Tag Archives: personal finance

Starting To Work On Your Success pt. 3

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Goal Setting 3

 

In the previous column, I asked you to compute how much your present lifestyle costs you. We are now on the second and third questions of eight questions you need to ask yourself to help you set your financial goals.

 

2) If you want your lifestyle to improve, how much more improvement do you want?

 

Since we are planning for many years ahead, it is normal that you want a better lifestyle.  This means that you will be spending more for the better lifestyle.  You have to write the kind of improvement you want in terms of your budget.  Knowing what you are already spending today in your present lifestyle, you can have an estimate of how much you have to be spending also today if you have the lifestyle that you want.

 

You will probably wonder and think that in the coming years, the cost of what you buy today will be so much more so why am I asking you to compute in today’s cost.  You are correct and you should consider that factor which is called inflation when we go into the actual preparation of your financial plan.  We will do that later but it is good enough to know how much you would need today for the improved lifestyle that you want.

 

 

  • How much risk can you take?

 

Taking risks with your savings is dependent on your personal orientation as well as your age and the kind of investments you already have.  The general principle is that nobody can be correct one hundred percent of the time.  Everybody makes mistakes.  Therefore, it is very possible that you may choose some wrong investments.  The key is to be able to rise and learn from failure and in effect, turn the failure as a success. And you can always rise from any kind of failure.  Unfortunately however, when it comes to money or business failure, it is only possible to recover if you still have time and energy left.

 

If you are young, you can take more risk because you have the time and energy. However, just because you are young does not mean that you should only invest in risky businesses.  You still have to balance your investments so that if some fail, you will have the chance to recover faster. As they say, never put your eggs in one basket.

 

As you grow more wealth and gain more experience, you can invest in higher risk opportunities only if you can really afford to lose your investment completely.  This means that you have enough investments that, if you lose the risky investment, you can still meet your financial goals. It is almost like gambling.  When you gamble, you know that you can lose that amount completely.

 

Remember, THE HIGHER THE RETURNS, THE HIGHER THE RISKS.  It is easy to be attracted to high returns especially when so many friends and relatives tell you stories about how much money they have made.  So, study your risk options well.

 

ANG PINAKABAGONG LIBRO NG PERA PALAGUIN SERYE pt. 2

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Sinabi ni Mr. Generoso Asuncion na nakabasa ng mga unang libro:

“Simula nang mabasa ko ang dalawang aklat na “Pera Mo Palaguin Mo 1 & 2” nagbago ang pananaw ko sa buhay. Maliban sa mga aklat, pinanood ko rin ang mga payo ni G. Colayco sa YouTube at binasa ko ang artikulo sa website. Ang laki ng pagbabagong ginawa niya sa buhay ko. Marunong na akong mag impok ng pera. Ibinabahagi ko rin ang mga kaalamang natutunan ko sa aking mga anak, kaibigan, kapatid, at mga taong nakikilala ko para malaman nila kung ano ang tamang paraan ng pag-iimpok ng pera para makalaya sa kahirapan. Maraming salamat Mr. Topakits. Isa kang LIWANAG sa madilim na kapaligiran ng kahirapan.”

Sinabi ni K. Cayanong, isang Customer Service Representative ng Convergys Philippines noong 2013:

“Naging masaya ako sa mga natutunan ko sa Colayco Foundation. Nalaman ko na mali pala ang paraan ng pag-aayos ko ng aking mga kita, pero nalaman ko din ang pagkakataon na magsimula NGAYON. Magsimulang mag-ipon at mamuhunan. Nalaman ko ang pangangailangan na dapat siguraduhin ang magandang kinabukasan ko at ng pamilya ko.”

Sana ay makatulong ang mga pahayag na ito upang himukin kayong basahin at pag-aralan, kung hindi para sarili nyo, para sa mga miyembro ng inyong pamilya na mayroong malaking pakinabang sa pamamagitan ng pagkakaroon ng mabuting batayan sa pamamahala ng sariling pananalapi.

 

Sinabi ni Mary Grace M. Orbase, isang mag-aaral noong 2011:

“Ako ay 14 taong gulang, estudyante sa high school at malapit ng maging third year high school, nabasa ko ang libro ninyo, Pera Mo Palaguin Mo! 2. Naging malaking inspirasyon ito sa akin. Natuto at naliwanagan ako sa aking murang edad. Natuto ako kung paano hawakan ang aking pera-na dapat ay palaging may maitatabi. Mabuhay at mapasainyo sana ang swerte. Sana ay marami pang katulad kong estudyante sa high school na makabasa at maliwanagan ng inyong libro J”

Sinabi ni Renz Sumera, isang Lisensyadong Chemical Engineer noong 2012:

“Nakatapos ako ng Chemical Engineering sa edad na 21. Naghahanap ako ngayon ng trabaho habang nag-aaral para sa board exam sa Nobyembre. Nabasa ko ang dalawang libro nyo, Money at Wealth at naging inspirasyon ito sa akin para pahalagahan ang pera at matutong mamuhunan. Di ko na mahintay na magsimulang magkaroon ng active income at mag-ipon ng hangang 20% para sa magandang puhunan. Salamat sa pagsulat ng mga librong ito at sana ay marami pang bagong mga nakapagtapos na katulad ko o mga batang propesyonal ang makabasa ng mga ito at maging insperado.”

Sinabi ni Leonardo Alba, isang OFW galing Abu Dhabi:

“Inuulit ulit ko po ang libro ninyo dahil may mga part na di ko po agad makuha. Pero all in all ay maganda po ang nilalaman nito with matching examples. Sa ngayon po ay try kong apply ang iba kong nabasa sa book.”

Sabi ni Cecilia T. noon pang 2012

“Ang mga libro ninyo ay nakapagtuturo at nagbibigay ng simpleng inpormasyon. Importante ito lalo na sa babaeng katulad ko. Itong librong ito ay isang biyaya. I have learned how to take care and grow the finances of my family.”

Mula kay Anthony Pinaglabanan ng Iowa

“Naimpluwensyahan ako ni Mr. Colayco sa aking pinansyal na kaalaman anim na taon na ang nakakaraan, mayroon na akong ipinuhunan ngayon at ito ay gumagalaw na laban sa pagtaas ng presyo ng mga bilihin at hindi lang pinapaginipan ang pagtaas ng puhunan ko. Ang susunod kong proyekto ay gumawa ng Passive Income dahil gusto kong magretiro ng maaga para makasama ko ang pamilya ko ng mas matagal.”

Nanggaling kay Razmon ng Zamboanga, 2006

“Salamat sa pagpalago n gaming pero kundi pati na rin sa pagbibigay ng kaalaman. Sulit ang pagpunta ko galing sa probinsya para bumili ng mga libro ninyo. Bumiyahe man ako ng malayo, nagbukas naman ito ng malaking oportunidad at pagsasakatuparan. Talagang lumago. Sa mga librong Pera Palaguin naunawaan ko na ang kahirapan ay dahil din sa kakulangan sa kaalaman kung paano aayusin ang iyong pinansiyal na buhay at hindi lamang sa kakulangan ng mapagkukuhanan ng pera.”

Ibinahagi naman ni Simpe Rogie Magana-Co

“Tinuturuan ninyo ang mga tao para magkaroon ng kaalaman sa pinansiyal nilang buhay sa pag-gamit ng simpleng lenguahe at mga praktikal na halimbawa. Patuloy ninyong binabahagi ang mahalagang kaalaman at personal na karanasan sa paghawak ng pera.”

Kuwento naman ni Sarah Jane Mayola OFW

“Matagal ko na po narinig yung Colayco Foundation nung nasa labas pa ako na nagtatrabaho bilang staff nurse sa isang ospital sa Kingdom of Saudi Arabia. Hindi po ako nagkaroon ng pagkakataon para magsimula at mamuhunan. Siguro dahil hindi pa ako handa o hindi pa ako determinadong baguhin ang buhay ko. Ngayon na nandito na ako sa Pilipinas, naghahanap ulit ako ng trabaho sa ibang bansa. Ngayon ko lang narealize ang kahalagahan ng proper investment and savings. Lahat ng ipon ko naubos na po at ako ay call center agent saMakati. Nakakaipon lang ako ng Php1000 every tuwing sahod pero desidido na akong mag-save. Ngayon hindi ko na gagastahin ang ipon ko.”

Sana ay makatulong ang mga pahayag na ito upang himukin kayong basahin at pag-aralan, kung hindi para sarili nyo, para sa mga miyembro ng inyong pamilya na mayroong malaking pakinabang sa pamamagitan ng pagkakaroon ng mabuting batayan sa pamamahala ng sariling pananalapi. Pasyalan ang www.colaycofinancialeducation.com

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ANG PINAKABAGONG LIBRO NG PERA PALAGUIN SERYE pt. 1

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Ang bago kong libro karugtong ng mga libro na isinulat ko ay mabibili na sa National Bookstore at iba pang bookstores at pati rin sa www.colaycofinancialeducation.com

Ang pamagat ng bago kong libro ay nagmula sa mga nauna kong libro. Ang unang libro ay “WEALTH WITHIN YOUR REACH. PERA MO, PALAGUIN MO!” Ang pangalawang libro ay “MAKE YOUR MONEY WORK. PERA MO, PALAGUIN MO!”

Ang pamagat nito ay madaling maintindihan: “WEALTH REACHED.  MONEY WORKED.  PERA MO, PINALAGO MO!” Inalam ng libro ang buhay ng mga tauhan sa unang dalawang libro at ipinaliwanag kung ano ang ginawa nila sa loob ng labing-isang taon matapos nilang basahin ang libro at pinakinggan ang mga payo ko. Mapapaniwala ka na kung nakinig ka noon, sana’y maganda na ang pinansyal na buhay mo ngayon.

Sana ay isa ka sa mga talagang nakinig. Kung hindi naman, hindi pa huli ang lahat. Kunin ang libro, basahin at pag-aralan at maniwala sa sarili na may magagawa ka. Marami nang tao ang nagtagumpay mula sa maliit nakinakailangang ipon.Ang kailangan mo ay Disiplina at Determinasyon.Kaya mo yan. Huwag ka nang maghintay muli ng sampung taon bagoka magsisi ulit dahil wala ka na namang ginawa. Gawin mo na NGAYON!

Ibabahagi ko sa iyo ngayon ang mga pahayag ng mga tao tungkol sa libro.

Sinabi niMr. Hans B. Sicat, Presidente at CEO ng Philippine Stock Exchange:

“Ibinahagi ni G. Colayco ang pananaw ng Philippine Stock Exchange sa pagsulong ng kultura sa pag-iipon at pamumuhunan dito sa ating bansa. Sa pagsisimula at paghihikayat sa mga empleyado para mag-ipon at mamuhunan, nakakapagbigay tayo ng payo sa tamang paghawak ng pera sa ating mga kasamahan na sana ay maituro din nila sa kanilang mga kaibigan at kakilala.”

Ayon naman kay G. Ignacio B. Gimenez, Tagapangulo at Presidente ng PhilEquity Fund, Inc.:

Ang “Wealth Reached, Money Worked. Pera Mo, Pinalago Mo” ay nakahihikayat at nagtuturo.Sa mahigit na sampung taon sa ganitong adbokasiya, ang mensahe ni Topax tungkol sa pananalapi ay lalo pang pinagyaman ng mga tunay na karanasan ng mga totoong tao na ginabayan niya at ng buong Colayco Financial Education. Hindi naman talaga kailangan ng napakalaking pera at pagsisikap para maging maayos ang buhay pananalapi. Ang susi sa pagyaman – oras, pasensya at tamang pagdedesisyon. Higit kailanman ang mga Pilipino ay kailangan maging marunong sa paghawak ng kanilang pera hindi lamang sa pagbili o pag-gastos ng perang pinaghirapan nila peropati na rin kung papaano ito palalaguin. Madaling basahin at indintihin, ito ang libro na makakatulong sa mga Pilipino siyasatinang posibilidad na bukas, magagamit at abot-kaya ng mga ordinaryong Pilipinong kumikita.”

More on Spending Practices that will put you in Debt

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USING CREDIT CARD INSTEAD OF CASH

 

There are some who have the cash to pay for their purchases but use their credit cards because it is cool.  Besides, there are points to be earned on the credit card.  Very good! Just make sure you set aside the cash to pay for the credit card statement on due date and not later.  Trouble will arise when you forget that you used your credit card and you see the cash available in your wallet.  You use the cash and are scrounging around payment on due date.  Worse, you keep using the credit card and not adding up your individual purchases.  Before you know it, you have overspent.

 

There are also more and more people using their credit cards for automatic payment of their utility bills and other monthly expenses.  What happens is that you don’t pay for your bills with cash as you normally do and the remaining cash is what you have available for your other expenses.  You are now increasing your risk of not controlling your expenses.  When your credit card bill comes probably several weeks later, you will be in for a big shock.  If you don’t pay your credit card on time, you will be in credit card debt and the interest and penalties will be horrendous.  It is always better to just use cash if there is serious risk of overlooking payment in due date, or worse, if you end up not being able to control your use of credit cards.

 

DO YOU REALLY NEED A VACATION?

 

Vacations are wonderful and good to recharge your body spirits.  It is however funny sometimes that so much is programmed during a vacation that you end up needing another vacation just to recover.

 

It is good to program your vacation especially from the financial point of view.  Unfortunately, some vacations are taken as an emotional outlet just to get away from reality because of a big problem.  Because of the emotional issue, the financial burden of the vacation is forgotten and credit cards are used.  That is a big mistake.

 

Never ever use your credit card to pay for a vacation unless you really have the cash actually set aside to pay your statement on due date.  During the vacation, try to leave your credit card behind and just bring your budgeted cash so you are not tempted.  When you are with family, make sure each one understands the budget and strictly follows it!

More on Spending Practices that will put you in Debt

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Acting like a Spoiled Brat is a third practice that could lead to unnecessary debt.

I am not a psychologist but I just look at practical situations.  Look at the action of children as they grow up.  Initially, they have to get what they want when they want it.  A hungry infant will not stop crying until fed.  As the baby grows older, he will insist on getting what he wants always to the point of selfishness.   It is up to the parents to train their child that he cannot get everything he wants all the time, especially if what he wants is not good for him or for those around him.  A child who is not disciplined is labeled a “spoiled brat.”  Unfortunately, many children grow up to be adults without learning the important lessons of patience and discipline.  Some adults have to get what they want and continue to be “spoiled brats.”

These adult “spoiled brats” tend to translate their bad trait into bad spending habits.  Some become shopaholics.  A shopaholic feels like he has to treat himself to be happy.  It would be good if he were terribly rich and could afford all the shopping.  But for most, the excessive shopping leads to eventual lack of money and worse, credit card debt.  Just like an alcoholic, a shopaholic will have moments when he realizes the hole he is digging for himself but it will be difficult to stop digging the hole.  He has to really change himself. He has to realize that shopping can no longer make him happy because it has led to problems that lead to his unhappiness.  Anyone who lacks money or is in credit card debt will always be unhappy.  There will be so many people running after him to pay his debts.  Can anyone be happy when he knows so many people are running after him to get his money?

A shopaholic has to find another way to make himself happy.  Even if it means consulting with a psychiatrist, he must do it immediately before he creates bigger problems for himself and for his family.  If he doesn’t, he will be forced to learn his lesson the hard way.  Usually, the shopaholic with a limited budget will end up feeling so miserable because he is being hunted by credit card companies.  He will be forced to pay for the purchases that are probably not useful anymore and worse, he no longer has the money nor the credit to go shopping.

Pera Mo Palaguin Mo! Public-service Radio Program

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Makinig, Magtanong at Matutong magpalago! sa DZXL558-Pera Mo Palaguin Mo

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Pera Mo, Palaguin Mo! Radio Public-service program is hosted by Francisco J. Colayco and co- hosted by Mr. Armand Bengco. The show is an hour long learning program that focuses on the 5 fianancial activities of an individual(earning, planning, saving, investing, spending).

Pera Mo Palaguin Mo! airs every Monday 11:00am – 12:00nn in Radio Mindanao Network’s DZXL558.

Watch Via Livestream

Like Us on Facebook

 

 

 

Wealth-filled Messages from the “Pera Mo, Palaguin Mo” Workshop

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by: Francisco J. Colayco

Last Saturday, the Colayco Foundation team and I held a “Pera Mo, Palaguin Mo” Workshop to almost 100 people at the Development Academy of the Philippines Building in Pasig City. I was astounded with the number of people in attendance. Even if it was a Saturday, they took the opportunity to start taking charge of their personal finance. It was an exhausting day for us. Nevertheless, it was fulfilling for us to see so many people learning and enjoying from the workshop.

After the event, we received some personal messages from our participants. I would like to share some of their thoughts with you.

Here are other letters from our participants:

It always makes us happy to be able to ignite a spark of change in our participant’s lives. I always said that becoming wealthy is an obligation to everyone. If you are wealthy, you will not just be able to help yourself better. You will be able to contribute more to your family, community, and country.

I hope you will join us in our financial seminars. For the schedule of our upcoming seminars, please visit www.colaycofoundation.com!

Combined Mutual Fund and Insurance

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by: Francisco J. Colayco

first published in Good News Pilipinas on October 23, 2009

Some asked me about a kind of insurance policy, which offers the insured the option to define whether he wants more protection or investment in one single instrument. His kind of policy is sometimes called VUL or Variable Universal Life.  VUL generally offers higher returns compared to the ordinary life insurance policy.

You should remember that like mutual funds, there is no guarantee of a specific rate of return. Some VUL policies guarantee return of principal if maintained over a specific period of time. In such a case, you will at least get your investment back even if it does not earn.

VUL policy can be a good alternative particularly if you need to have life insurance protection.  The main advantage is that you have both the mutual fund and an insurance coverage.  The mutual fund that is incorporated in the VUL is a mutual fund that is established and managed by the insurance company itself.  In general, there are agents for insurance policies and therefore, their commissions are deducted from the premium that you pay.  This means that the amount to actually go into the investment for the mutual fund portion could be reduced by that commission.

You should ask your insurance provider about the effect of the commission and what specific type of mutual fund your premium payments would be invested in.  Usually, there are fixed income, equity and balanced mutual funds. Be also sure that you fully understand the terms of the VUL, particularly the provisions on lapsation if any.  Lapsation means that if you forget to pay your premium, will the insurance company consider your policy as cancelled or will it give you time to pay etc.

Generally, VULs are cheaper and more cost effective compared to the ordinary whole life insurance policy.  Another advantage of VULs is that being an insurance product, your VUL policy is not subject to garnishment.  Garnishment means that if your assets are foreclosed for whatever reason, the VUL policy is not considered an asset for foreclosure.

On the other hand, investing directly in a mutual fund offers only pure investments.   It gives you more flexibility in case you want to withdraw part of all of your investment should the opportunity or need arise. If you take this route, in addition to the mutual fund, you should consider getting yourself term life insurance, which is simply buying life insurance protection year by year.

Paano Mag-Invest Nang Ligtas sa Mutual Funds

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ni: Francisco J. Colayco

unang lumabas sa Bulgar noong ika-30 ng Hunyo, 2010

HINDI garantisado ang tubo sa mutual funds. Sa katunayan, puwede pa ngang bumaba ang halaga ng investment mo. Pero kung susundin mo ang ilang simpleng patakaran, napakaliit ng tsansa na matalo ka. Tandaan na sa Mutual Funds, hindi ka kumikita o nawawalan ng pera hangga’t hindi mo binebenta ang shares mo.

Mahalagang maunawaan na puwede mong ibenta ang iyong shares anumang oras at tiyak na may bibili nito. Sa ibang uri ng investment, puwedeng maging mahirap ang paghahanap ng buyer lalo na tuwing panahon ng emergency.

Ang pangunahing patakaran ay ang mga sumusunod:

1.) Piliin lamang ang mga pinagkatitiwalaan at kilalang mutual funds. May inaalagaang reputasyon ang mga kilalang kumpanya at napakalayong mangyari na ipapaubaya nila ang kanilang mutual fund sa mga fund manager na hindi mahuhusay. Pero siyempre, kahit ang mga kilalang pangalan ay puwede pa ring magkamali. Kung kaya puwede pa ring protektahan ang sarili sa pamamagitan ng mga sumusunod na patakaran.

2.) Pumili sa mga pangunahing uri ng mutual funds: Equity Fund, Bond Fund, Balanced Fund. Piliin kung alin ang angkop sa iyong personal na planong pinansiyal (kailangang may malinaw kang plano bago mo man lang isiping mag-invest). Sa bawat uring nabanggit, ang mga fund na may mas mataas na paglago sa mga nagdaang taon ay may mas mataas na tsansang maging matagumpay pati sa hinaharap.

3.) Ikalat ang iyong panganib. Huwag ilagay lahat ng savings sa mutual funds. Hinihikayat ko kayo na i-invest na lang ang mga halagang gagastusin sana sa mga bagay na walang halaga. Sa halagang Php 35.00 kada araw, makakaipon ka ng Php 1,000.00 sa isang buwan. Kung sumali sa isang Equity Mutual Fund na karaniwang lumalago nang 15% kada taon, ang Php 1,000.00 kada buwan (na dagdag sa Php 5,000.00 na panimulang hulog sa mutual fund) ay magiging Php 238,000.00 sa loob ng 10 taon. Pero sa loob ng 120 buwan na ito, ang inilabas mo lang na pera ay Php 125,000.00. Sa loob ng 20 taon, ang pera mo ay magiging Php 1,409,000.00 kahit na Php 245,000.00 lang ang inilabas mo.

Kung ang panimulang requirement na Php 5,000.00 ay ang kabuuan ng lahat ng inyong savings, mag-isip nang mabuti bago mag-invest. Kung sa susunod na 3-5 taon ay wala naman kayong mahigpit na pangangailangan para sa savings, puwede n’yo nang subukan ang investing. Kung may biglang pangangailangan at mapipilitan kang ibenta ang iyong shares, may posibilidad na malugi ka nang kaunti pero maliit lang ang posibilidad na maubos ang iyong investment.

 

4.) Magtalaga ng target para sa sarili mo. Sabihin na nating gusto mong kumita ng 20% sa loob ng isang taon. Kapag naabot mo na ito, ibenta mo na ang ilang bahagi ng iyong shares upang makuha mo ang tubo, pero huwag mo na galawin ang original na halaga ng iyong investment. Kung piliin mong huwag magbenta,  pwedeng bumaba lang ang iyong average return on investment.

Beware of Card Skimming

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by: Art Ladaga

Few days ago, news got out about a woman who lost her retirement fund of P400,000 from her ATM account. For 31 years, she worked hard to earn and save that amount. Investigation revealed that her bank account details were obtained without her knowing it. Apparently, someone installed a device in the ATM machine she used and copied her card’s details (for more details of the story, click here).

The woman was one of the victims of card skimming, a dubious practice where criminals install a device within an ATM machine to obtain card details of ATM holders. Most of the victims are those who have a big amount of money in their ATM accounts. In just a blink of an eye, they can lose everything they had worked for.

We at the Colayco Foundation would like to remind everyone NEVER to have a big amount of money in your ATM account. It’s important to spread your money in different investments. Mr. Armand Bengco, the foundation’s Executive Director, recommends having only an amount up to P5,000 in your ATM card, especially if it’s your payroll account. Life savings (if one already has it) should be placed somewhere safer like a time-deposit account.  Putting it in an ATM account is highly vulnerable to ATM skimming.

When handling your ATM card, you must always exercise caution. Here’s an infographic from Inquirer.net on how to protect yourself against card skimming:

There’s a deep truth in the saying “Prevention is better than cure.” And this is highly applicable in personal finance. If you do not exercise it, then you risk losing the wealth you worked hard to achieve.

Sources:

http://http://kickerdaily.com/ex-cop-loses-p400k-retirement-fund-to-atm-fraud/

http://business.inquirer.net/176605/bsp-officials-downplay-atm-fraud-in-ph#ixzz3AM77rF8C

*Art Ladaga is the current Programs Development Officer of Colayco Foundation for Education