Tag Archives: personal finance philippines

Paggastos ng Passive Income vs Compounding

ni: Francisco J. Colayco

*Unang lumabas sa Bulgar noong Nobyembre 24, 2012

Tanong sa akin:  Ano ang epekto kapag ginastos ang passive income imbes na hayaan lang iyon na lumago?

Kahangahanga na nagtatanong ka tungkol sa paggastos ng passive income. Ibig sabihin nito, mayroon kang passive income dahil ini-invest mo ang mga savings mo. Ang pag-iinvest ng iyong ipon ang pinakamainam na paraan para palaguin ang iyong yaman basta lamang pinipili mo ang mga tamang investment.

Gaya ng alam mo, pwede mong gastusin ang kinikita mo mula sa iyong mga investment. Ito ang prinsipyo na susundin: gamitin ang active income – ang kita na galing sa dugo’t pawis –  para sa mga pangangailangan o needs. Samantalang para sa mga luho o wants, ang pwede lang gamitin ay passive income Pinalago mo ang iyong pera at may karapatan kang gastusin iyon kung gugustuhin mo. Pero kung hahayaan mo lang lumago pa lalo ang iyong passive income o kahit ang ilang bahagi nito, mas mabilis mong makakamit ang inaasam na yaman.

Kapag hindi mo ginagalaw ang passive income at hinahayaan mo lang itong lumago rin gaya ng prinsipal na halaga, napapakinabangan mo ang “compounding”. Kaya naman bukod sa tubo na nagmumula sa prinsipal na halagang na-invest mo, tutubo rin mismo pati ang kinita mo mula sa prinsipal… at patuloy na ganito ang mangyayari. Napakabilis ng paglago ng kita kapag napapakinabangan ang “compounding”.

Mas madali mangyari ang compounding ng iyong passive income kapag pinili mo ang isang investment kung saan automatic na ang compounding. Kung ikaw ang magdedesisyon kung gagalawin ang passive income o hindi, matutukso kang gastusin iyon o baka hindi mo na alam kung saan iyon dapat iinvest uli. O kaya naman, baka makalimutan mo iyong i-invest uli dahil abala ka sa ibang bagay.

Ito ang isa sa mga dahilan kung bakit gusto ko ang mutual funds para sa investment. Kapag nag-invest ka sa isang mahusay na mutual fund at iniwan mo lang doon ang pera mo, automatic na itong magcocompound para sa iyo.

Kung gagastusin mo ang iyong passive income, iyon na ang katapusan ng perang iyon! Hindi na iyon lalago. Mas nakakalungkot kung gamitin mo ang passive income sa mga luho na hindi naman talaga mahalaga sa iyo. Siguruhin na talagang makakapagpasaya sa iyo ang luho na paggagamitan ng passive income para naman hindi iyon masayang nang lubos.

Bumisita sa ang aming website www.colaycofoundation.com para sa aming mga seminar. Tingnan ang aming mga handog na pwedeng iregalo sa pamilya at mga kaibigan.

 

The Battle Wages On!

by: Art Ladaga

Photo courtesy of RTVM.gov.ph

Twenty-seven years ago, the Filipino people triumphed in overthrowing two decades of oppressive dictatorship. Democracy was restored not through guns, tanks, or any military arsenal, but through flowers, rosaries, and one unified desire. People Power I was proof that when people band together- known as the Power of One– they can create miracles and liberate a country from tyranny.

Twenty-seven years after People Power I, many of our countrymen remain within the shackles of financial tyrants. This is the new battle being waged: the battle for financial freedom! According to Francisco Colayco, financial freedom is when you can maintain your desired lifestyle without the need to work. Only in eradicating these three tyrants will financial freedom be realized.

 

POVERTY: Poverty is a lack of basic necessities, but it is also more than that. According to Nobel Prize laureate Amartya Sen, poverty is also capability deprivation (i.e. not being able to do anything and be productive). One reason why there’s capability deprivation is due to lack of education. Education enables us to recognize opportunities for active and passive income. Sadly, our present educational system grooms us to be hardworking employees. There will come a time that you can no longer work. You might be earning six or seven digit salaries now, but when you retire, you will not be able to maintain your lifestyle without passive income. Thus many people remain poor because they do not know how to utilize earning income actively AND passively!

FINANCIAL IGNORANCE: Having a lot of money does not guarantee financial freedom. Knowing how you use and grow it makes a significant difference in your financial life. In a recent study, Citibank reported that the country’s financial score was 53 out of 100. This means that more Filipinos are now becoming savvy in handling their finances. This is definitely good news, but we cannot be complacent.

The massive financial scam in Pagadian City (2012) was a major eye-opener to the dangers of financial ignorance. In the website of Philippine Daily Inquirer, I read about a man in Pagadian City who committed suicide three months ago. He invested all of his retirement money in an opportunity he did not fully understand. When the culprits had gotten away with his money, he experienced depression to the point he decided to end his life! If spending on seminars about money and investing is expensive, financial ignorance is 1000 times more!

GREED: If your only goal in life is having lots of money, you have a major problem! Seeking money for itself poses a real internal dilemma. The Buddha once remarked, “Greed is any imperfection that defiles the mind.” Indeed, how many lives and relationships were ruined because of financial greed? Greed entraps you in a vicious cycle of acquiring. You cannot stop gorging on money because it’s never enough. That is the delusion of it! Eventually you will reach a point that you will internally “blow up,” wrecking your life and the lives of others in the process. In the effort to obtain everything, you lose everything!

 

Photos courtesy of Pinoy Exchange.com

The battle for financial freedom is an ongoing-battle. Financial freedom for our countrymen will only be attained through eradicating the three tyrants. Defeating all three is not easy, but it’s not a hopeless cause. Learning from People Power I, only through the Power of One will these three tyrants fall. And it will be possible if all Filipinos will fight as one, under the banner of FINANCIAL LITERACY!

Financial literacy opens the doors to various earning opportunities, thus helping eradicate poverty. You also become more competent and knowledgeable in handling money, thus helping eradicate financial ignorance. And you become goal-oriented in earning money, thus helping eradicate greed. Only through learning proper financial management grounded on proper values can we expect the rise of a ONE WEALTHY NATION!

Photo courtesy of Manila Standard Today

Thus, THE BATTLE WAGES ON!

Sources:

Alipala, J., & Umel, R. (2012). Teacher kills self after losing all his money in scam. Inquirer Global Nation. Retrieved from http://globalnation.inquirer.net/56146/teacher-kills-self-after-losing-all-his-money- in-scam?ModPagespeed=noscript

Dumlao, D. C. (2013). Filipinos more savvy about finances, study shows.  Inquirer Business. Retrievedfrom http://business.inquirer.net/105779/filipinos-financial-quotient-at- record-high-online-poll-shows

*Continue the legacy of EDSA! Achieve financial freedom NOW. Colayco Foundation for Education Inc. is offering two financial seminars  this March 23: INVESTability: Stock Market and INVESTability: Mutual Funds. Just click the links for more details about the two seminars.

* Art Ladaga is the current Programs Officer of the Colayco Foundation for Education, Inc.

Women & Money

Reminiscing events from 1 year ago and the product of a moment.

I was initially unbelieving that it was me she was calling when Suze Orman invited ”the Filipino author who is present here” to the stage during her February 25 talk (2012).

I do not know Suze Orman personally although I enjoy watching her shows.  I did not know that her friend Doris Ho, whom I also just met that morning gave her my set of books when she arrived in Manila.  After the short conversation on stage, I sent a text to our Executive Director Armand Bengco, who was at that precise time in Hong Kong talking to our KsK Multipurpose Cooperative members.  I texted him that an amazing thing just happened!  Suze Orman, Top USA Financial guru invited me to join her on stage this morning as she was giving a talk sponsored by BPI at The Fort.  Suze gave a terrific talk and it was almost unbelievable how much she cares for Filipinos and has the same line of thinking in personal financial education as I do.  Suze committed to help us educate more Filipinos and I look forward to an active collaboration with her!

Of course our excitement was and still is pitch high and this article that just reached me is a perfect way to share with you what kind of a person Suze Orman is.  I am definitely proud to have been singled out by her during that talk and I look forward to a collaboration with her on our common mission.

 

 

 

_________

FEBRUARY 25, 2013

Meeting Suze gave the push needed for a new book to come about – Easy Money Para sa Kababaihan, ang natatanging libro tungkol sa pag-hawak at pagpapalago ng pera na para sa babae!

 

 SRP Php95 – Available very soon in all leading bookstores

 

 

SUZE ORMAN GAVE FILIPINOS A MONEY TALK

Published in ENews of Asia Society

March 1, 2012

Suze Orman, America’s most trusted financial advisor, was in town last February 25 to give a talk on taking control over one’s personal financial power. Approximately 700 guests filled the NBC tent Saturday morning to attend the Bank of the Philippine Islands event and listen to the “one-woman financial advice powerhouse” as described by US Today. A two-time Emmy-Award winning television host, she was in Manila to keep a promise made to her friend Doris Magsaysay-Ho, chairwoman of Asia Society Philippines, to help and inspire Filipinos in their need for financial literacy.

 

“Hope is not a financial plan,” stated Orman who highlighted the jackpot-mentality that some Filipinos have when it comes to their money. One shouldn’t rely on the lottery and simply hope for the best or simply keep the money in your house safe and sound; you need to take control of the opportunities available when it comes to your finances.

Having been raised in an unruly neighborhood on the south side of Chicago, Orman was no stranger to poverty. She used to live in her car and waited on tables earning $400 a month for seven years until she dreamed of owning a restaurant of her own at the age of 30. Having heard her dream, one of her regular customers collected the contributions of other customers tantamount to $50,000 to lend to her for 10 years without interest. She took her money to Merrill Lynch to put in a money market account but the broker made her sign papers to make it seem like she was a sophisticated investor who was qualified to invest in stock options. Within three months, she lost the money.

Realizing she couldn’t pay back the $50,000 with her job as a waitress, she applied as a broker  at Merrill Lynch and was hired due to the affirmative action that the company had to hire women. However, her boss informed her she would be fired in 6 months.

 

Studying as a broker, she learned that it was part of law as a broker not to invest someone’s money in a way that he/she could not afford to invest it. She proceeded to sue Merrill Lynch for the bad handling of her $50,000 and because of the ongoing case, Merill Lynch could not fire her.

“Always do what is right than what is easy,” she said. The broker who lost her money was let go, her boss moved on and in 2 years she became one of Merill Lynch’s top producers and earned her $50,000 back with 18% interest.

For young people and their finances, Orman expressed the importance of saving a portion of their earnings regularly as early as possible. “The quickest way to get rich is to get rich slow.” stated Francisco Colayco, a well-known author who was brought to the stage by Orman herself. There isn’t a get-rich-quick formula to achieving one’s wealth, but wealth can be gained by saving and investing continously slowly but surely.

On the Philippines, Orman stated we shouldn’t go the way of the US where they allowed their economy to grow on credit, lending to people who could not afford to pay it back. “Build this country on cash so that it could never collapse, then you can change lives,” she said.

Orman’s talk and very first appearance in the country that day to the 700 guests and employees of BPI indeed proved to be a success. Her message has provided inspiration to those who seek to gain financial freedom.

Ang Perks ng Pagiging Single

ni: Art Ladaga

Pebrero na naman. Para sa mga may in a relationship status sa Facebook, panahon ito ng paggunita ng pag-ibig. Tataas na naman ang presyo ng mga chocolates, flowers, at anu-ano pang binibigay kapag Valentines day. Hindi rin nawawala ang mga radio requests ng mga cheesy love songs moderno man o hindi. At bumabalik muli sa uso ang paggamit ng mga gasgas na pick-up lines!

Ang itsura ng aking mga pin buttons, ayon sa ‘king pagka-alala

Sa kasamaang palad, hindi ito ang realidad sa karamihan ng mga single.  Ibang holiday pa nga ang ipinagdiriwang nila kapag February 14. Ito ang S.A.D. o Single Awareness Day! Marami silang iniisip kung paano gunitain ito: may naglalasing, bumibili ng mga bulaklak para lang ibigay sa sarili, at nagsusuot ng anumang bagay as an expression of singlehood. Noong nag-aaral pa ako, may suot nga akong dalawang pin buttons na nagpapahayag ng pagiging miyembro ko sa Samahan ng mga Atenistang Walang Iniibig (S.A.W.I.) at sa Samahan ng mga Atenistang Palaging Umaasa Lamang (S.A.P.U.L)!

Mahirap ang buhay single. Madalas, gusto mong magwala kapag napapadaan ka sa dalawang magkasintahang nagpi-PDA o Public Display of Affection. Nagseselos ka rin kapag nakikita mong naka-post sa Facebook ang pictures ng iyong kabarkada kasama ang kanyang minamahal. At siyempre, masakit din ang hindi gumastos ng pera dahil wala kang ka-date sa February 14!

Mahirap talagang maging single, pero talaga bang kasuklam-suklam ito?  Kung iisipin mong mabuti, may benefits din kapag wala kang minamahal!

Una, hindi mo kailangang gumastos kapag February 14. Wala kang dahilan para magluwas ng pera. Sa totoo lang, puwede namang gunitain ang Valentines Day nang hindi gumagastos. Nakasanayan lang na dapat gumastos ang dalawang magkasintahan para maging “special” ang holiday. Tingnan mo nalang ito kung anu-ano ang ginagastos nila para sa isang date:

Kung single ka, hindi ka na mag-aabala sa mga gastusing iyan!

Mas madali ring mag-ipon. Mas maraming pera sa bulsa mo dahil wala kang pinaggagastusan. Mas marami ka pa ngang options kung paano gamitin ang pera mo. Halimbawa, puwede mong gawin ang emergency fund mo para may pagkukuhanan ka kung sakaling may masamang mangyari sa iyo.

At ang huli, mas madaling lalago ang pera mo. Hindi ka mahihirapang mag-invest dahil wala kang pinagkaka-abalahan. Puwede kang mag-invest sa mutual funds kung nakapag-ipon ka na ng P5,000! Maganda ang naging performance ng mutual funds kahit hindi garantisado ang kita.  Umaabot ang kita mula 10%-30% kada taon! Kung nag-iinvest ka ng P1,000 kada buwan sa loob ng 40 taon, puwedeng lumago ang pera mo ng P97,000,000!

Kita mo na? May perks sa pagiging single. Makakamit mo ang yamang nais mo kung alam mo paano palaguin ang pera mo. Sabi nga ni Francisco Colayco, “Huwag magpapahuli,” dahil maganda ang takbo ng ekonomiya ngayon. Sa halip na magmukmok ka sa tabi, sumakay ka na sa tren ng paglago! At mangyayari lang iyan kung alam mo paano palalaguin ang perang hindi mo ginastos!

*Huwag nang magpahuli sa tren ng paglago! Sumali na sa Pisobilities at INVESTability: Mutual Funds seminar sa Pebrero 16, 2013! I-click lang ang mga links para sa karagdagang mga detalye. Tumawag na sa 637-3731, 637-3741, o 09178088857 para mareserba ang inyong slot o para sa mga karagdagang katanungan!

*Si Art Ladaga ang kasalukuyang Programs Officer ng Colayco Foundation for Education, Inc.

Three Amazing Ways to Express Your Love

It’s the first day of February! Forget the chocolates, roses, and candle-lighted dinners this Valentines Day. Here are 3 simple, effective, and cost-friendly ways to show your love to your special someone. SHARE AND SPREAD THE LOVE!

Experience LOVE AND WEALTH at the same time! Join the upcoming Pisobilities and INVESTability: Mutual Funds seminars on February 16, 2013! Click the links for more details on both seminars. For inquiries and reservations, please call 637-3731 or 637-3741!

* Art Ladaga is the current Programs Officer of Colayco Foundation.

Engaged couples

by: Francisco J. Colayco

(Still a very relevant article considering February is fast approaching!)

December and January are the most popular months for weddings in the Philippines. This is probably because the weather is cooler. It is nice to sing “Santa, make me his bride (make her my bride) for Christmas.” It is wonderful to start the New Year with your most beloved in the entire world!

I received an email about why the wedding ring is worn on the fourth finger. We have five fingers.

– The Thumb symbolizes our parents.

– The Forefinger symbolizes our siblings.

– The Middle Finger symbolizes ourselves.

– The Ring Finger symbolizes our spouse.

– The Little Pinky symbolizes our children

Put your hands and fingers together as in prayer. Then, fold your middle fingers inward so that the outside of each knuckle touches each other. Keep the tips of the other fingers touching each other. While making sure that the middle fingers continue to be folded touching, try moving the other fingers:

– You can move your thumbs showing that your parents can leave you.

– You can move your forefingers showing that your siblings can leave you.

– You can move your pinkies showing that your children can leave you.

– But try moving your ring fingers and you can’t.

Marriage is permanent but while you are not yet married, this article might prove useful for you.

We all know that the engagement period is the time to really get to know each other before marriage. But couples who become engaged seem to think that they cannot break the engagement, if necessary. Should the couple see “substantial differences” in thinking, this period is the time to understand those differences before they become “irreconcilable differences”, which become the reason for many separations and annulments. Do not believe that you can change your partner once you are married. For most, the marriage makes the partner even more fixed in his/her ways.

So many engaged couples are embarrassed to discuss money matters before they get married. Based on my experience, if you cannot discuss financial matters with your loved one before you get married, it is almost inevitable that you will have problems related to financial matters during your married life. It is not the amount of money that you have that matters but what you intend to do with it and how you expect to manage it. You could be very lucky and have all the money you will ever need until you retire. However, nothing is sure in this world and all of that could easily be lost with wrong management of finances.

YOUR VIEWS ON MONEY

Many times, the family environment you grew in will dictate your reaction to money. One of you may be always saving or even downright stingy and the other might not care about money and may even be a spendthrift. During the courtship period, your real personalities may not be immediately obvious since you are trying to show your best side. I suggest that you tell each other frankly how you view money. Ask each other how you will view your success and the role of money in that success. If it turns out that your ideas about finances are not compatible, both of you will have a better understanding on how to accept each other for what you are or to agree on how you will both overcome the differences. There is also the option to postpone the marriage or cut the relationship if the issues are truly irreconcilable and you can see that love might not be enough, in the long run.

 
AGREE ON YOUR LIFESTYLE

Understand how much money and also how much debt each of you already have. If there is debt, you have to agree on how it will be paid. Be open about how much each of you earns and what you expect to be spending as a married couple. Do not leave the decision of what to spend on a day-to-day basis. This could lead to unnecessary misunderstandings on how much each should be spending on specific items. Having a budget will help you agree on the kind of lifestyle you should live to be able to reach certain goals. For example, you can aim to have a car within a year, a house within five years etc.

Having children is also another matter that has to be discussed in relation to finances. How you raise your children will depend on the time you will have. If both of you have to work for your chosen lifestyle, obviously, you will have to share the raising of your children with yayas or your parents.

HOW WELL DO YOU UNDERSTAND PERSONAL FINANCE

As I have seen time and again, parents and schools rarely teach personal finance. Even finance students and employees do not know how to manage their personal finances. They may be very good in their theoretical studies and in their actual jobs related to finance but that is not what personal finance is all about.
I have many friends who give my books as wedding presents. I am happy that the couple will have some guidance during their married life but it would have been better if they had been given the books before or when they became engaged. The books will help them understand how they can save and grow their savings. With these books, they can discuss and mutually agree on the type of investments they would choose both for the short-term and for the long-term. You can also join our Pera Palaguin Seminars that we hold regularly.

WHO WILL BE RESPONSIBLE FOR KEEPING THE MONEY

Even if financial wellbeing is a joint undertaking, one of you has to be responsible for:

– Staying within the agreed budgets. Informing the other when there is any possible deviation foreseen.

– Keeping track of all important documents and records such as your marriage license, passports, Income Tax Returns, insurance policies, investment certificates, etc. Decisions on Insurance, Investments and Income Tax Returns filing should always be done jointly in consultation with experts.

– Properly maintaining and balancing all bank accounts to prevent penalties and not allow cash idle without earning any interest. The matter of keeping joint or separate accounts or a combination of the two is a choice that the couple should agree to. They should be open with each other with their reasons.

Of course, these activities can move from one to the other, say one year each. This way, both of you learn and have a good understanding of your financial situation. This is especially important in case of emergencies where one is not available.

WHO WILL PAY FOR THE WEDDING

There used to be a rule where, in the Philippines, the groom’s family pays for everything and in the United States, the bride’s family pays for everything. Today, the best solution is for the couple to pay for everything. The families of both the groom and the bride can give whatever monetary gift they can afford. From the gift, the couple can decide on how much they want to spend for the wedding itself.

I always admonish couples not to spend too much on their wedding day. It is only one day and they have the rest of their life together to look forward to. The rest of their life together is definitely more important. They should not try to keep up with their friends who got married before them. Parents should respect the decision of their children.

COMMIT TO DISCUSS MONEY REGULARLY

Differences are inevitable. Work on a program of continuing discussion and communication with an open mind and sincere heart. Bring in an objective and experienced financial adviser if your differences seem to be major. This is key to your long-term financial compatibility.

LOVE OR WEALTH? WHY NOT HAVE BOTH! To know how, join Colayco Foundation’s Pisobilities and InvestABILITY: Mutual Funds seminars on February 16, 2013! Click the links below for more information about the two seminars:

Pisobilities

InvestABILITY: Mutual Funds

For reservations and inquiries, please call 637-3731/637-3741. Look for Ms. Lala!

* Article first appeared on the GMA News TV Blogsite