It’s been a while from continuing the series about finance. But don’t worry, I asked a close friend who is an expert in mutual funds to share his knowledge and experience about it.
Should You Invest in Mutual Funds?
By Sevino Estil, Financial Advocate and Founder of Beyond Building Wealth
That’s the same question I get when I first started learning on how and where I should invest my money. And so, when I did my research, I found myself going back to the basics: Knowing what investments really are and what investment products that fit my needs and goals. Let’s start with some of the basics.
What are Investments?
Investments are assets that you acquire with the expectation that it will appreciate value over time in which can give you returns. These can vary from different products or vehicles that let’s your money grow. It can be mutual funds, stocks, forex, businesses, real estate and even VULs.
Keep in mind that investments can NEVER give you guaranteed returns. Meaning investment products and vehicles have their different RISKS and thus your asset can either lose money or gain profit. Just like businesses, right? That’s the idea to it.
So now that we got that settled, let’s look at Mutual Funds.
What are mutual funds?
Mutual funds are investment instruments by which the money of the investors is combined or pooled together and that are invested in the stock market or fixed income vehicles by professional fund managers.
The fund managers in turn makes the professional financial decisions for us by buying and trading shares in the PSEi (Philippine Stock Exchange Index) using the pool of money of the investors.
The gains and profits will then be shared to the investors that is proportional to what they’ve invested.
This also means that you no longer must learn how and when to buy and trade shares in the stock market. The long and complicated efforts in studying financial markets and the skills needed to be a good trader will now be the fund manager’s responsibility.
While as the investors will only need to invest their money and wait to see their money grow until it reaches their target fund amount.
Let me now answer some of the common questions about Mutual Funds.
Are mutual funds guaranteed investments?
The answer would be no! All investments have risks, and you would only hear guaranteed investments when it is a scam. Read that again. Guaranteed investments are SCAMS.
Be aware and diligent that ALL investments have risks. And the only way to prevent losing money is by studying how the investment works and managing the risks that are involved. Much like before opening a business venture, you study and manage the factors that will prevent your business from closing.
It’s the same principle with Mutual Funds, you manage your risks.
How can you manage risks?
You can manage risks by investing in fixed amounts on a regular schedule let say monthly basis or even more frequently. This strategy is known as Cost Averaging Method, by doing this, you buy more shares when the share price is lower (in shopping terms, it’s on red hot sale).
The principle can be simply summarized that consistent monthly investing manages the risks involved in mutual funds.
What are the different kinds of mutual funds?
There are several kinds of mutual funds and a lot more when you check the different kinds of mutual fund product per Mutual Fund Company. As basics, I’ll share with you these:
1. Fixed Income Funds, this is also known as Bond Fund. This is invested in treasury bills, and commercial papers. This is the best fit for those who have financial goals of 6 months until 2 years timeline, also called Short Term Goals. This is less risky compared to the other mutual fund types. The Rate of Return (ROR) varies from mutual fund company and can range from 1% to 4% annually.
2. Stock Funds combined with Fixed Income fund, also known as Balanced Fund. This is a combination of Bond Fund and the Equity Fund where in it becomes riskier with higher return than Bond Fund, but less risky with lower return than Equity Fund. This is best fits people who have financial goals of 2 years until 4 years timeline, also called Medium Term Goals. The ROR varies from mutual fund company and can range from 4% to 10% per annually.
3. Lastly, Stock Funds, also known us Equity Fund is the high-risk type of mutual fund wherein the fund manager invests the money in the stock market. Usually, the investment relies on the top performing companies in the PSEi, also called the Blue-Chip Companies. This fits better with investors that have Long Term Goals where in their financial goal timeline ranges from 4 years and above. The ROR ranges from 8% until 15% (some mutual fund companies can perform higher than 15%, just do your research on it.)
What are the advantages of investing in mutual funds?
Based from my experience and comparing it to other kinds of investment vehicle, I’ve come up with these list of advantages:
1. High Potential Earnings, average yields of 6–18% per year when you invest long-term and stay consistent in investing.
2. Professional Fund Management, meaning you have a full-time, skilled & professional fund manager that does all the research, selection and monitoring of your investments. The hard work is being done by the professionals and all we need to do is to consistently invest in our mutual fund accounts. That translates to more time for me to focus on what’s important in my life: my wife, family, career, business and my ministry to Christ.
3. Mutual fund investments are spread across a wide range of companies and industry sectors which lowers your risk if a company or sector performs badly. This is another risk management strategy that fund managers practices to prevent and minimize loses of the investors’ money.
4. Affordable, yes, it is affordable to start your mutual fund investment. The minimum initial amount is PHP 5,000 to open your account, and the minimum additional amount is PHP 1,000. You don’t need hundred thousand or millions to start investing.
5. Tax-Exemption (based on R.A. 8424 or Tax Reform Act of 199, mutual fund earnings are not subject to 20% withholding tax). Your earnings and gains in your mutual fund will not be subjected to tax.
6. Liquidity, you can easily withdraw your earnings from your mutual fund account. Investors can redeem their shares at the current net asset value (NAV) of their investment easily and at any time. (Just check with your mutual fund company with regards to their policy and procedures in doing so, for it also varies per company.)
7. Safety & security. Mutual fund companies are highly regulated by Securities & Exchange Commission & are audited regularly by external auditors. Couldn’t get any secured and safer than that.
What are the Disadvantages?
Now that we’ve learned about the advantages let’s now look at the disadvantages, because there’s no such thing as a perfect investment vehicle. Let me share to you these:
Uncertainty of returns, not guaranteed. Unlike fixed-income products (such as time deposits), your investment does not guarantee a positive return, you can lose money.
Lack of control. Investors cannot directly influence and make decisions on which securities the fund manager should invest in. Thus, you’re left just “sitting at home” and hoping that your portfolio adviser makes good investment decisions. Every decision will be made by the fund manager.
Costs and fees, this includes sales commissions and redemption fees that are applied to your investment if you decide to redeem your money in your MF account. This can significantly affect your expected returns. (This again varied per mutual fund company so make sure you check their policies and regulations with regards to their fees.)
Are mutual funds the right investment for me?
We are back to our title topic. If you are still new to investing and in the financial markets, mutual fund is a great and highly recommended way for you to start. Since it’s professionally managed, you don’t have to learn macro economics, you just need to invest your money regularly and give time for your money to grow. Think of it as training wheels. Then eventually, as you learn and gain experience you can immerse yourself in other types of investments.
What to consider before investing in mutual funds?
The best way to consider is by creating and reviewing your goals, time frame and your risk tolerance. All these three will play a huge part in making your decision and in choosing the right mutual fund company and mutual fund product that fits your needs and in achieving your goals.
How to get started?
Once you know your goals, time frame and your risk tolerance, all you need to start are:
First and foremost, fill out the mutual fund forms (check with the mutual fund company on how and where to get their application forms). Make sure all your information and spelling of your name is legally correct to prevent any problems or discrepancies along the way.
Prepare the initial investment amount, most of the time the initial minimum investment is 5,000 pesos. You can either deposit it to the mutual fund company’s official accounts, directly deposit it via the company’s cashier, via debit card and/or credit card. (This varies per MF company.)
Photocopy one valid government ID as proof of identification for your application.
That’s it! If you think about it, it’s like opening a bank savings account.
How to withdraw?
And since we are talking about investments and gains, we need to know how you can redeem your money. You can withdraw by contacting your investment advisor to sell your shares and they’ll be the ones to guide you on how and when the money will be given to you.
I’ve been an investor for more than 5 years now and I’m still learning as of this moment. With this article that I’ve shared to you, I hope you’ll not just stop learning here but read other resources and even attend seminars on finance and investments. Most importantly get a mentor that will help you and guide you in becoming a successful investor. Whether it be via mutual funds or other types of investment, make sure that by the end of this article, you’ve decided to start investing, because the greatest guaranteed loss that you’ll ever have in your life is investing when it’s too late.
But the question is — should I invest my money in it?
We have friends, colleagues, and even relatives who are financial advisors offering this kind of investment.
Some financial mentors recommend it. But how do I know if this is the right investment for me?
I said before that I was once a Licensed Financial Advisor. In fact, if by chance you’ve met a good financial advisor; you’re in good hands!
On the other hand, others will trick you to put your money on it without informing you what are the advantages and disadvantages of this investment.
I also shared before that I stopped paying my VUL and withdrawn all the remaining accumulated cash value it has because I felt it wasn’t aligned with my goals.I think that I got tricked because when the time came that I asked if I could add an add-on for it (critical illness, disability, etc,) he asked me instead to buy a new policy.
And I don’t like to buy a new policy because I have other investment in mind that I would like to put my money in it.
That started my journey in increasing my financial knowledge and eventually led me to another investment strategy that fits me well — BTID (Buy Term Insurance, Invest the Difference).
But which should I choose? VUL or BTID?
Today I have a close friend of mine who is also a Licensed Financial Advisor wrote something about it.
BTID is the acronym of Buy Term Invest The Difference. It’s a financial strategy that uses the concept of buying a Traditional Term Life Insurance and then investing the rest of your cash flow or budget in a separate investment product/vehicle.
VUL is the acronym of Variable Universal Life Insurance. VUL is a non-traditional life insurance product wherein it combines life insurance with mutual funds (a type of investment product/vehicle).
It’s The Wrong Question
Going back to my point: the question whether “which from BTID or VUL is better” is wrong.
Why? Because BTID and VUL are both strategies that solve specific problems.
It’s the same as asking which is the better fruit, apples or oranges? Both fruits are great, but it’s your preference and purpose that’ll determine which is better for you. Like if you’re making apple strudels for your family’s dessert, then using oranges would be a bad idea, right?
Similarly asking is whether which is the better medicine between Paracetamol or Guaifenesin.
With this analogy in mind, neither which is the better medicine between Paracetamol and Guaifenesin. Both are effective as medicines, but with different purposes. Paracetamol treats fevers and pains, while as Guaifenesin treats coughs and used as an expectorant.
It’s the same with BTID and VUL.
Asking The Right Question
Now, the right question to ask is: What’s the best financial solution for my needs and goals?
Your financial needs and goals will then determine what financial strategies and solutions are best for you. And based on my experience, it is never the exact same solution and strategy for everyone.
Financial solutions should individualize, customize and specific based on what the person needs and based on what the financial assessment reveals. It is very similar to what physician’s do to their patients.
So to answer the right question, get in touch with your trusted financial adviser and have a complete financial assessment from them.
Your financial adviser should give you recommendations depending on what will be the result of your assessment and then work with you in building your financial plan and in achieving your milestones.
I’m saying this because not all financial advisers are client-centric but instead sales-centric. They play the sales agent role instead of the financial advisers’ role in guiding clients achieving breakthroughs and meeting the client’s needs.
As a Financial Adviser, I make it to a point that I make a complete Financial Assessment to every client that comes my way, and I also take into consideration their preferences, budget, and personality as an investor and as an individual before making any financial solutions and recommendations.
Characteristics of BTID and VUL
Now that we’re all on the same page, let’s look at the characteristics and specifications of BTID and VUL. Here’s a list for you to better grasp the similarity and difference between the two.
Cost of Insurance
Low-cost traditional term insurance premium on the onset of application. Term insurance premiums increase in cost every 5 years
Higher cost of VUL insurance premium on the onset of application since insurance and investments are combined VUL premiums are constant and do not change from the onset of application
Duration of Protection
Short term protection of 5 years or 1 year (varies from insurance companies)
Long-term protection until age 88 or 100 (varies from insurance companies)
Needs to be renewed every 5 years or annually (varies from insurance companies)
No need to renew VUL policy is on-going from approval of policy until maturity age or until premiums are still paid.
Protection/insurability is not guaranteed with Term Insurance since there are instances that your insurance company will require you to undergo a medical exam once the renewal period of 5 years or 1 year is over.You may be denied insurance protection if you’re declared medically unfit, or a much higher premium will be charged to your term insurance based on the medical results.
Protection/insurability is guaranteed until the stated age on your VUL insurance contact.
You can pay Insurance premiums can via auto debit and bills payment online.
Investments are separate and there are no bills notification for you to add to your investment.
You need to manually add/deposit to your investments for you to invest regularly.
Insurance and investments are linked together thus both are paid and invested to regularly (via auto debit and bills payment online) in just one account.
Insurance can be monitored and checked regularly online (varies from insurance companies). Investments are monitor separately via online or offline since it is a different product.
Insurance and investments can be both monitor at the same online portal (varies from insurance companies)-
Financial Advisers can regularly monitor and manage your investments for you and notify you of due dates, market updates and other product related needs.
Commitment & Discipline Needed
High commitment and discipline needed since you’ll handle and manage your investments manually.No one will remind you of your due dates, insurance expirations dates nor give you market updates. It’s your money anyway, you have the total control of it.
High commitment but low discipline since your Financial Adviser will manage your policy and portfolio for you.
Your Financial Adviser will remind you and notify you of your policy due dates and investment updates as needed.
Fit Financial Needs
Short term insurance protection. Manual managing of investments.
Long-term insurance protection.
Clientele experience with your Financial Adviser handling your account and policy
Fit to Personality Type
Disciplined and committed with a strong habit of saving and investing regularly
Newbies and are just getting the habit of saving and investing
Is BTID or VUL better for me?
Now, that’s a better question. And all I can say is, it depends. Let’s talk about it and let me assess you financially to see which is better for you to achieve your financial milestones, goals, and needs.
Either way, whichever you choose BTID or VUL is great. As long as you STARTNOW!
What’s most important is that you start in building your wealth, protection and roadmap as early as today, because in the long run your future self and your family will thank you for it.
Now to answer the question: Should I Invest in VUL?
It’s me again — Dhenn. My answer: It depends. For me, BTID works best, for others VUL works best. In my own personal experience and opinion, you will only buy VUL if you fall into these type of person:
1. You’re “too lazy” to look for better investments or you are a newbie. 2. You already have enough funds and stock investments and looking for secondary investment to protect those assets. 3. You want to help a friend who’s selling you that type of insurance.
Overall, one of the many reasons why I did not continue my VUL policy is this:
1. I want total control over my investments. 2. I learned that the first three years of the policy (depends on the company), most payments will go to insurance first and a small fraction of the investment which is reasonable as you also bought an insurance. 3. BTID just works best for me now.
By the way, Jen is offering free coaching and Financial Blueprint Session so you can better recommend the right financial strategy and product for you. Contact Jen below for an appointment if you want to avail the VUL.
When I was a fresh graduate, I never thought about how to invest my money. I am a good saver but never an investor.
Things have changed when I became buried in debt when I was 23. A friend who was a financial advisor talked and offered me an investment in which I almost put all of my savings on that instrument. Later on, I regretted my decision because that investment wasn’t fit with my goals and aspirations.
Though it helped me a lot to open my eyes to the possibility that there are more investment instruments out there, but which one should I choose?
What is Investing?
But before that, what is investing?
For some people, they thought that investing is a gamble, but Investopedia.com says, investing is the act of committing money or capital to an endeavor (a business project, real estate, etc.), expecting of getting an additional income or profit.
People who invest their money have two primary reasons; to grow their money and to have an additional income.
To grow your money, you have to make it work hard for you and putting your money into a savings account couldn’t do that because our taxes are increasing thus instead it will grow over time, its value will decrease.
Before you invest, consider the tips below:
Before You Invest
Before you invest, you should set a goal first and commit to achieving it. If you haven’t set your goals, please read this first.
And also, do not invest in something you do not know.
Then, you should save by now. 3 to 6 months worth of your salary will go into your savings account. Never put all your money into an investment. If you don’t know how to save yet, this is how to save money.
Why do you need to have savings first before investing? Because investing has a lot of risks. You will either lose your money or grow it. In such an event you will lose it because of several factors; you don’t have to worry about it and pulled it out like most people do.
Now, given that you have savings for emergency and have a goal already, then you need to determine what kind of investor you should be.
Once you have the result, you can now invest depending on the risk you can handle and the goal you have for your finances. Now, where to invest and how to invest my money?
Where to Invest?
There are different investment instruments where you can put your money to make it work hard for you.
1. Investment-linked Insurance.
Some people called it as VUL (Variable Universal Life). It is also as an investment but known as an insurance policy. It has the component of savings, investment, and life insurance. Most financial advisors offered this product as an investment.
There are also pros and cons for this one and will invite a friend to write it on the next blog.
2. Mutual Funds.
Mutual funds are a great way to grow your money as you don’t have to study or pick a company where you should put your money. It can also be a combination of stocks, bonds, and money market.
It is a pool of money collected from investors for the purpose of investing it into different instruments like bonds, securities, money markets, and stocks.
And then there is a fund manager who will manage the fund and do the work for you.
A bond is a form of a fixed-income investment wherein your money will fund an entity or a company project or government for a definite period with an interest rate.
For example, a government has a project and they need to tap investors for funding. As an investor, I will lend my money to the government and put an interest rate on it. The interest will return together with the capital after a period.
I have this kind of investment already wherein I will expect my money to return with the interest rate after 10 years. So far this is a low-risk investment but also low returns.
A stock is a security that signifies ownership in a corporation and represents a claim on part of the corporation’s assets and earnings.
A stock will earn you the right to become a shareholder of the company, thus you also earn a fraction of the company earnings.
For me, investing in the stock market is a great way to make your money work hard for you. The stock market is a place wherein investors can buy stocks/shares of a company. Once you become an investor in a company, the way you think about the company will never be the same.
And lastly, I know you heard about it already:
If you have heard about Bitcoin, Ethereum, Ripple and other altcoins, you may wonder where it came from? Watch this video first:
Cryptocurrency works like a digital currency and unlike any other investment, Cryptocurrency can only be accessible on the internet. It works as a medium of exchange with a purpose of decentralizing money so the banks cannot even manage it.
Most economist and investors are against it. There were no guaranteed returns in this kind of instrument. You cannot invest in this one for the long-term for now.
As an investor, I am not against with this instrument. To be honest, I am also investing in this, not by buying the coins using my cash but investing in machines that can mine a coin. But that’s enough for now, I will write a separate article how to do it at least on my own experience.
Now, how to put your money in this investment? That will be a long lecture and I promise to write how to invest on that instruments one by one on my next article.
Disclaimer: If you own the photos, please leave a message and will credit it to you.
I’ve been receiving a lot of messages asking me to write how to invest in the stock market (in my case Philippine Stock Exchange), how to start, and what are the procedures.
But without proper mindset and guidance, investing will be a gamble for someone who doesn’t have the proper mindset on why we do it. Thus, before I write something about it, I will tell you first, how to save money.
Saving money is important for someone who wants to become an investor. I remember a former colleague who was so eager to invest. He admitted that he doesn’t have savings as he spends it on buying new gadgets. He knows how to save money, and then he spends it. When he became an investor, he put all his money in the stock market, and then after having a profit on it, he will spend it again to purchase a more expensive gadget.
“Ilang taon na akong nag-tatrabaho pero wala pa rin akong ipon.” (I’ve been working for years, and yet I don’t have savings) I remember as he rants.
I know some of us have been complaining about it. That after years of working so hard, we wonder why we don’t have savings at all. Saving money is difficult until we learned why we do it.
Why saving money is important and why should I?
Saving money is important just in case you will need the money. “Well, Dhenn I don’t think I need money. I have a credit card for that.”
Having a credit card is good as it gives you the power to purchase when you don’t have the money. When I received my first credit card, it was January 2014, and since I cannot afford a DSLR Camera, I purchased a Canon 1100D using my credit card. I asked then the saleslady if I can ask for a discount. She said that if I will pay it in cash, I will only pay 16,000 pesos (original SRP was 19,999.00)
That’s a whopping 20% discount that I could never get in the bank.
I learned a lesson that year; do not use your credit card to purchase something expensive. If you can’t pay it in cash, it means you cannot afford it.
Saving is not just important in case you need the money. You can save because you need an emergency fund for emergency situations. You save for retirement, a down payment for a house or car, for your future wedding, or education. There are also a lot of benefits of saving your money in which I will mention below:
Benefits of Saving Money
When I saved money with proper mindset and guidance, it brought a lot of benefits in my life. I no longer save just to spend, but rather I save money to invest it later.
For me the benefits are the following:
1. Increase in income, for a money not spent is money earned.
2. Stress-free life.
According to a survey made in Australia, 80% of the working population experiencing stress over money.
Why? Even though our employers pushed us to have a work-life balance, if we have a lot of financial responsibilities, we will work and get the promotion instead.
Knowing that you have saved money, creates a healthy lifestyle as you need not worry about it.
3. Spend without guilt.
Have you tried buying an item with your credit card? You swipe and sign, there’s no emotion and a lot of thinking involved. After that, you wonder why your bills are that high.
Unlike paying in cash, you will think twice whether you need it. And every time you make large purchases, it’s painful, but worth it because you work hard for it.
Now you know why you should save and the benefits of it, I know you will ask how much should you save.
How much should I save?
My answer is; it depends. There are a lot of formulas out there that you can Google it out. Formulas may not work for everyone else as we have different lifestyles and different backgrounds.
As for the formula that works for me is this:
Expenses = Income — Savings
In this simplified formula, you will minus your savings from the income and the rest will be for your expenses.
Then how can I determine how much will I save? This percentage works for me as well:
10% = Tithes
20% = Savings
70% = Expenses
Now the last question is, where should I save?
There’s a lot of medium you can use to save money and these are:
1. Piggy bank. But this is not wise these days because your money could be at risk.
2. Banks. Thru savings account or time deposits. the safest, but has the low-interest rate.
3. UITFs or Mutual Funds with low risk. Don’t put your savings to a high-risk medium.
4. Cooperatives. Safe and most profitable of them all but also with risk. Research about the cooperative first. Some part of my savings is in AFPSLAI and some on my company’s cooperative.
The returns are not that much high, but I earned 4,000 to 5,000 per year, and that is not bad rather than putting it in the bank.
Now at least you know how to save. Share this if it helps you. See you in the next series.
“Welcome aboard, 2018!” “2018, please be good.” “Sana suwertihin ako ngayong taon.” “This year, sana magka-love life na ako.” “This year, mag-iipon na talaga ako.” “This year mag-da-diet na talaga ako.”
You can hear all these hopeful sayings whenever a new year comes. A new year that somehow builds our once broken hopes and dreams.
And then we did our bucket list, travel goals, fitness goals, and financial goals.
But then, reality kicks in. According to a survey made in the U.S, all the new year’s resolutions ended in January.
Motivated ka sa una, pero hindi mo pala kayang mag-commit.
Just a disclaimer, I’m not a financial expert or guru. I was “once” a financial advisor but don’t ask me for any specifics, and in these financial blog series, I will talk only about my experiences, what I also learned from the gurus, and also what I am doing.
And before we are going deeper, let me start this series on how to reach your financial goals this year.
“Ang hirap maging adult! Sana estudyante na lang ulit ako!” I once heard this from a young professional who mumbled because of his financial responsibilities.
Some veered away when his friends talked about money. That’s one way of escaping from reality. And a lot of Filipinos doesn’t want to talk about it as it is a “taboo” topic.
While in some Chinese families, they often talk about it. Where to do business, where they will put their hard-earned money, etc.
Do you want to reach your financial goals this year? Here are some tips;
1. Set a goal first! Be specific.
Zig Ziglar, a motivational speaker said, “If you aim at nothing, you will hit it every time.”
Buy a journal notebook or planner and write down your financial goals there. For example:
“This 2018, my aim is to achieve 100k pesos worth of savings and investments.”
Now I know you will ask “how”, but just leave your goal written there.
2. Don’t Announce it.
If you want to succeed, don’t announce it. There’s a study that people who announced their goals to the public often accomplish less.
Yesterday, I posted some things I’ve accomplished last year and what I wanted to “look forward” this year on my Facebook account. It was not a goal but rather list of things I’m looking forward.
3. Commit yourself to it.
Now here’s the hardest part. Wag mo iwanan sa ere yung goals mo katulad ng ginawa mo sa ex mo.
Here’s how I commit myself to my goals:
Divide your specific goals to 12 months.
For example, my goal this year is to save a hundred thousand pesos. So my monthly goal is to save 8,333 pesos per month. Write it down:
“This month I will save 8,333 pesos. I will deposit or invest that amount before spending.”
Again the rule should be: Expenses = Income — Savings
What are my action plans?
Here comes another challenge. What actions should I take to achieve this goal? Be thrifty, spend less, find another income stream, buy an investment product, open a.bank account, that is your call.
For instance, buying investment instruments or products will help you a lot in building the habit of saving. But just make sure it is a legal company.
Stay away from Ponzi schemes, multi-level marketing that promises high returns when you recruit people. If it is good to be true, then it is not good, beware!
4. Educate yourself.
You are here because you want to know more. Congratulations! Don’t stop, buy books that will help you achieve your goals.
It was 5 years ago when I jumped-off from being a hard-core gamer to a reader. Up to this day, I owned and read more than 200 books and I love it!
I also attended a lot of seminars makes me eligible to be called “seminarista”. Don’t be afraid to spend a lot on education. Wisdom is proven the most expensive. It has no guaranteed returns, but it can make you wise and rich.
Currently, I’m now exploring and studying in the possibility of investing on cryptocurrencies like Bitcoin, Ether, etc. Welcome to the digital era of currency!
If you constantly ask “how”, then probably like me, you need to study more. Again, do not spend either invest on something you do not know.
5. Commit your plans to God.
Do you want to be successful? then commit your goals to God. The Bible says in Proverbs 16:3 – “Commit to the LORD whatever you do, and your plans will succeed.”
If He prospers it then it is not against His will. And blessed are the people who commit their ways to God.
So can we please stop telling 2018 to be good to us? Because 2018 will never be good to us if we don’t start it from ourselves.
It’s been a long time since the last the I wrote on my blog. But I’m happy that I still have you my loyal readers and followers of this blog. The reason I have published nothing yet is that there’s a lot of events happened for the past few weeks and I am not surprised there will be more next month! I came from a mission trip, attended a seminar/workshop of John Maxwell etc. How isn’t a busy life it?
Being busy does not translate to being productive. Sometimes we are getting busy because of unimportant things. And as the old saying, “time is gold.”
Today, let me share something I learned over the past few years when I started my journey to becoming financially literate, and responsible.
I remember when I was a fresh graduate, all I ever wanted is to earn my money. Then my first salary came, then I received my salary increase the next year, but instead of being happy about it, money became a burden. I wanted to jump from one company to another for one goal — to increase my salary.
But I noticed that even though we as millennials continue to do that, I know people who are earning more than I cannot save money. Why is that happening? It’s because:
1. It is not how much you make but how much you keep. A money not spent is a money earned.
Have you ever compare yourself to others before? Comparing can get you nowhere. It’s like wanting what others have.
Have you experienced frustrations because others often compare to your siblings or cousins when you were young? That’s unfair! You are not them and they are not you.
The only best way to be content and keep growing is:
2. Compare yourself to yourself.
Compare how much money you saved last year versus this year. Did it increase? My investment portfolio was around 70k last year, and it became 155k this year. It could have been 400k if I didn’t purchase a car and a piece of land.
The goal of comparing yourself to yourself is to be better. In any area, may it be a career, relationship, character, and wisdom, it would be healthy to practice self-evaluation as Socrates a famous Philosopher once said; “An unexamined life is not worth living.”
3. Good days are always ahead of us.
Have you ever experienced time in your life that phenomenon called “when it rain, it pours?’” Yung nakaranas ka lang ng isang bad vibes, tapos tuloy tuloy na?
Ang sakit bes! But don’t worry, believe that good days are always ahead of us. Every pain and trials will pass, there is no temporary here in this world. As C. S. Lewis once said, “Isn’t it funny how day by day nothing changes, but when you look back, everything is different…”
4. Income — Savings = Expenses.
How I wish I knew this before I started my first job. Often, I saved what is left when it should be I will spend what is left after taking out my savings from it.
The time I applied this principle to my finances, I did not complain that I was earning too little. And if I exceed, there’s no one to blame but myself.
5. Invest in yourself first.
This is a must. Do not invest in what you do not know. I’ve made a painful mistake of investing without really knowing how it works. I lost thousands of money in investing in stocks and VUL.
I am nothing against VUL here, but I made a mistake of agreeing on the agent unknowingly that I can invest on other investment instruments or he should educate me more about it than making a sale.
6. Financial stability is an illusion. It’s a moving number.
Numbers are moving. Did you notice it? The price of goods is steadily increasing each year, so our needs also.
No one can ever be financially stable or financially free unless he or she learns how to handle his or her finances responsibly.
Be financially responsible.
7. Never kill the goose that lays the golden eggs.
Sometimes not because you are earning more than the other, you should leave the other one and make more money with it. Would it be great if you have multiple sources of income isn’t it?
8. Never put your eggs in one basket.
Diversify. Diversify. Diversify. The wisest king on earth who ever lived, King Solomon once said, “Divide your investments among many places, for you do not know what risks might lie ahead.”
9. The money will not make money. Idea is.
Don’t fall into the trap of what others are saying. You don’t need money to make money. Yes, you need a capital to start a business, but it doesn’t mean all you need is money.
Yourself is still the best asset. Your ideas can change the world. Make it a habit to invest in yourself by education, read books, learn from others. Gain more experience.
Still not convinced?
Did you remember the first time you were applying for a job? Did the HR ask you money? No. They asked you what talents and skills can you bring to the company right? Then they will pay you for it.
Skills, knowledge and, talents make money.
10. The intention will never bring you to the destination but the intention with the right decision with right information will.
The intention will never bring you to the destination. You can make plans, you can make goals, you can aim but achieve nothing.