Tag Archives: investing

Take Charge of Your Children’s Future!

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By Bobet Prudente

I remember 39 years ago, when I first enrolled at the University of the Philippines in Diliman, Quezon City. I was a full scholar and didn’t have to pay for tuition fee, but we were still assessed. And our typical assessment was about P300 tuition and fees for the entire semester. Not P300 per unit, it was about P300 for the entire semester.

UP Diliman

The Oblation at the University of the Phillipines in Diliman, Quezon City.
By Rinangel Buenavente, Crispin Sta. Ines [Public domain or Public domain], via Wikimedia Commons

Last January, my youngest son enrolled in the same campus at UP Diliman, and his tuition and other fees totalled P30,000. And I think UP has not increased tuition fees for at least 5 years.

Let us do the math.
* P300 x 10 = P3,000
* P300 x 100 = P30,000

In my lifetime, in 39 years, the tuition fee in my school increased 100 times, or about a compounded rate of 12.5% every year.

How much would YOU pay for YOUR children’s college education?

Most of you will be sending kids to college in less than 15 years, so maybe you will not pay 100x, but perhaps 8x to 10x what YOU paid when you were in college?

I talked to a seminar attendee a few weeks ago, and asked him how much he paid in college. He said, P15,000 tuition fee per semester.

Let us do the math again:

  • in 15 years, maybe tuition will increase only eight times.
  • P15,000 x 8 = P90,000 in one semester
  • P90,000 x 8 semesters = P720,000

And that is just for tuition. How about other school fees, transportation, allowance?
Let us say you spend another P280,000, and the cost of sending one child to college is P1,000,000.

If the basis is P30,000 (like what I paid in UP Diliman), the cost of sending one child to college in 15 years, will probably be P2,000,000

If you have two children, that is P2,000,000 to P4,000,000 you’ll be spending in 15 years.  Are you preparing to send your children to college?

Are you saving and investing so you’ll have an extra two to four million pesos in 15 years?  Are you saving enough, so you’ll have some money left over for your retirement?

Would you like learn ways to increase your cashflow, save and invest, so that you can send your children to college?

IMG launched a new seminar “Building Your Future” in January 2016 to help Filipino families achieve financial freedom through financial education, saving and investing. Our goal is to have 1 million financially educated families by 2020 ( hashtag #1M2020 )

Would you like to attend our free 1-hour “Building Your Future – Controlling Your Money” seminar in various locations, to get financial education?

Would you like to take charge of your children’s future?

#1M2020

How to Spend Your 13th Month Pay

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Merry Christmas!

It’s that time of the year when Filipinos are happiest.  Many are eager to receive their 13th month pay to buy presents for family and friends, and to splurge a little on gadgets.  For some, there are extras, perhaps even a 14th and 15th month pay.

How do I spend my 13th month pay?

How do I spend my 13th month pay?

How do you use it?  I strongly suggest you think a little beyond the holiday season, Christmas presents and merry making.  Why don’t you….

  1. Plan

Close to 70% of people who get large amounts of money go broke within 5 to 7 years.  This is because many people are so unfamiliar with having a large amount of money.  Plan how to use your money, and budget how much you want to spend for Christmas and how much you want to allot for more productive use.A good rule of thumb is 10% for your spiritual community, 20% for your future, and 70% for your expenses and lifestyle:

  • 10% for your eternity
  • 20% for your maturity
  • 70% for your family

And then you plan further.  How do you spend your 70%?

  1. Protect Your Family

Have you considered what would happen if the Lord decides to call you home early?  What would happen to your family?  You can be healthy today, but what if tomorrow, you meet an accident?  Will your family go hungry?Buy SUFFICIENT life insurance coverage.  There are inexpensive options available, such as term life insurance.  P6,000 annual premium at age 25 can buy you P1M coverage.Combined with some mutual fund investments, P3,000 per month for 10 years can  buy P1.2M of life insurance at age 25, slowly growing to more than P4.8M coverage ( or P3.8M cash benefit) by age 60.

Learn about protection, savings and investment in free seminars,  like the SAVING YOUR FUTURE seminars on Practical Money Management from IMG.

  1. Eliminate debt

The typical Filipino makes strange financial decisions.  Most save in banks where their money earns 0.20% per year (that simply means if you put P100,000 in the bank on Jan 1, then by December 31, the bank will give you P200 interest after withholding tax), but borrow from the “friendly Bumbay” at 5-6, or from the “sosyal” credit card company at 3.5% PER MONTH.

Pay your credit card debt. By paying  credit card debt you effectively invest your money at a rate at least equal to the 3.5% they charge you.

Read more about How to Invest by Paying Your Credit Card, and earn an equivalent compounded annual growth rate of approximately 51%

  1. Invest

Investing is increasing the value of your assets using your existing resources, like time and money.  While some consider investing a science, there are enough elements of creativity involved, I prefer to think of it as an art.Investing in your greatest asset – you – is probably your best investment.  You probably invested hundreds of thousands of pesos in your formal education (elementary, high school, college) so you can get a good job, and work for money.

Invest in your financial education, to learn how make money work for you, and to gain financial wealth and spiritual abundance at the same time.  Join the TrulyRichClub.

Start by taking a crash course in stock market investing.Invest in safe investment vehicles to build your retirement fund and your children’s college funds. Equity mutual funds and UITFs are good starting points.

  1. Setup Your Emergency fund

Setup your emergency fund, normally three to six months of your living expenses.  Emergencies are for emergencies or unexpected large expenses such as medical emergencies or temporary unemployment.  Sale in malls are not emergencies, even if your dream shoes are on sale at 70% off.

Keep your emergency funds in savings or time deposits.

  1. Indulge

Spend a little on yourself.  Save specifically on little pleasures for yourself, maybe an occasional vacation or adventure.  Save for your future, but  treat your present self every now and then.

A note on the 10% for Eternity

Share your blessings  to your spiritual community and to the less fortunate.  Remember we are merely managers of of God’s wealth.  Giving actually makes you feel more blessed, and appreciate the abundance of God’s universe.  Giving makes you win in all areas of your life.  In other words, TrulyRich.

Bobet Prudente is a financial coach and Senior Marketing Director at IMG TrulyRichMakers.  He is a member of Bo Sanchez’ TrulyRichClub .  He conducts regular FREE Saving Your Future seminars on Practical Money Management Techniques in Quezon City.

 

Save Early!

Si Aga Maaga, Inna Sakana, Pol Pahabol at Loi Tuloytuloy

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Let me tell you the story of four college friends, who  became millionaires when they retired.

The first friend, Aga Maaga, immediately started saving at age 21. He began saving P2,000 per month and investing it at 12% per year. After six years, he had a mini-reunion with two of his friends.

Aga Maaga

Aga Maaga started saving early, and invested P24,000 a year at 12% per annum. He did this for 7 years.

He told his friends, “Wow! I saved only P24,000 per year for six years, for a total of P144,000. But thanks to the power of compounding, my accumulated balance is now P218,13! But I am getting married already, and I can’t afford to save anymore, so I will stop saving.”

His two friends, Inna Sakana and Pol Pahabol  said “Wow! We’re 27 years old already, but we want to start now! We will begin saving P2,000 per month too, and invest the savings at 12%”

The three friends met again six years later, and compared their portfolio.

All three friends saved P2,000 per month, or P24,000 per year for six years for a total of P144,000. But Aga Maaga already had P430,562 after 12 years, while both Inna Sakana and Pol Pahabol had P218,136, just like Aga Maaga six years earlier!

They noted Aga Maaga‘s investment was already P430,562, or almost twice their P218,136!

Inna Sakana said “I will also get married, and have to stop saving. Maybe my investment will grow like Aga Maaga”

Aga Maaga, Inna Hulina and Pol Pahabol

Inna Hulina and Pol Pahabol copied Aga Maaga’s investment, but started 6 years later. They saved and invested P24,000 per year at 12% per annum for six years.

Pol Pahabol said, “I want to catch up with Aga Maaga, so I will keep on saving and investing, until my accumulated investments exceed Aga Maaga‘s”

The three friends met many years later, when they reached 60 years old. They compared their portfolios.

At age 60, Aga Maaga, after saving P144,000 from age 21 to 26, and waiting till age 60, had P10,283,493 in his portfolio. His money grew 71 times from age 21 to age 60!

At age 60, Inna Sakana, after saving P144,000 from age 27 to 32, and waiting till age 60, had P5,209,938 in his portfolio, about half of what Aga Maaga had! The only difference in their investment strategy, is that Inna Sakana began saving six years later!

After 40 years

After 40 years, Aga Maaga and Pol Pahabol both had P10M pesos. But Aga Maaga invested onyl P144,000 while Pol Pahabol invested P816,000!

Pol Pahabol observed that because he kept on saving and investing, his portfolio grew faster and through the years, he was slowly catching up with Aga Maaga. Finally, at age 59, he finally had more than Aga Maaga. At age 60, after saving P816,000 over 33 years from age 27 to 60, he had P10,335,924 in his portfolio, his money grew only 13 times compared to Aga’s 71 times!

Inna Sakana said “Hay naku, nakakainggit si Aga!  Pareho lang ang aming na-invest, pero nahuli lang ako ng 6 years, tapos P5M ang diperensiya, kalahati lang ang aking investment ikumpara sa kanya?  

Pol Pahabol said “Hay naku, ang hirap naman habulin ni Aga!  Grabe! He saved and invested P24,000 a year for only 6 years, or P144,000!  And I invested P24,000 a year for 33 years or P816,000!  Tapos halos pareho lang pala kami?”

Then their fourth friend, Loi Tuloytuloy joined them. He said, that like Aga Maaga, he started saving P2,000 per month or P24,000 per year at age 21. Like Pol Pahabol, he continued saving P24,000 per year until age 60.

At age 60, he had P20,619,417, or about the same amount as Aga Maaga and Pol Pahabol combined!

Loi Tuloytuloy

Loi Tuloytuloy just kept on investing P24,000 per year for 40 years. At 12% per annum, he had more than P20M by age 60!

Who is your role model? Who would you like to copy?
Si Loi Tuloytuloy?
Si Aga Maaga?
Si Pol Pahabol?
O si Inna Sakana?

We’d all like to be like Loi Tuloytuloy, and accumulate P20,619,417, but if not we should be like Aga Maaga, who started early!

Are you ready to start saving and investing? Are you ready to grow your wealth?

Save Your Future by learning Practical Money Management Techniques in our FREE seminars. Register early, there are limited slots available!   Click below to register for the FREE Financial Seminar in

Are you ready to grow your wealth?

Are You Ready to Grow your Wealth?

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Investing early and correctly make it easy!

Don’t’wait for the right time to invest, now is the right time!

People who wait till tomorrow to invest never actually  start, because tomorrow never comes;   there will always be another tomorrow.

Suppose you are 20 years old, and you want to have P5M in your retirement fund at age 60, then you have 40 years to build your retirement fund.

If every month, for 40 years, you save P421 in an investment vehicle that earns 12% per year, you will have P5,000,000 in your retirement fund.

Investing P421 monthly at 12% will give you P5M in 40 years!

Investing P421 monthly at 12% will give you P5M in 40 years!

But most young people will say, “I’m young, I’m healthy and I just got my first job! I’ll enjoy my salary and begin saving later!”

At age 30, you wonder if you should begin saving.  You still have 30 years to save before you retire at age 60, right?

If every month, for 30 years, you save P1,416 in an investment vehicle that earns 12% per year, you will have P5,000,000 in your retirement fund.  Because you waited 10 years, the amount of money you need to save to reach P5,000,000 already tripled!

Investing P1,416 monthly at 12% will give you P5M in 30 years!

Investing P1,416 monthly at 12% will give you P5M in 30 years!

At age 30, people say, “I just got married and have lot of new expenses.  I’ll save tomorrow.”

Many people have excuses not to begin saving and investing.  But just look at this table.

Investing early makes it easier to build wealth

Investing early makes it easier to build wealth

At age 40, one needs to save  P5,004 every month, investing at 12% per year for 20 years to have P5,000,000 at age 60.  But people at age 40 say, ”The kids are growing up, and I have lots of school expenses.  Maybe I can begin saving tomorrow.”

At age 45, one needs to save  P9,909 every month, investing at 12% per year for 15 years to have P5,000,000 at age 60.  The amount needed almost doubled in five short years!  But still people say, “My God, I didn’t know college can be so expensive! I can’t afford to start saving.  Maybe tomorrow.”

At age 50, one needs to save  P21,500 every month, investing at 12% per year for 10 years to have P5,000,000 at age 60. The  amount more than doubled! But still people say, “My parents’ retirement money just ran out, and we have to support them.  And I have more bills to pay. I really hope I can start tomorrow”

At age 55, one needs to save  P60,600 every month, investing at 12% per year for 5 years to have P5,000,000 at age 60. The  amount almost tripled!  That is about P2,000 per day!

Which is easier, saving P421 PER MONTH starting at age 20, or saving P2,000 PER DAY starting at age 55? At age 55, people sadly say,

“I should have started saving yesterday.”

And finally at age 65, people say, “My retirement money is just enough to pay for my debts. What will I spend tomorrow?”

It is never too late to start saving and investing! The earlier you start, the better!  It keeps on getting exponentially more difficult as you grow older.

Are you ready to start saving and investing? Are you ready to grow your wealth?

Save Your Future by learning Practical Money Management Techniques in our FREE seminars. Register early, there are limited slots available!   Click below to register for the FREE Financial Seminar in

  • Makati (World Center Bldg, Sen. Gil Puyat Ave, Makati across Mapua)
  • Quezon City (Timog Ave cor. Quezon Ave, in front of Ninoy Aquino monument)
  • Dasmarinas Cavite (Camerino Ave, near main Church)
  • Calamba Laguna (Highway corner Chipeco, Brgy Halang)

7 Ways to Upgrade Your Financial Life!

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By Laurent Dionisio

Let me give you to seven ways  to upgrade your financial life.

Tip 1 – Be Financially Literate

Financial education is key to prosperity.  Learn practical tips on money management, debt-management, saving and investing by continuously educating yourself.  The Internet is a rich resource for self-improvement.  You can also attend  a FREE Financial Planning and Coaching Seminar to help you get started and to create your personal financial plan/blueprint.

Tip 2 – Minimize or Eliminate Debts

“Some debts are fun when you are acquiring them, but none are fun when you set about retiring them.” –Ogden Nash

If you can, try not to get consumer loans or accumulate debts for non-essentials, like vacations, gadgets and flashy appliances.  It is a burden both for your financial and personal life. It imposes you some hefty cost of capital or interest which is a burden for you. Use the power of compound interest in your favor and not the other way around.

Do you have Credit card loans? Home loans? Car loans? Rule of thumb is make sure that your total amortization is within the 30% threshold of your total income.

1280_The_financial_crisis_Wallpaper_Money_Tree

Tip 3 – Develop Debt Elimination Plan

Given that you have current debts and loans, you must develop a plan how to eliminate them. There are actually ways to eliminate debts but the two basic strategies I know is by eliminating them by interest rates or outstanding balance. For the former procedure, list down your debts per interest rates from highest to smallest, then put your extra cash on the first loan with the highest interest rate first after after paying the minimum for all of the loans, thus, prioritizing to eliminate the loans with the higher interest rates while building momentum.

Same procedure with the latter method of elimination, you just prioritize according to loan outstanding balance. Do not forget to celebrate small wins!

Tip 4 – Make your Own Budget Plan

In your income statement, you can construct your own budget plan. Get your average yearly and monthly income and your corresponding expenses. Classify your expenses from dispensable and indispensable or some would classify it as needs or wants. Dispensable expenses are charges that sometimes are just wants like dining out, cable and internet fees, movies or travel expenses.

On the other hand, indispensable expenses are those expenditures that we cannot live without like food allowances and water/electricity dues. Of course, classifications are unique for each of us depending in our lifestyle and judgment.

Shall we make a budget? I think we should. Its vital role is to control our cash inflows and outflows. It also gives us some sense of control over our financial life. Moreover, it will also make us aware and responsible on our expenses and income especially those that are dispensable.  It is basically an overview of our financial standing.

Tip 5 – Improve your Budget Plan

After laying down your current budget, you now have the whole picture of your cash flows. You may now tweak some of it and get your desired savings or expenses ratio. You need to see your expenses for you to check the leaks that drain your financial bucket. You need to put some stop on it before it is too late. On the other hand, you can also see if you are saving enough for your financial goals.

Do you allocate more for your entertainment expenses likes for movies, dining in a restaurant or your travel expenses? This could be hard but changing some of your bad spending habits could really benefit your financial standing in the long run.

Tip 6 – Make your Own Financial Statements

It is very important to know your financial standing. For you to achieve your financial goals, you need to know where you stand now, financially. Knowing where you will start will help you lay down your financial plans and strategies. Personally, I created my balance sheet, income and cash flow statement. I update them monthly so that I can track if I am making a progress or not. Then I assess if should I adjust my financial strategies and plans.

Do I have enough liquid assets to cover my current debts (Current ratio)? Are my assets mostly funded by debts or equity (Debt to equity ratio)? Do I have unnecessary expenses that I can eliminate to increase income? What is percentage of discretionary expenses to my total expenses?  What percentage of amortization expense compared to my total income?

These are some of the vital information you need to know your financial status and health. So I advise that you make time to prepare your own financial statements so that you will have a blueprint of your current financial standing.

Tip 7 – Start Saving and Investing

When you follow the given steps above, I am sure that your will finances will improve and eventually create excess cash. So the best thing to do is not to spend it again but rather save and invest and make your money work you instead working your ass off just to pay all of your debts.

How? Start to live simply, increase your income, learn and invest in yourself and start saving and invest your money. Believe me, when you start saving or investing, you will have this sense of pride and accomplishment.

But remember, financial education is key to prosperity.  You can attend  a FREE Financial Planning and Coaching Seminar to start your journey to financial freedom.

Congratulations! You are on your way towards your financial goals!

Good luck!

Laurent Dionisio, CPA, RFP©

Laurent Dionisio is Owner & Publisher of PinoyFinancialPlanning.com, A Certified Public Accountant, a Registered Financial Planner, currently taking up Master in Business Administration, and the continuing professional experience and education through attending seminars, conferences and reading books and everything about finance make him knowledgeable and competent in this field.