicle to invest in you may ask? It depends on your risk appetite. I only choose stocks because stocks earns at least 3% a day, and can even give you as much as 50% if you know where to get it. Does that make sense?

Before I end my blog for today. I would like to congratulate our PSE and investors who have been smart enough to start already! Quoting from Aya Laraya, RFP and fund manager from colfinancial (formerly citiseconline), he said: "No matter how much you save, if you're not beating inflation it's useless." So, get to learning more and start now!

***First step to investing is to find a broker, and I don't know if I will be breaking the rules of blogging or what not but, if you'd like to learn more and start investing in the stock market, you can check out the website for goodluck!

Saturday, April 20, 2013

Financially Stupid

Nope, I'm not trying to be judgmental, but if you think I am after reading the first few paragraphs, then it is either you whose judging me wrongly or I may have to repent later after writing this blog. But first, let me tell you a true story.

After one of the Financial Literacy Seminar he was teaching, a certain attendee went to approach the speaker, he is a CEO and Marketing Directors of a prestigious financial institution. The man said to him, "Sir, you gave a great lecture however, I want to attest to you that my wife is an asset and not a liability. Look at her, she is very pretty."

Mr. CEO just smiled and said,  "My friend, the definition of assets are people or things that helps put more money into your pocket."

"Tell me, does your wife help you put more money or savings into your bank account or does she spends most of them?"

"Well," the man said, "She buys a lot of nice expensive things, like make-ups and stylish clothing using my money."

"Then my friend," said Mr. CEO, "You have to talk with your wife and discuss how you will turn around your finances, because according to your story she doesn't sound like an asset to me."


On the next seminar schedule, the same man approached Mr. CEO again and said; "Sir, thank you for your advise. My wife now is truly an asset. We've spoken and she now started to be frugal. Also, she manages to save some of the money to our bank account every time I give her money from my salary." 

--The End--

End of the story now on to my blog. In one of the talk show videos I keep watching on you tube there is this episode I came across with, on which the main topic is the stupidity of women when it comes to finances. The guest of the show a financial expert said this about women; "Many Women are Peso smart but Million foolish." 

We'll, I believe that not all women are financially stupid, but most are... and men too! I didn't get to finish watching the whole episode but I have my own presumptions I have my own presumptions and here are just a few:

1. Women know where the latest mall bargain is but they don't know which companies of the stock market are on sale. 

Men, may or may not know where the mall sales are or they wouldn't even care; but they also don't know when the stock market is cheap or they don't even care about the stock market, period.

2. A hair re-bond session that charges a fee of not less that Php 1,000.00 is not so much to pay for, not knowing that 1,000.00 at 12% interest will turn into 1Million in 24 years.

What is a car loan when he can show off a brand new Porsche to his friends and dates.

3. They'd rather date a handsome guy who likes to spend his money more than he earns them, instead of dating the one who has potentials.

Men, would date a pretty girl instead of dating the smart ones who can make sense about money. 

After all is said and done, both of them are living in financial disaster!
In reality, most men and women of all sizes and shapes, many are still lacking in Financial Literacy. People still make unnecessary purchases and get scammed in wrong investments, which just proves that in this day and age; People are financially stupid. According to an anecdote I've once read, there are two kinds of people.

"The One who is rich, and The Other who wants people to think that he is rich. "

The other use to love fancy-schmancy things. To die for shoes and apparels,  Expensive perfumes, cool phones and gadgets and other branded items. In short, 'the must-haves that they don't really have to have.' They are lured into the world of consumerism. They feel they don't want to do anything with savings and financial investments since they feel that it's (1) only for the experts, (2) they just simply don't care about their financial future. 

I'm not saying that buying nice things are bad stuff. To be honest I like those kind of stuff too. I would love to have those if only they are given to me as gifts, I would appreciate it. Otherwise, I will have to make a way to afford it, otherwise... I can do without it for now.

If we try to secure our financial future by living frugally at our present status. We can rest assured that we can be comfortable in our old age. In short we can delay our instant gratification for a long term return of our investment. 

Others would contest, why study Financial literacy when "money is the root of all evil."? If that's the case, I who wrote this blog should have been cursed now? and if not now then maybe later in my life.

My take on it though, is this; We are stewards of God's creation, and as children of God, we can try to be abundant as much as we can in order for us to help build Lord's Kingdom on the earth. Money is Not the root of all evil. Take note that in 1 Timothy 6:10 the exact words were, "For the love of money, is the root of all evil." see the difference?

There is a need for a change of mindset if we'd lime to build a strong financial foundation. Discipline also, instead of spending money on useless stuff, we can still consider the difference our money makes as investible funds.

So, instead of upgrading your cellphone every month.Why not invest them on assets that can generate you more income in the future. There is a cost of course. It may affect our lifestyle a bit, and social life a bit but trust me, you'll survive without what you thought you can't live without. 

The question of so many of us then is this; Is it possible that people can really study and get into, Stocks, Bonds, Mutual funds and or UITF's to improve their financial status in life?

Why, yes! and if you ask why... then why not?