The Pinoy's Power Nap

It's been a while. I missed writing my thoughts away.

Something for you readers.....

THE POWER NAP

They say power naps are good for you. However, the ordinary Filipino do more than just nap in the afternoon. They (we) sleep.

I am referring to the lazy ones of course. Or those who just don’t understand that time is gold. Or those who think their work for the day – and so are their income for the day – are enough for them to afford  a longer nap than usual.

When I was in the US,one of the first things i noticed was the ordinary US street (kalsada). They are almost empty , unlike in the Philippines where in every corner you’ll see some group of people chatting their time away. I’m talking adult half-naked males puffing cigarettes and women (sometimes even carrying around babies) here, by the way.

Dear reader, ever wondered why we have become this way? Or who taught us to be this way? Or why? Again, our society permits us to be like this. I have never heard of anybody in the Philippines who  EMPHASIZED that this is bad. No one, Nada.

“Kulang na nga ang kinikita natin sa maghapong trabaho, may gana pa tayong makipag-tsismisan sa kanto? O kaya matulog sa hapon?”

If we want wealth to follow us the rest of our lives, let us stop following  the old ways. Let us value TIME more. I mean 100x more. Be productive; Find work; Find means to earn extra cash during your spare time.

DO NOT TAKE A longer NAP than usual. It is bad. Even  shameful.

When you’re retired and gray, you’ll have plenty of naps and tsismis time. But today, while you still can, be as productive as possible. Always be on the lookout for extra income. Earn more cash. Seach for it; Ask around; Think of ways to earn more.

Once again  dear readers, do not let the world pass us by. Pinoy, wake up. It is time.

What newbie investors need to know

    




Newbie? Here's what you need to know. 





Investing Early is key. I have been emphasizing this over and over again in my blog.

With this post, I will teach readers the 2 types of investments:

1) lending investment
2) ownership investment.

What is lending investment?
It is actually “lending your money to institutions in exchange for a profit. Putting money in the bank is lending investment. Money in a savings account or in a time deposit is actually a loan to the bank.

What is ownership investment? 
It is the acquisition  of OR OWNING assets (shares of stock, property, etc.) with intention of periodically earning income from these assets. In ownership investment gains or losses are actualized only when the asset is sold. This type of investments are generally  more suitable for long term goals.

Now the more important stuff. Guides in Investing:

Know that:
a) the higher the return, the higher the risk;
b) the longer the time, (investment period), the lower the risk; and
c) the longer the time, the higher the return

Investing is a choice. Retiring rich is a choice. If you know what you're doing early on, nothing will stop you from retiring rich. Doing something NOW rather than later (or none at all) IS A FAR BETTER CHOICE to make.

Again, it’s developing the habit that’s more important. When you muster the discipline, you will retire rich.

Good luck and happy investing!

See this yahoo featured article about how to retire a millionaire

Yahoo featured this today. Click the link.

start-with-10k-retire-millionaire-marketwatch: Personal Finance News from Yahoo! Finance

For most of us Pinoys, around P10M (instead of $1M) is enough retirement fund. So do the math. $:P exchange rate is around P42. This should give us an idea of how much to target monthly and how long.

Good luck, people. Information is key!

Loans

I'm thinking of creating a directory of Financing Institutions available for the Filipinos.

Why? Because i personally believe that loans are not bad. We Filipinos must learn to disassociate loans from the normal lines of thoughts such as "utang na loob" or "pabigat".

Let me tell you a story I keep on telling to people afraid of taking out loans:

You see, I work for a financing company. And for over a decade now, i have seen people actually make good with their loans from us. Almost all our clients, actually. Of course we also have delinquents.

This is why  I do not discourage people from taking out loans.

You know what's bad? If he uses that loan to buy something which WILL NOT earn - like a cellphone, or a watch, or a TV set. Then he's in trouble.

On credit cards:
Image via Wikipedia
One of my staff is very enterprising. Do you know what she uses her credit cards with high credit limits for?  Strictly for BUSINESS only. How? Here:

With high, i mean up to P200k per card. She has friends who do not have credit cards but are so bent on  buying high end items such as new refrigerators, tvs. aircon, etc. So she offers that she uses her card to buy them the items, but she'll collect monthly from them. for principal, interest AND, check this out, a little patong (profit). Isn't that clever? That's making money out of plastic.

I haven't followed her footsteps, by the way. First, because i do not have credit limits that high (i get awed at how high credit limits credit card companies can actually afford to give middle-income earners nowadays). And i'm not much into usury.

But i must say, this is a smart way of making extra money. (By the way, have you been checking out my page about "earning extra"?. Click here)

So you see, as long as you use loans to make money, nothing is wrong with it. Investing is the name of the game. Saving money is not enough (read my post about what to do with money saved here). One needs to find ways to create money and build wealth.

Let's start looking at loans the positive way. The old way is not applicable anymore. The world has changed.

Information is key, people!

PS
You might want to read:

Mutual Funds Performance update - Q1 2011 report

Let me refresh your memory, dear readers:


Image via WikipediaWhat is a Mutual Fund?

A mutual fund collectively pools money from individual and corporate investors. These funds are managed by a professional fund manager who invests the collected money in financial securities such as stocks, bonds, or money market instruments. In local lingo, this is one type of  "bakas" system of investing, as I mentioned in a previous article of mine. (Read about it here). 


Our friends from the Investment Company Association of the Philippines (www.icap.com.ph).has made public the Philippine Mutual Funds Performance Report for the 1st quarter, 2011, as follows:

In bullet points:

• Mutual funds in the Philippines were off to a not-so-good start in 2011, as most funds registered negative returns during the first quarter of the year.
• This was in stark contrast to the funds’ performance during the similar period last year, wherein all but one mutual fund were in positive territory.

Note: 

a) Figures in (xxx) below denote a loss; 

b) In blue means a gain 

EQUITY FUNDS (primarily invested in Peso equity securities): 
Sun Life Prosperity Phil. Equity Fund – (1.18%)
Philequity PSE Index Fund – (1.31%)
Philequity Fund – (1.52%)
United Fund – (2.11%)
Philam Strategic Growth Fund – (2.78%)
Philippine Stock Index Fund – (4.18%)
First Metro Save and Learn Equity Fund – (4.86%)
ATR KimEng Equity Opportunity Fund – (5.46%)

FOREIGN CURRENCY-DENOMINATED EQUITY FUND
ATR KimEng AsiaPlus Recovery Fund – (0.05%)

BALANCED FUNDS (primarily invested in Peso debt and equity securities)
Sun Life Prosperity Balanced Fund – (1.51%)
Optima Balanced Fund - (2.29%)
Bahay Pari Solidaritas Fund – (2.79%)
GSIS Mutual Fund - (2.82%)
Philam Fund, Inc. – (2.82%)
NCM Mutual Fund of the Phils. – (2.86%)
First Metro Save and Learn Balanced Fund Inc. – (5.16%)
MFCP Kabuhayan Fund – (5.90%)
ALFM Growth Fund – (6.74%)


FOREIGN CURRENCY-DENOMINATED BALANCED FUNDS: 
Cocolife Dollar Fund Builder – 0.68%
Sun Life Prosperity Dollar Advantage Fund – 0.19%

BOND FUNDS (primarily invested in Peso debt securities)
Cocolife Fixed Income Fund – 1.33%
First Metro Save and Learn Fixed Income Fund – (0.13%)
Grepalife Bond Fund Corporation – (0.24%)
ALFM Peso Bond Fund – (0.37%)
Philequity Peso Bond Fund – (0.82%)
Sun Life Prosperity Bond Fund – (1.00%)
Ekklesia Mutual Fund – (1.28%)
Philam Bond Fund – (1.32%)
Prudentialife Fixed Income Fund - (3.01%)
Sun Life Prosperity GS Fund – (3.06%)

FOREIGN CURRENCY-DENOMINATED BOND FUNDS:
PAMI Global Bond Fund – 0.41%
Philequity Dollar Income Fund – 0.02%
ALFM Dollar Bond Fund – (0.04%)
Grepalife Fixed Income Fund Corp. – (0.22%)
Grepalife Dollar Bond Fund – (0.31%)
Sun Life Prosperity Dollar Abundance Fund – (0.90%)
Philam Dollar Bond Fund – (0.93%)
ATR KimEng Total Return Bond Fund – (1.35%)
ALFM Euro Bond Fund – (1.73%)
MAA Privilege Euro Fixed Income Fund - (2.90%)
MAA Privilege Dollar Fixed Income Fund – (4.76%)


MONEY MARKET FUNDS (primarily invested in short-term Peso securities)
ALFM Money Market Fund – 0.41%
ATR KimEng Money Market Fund – 0.34%
First Metro Save and Learn Money Market Fund, Inc. – 0.29%
Philam Managed Income Fund – 0.14%
Sun Life Prosperity Money Market Fund – 0%

My take:
Although the rate of return is a good measure of performance, other things such as consistency of return and exposure to risks must also be considered. Note that past performance of a fund is not and cannot be a guarantee of future returns.


So there. Again, INFORMATION IS KEY! Be wise with your investments, readers.

You may also want to read my article on : Earning while sleeping. Read here.
Hesitant? Read my article on hesitation here.

A lesson for Juan Dela Cruz

Today's headline in The Philippine Daily Inquirer says: "Don't dumb down viewers, TV urged". Read the news here.

In Tagalog: Huwag gawing bobo ang mga Pinoy sa mga ipinalalabas sa TV shows.

This is one of my advocacies. This is one of the things i'd like to shout out to every Pinoy. That we're better than what these TV stations (and radio) think. That we can change if want to.

Imagine the whole day the Pinoy gets to watch silly TV shows? And continue on at night before going to bed?
This has been going on for decades now. Kaya hindi tayo umaasenso, is because we tolerate this.

Value your time, people. I'm not saying you stop entertaining yourself totally. I'm preaching PRODUCTIVITY here. Get busy; Be always on the go.
Find work during your spare time.(Read about it here.) Look for anything productive. Sayang ang oras.

This is one of the Filipino's sicknesses - we do not value time. Lagi na lang tayong pa-petik-petik. This has got to change. Really, it's time (read my article about time here) . If not now, our kids will redo this in their lifetime as well.

Again, the lesson for today: Re-think; Start valuing your time. Time is gold. Every minute spent without any production is a wasted minute forever. Hindi na natin ito maibabalik pa.

What i'm saying is that the Pinoy's version of creating wealth isn't just creating wealth. It's deeper. It starts from changing the society we live in.

Readers' question: How do i save money?

A reader emailed me, asking "how do i save money?".Another one asks my opinion on Francisco Colayco's suggestion (in his book, Pera mo, Palaguin mo) of using envelopes.

With this post, I hope to answer these questions in the simplest, and most effective way i can. In fact, i will only use 3 words: Just do it!

I'm sorry if you were expecting a magic formula. But folks, really, ask yourself, how else do you expect yourself to save? In my opinion, there is no formula. Just willpower.

By all means you can, save every excess centavo. These add up. It's developing the habit that's more important. Once you've developed the habit, and have made this automatic and lasting, I promise you, you will very soon be taking the next big leap which is "growing your money" thru investments.


I can relate to you, ordinary Juan Dela Cruzes. I've been there. I am living proof that this is possible. Discipline, willpower and a bias for action. These are key.

Hesitant still? Also read (click links) relevant topics about:

a) Why create wealth?
b) Why save?
c) Money-saving tips
d) Investing 101
e) What to do with money saved

what to do with money saved

As you now know, every penny counts. If you've been following my posts, i'm betting you're now well on your way to creating your own wealth.

Let's recap. So far, i have taught you to:

1. Realize and admit you have a problem first

2. Understand your "big why"

3. Take action - know what to prioritize when it comes to spending

4. Start saving
5. Start valuing your time

Now we go to the next lesson to be learned- What to do with money saved.

For beginners:

My advice at this point? Go to your nearest bank. Open a passbook account, start saving there regularly. 

The objective is for you to develop the habit of not pocketing your excess pesos. Put it where you cannot have ready access to it. Remember it's a passbook, and not an ATM account. It's also a way for you to become at ease with the people inside banks.

For people with credit card problems:  

Start paying up. Little by little. Just face it and get over it. 

For people who are now ready for the next big leap: 

Start investing. Read my previous post re Investing 101. Choose among the items there. Research, ask around. Consult with knowledgable people. Start small. Just do it.

Details in my next posts. I promise you readers financial freedom. Start believing.