Pages

Wednesday, January 26, 2011

How To Open A Mutual Fund Account

This entry is in response to Shine’s request on how to start a mutual fund account. 

I can only speak for the mutual fund companies I have invested but the process is almost the same for all.

For Philequity Management Inc. (PEMI), Click LINK

For First Metro Asset Management Inc. (FAMI),  Click LINK

For ALFM (BPI) –Visit any BPI branch and ask about their mutual funds.  They will give your forms to fill-out.  Here are the various ALFM mutual funds, Click LINK

For Philam Asset Management (PAMI), here's the investment procedure.

1.    For Individual or Corporate Accounts:
  • Investor/s fills the following forms:
a.      Investment Application Form (IAF)
b.      Client Information Sheet

  • Investor/s submits a photocopy of any government issued ID.
  • At most, 3 persons can open a joint account
  • For Corporate Account please submit the ff:
1.      Articles of Incorporation & By-Laws
2.      Certificate of Registration
3.      Board Resolution, authorizing the investment
4.      Secretary’s Certificate w/ Specimen Signature
5.      Certificate of Beneficial Ownership

2. Investments can be made through:

CHECK:  Check should be made payable to the fund, i.e.,

        Philam Bond Fund, Inc.
        Philam Fund, Inc.
        Philam Strategic Growth Fund, Inc.,
        Philam Managed Income Fund, Inc.,
        GSIS Mutual Fund, Inc.

(For any out-of-town checks or offshore dollar checks received, booking of investment will be made upon clearance of check).

CASH - For dollar cash notes, please provide a copy of the dollar bill serial number or a photocopy of the dollar bills.

3. For investment coursed through BANKS, deposit amount payable to the fund with the corresponding bank account number.   Please provide PAMI a copy of the deposit slip and fax IAF & Deposit Slip to fax # 813-6813/18 before the cut-off time, 12 noon.  Please indicate name of BDO as recipient.

Note for Faxed Investments:  Original Receipts and Confirmation of Purchase (OR/COP) will be released only after ORIGINAL copies of investment forms and deposit slips have already been submitted to PAMI.

Pia’s Practical Tip #4 On Saving Money

Tip #4:
Auto-deduct your savings or investments on a regular basis (e.g monthly, every payday, etc).

Qualitative Benefit:
  • You are not tempted to spend your money whenever payday comes.
Quantitative Benefit:
  • If you invest Php 1,000.00 per month, you’ll be able to accumulate Php 16,000.00 per year @ 12%.

Friday, January 14, 2011

Goal #1 - Check!

So much good news this week!

I finally issued monthly checks for my mutual fund investment equivalent to 5%! Increasing my long-tern investment of 10% (at present) to 15% is one of my goals for 2011 and it’s already claimed!


I was planning to postpone it until middle part of the year but after reading this article 
entitled 5 Secrets of Successful Savers (click here), I felt I had to do it.

In other words, I had to ACT and MOVE!


Here’s an excerpt from the article:

5 Secrets of Successful Savers


1) They started slowly. Overcoming the initial inertia that prevents many of us from saving is often the hardest step. That's why starting by saving just a small amount can get you on the path towards bigger savings. Nicole Mladic, a 31-year-old communications director in Chicago, couldn't afford to put away a big chunk of her salary when she was in her mid-20s, so she started saving 2 percent. A few months later, she raised it to 3 percent, then went to 4 percent, and eventually reached her goal of 10 percent. Today, her net worth is over $90,000.

 
It’s a great start indeed!

Tuesday, January 11, 2011

Wealth Within Your Reach Pera Mo, Palaguin Mo by Francisco J. Colayco

Francisco J. Colayco is one of my mentors towards financial freedom.  I have not met him personally but I can reach him through his books and seminars  under the Colayco Foundation for Education.  

I read Wealth Within Your Reach Pera Mo, Palaguin Mo a few years back and it is a good book to motivate us towards our goal.  It has in-depth discussions on financial independence and makes us understand its importance. 

It also shares stories of successful entrepreneurs and how we can learn from their successes and failures.

This is a must read for every Filipino living here and abroad most specially those who want a clear understanding on financial wisdom.

It does not only talk of the  basics on financial independence but most importantly, the hows and what can be done.  

Here's a summary of Francisco Colayco's Pera Palaguin Commandments for Financial Freedom:
  1. Pay Yourself  First
  2. Define Your Financial Target At Each Phase
  3. Stop Spending On Things That Decline On Value
  4. Protect Your Greatest Income Generating Asset: Yourself
  5. Grow With The Economy And Beat Inflation
  6. Trust The Power of Compound Interest
  7. Assess Risks and Options: The Higher the Return, the Higher the Risk
  8. Make Money Work For You
  9. Invest And Diversify
  10. Use The Power Of One: Strength In Numbers
Click LINK To Buy Book Now!



The Power Of Compound Interest – An Illustration

A family member of mine has finally decided to put in monthly investments in an equity fund. She started this January 2011 and chose Philequity Fund.

Actually, she has made initial investments last year but failed to be persistent in investing regularly. 

I do understand her situation since she is a new wife and mother so her family is just recovering from major family-related expenses. Any newly-married couple can relate to her.

But for the new year, she finally decided to ACT and INVEST REGULARLY.  And she called me to tell the good news!  She will put in Php 3,000.00 monthly to her equity fund and issued post-dated checks for the rest of the year.

I am so happy for her!  She is finally realizing her goal to become a multi-millionaire someday by letting her money work for her. 

I would like  to show a chart that will illustrate the value of her Php 3,000.00 monthly investments in the years to come.  I showed the same chart to her during one of our sharings on investments and financial freedom.

Year
Age
Future Value Of Investment at 12% per Annum*
Future Value Of Investment at 15% per Annum*
2011
30
         36,000.00
         36,000.00
2012
31
         80,640.00
         82,800.00
2013
32
       130,636.80
       136,620.00
2014
33
       186,633.22
       198,513.00
2015
34
       249,349.20
       269,689.95
2016
35
       319,591.11
       351,543.44
2017
36
       398,262.04
       445,674.96
2018
37
       486,373.48
       553,926.20
2019
38
       585,058.30
       678,415.13
2020
39
       695,585.30
       821,577.40
2021
40
       819,375.53
       986,214.01
2022
41
       958,020.60
     1,175,546.12
2023
42
     1,113,303.07
     1,393,278.03
2024
43
     1,287,219.44
     1,643,669.74
2025
44
     1,482,005.77
     1,931,620.20
2026
45
     1,700,166.46
     2,262,763.23
2027
46
     1,944,506.44
     2,643,577.71
2028
47
     2,218,167.21
     3,081,514.37
2029
48
     2,524,667.28
     3,585,141.52
2030
49
     2,867,947.35
     4,164,312.75
2031
50
     3,252,421.03
     4,830,359.67
2032
51
     3,642,711.55
     5,554,913.62
2033
52
     4,079,836.94
     6,388,150.66
2034
53
     4,569,417.37
     7,346,373.26
2035
54
     5,117,747.46
     8,448,329.25
2036
55
     5,731,877.15
     9,715,578.63
2037
56
     6,419,702.41
   11,172,915.43
2038
57
     7,190,066.70
   12,848,852.74
2039
58
     8,052,874.71
   14,776,180.65
2040
59
     9,019,219.67
   16,992,607.75
2041
60
   10,101,526.03
   19,541,498.92
2042
61
   11,313,709.15
   22,472,723.75
2043
62
   12,671,354.25
   25,843,632.32
2044
63
   14,191,916.76
   29,720,177.16
2045
64
   15,894,946.78
   34,178,203.74
2046
65
   17,802,340.39
   39,304,934.30

*Annual return of 12% and 15% per annum.  P 36,000 per year until she’s 
50 years old.  Projected returns are not guaranteed.  The fund can perform 
well in some years and poorly in others.  Historical performance is not indicative 
of future performance.  The figures presented here are for illustration only, 
with assumptions on the rate of return that can be achieved by the fund over the 
long term.


That is assuming she will only invest Php 3,000.00 per month but as she gets older and continues to climb the corporate ladder, she will be able to earn more and hopefully, invest more, thus, increasing her potential returns.

Congratulations and may you continue to ride this journey!

My sister and I...Cheers!

Pia’s Practical Tip #3 On Saving Money

Tip #3:
Use cash instead of credit when shopping.

Qualitative Benefit:
  • You’ll not overspend.  You’ll be able to shop within your means.

Quantitative Benefit:
  • You’ll rid yourself of credit card charges in the event you cannot pay in full.  Savings of at least Php 2,100.00 per year.  Computation @ Php 175.00 as finance charge monthly for a Php 5,000.00 shopping spree.

Friday, January 7, 2011

Pia’s Practical Tip #2 On Saving Money

Tip #2:
Withdraw or inquire ATM transactions from the same bank.  Other banks often charge fees.

Qualitative Benefit:
  • You can directly go the bank (over-the-counter) if something goes wrong  with the ATM machine.
Quantitative Benefit:
  • You’ll save up on transaction fees.  Savings of at least Php 480.00 per year.  Computation @ Php 10.00 per ATM transaction, weekly.


Thursday, January 6, 2011

Pia’s Practical Tip #1 On Saving Money

Tip #1:
Internet or Electronic Banking. Have your account enrolled online for all your bank transactions (bills, balance inquiry, etc). 

Qualitative Benefits:
  • It will save you ENERGY from frequent trips in banks and payment centers.
  • It will save you TIME for not having to wait in line!  Imagine the long lines in payment centers.
Quantitative Benefits:
  • You don’t have to pay for parking fees. Savings of Php 720.00 per year. Computation @ P30.00 per month, twice monthly.
  • You’ll save on gas or tanspo fares if you commute.  Savings of Php 1,440.00 per year. Computation @ 60 per liter (average only, to and from destination).
  • No transaction fees on balance inquiry and account transfers.  Savings of Php 1,200.00 per year. 
Here are some of the websites I personally use: