Ten pesos a day keeps bankruptcy away

To those who read my articles, you might have realized by now that I am not able to reply to comments most of the time unless it is sent to info@colaycofoundation.com.

One good reason is that, sometimes, the person making the comment is not really after a reply but is merely venting.

Moreover, many times, my replies in themselves are too long and would be an article in itself.

Oftentimes, there is no way to answer without eliciting more of the same refusal to believe.

But as time passes, perhaps the window of opportunity presents itself to bring up the reply again based on actual facts.

Two years after might be a good time to reply to a comment made to my second article in a GMANews.TV blog dated April 2008.

“Litong Lito?” distrusted the principles that I have been espousing since 2001.

I am bringing up the issues as they were written in 24 April 2008. It will take several issues to explain them so I will cut them up by subject matter.

This comment arose from a portion of my 22 April 2008 blog:

“Saving Ten Pesos a day or Three Hundred Pesos a month invested prudently can earn you an average annual rate of 12 percent.

At this rate, if you leave your money alone, and just let it “roll” it will compound and grow to a value of PhP 66,600 in 10 years.

Look at what happened here?

Over a period of ten years, you actually saved only PhP 36,000 and it grew to almost double the amount.

If you are able to continue this process for another 10 years, meaning saving another PhP 36,000 over 120 more months, your savings will grow to PhP 273,400, or almost FOUR TIMES more than the total amount of PhP 72,000 you saved over 20 years.”


In the meantime, Litong Lito came up with this reply:

After ten years ... ano na kaya ang mabibili ko sa sampung piso?

Ano po ba ang "inflation rate" ngayon?

Naiisip ko lang po na kung ang makukuha kong tubo kada taon sa investment na papasukin ko ay steady 12 percent at ang "inflation rate" ay steady sa six percent (March 2008 = 6.8 percent), ibig sabihin ang neto ko ay six percent lang.

Ibig sabihin ang 10 peso daily savings ko for 10 years ay aabot nga ng PhP66,600 pero hindi na ito kasing "powerful" ng pera ngayon? Baka after 10 years ang PHP66,600 pesos ay parang barya na lang. Not considering the risks?


If I understand “Litong Lito?” correctly, he is saying that the P66,600 will be practically useless because of inflation. Furthermore, there are risks in the 12 percent p.a. investment to contend with.

My reply to “Litong Lito?”:

1) Note that you assumed inflation at six percent per annum and just to keep the example simple, that is half of the 12 percent per annum that I said you could earn over a period of 10 years.

Thus, to keep at par with the six percent inflation you only need to grow your money to P48,750 by the tenth year.

Therefore, the Php66,600 would still be able to purchase for you 36 percent more goods than if you had just managed to keep in pace with inflation. In other words, you would still have P17,850 left over after buying the same amount of goods with your P48,750 now adjusted for inflation.

2) If you still saved the 10 pesos daily but just kept it in your piggy bank and not invested it, you would have Php36,000 at the end of 10 years with a purchasing power of only about half or Php18,000.

3) If you don’t save the 10 pesos daily, you would have spent it along the way on practically useless things. At the end of 10 years, you would have exactly nothing.

4) On the risks of the investment, I reiterate that all returns are risk-driven.

The same is true with mutual funds and unit investment trust funds (UITF).

Though they are closely supervised by the Securities and Exchange Commission (SEC) and the Bangko Sentral ng Pilipinas (BSP), this type of supervision does not extend to the quality of fund management.

Regulatory bodies are focused on compliance with legal requirements and to ensure that fund managers do not run away with the investors’ money.

Actual performance of the funds are published the daily and may also be seen in selected websites. Thus, the risk of losing part of your investment could happen in the following cases:

choice of a mutual fund or UITF with poor performance by the appointed fund manager. There are many choices and with a little research and analyses, you can find the right one for you.

selling at a time when the Net Asset Value (NAV) is lower than your actual average cost per shape. This is unlikely to happen if you are regularly buying the same shares with the same amount of money, (i.e., you are peso cost averaging). This is why it is important to have a long-term outlook.


Here is a reminder for all would-be fund investors.

It is easy to get into a fund.

But the real challenge is when do you get out?

The idea of maximizing returns is never a practical one.

The best rule in managing your investment is to have a specific target amount you want to achieve at a specific time or date in the future and a specific reason or purpose on how this amount will be spent.

This roadmap will automatically tell you what kind of return you will need and what the attendant risks there are.

This defines your own personal benchmark in deciding when to redeem your shares or when you should put in more investments given prevailing unit prices.

I wish to reiterate that investing is very personal.

The key is knowing what investment instruments suit you best.

Don’t get carried away by tips from kibitzers.

Remember:

1) If you were ready not to even save the 10 pesos daily and will have nothing at the end of 10 years, logic dictates that you should not feel bad if you lost the entire investment and have nothing at the end of 10 years.

But I am saying that it is really unlikely that you will lose the entire investment.

2) Do put your entire savings in one investment; only 10 pesos daily, which was really just an example.

In fact, the lowest investment in a mutual fund is an initial Php 5,000 and Php 1,000 additions thereafter.

After the first Php 5,000 investment, you would have to save 33 pesos daily instead of 10 pesos to reach your Php 1,000 additional investment per month.

If you cannot save 33 pesos daily, then this advice may not be something you can follow.

3) I am assuming that 33 pesos daily savings is something you can afford to invest and then forget. Let it just roll and be amazed what it can grow into in 10 years or longer.

4) Inflation rate went down in the past year and the average for the past five years is about 5.7 percent per annum but in the past two years, if you had taken my advice and chosen the best performing mutual fund, you would have earned 27 percent from April 2008 to March 2010 or about 13 percent per annum.

Note though that the first investment is the required Php 5,000 and Php 1,000 regularly thereafter.

For seven (7) stock or equity mutual funds, the average annual compounded rate of return over the last five (5) years ranges from a low of 8 percent to a high of 14 percent.

Note that this average already takes into account the horrible performance in 2008 where the stock market dropped by more than 50 percent.

I will continue with replies to “Litong Lito?” comments related to his real estate investment in Part 2 of 3 soon.

Thank you for your patience.
Article:
http://blogs.gmanews.tv/francisco-colayco/archives/31-Ten-pesos-a-day-keeps-bankruptcy-away.html

Don’t Be A Zombie

One day, a female doctor was working late in the hospital.
She was on the elevator with another woman.
When the elevator doors opened, the doctor saw a girl running towards the elevator. She gasped. She pressed the button and closed the doors.
The other woman asked her, “Doctora, why did you close the doors? I think that girl was coming in…”
With cold terror in her voice, the doctor said, “I know that girl. She was my patient. She died yesterday.”
“Died?” the other woman said. “How could she be dead? She was running. You must have been mistaken.”
The doctor shook her head. “Did you notice the red tag on her wrist? When a patient dies, the nurses attach a red tag on their wrists.”
The other woman said, raising her arm, “Like this one?”
Are You A Zombie?
You have two choices in life.
You can live deliberately or you can live passively.
There are many people alive now, walking, talking, eating… but inwardly, they’re dead. Especially when it comes to their decisions in life. They’re zombies.
Why?
They live passively.
They just accept what’s happening.
· Tempted to do the wrong thing? “I’m weak,” he’ll say.
· Can’t get a job? “Tough luck,” he’ll say.
· Family life is shallow? “I was raised this way,” he’ll say.
· Health is deteriorating? “My genes,” he’ll say.
· Poor and in debt? “My lot in life,” he’ll say.
But not to choose is already a choice!
Friend, God doesn’t want you to be a Zombie.
God wants you to live deliberately.
God wants you to choose wisely and pass the tests that life brings to us.
Let me share a beautiful story written by S.I. Kishor about a man who passed the test.
Will You Pass The Test Of Life?
John Blanchard was a soldier.
One day, in a library, he found an old book with a lot of writing in the margins. He read her handwritten notes in the book and admired their deep insights. At the front cover, he saw that the book was previously owned by a certain Hollis Maynell.
With much effort, he located her address. He wrote to her and told her about her old book and how he liked her written notes.
And she responded, thanking him for his kind words.
But that day, he was shipped overseas to fight in a war.
Still, they kept writing to each other. During the difficult times at the battlefield, her words inspired him and gave him hope.
Little by little, John was falling in love with her.
He requested for a photo, but she replied that if he really cared for her, it won’t matter how she looked.
Finally, he was going home.
They decided to meet at the Grand Central Station at 7pm.
He said he’d be in his soldier’s uniform bringing her old book.
And she said, “You’ll know me by the red rose I’ll wear on my lapel.”
When the train arrived at 7pm, John was there, wearing his neatly pressed military uniform, with her old book in his hand.
The first woman to step off the train was a beautiful woman in a green suit. But there was no red rose on her blouse.
John was disappointed. But she was so lovely, he kept looking at her. She walked in front of him, glanced at him with a smile, and asked, “Are you following me, soldier?”
A part of him wanted to follow.
But no, he had to wait for Hollis Maynell.
The next woman who stepped off the train had a red rose on her lapel. She was perhaps 45 years old. She had graying hair beneath her hat. And she was very overweight. Meantime, the beautiful woman in the green suit was walking away.
John was torn.
Yet he looked again at the woman who was wearing the red rose. He remembered her letters and what a fascinating a person she was. He remembered how wonderful her words made him feel. He told himself, “This may not be love. But this may be more than love. This will be a beautiful friendship with a lovely person.”
He walked up to her, straightened himself, handed the book to her and said, “My name is Lieutenant John Blanchard. You must be Ms. Hollis Maynell. I’m so glad you could meet me. May I have dinner with you tonight?”
The woman smiled. “I don’t know what this is about, son,” she answered, “but the young lady in the green suit asked me to wear this red rose on my coat. She also said that if you asked me out for dinner, she said she’d be waiting for you in the big restaurant across the street. She said it was some kind of test!”
Your Choices Shape Your Destiny
Imagine the end of this story: John and Hollis getting married, having kids, and growing old together.
Because he lived deliberately.
Because he made the right choice.
Because he passed the test.
Friend, life is a series of tests.
And your choices—your answers to the test—
will shape your destiny!
Sometimes, it’s a choice between love or lust.
Sometimes, it’s a choice between selfishness or selflessness.
Sometimes, it’s between what your heart wants and what your flesh wants.
Sometimes, it’s between what will bless you forever and what will give you pleasure this moment only.
Your life is really all up to you.
You’re the chef of your meal.
You’re the architect of your house.
You’re the scriptwriter of your movie.
You’re the composer of your song.
You’re the painter of your masterpiece.
At the end of the day, you decide how happy, fulfilled, and blessed you want to become.
For A Bowl Of Soup
One day, Jacob was cooking some bean soup.
And his elder brother Esau walked in very hungry. Esau was so hungry, he could eat a horse (with the jockey included). He said to Jacob, “I’m starving; Give me some of that red stuff.”
That was when his younger brother offered the most preposterous deal of the century. He said, “I’ll give it to you if you give me your rights as a firstborn son.”
Do you know how absurd this is?
It was like Jacob said, “I’ll give it to you if you give me your kidneys,” or “I’ll give it to you if you give me your eyeballs.”
We don’t see how insane it is because we don’t know what “firstborn” means.
As firstborn son, Esau enjoyed the highest honor.
As firstborn son, Esau represented his father in society.
As firstborn son, Esau had first choice in the family’s inheritance.
If you placed a monetary value to that, it would be worth millions. And Jacob was asking for all that for a single bowl of red soup!
But here’s what’s more preposterous: Esau agreed!
He threw all of that for a bowl of soup.
Absolutely nuts.
Don’t Be Like Esau;
Live Deliberately!
Don’t live passively.
Don’t live life sleeping on the wheel.
Don’t live by simply going through the motions.
Don’t live your life simply accepting what happens.
Don’t exchange your sonship for material things.
Don’t exchange God’s wealth for man’s wealth.
There will be many Jacobs along your path, who will try to steal your greatest treasures. There will be many Jacobs who will offer momentary pleasure in exchange for your sonship, for your dignity, for your peace-of-mind, for your long-term happiness.
When I think of Esau, I think of a man who had an affair with his secretary.
For a few moments of pleasure, he lost the trust of his wife, the unity of his family, the blessings for his children.
I too had an affair with my secretary. This affair lasted for 12 years. Of course, before I had an affair with her, we got married first. Because I live deliberately. (When I was still single, I was the boss and Marowe was my secretary. Now that we’re married, she’s my boss and I’m her secretary. Hay, buhay.)
Is The Driver Asleep?
Here’s another analogy: You’re the driver of your car!
I’ve heard people say, “God is now the driver of my life.”
That’s impossible.
God will never take the steering wheel of your life.
Because He asked you to drive.
You hold the steering wheel.
You call the shots.
You make the decisions.
You choose where to go.
But I’ve met a lot of people who fall asleep in the wheel.
They doze off.
They don’t take the right turns.
Worse, they take the wrong turns.
And disaster happens.
Even If You Fall,
Rise Up Again!
I repeat: Life gives you tests.
Sometimes, you fail those tests.
You make the wrong choices.
You fall.
You stumble.
You sin.
But failing in one test doesn’t mean you’ll fail in life.
I should know.
I’ve failed in many of my tests. (Many, many, many tests!)
But I’ve never given up.
I’ve got a word for you: God is the God of Second Chances.
Some people condemn themselves for making wrong decisions in their lives.
They are their own cruel judges.
· “I married the wrong person. I’ll never be happy.”
· “I got pregnant out of wedlock. I’m a single mom now. I blew my chance. I’ll never have a complete family.”
· “I had an affair. It destroyed my marriage. I lost my family. I will always be miserable.”
But don’t lose hope.
We all make mistakes. All of us do!
But God says, “I don’t look at your mistakes. Stop condemning yourself. Move on. Stand up again. I can still make your life beautiful. I can still fulfill your dreams. I’ll be here to supply all that you need to create a new life.”
Let me tell you my last story of how I failed a test…
How I Fell
I was twenty years old.
And still single.
I was attending a meeting in a province.
I asked one of the members of my organization, a young woman, to join me and help me in the meeting. (I never realized how dangerous this was. I never did this again. Since then, I’ve always went with another guy.)
We rode the long 9-hour bus trip together.
And we talked everything under the sun.
She had an attractive smile. And a demure, quiet disposition.
But something else was going on.
Sitting beside a young and lovely woman stirred up sexual feelings within me. My arm touching her arm. My leg touching her leg.
The long trip made us both sleepy.
Or I pretended to be sleepy. (Sorry, Lord.)
And I rested my head on her shoulder. (“Style mo bulok!”) Soon, I locked my arms around her waist—like she was my pillow. And she didn’t resist.
Why? As her religious leader, she trusted me so much.
Thankfully, nothing more happened.
When we got off the bus, I felt ashamed for what I did, because I exploited her trust. What I did was wrong. I abused my authority. I exploited our friendship.
We parted ways as though nothing happened.
That event happened more than twenty years ago.
It Could Have Destroyed Me
I was reminded of that experience recently.
Because one day, someone called me up.
She said she belonged to another prayer group. And she asked for advice. She said her prayer group leader was caught having sexual affairs with his female members. It was shocking. The news is now breaking the prayer group apart.
I sighed and prayed for her group.
After I put the phone down, I realized there was really no difference between that prayer group leader and me.
We both were guys.
We both fell.
We both were weak.
We both were surrounded by a lot of women who trusted us.
The only difference is that I stood up after I fell.
I exploited my female friend in the bus with an inappropriate hug. And I can remember falling at other times in my life.
But it never became a habit. (Jim Rohn says, “Failure is not an act. Failure is a habit.”)
I rose up from my failure.
I didn’t wallow in my sin.
God says in Isaiah 43:18-19, Forget about what has happened before, do not think about the past, instead look at the new thing I am going to do.
I repeat: When God looks at you, He doesn’t look at your failures. God doesn’t look at your mistakes. He looks at your beauty, your goodness, your holiness buried deep inside. He believes in you. He trusts that you’ll rise from your fall.
I’ve not lived perfectly.
But I’ve tried to live deliberately.
When confronted with choices, I try to be awake.
Not a zombie.
Not asleep in the wheel.
I invite you to do the same.
Live deliberately.
Pass the test.
Choose the best.
Your great future awaits.
May your dreams come true,
Bo Sanchez
PS. Do you want to earn money through Real Estate? Real Estate Guru Trace Trajano will teach you how, using his very own “Quick-Turn” strategy. He’s giving a free online seminar on June 26, 7:30pm (Manila time). The last time he did this, 246 people couldn’t go in because the available lines were already full. Click HERE NOW to reserve your seat.
Article:
http://bosanchez.ph/don’t-be-a-zombie/

DOLE expects better job figures for farm sector after El Niño

THE Department of Labor and Employment (DOLE) expects better results in the next Labor Force Survey (LFS) once the agriculture sector recovers from El Niño, which caused job losses in the first few months of the year. Labor Undersecretary Romeo Lagman also said in a Palace briefing that it is important to see the “positive aspect” [...]
Article:
http://www.tucp.org.ph/news/index.php/2010/06/dole-expects-better-job-figures-for-farm-sector-after-el-nino/

Stay here or migrate

We have been given new hope with our President-elect Benigno Aquino III. But it will take time before our “bad economy” really picks up. Thus, there are still many who are considering to emigrate for better opportunities. I’d like to answer a question asked of me: “Is it still possible to give our children a comfortable life here or is the most feasible solution to move abroad?”

You need to weigh your options carefully understanding the following:

The “bad economy” is not limited to the Philippine economy. It is the World economy that is badly hit by the extraordinary ramifications of the financial crises in all developed countries not to consider the rise and still rising prices of commodities (including uncertainty in oil). Anywhere in the world, perhaps unless you are extremely rich, you will feel the painful price increases in food and all other needs.

Your source of income is very important. With the decline in all economies, jobs are precarious. Losing your job while you are in another country is more catastrophic. Here, you have your family and friends you can run to. Abroad, you are usually alone unless you also have family and close friends there. However, those who qualify are given access to government “unemployment benefit” assistance.

You need to define the parameters of “comfortable.” If you live anywhere abroad, you will not have the luxury of house-help like we do here. Hopefully, your children are already trained not to depend on them. You also need to consider the higher costs of additional clothing and heating bills for winter.

Peace and order is a special desire of people who move abroad. The bad news is that kidnappings and killings also happen in other countries. We just don’t hear as much about it. In the final analysis, you just have to choose a good community and your entire family should be careful about safety and security whether you are here or abroad.

Free schooling and medical insurance seem to be the main advantages if you move abroad. However, the culture in other countries is usually more permissive and that may affect your kids’ development both positively and negatively. Medical insurance is usually attached to your job or your citizenship.

Here, the cost of schooling is substantial and needs careful preparation. While medical costs can be high, there are always doctor friends and relatives to run to in addition to relatively cheap medical insurance and/or HMO-based medical plans.

Your children's ability to find better jobs in the future is dependent on their chosen field and not where they were schooled or lived.

The good news however, could be that growth in global economy is now better poised to happen in the emerging Asian economies. Established companies and Investors in general are looking towards Asia as their main venue for expansion and establishment of new business operations. While China may lead the field in this regard, the Philippines has its own unique attractiveness if we get our act together. Going forward, we can expect real growth in the hospitality industries, such as hotels and other service-related operations, which every Filipino can be trained for. One needs only to look around to see that in more developed countries now (e.g. Singapore, Spain, etc), Filipinos are the professionals of choice. Why export our skills when we can build the industries that will hire them right here in our own country? By and large, we are still considered as an English-speaking nation with good familiarity in western business organizations. While our advantage in verbal and written communications is fast deteriorating, this can still be arrested and turned around with true political will as well as a unified effort among private educational and discrete training institutions.

While other countries may be speeding up to develop skills for global-oriented business operations, the Philippines still enjoys a substantial advantage. We can capitalize on this now!.

Finally, all things equal, it seems more idyllic to live and retire in the Philippines.

To help you cope with your financial issues, join any or all of our seminars: Pisobilities Seminar on May 29, Pera Mo Palaguin Mo Workshop on June 12, INVESTability: The Stock Market on June 18 and INVESTability: Invest for Regular Income on June 25. Call us at 6373731 or 6373741 or write info@colaycofoundation.com.