Tag Archives: protection

Protect Your Familyh

What’s the best protection for your baby?

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What’s the best protection for your baby?

When your baby arrives, you begin thinking of your child’s future.

Many begin by opening a bank account for the child, promising to oneself to set aside money every month for the child’s future.  But realistically, with today’s low savings account interest rates of 0.2% effective rate ( after witholding tax), a thousand pesos per month is expected to grow to only ₱245,000 after 20 years ( or total interest of ₱5,000 after 20 years )

The best protection for your child is a combination of equity mutual funds in-trust-for (ITF) your baby, plus term life insurance for the breadwinner with your baby as beneficiary.

If we set up an equity  mutual fund, in-trust-for  your baby, assume 12% growth and invest ₱1,000 per month, we get these projected values:

  • ₱1m to ₱2.3m after 20 years, or
  • ₱3.5m to ₱14m after 30 years or
  • ₱12m to ₱86m after 40 years!

This investment can probably suffice to fund your baby’s college tuition after 18 years, or jumpstart family life on marriage after 30 years, or provide retirement as early as 40 years!

This is a great plan, but we know that what actually happens do not always match our plan.  What if you die too soon?

If the breadwinner is 31 years old or younger.  ₱500 per month can buy ₱1m of life insurance coverage for 18 years.

This means that if the Lord takes you, the breadwinner, home early, and you die too soon in the next 18 years, you can leave ₱1,000,000 for your baby as a parting gift.

With this combination, you protect your baby’s future whether you die too soon, or live long enough to see your child grow!

This solution requires only ₱1,500 a month or about ₱50 per day.
Can you commit ₱50 per day for each of your children?

Ask your questions or put your comments below this.

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.

 

Do You Love Your Family?

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Give your Christmas gift to your most important person in the world!

This time of the year is when most employed Filipinos get their 13th month pay, and/or Christmas bonus, when we become generous, and we begin thinking of Christmas gifts for all our loved ones.  Remember to give your Christmas gift to the most important person in the world.  YOU!

Now, why am I identifying you as your most important person in the world? Am I telling you to be selfish?  Nope.  Nothing could be further from my intention.

  • Do you love your family?
  • Do you carry any significant financial responsibility with growing children or aging parent?
  • Are you concerned about lack of savings, or investments for your retirement or kid’s college education?
  • Are you concerned about what would happen to your loved ones in case you pass away early?
  • Are you concerned you would be a burden to your children in your old age?
Do you love your family?

You are your most important person in the world, because you are responsible for your loved ones, because your loved ones need you, because they depend on you. To protect your loved ones, you must protect yourself.

If you answered “Yes” to any of these questions, then You are your most important person in the world, because you are responsible for your loved ones, because your loved ones need you, because they depend on you.  To protect your loved ones, you must protect yourself.

If today, you are earning and financially support your loved ones, you provide financially for their present and future needs.

  • Do you want to have the means to get sufficient medical benefits, to ensure you can continue to be productive?
  • Do you want to have emergency cash and medical protection even if you lose your current job?
  • Do you want your loved ones to receive substantial cash if you pass away early?

And in the future, when you have retired, or when you are no longer able to actively work to earn for your daily basic needs for food and shelter

  • Do you want to free your loved ones from financial burden of supporting you?
  • Do you want to free your loved ones from responsibility for your medical bills?
  • Do you want to enjoy a retired life of comfort with your loved ones?

If you answered “Yes” to any of these, your Christmas gift to your most important person in the world, to YOU, is simply to START.

  • Do you want to start earning additional cash in your spare time, learn how to make money, and learn how to avoid bad debt?
  • Do you want to start investing in short term health protection, long term health protection and life insurance?
  • Do you want to start investing for your children’s education, for your retirement, for your dream home, for your dream vacations?

You can start by attending our Practical Money Management Tips seminar in Makati, or our financial seminars in Quezon City, Calamba and major cities.