Financial Blogs I Follow

Here are some of the financial blogs I follow.  I learn so much from them so I thought of sharing them with you!

1. Ready To Be Rich 
2. Pinoy Money Talk 
3. Money Magnets 
4. EntrePinoy Bank

 Have a good read! :)

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!

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!

One Less Credit Card For 2011

Since this is the new year, one of my resolutions was to cut my third credit card.  Yup, I used to have three credit cards.  In fact I had a fourth one but I already stopped using it a long time ago. 

I decided to cut my third one because, like you, I want to grow financially.  My other two cards are already practical to use so having a third one became a liability more than anything else. 

So this lead me to think about credit cards and how useful (or not?) they are in my life.

I got my very first credit card during my first year of  work and like many first time users, I was buried with debt after some time. I wasn’t able to control my spending. I wasn’t able to pay my monthly dues even the minimum amount so the interest incurred on the principal amount increased exponentially! 

The original balance was only P20,000.00 (USD445) but it doubled in a matter of months!  So I had no choice but to pay for it. 

It was a very difficult phase because I was only earning enough that time. 

Looking back, I made the right decision to talk to my creditors and sought their easy, pay-out scheme.  It wasn’t easy at all but I was able to pay everything in full after some time.

From then on, I stopped using credit card and paid everything in cash.

I liked that “cash only” phase in my life because I can detect my cash flow. When my cash flow is getting slim,  I forced myself to stop from spending and wait for cash to come in.

But having to pay everything in cash has its disadvantages for me. 

One disadvantage was security.  Having to carry a huge amount whenever I need to pay for bills most specially insurance dues makes my security at risk. Thank God nothing untoward happened to me.  The worst experience was when our helper ran away with my money when I asked her to pay for bills.

After that, I applied again for my second credit card but I was still financially immature and I was buried again with debt.

Being buried in debt for the second time at a young age is no laughing matter. History has a way of repeating itself as they say. Same is true in my case.

But I never allowed myself to focus on my “debt” problem and instead think of solutions. 

From then on, I was determined to become financially mature with credit cards. After paying my second mountain of credit card debt with my bonuses and 13^th month, I finally succeeded.

Falling down for the second time lead me to the determination to control  my credit card usage. 

Right now, I pay all my credit card bills in full because I realized that although credit cards are convenient to use, they charge us enormous fees if we don’t pay our dues in full.  Even if we pay the minimum amount,  the same enormous fees still apply.

Imagine this, monthly charges are 3.5% as finance charge and at least 3% as late charge. Charges depend on the credit card company. They charge us those interests MONTHLY. 

Annual charges could reach as high as 30%.  30% interest rate per annum!  Savings account in banks  only offer 1% interest rate per annum less tax.  So do the math.

image source

Over the past 5 years, I have accumulated four credit cards with good credit standing but for 2011, I want to stick to two.

The third one became a liability in a sense that it adds to my list of billing due dates.  I seldom use it so might as well stop using it.

I want to eliminate clutter in my life and this is just one of the ways.

P.S.  What lessons have you learned from your credit card horror stories?

Happy New Year Everyone!

The new year gives us a fresh start so we come up with new year resolutions.  Some of the popular resolutions we often make are going to the gym to lose weight, stop smoking, save more, spend less……

So whatever you intend to accomplish this 2011, I salute you for coming up with your own resolutions.  The desire to actually accomplish them is already an achievement. 

Cheers to 2011! Let the race begin…

Do you not know that the runners in the stadium all run in the race, but only one wins the prize?  Run so as to win.

1 Corinthians 9:24

Download " My Maid Invests In The Stock Market…And Why You Should Too."

Here is a link to Bo Sanchez's My Maid Invests In The Stock Market…And Why You Should Too. 

This ebook lead me to investing in the stock market and I am grateful up to this day.

Just In Case You Haven’t Gotten This Yet…

 

        Am really feeling good today.

People are telling me they just love my little book, My Maid Invests In The Stock Market…And Why You Should Too.

Wow, I’m happy to serve you in this small way.

Yes, it’s now a printed book in the bookstores, selling like it was water in the sahara.

But the best things in life are free. So the “concise version” as an eBook is still downloadable without cost below. 

Grab it and enjoy. 

My gift to you!

Just click the link below…

 

Download Bo Sanchez’ Ebook,

My Maid Invests In The Stock Market…And Why You Should Too!

 

May your dreams come true,

 

Bo Sanchez

 

Bo Sanchez, 60 Chicago St., Cubao , Quezon City, Metro Manila 1109, Philippines

Jewelry: Are They Really Investments?

When I was growing up, I often hear my mom and her friends say that jewelry are investments.  True enough, she was able to accumulate many pieces over the years. 

In my mind, a good indication that my family was in “good, wealthy times” was when I would see many bling blings in my mom’s closet.  Of course, lesser jewelry indicated bad times or a financial crisis.

When I became older, I began to understand the real value of jewelry in our family’s finances.  My mom would later tell me that whenever she needed money to fund her businesses, she would “sell” her jewelry to friends or even pawnshops. By doing this, she was able to receive cash almost instantly but they were sold at lower costs.

So here is a question that puzzled me over the years:  Are jewelry pieces investments?

image source

The story I narrated above was during my grade school until college years. When I started working, I, too, was attracted to jewelry. 

In fact I had 2 jewelers (in Tagalog, we call them “alahera”), the first one I met through referrals in the office and the other through my mom. 

I remember the first set I bought.  I was 24 years old. They were a pair of earrings with matching ring.  14K white gold,  X-shaped with small diamonds priced at Php 14,000.00 (USD 305). 

I paid Php1,000.00 (USD 22) every payday in the next 7 months.  After I fully-paid my first set, my jeweler offered me another set, and another and another……I became her loyal buyer (“suki” in Tagalog) for the next three years. 

The reason I stopped buying from my original suki was when I met a new jeweler and I bought pieces from her as well. And the cycle continued – I bough one set and after paying it in full, I was always offered another set.  I paid all my jewelry in terms.

After five years of paying off one piece of jewelry after another from two jewelers, I decided to stop buying. 

I realized that even if I have gold and diamonds, I was not liquid enough.  I remember a time when I needed cash ASAP and the first thing I did was to sell my first set of white gold.  I even went to pawnshops and asked how much they were willing to buy, and the highest “bid” I got was Php 5,000.00 (USD 110)!  Less than half of the amount I paid.  I also tried to sell by emailing some friends and office mates about it but there were no takers.

Good thing that my mom came to the rescue!  She bought the set from me even though I knew she did not like it. 

In fact, she gave me and my sister some jewelry that she does not use as much and that was the second reason I stopped buying for myself! 

Seriously, after attempting to sell my jewelry set,  I realized that I can’t easily convert it to cash.  I mean, it was worth thousands of pesos but at that moment it was of no value to me because I needed cash.  There are countless pawnshops out there who are willing to give cash but I was not desperate enough to sell my jewelry at half the price.

That time, my thought was I used my hard-earned money to buy that set and took me months to pay for it.  I can’t let it go just like that.

So based on my love (and hate?) affair with jewelry, do I consider them investments?  

Yes and No.

Yes, they are investments because the prices of gold and diamonds always go up.  The price of gold per gram  five years ago is a lot higher compared to its price today and continues to increase.  A one-carat diamond costs  Php 50,000.00 ten years ago and the price today? At least Php 100,000.00.  That depends on the 3 Cs (cut, clarity and color). 

No, they are not investments because like what I experienced years ago, I cannot easily turn my jewelry set into cash!  Except, of course, if you have a jewelry store or you know a jeweler, then you can actually sell it at a decent price. But again, it may take a while before an interested buyer comes along.  So you still have to wait for that cash to come. 

I believe that jewelry become “true” investments whenever they are passed from one person to another.  They now become heirloom pieces.  Like the jewelry pieces that my mom gave me and my sister.  They are definitely priceless to us because of their sentimental value – there is emotional attachment. 

Lastly, my fondness with diamonds ended temporarily when my jewelry mentor, my mom casually mentioned that it’s better to have cash than jewelry.

In other words, it’s better to have liquid investments. The last piece I bought was three years ago and I follow her independent financial advice until now.

P.S  Do you really think that diamonds are a girl’s best friend?