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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:






Pia’s Practical Tips On Saving Money - Intro

This title will have multiple entries wherein I’ll share some of my practical money-saving tips.

They will come in brief, short sentences - not the usual long paragraphs you often see here in my blog.


 

Starting: The Great Separator By John C. Maxwell Philippine Daily Inquirer

I recently read this article from Inquirer's website and I'm re-posting it here in my blog.  This is a great message for all of us and may this article motivate us TO ACT NOW!






To view this article, CLICK LINK.

Do you want to be a success? As you know, many obstacles can keep even a highly motivated person from succeeding. But today I want to talk about the ONLY obstacle that will ALWAYS keep us from success: Not starting.

Starting is the Great Separator. It separates…

The doers from the do-nots,
The haves from the have-nots,
The winners from the whiners, and
The successful from the unsuccessful. 

If a desire were enough, then everyone would be a success. But success is like a book, and starting and finishing are the front and back covers. Until you open that front cover, you can’t experience anything from the pages within.

So how do you get started?

1. Start with Yourself.

If you’ve ever flown on an airplane, you’ve heard the pre-flight instructions about the oxygen masks—which drop down from the ceiling in the case of emergency. If you’re traveling with someone who would need help, who do they always tell you to place the mask on first? Yourself! They want to remind you that you can’t help anyone else get oxygen if you aren’t able to breathe.
Starting with yourself is not a selfish goal—as long as you’re not doing it for your benefit alone. By putting on my oxygen mask, I get the oxygen I need in order to help others get oxygen. As a leader, I obtain what I need in order to help others succeed.

2. Start Early.

I can’t overstate how much you gain from starting early. It’s something you can’t really understand or grasp when you’re young. One creature that understands this principle is the ant. Consider what the Bible says in Proverbs:

“Go to the ant, you sluggard;
Consider its ways and be wise!
It has no commander,
No overseer or ruler,
Yet it stores its provisions in summer
And gathers its food at the harvest.”
-Proverbs 6:6-8

The activity of any individual ant seems to have little impact. After all, it can only carry one seed or leaf or grain of sand. And it’s not clear what any single grain has to do with the big picture of what is being formed. But regardless of how it looks from the outside, the impact is happening, and something is developing.

Whether you are trying to lose weight, build a business, build a marriage, raise a child, overcome a pattern, resolve a depression, or build a business, it is done the same way: one brick at a time. And the earlier you begin, the more bricks (or grains of sand) you can accumulate.

3. Start Small.

Most of us would love to see the entire path from where we are to the top. But life doesn’t work that way. Like a person carrying a lantern, most of us only see the small portion of the path ahead. Our best response is to just take the next step.

Why start small? It encourages you to get started and allows you to prioritize and concentrate. It also provides the necessary step to take the next step.
Like the person carrying the lantern, your path will only be illuminated a short distance ahead. We’ve all walked home in the dark. The lantern we carry may not illuminate the house, but it does show us the path that will take us there.

4. Start with The End in View.

John Wooden, an American basketball coach, was known for his focus on preparation. Every practice kept the goal—the next game—in view. Why? Because, as he said, “It’s too late to prepare when opportunity arrives.”
First, pursue your passion. A passion, a goal that you feel strongly about, gives you energy. Next, let planning give you direction.
The beginning of the journey is the place to study the map. You may not always know the entire route, but your planning should always point in the direction of your destination.

5. Start now.

It’s too easy to say, “I’ll start tomorrow.” We promise that tomorrow, we will start a diet, studies, a career, or a relationship. But until we actually begin, a dream remains a dream.

It may be a cliché to say that every journey begins with the first step, yet it is still true. Successful people don’t wait for everything to be perfect to move forward. They don’t wait for all the problems or obstacles to disappear.
They don’t wait until their fear subsides. They take initiative. They know a secret that good leaders understand: momentum is their friend. As soon as they take that first step and start moving forward, things become a little easier.
If the momentum gets strong enough, many of the problems take care of themselves and talent can take over. But it starts only after you’ve taken those first steps.

START the year right by raising your leadership skills! Attend the Developing The Leader Within You workshop with Maxwell-Certified facilitator Francis Kong on Jan. 20-21, 2011 at the Edsa Shangri-La Hotel. Call Inspire Leadership Consultancy at 687-2614/706-4853. Special rates available for early bird registrants and academe/non-profit organizations!