A Theme Song for Financial Budgeting

And now we're starting over again, it's not the easiest thing to do
I'm feeling inside again, 'cause every time I look at you
I know we're starting over again, this time we'll leave all the pain away
Welcome home my lover and friend, we are starting over, over again

For the first half of the year, I have exhausted my stock portfolio to half and almost nil out my emergency funds coz of my eagerness to pay off in full my home mortgage (wohooo! Just a few weeks ago, I have claimed my property title back from the Registry of Deeds!). I am now living a life of being debt-free! And then whaaapaaak! Suddenly, I drifted away from my financial goals and my discipline of monthly savings and investing were torn apart. Waaah! *Cry

The 10-20-70 Rule

Prior to setting my foot in going abroad and with the knowledge of how much I will earn, I prepared a detailed excel spreadsheet of how much of my monthly salary will be allocated to paying my house mortgage, monthly allowance/allocation for my parents, food, rent and other possible expenses that I may incur.  I never had put aside something for savings/investments on my spreadsheet, because I have lack of knowledge about the investment instruments that I can possibly get into. The topmost priority during that time was instead of paying my house for 21 years, I will strive to achieve to pay it within my 3-year contract abroad.

 

Armed with this, I had myself ready for my financial and career journey.

 

But eeeeek!

 

Leap of Faith!

Just bought another real estate for investing! It is in prime location in the capital city, with 2 bedrooms and 2 balconies! Such a blessing. This entails me to work smarter in managing finances. May this also be a form of blessing to others. Looking forward to helping more Filipinos to also be financially educated and take charge of investing!:)

How to Make More Money Before Quitting Your Job... Yet

Two of the great authors I looked up to in the world of personal finance and social entrepreneurship have teamed up to create a powerful book for every employee who got a burning desire to create more income outside his company cubicle.

Please click on the attached image to purchase the book.  It is selling at Php320, but is on a promotional price of Php160 until midnight of October 26.  Hurry and grab you copy!  I just got mine. :)

 

Keep learning and keep on moving forward!

Cheers,

Lyn-Lyn \(",)/

On Retirement Pensions through Mutual Fund Investment

My colleagues and I, who are all Filipino auditors working here abroad, had discussion about social security contribution earlier during our lunch break.  We discussed how much should be contributed monthly to our social security in the Philippines, if we are really required to the contribution and about its frequency.

Personally, I paid my social security monthly premium during my first year of working abroad.  However, at the start of January 2012, I stopped paying for my SSS premium when I have read about news that some retirement pension plans are not being paid to the people, and that the monthly pensions received by “pensioners” (sorry for the redundancy) only ranges from Php1,200 to Php2,400 monthly.  Does anyone here know how much the monthly pensions received from SSS?

The Importance of Good Financial Planning

I clicked the start button of Bridgette (my laptop), opened the MS office application for Excel, and drafted a spreadsheet of how I would allocate my funds to arrive at my net worth.  It was a short-term planning, approximately one year financial plan, incorporating all the external factors that would influence my budget and fund allocations in the coming months.  In going through the journey of personal finance, having a financial plan plays an important factor at the starting stage.

I clicked the start button of my work laptop, opened the MS office application for Excel, and drafted a spreadsheet of a financial budget that I would allocate to my team before we start on our fieldwork with our next job client.  As much as we ensure that quality is being undertaken in the job, at the endpoint, the efficiency performance of the budgeted versus the actual results of our fee recovery still has greater bearing, internally speaking.  Hence, financial planning of the job budget is an important factor to always consider at the planning stage.

How to Manage Our Asset Allocation

Personal finance books and websites discuss about risk appetites in engaging into investments suitable for our own personal short-term and long-term needs.  It has been a wonder to me what the “proper” asset allocation would be for all assets available in the market: equities, bonds, cash, and alternative assets (such as real estates, and businesses).  I believe that part of managing our personal finances is creating a system to where we would like to put our assets on that would give us passive and earned income in the coming years.

Online Business and E-Commerce

Setting up websites, talking to suppliers, dealing with shipments and taxes (waah!), communicating with my partners (friend and family) - - these are all stuffs that I got “addicted” to during the past weeks. And it keeps my blood rushing and burning with so much enthusiasm! ^_^ I got loads of words that I want to write down – simple observations about the things and events that are happening around me – and I hope I would be able to find the right words and write them down soon. =)

 

For now: Aja! Aja! \(“,)/

 

Keep learning and keep on moving forward!

Cheers,
Lyn-Lyn \(“,)/

I Kissed Credit Cards Goodbye!

Back over two years ago, I attended a seminar provided by a speaker who is a managing director of one of the leading banks in the Philippines.  I could no longer vividly remember what his topic was all about, but I do remember that he mentioned about the next “booming” industry for Philippine banks:  which is consumer loans.  House amortization and car mortgages would go less as compared to previous years, BUT there will be an increasing demand for customer loans.  How?  Through the issuance of credit cards!

Hey Pilipinas, mag-invest ka!

With the stock market reaching the 5,000 level, this is just an indicator that the Philippine economy is booming!

My message is for those who wants to get into “investing” but don’t know why.

If you doubt your technical knowledge about stock market and like to take caution, but still want to put your hard-earned money/savings into stock market, try to invest in mutual funds.  Your money will be handled by fund managers, so the only thing you got to do is deposit your money there.

Weighing the Opportunity Cost

Debt management or getting out of debt is one of the firsts to do’s in making one’s personal finance better.  For the last couple of months, I have heard of friends who are down with debt and are troubled on how they can make both ends meet.  As they say, never pay a debt with another debt, otherwise you will just end up yourself circling around in just the same roller-coaster ride.

Increase your cash flows
Increasing our cash flows is a first step to pay off debts.  How? There are a number of simple ways, like getting into sideline business (ie: prepaid e-load cards), part-time jobs, the likes.

Your additional cash flows can be used either to:

1. Put money in your savings account or emergency fund;
2. Put into long-term savings, equity investments, mutual funds or retirement fund;
3. Put up business or real estate investments;
4. Pay-off debts

Building trust by paying your debts
Let me focus on the bullet #4, which is to pay-off debts.  Most of the time, people tend to “forget” the debts that they owe to other person when they have enough cash on hand –which will really create a bad impression because this means that you are not trustworthy enough to give the money back to the one who lends you during those time you need it most.

Trust, in every relationship, (yes even in debtor-lender relationship) plays an important role.  You may have money now, but there comes a point that when you’re in the brink of needing extra cash again, nobody will lend you because you were not faithful enough to pay it then.  Do you think you will be able to borrow money again? I doubt it.

Top 10 Tips to Successful Investing!

Here’s 10 quick tips to get you started on investing and creating your winning porfolio!

1. Start Early

The only way you can make the most out of the limited time you have is to start early. The sooner you invest, the more time your money will have for growth. If you delay, you will almost certainly have to invest much more to achieve a similar result. Let the power of compounding work for you.

2. Keep Some Cash Aside

It is always a good idea to have some money set aside in case of emergencies. Maintaining six to nine months worth of living expenses will insulate you from a sure fire formula for investment loss – distress selling.

3. Know Your Risk Profile

What is the point of investing in the stock market if you are going to lose sleep, or a heart attack (whichever comes first) every time prices go through a rough patch. You need to be realistic about your risk appetite. An investment advisor can help you determine your tolerance for risk.

4. Never Forget About Inflation

Don’t fall into the false sense of security that very conservative investments might give you. The returns may look respectable at the start but not after you deduct the effects of inflation. Keep in mind that risk is not just about losing money. It is also about not having enough in the end.

5. Think Carefully About How Long You Can Stay Invested

If you plan to stay invested for a long period of time, say five years or more, then it is okay to get into the stock market and let your money work harder for you. But if you will need your funds very soon, you are going to be better off with low risk investments.

How Can A Person Start His Savings?

If there’s a will, there’s a way! Savings is always possible.  There are people who earn just minimum wage but able to open a bank account and save part of their salary for future funds.  Others invest it to their sari-sari store (a.k.a. “mini-grocery” store) and earn profit.  Sadly, there are others who earn Php20,000 and above, (and also those who earn PhpXXX,000 a month!), who are single and having the prime of their lives, but are buried in debt and never even get to save even just an insy-bitsy-weeny-portion of their monthly salary.

Piso, Magkano Ka?

I have realized that one of the activities that a “Bagong Bayani ng Pilipinas” tend to look forward to, aside from coming home to be with loved ones, is the foreign exchange rate for remittances to Philippines.  Five years ago, every one US dollar is equal to Php55. Now the US forex rate is just equal to Php44.  Good news or bad news?  Hmmm…

 

This is something we can view as positive because this means that our Philippine peso is getting stronger as a result of a better economy, trust on our political leaders and stronger stock market (Yey!).  However, for every overseas filipino worker abroad who sends remittance to supply the needs of his/her family in the Philippines, this is bad news.  Oh, if every OFW just know how to take advantage of the power of “hedging”! (ie: to gain from the forex loss, invest the remittance to income-generating assets).