Friday, July 25, 2014

Investing in Stock Market for OFW

Today, I'll write about some tips about stock market investing.


COL Financial (formerly CitisecOnline) is a stock brokerage firm. According to Wikipedia, a brokerage firm or simply brokerage, is a financial institution that facilitates the buying and selling of financial securities between a buyer and a seller. There are lot of accredited brokerage firms in the Philippines (see below).

StockbrokerWebsiteMinimum InvestmentBroker's CommissionAffiliate Banks for Account Funding
AB CAPITAL SECURITIES, 50,0000.25%Metrobank
ABACUS SECURITIES 10,0000.25%Metrobank, BDO, RCBC
ACCORD CAPITAL EQUITIES CORP.www.philstocks.phPHP 5,0000.25%BDO and BPI
ANGPING & ASSOCIATES SECURITIES, INC.www.angpingonline.comPHP 5,000 (for students); PHP 15,000 (for professionals)0.25%Metrobank
BPI SECURITIES CORP.www.bpitrade.comNo minimum0.25%BPI
COL FINANCIAL GROUP INC.www.colfinancial.comPHP 5,000 (COL Starter); PHP 25,000 (COL Plus); PHP 1 million (COL Premium)0.25%BPI, BDO, Metrobank
DA MARKET SECURITIES, INC.www.itrade.phPHP 50,0000.25%BPI, BDO, Metrobank, RCBC
F. YAP SECURITIES, INC.www.2tradeasia.comPHP 25,0000.25%RCBC and BDO
RCBC SECURITIES, INC.www.rcbcsec.comPHP 10,0000.25%RCBC
UNICAPITAL SECURITIES, INC.www.utradeph.comPHP 10,0000.25%BDO, BPI, Chinabank, Malayan
WEALTH SECURITIES, INC.www.wealthsec.comPHP 10,0000.25%UnionBank, BDO, BPI, EastWest Bank, RCBC, Metrobank
Why invest in stock market?
  • Liquidity
    There are usually buyers and sellers in the market for most major companies. As a result, you can buy and sell at your convenience. Ito yung tinatawag na liquidity madali mo bang makuha ang ung investment mo.

  • Cost
    Another thing to take note of is that the cost. Mababa lang ang cost in investing into stock market. Please check your stock broker fees and charges. Halimbawa for COL Financial their commission fee has a minimum charge of Php20 per transaction.

  • Low capital requirements
    You can start investing with Php 5,000 minimum investment depende sa stock brokerage firm (check the table above). Pag bibili ka ng shares of stocks may board lot depende sa minimum required ng stocks, kung ilang un pasok na board lot sa available balance mo yun ang mabibili mo.

  • Simplicity
    Buy low, sell high. Yet another advantage is that information about shares you're holding is easy to obtain. Pwede mong ma-check ang stock prices mo thru newspaper and sa internet. Public companies are also required by law to produce an annual report (which is sent to shareholders), disclosing their financial track records for the previous year.
How to earn in stock market?
  • Sell when you hit your target price
    Good investors invest in the long term. There is one strategy where in you buy and hold good stocks using peso cost averaging so kahit anung presyo nito bibilhin mo siya. Good stocks pay out much more over the long run.

  • Cash Dividends
    Dividends are a benefit to owning shares in a company that is paid out depends on the company. Ito yung cut mo sa kinita ng company. Stable companies often pay out dividends to keep investors happy because their stock price does not often change. Dividends are a great way to reinvest your cash dividends.

Below are some of my personal advice to keep in mind before entering the stock market
  • Invest only if you have surplus money in the bank
    First, review your finances and ask yourself. Meron ba kong extrang perang pang-invest? May credit card debts ba akong binabayaran? Meron ba akong fund incase mawalan ako ng trabaho or emergency? If you don't have spare money to invest, currently carrying debts and still saving for emergency fund maybe what you can do is #aralmunabagoinvest. Practice creating a budget and a plan para pagpasok ng income mo ay maibabawas mo na agad ang para sa savings mo. Ideally, put 3-6 months of your monthly expenses sa emergency fund para incase something happens hindi mo mapupull-out un mga pinasok mong money sa stock market ng palugi.

    Income - Savings/Investments = Expenses

  • Invest with a plan.
    How long you want to stay invested? Are you investing for your retirement? Are you investing for a child's college education? Are you investing to provide extra income? Ito ay ilan lamang sa mga tanong na ikaw lamang ang makakasagot. Whether you are investing in stock market, mutual funds, bonds, etc. have a plan. The key is to make your plan visible para alam mo yung target mo. Mas masarap at mas gaganahan kang mag-trabaho kapag alam mo yung investing goals mo.

  • Educate yourself, reasearch companies
    Learning is a continous process. Learn some basic terminologies, watch helpful videos like Pesos and Sense. Don't invest solely in one company. An ideal investor will have a diversified portfolio. This means you'll have money in a variety of stocks with different goals. Take time to study so you'll learn how to recognize high-fee investments, best investment for you (avoid sweet salestalks) and move toward a purposeful investment strategy.
The bottomline: Remember, your hard-earned money is your money. Learn to appreciate it and make an effort to make it grow. Accept that no one gets rich in an instant unless you strike lotto. As an OFW, save your money, learn how to invest and keep it for rainy days.

Saturday, July 19, 2014

Ipon muna bago invest

Nong umpisa hindi ko akalaing magkakaroon ako ng interest alamin/aralin ang Financial literacy o ang mga bagay bagay na may kaugnayan sa aspetong pinansyal. Ang sabi nga nila, no one is born knowing how to save or invest.

Every successful investors start with the basic.

Ayon sa Investopedia, financial literacy is the possesion of knowledge and understanding of financial matters. It is only last year where saving and investing piqued my curiosity, so I began watching helpful videos, attending seminars and reading books.

Tonight, I would like to share two questions we need to consider before we start saving and investing. First, look where are you now today in terms of your finances. Do you have debts? Dito kame nag-simula. Iba't ibang tao ay may iba't ibang pangangailangan depende sa lifestyle at sa life stages.

1. Do you have debts? I mean bad debts - usually, credit card bills, unplanned travel,  gadgets or appliances.
If you do ay mas maiging bayaran mo muna ang lahat ng iyong mga kautangan (maliban sa mortgage or real-estate loan) bago ka magsimula.

Pwede mong gamitin ang Debt Snowball made popular by Dave Ramsey. Ilista ang lahat ng iyong mga utang. Unahin mong bayaran ang may pinakamaliit na halaga bago ang mga utang na may kalakihan. Pay your debts from lowest balance to the highest balance. For me, it's a great way to get out of debt.

The bottomline here why you need to start paying off all your debt first is because the interest on your debts is much higher than the interest you will earned if you start savings. This can apply to pay off all your credit cards and other loan debts.

Last week after lunch my colleague asked me if it's okay to take a loan and deposit into savings account. I say, "No no". Dahil ang loan ay siguradong may interest at higit na mas mataas ang interest nito kesa sa kikitain ng perang ilalagay sa savings account.

Second, have a plan and financial goal with timeframes. Know where you stand and how are you doing financially.

2. Gusto mo bang mag-ipon o mag-invest?

Para sakin mahalaga ang dalawa but it's more important to understand the difference between saving and investing to start.

Saving - This act as your emergency fund. You will put away part of your money in a bank where you can access  immediately. Pag nilagay natin ang pera natin sa savings account we are less concerned with return but it's safe.

Investing - The act of placing money in risk assets with the hope of higher returns than savings. The higher the risk the higher the returns.

But there is no right answer here again it may depends on your circumstances. Over the long term, the stock market usually outperforms savings accounts. Kaya mabuting malaman natin anu ang babagay sa atin. Hindi lamang sa stock market tayo pwedeng mag-invest. We can choose investing  in mutual funds, bonds, property or starting a business. These investment vehicles gives higher interest than savings accounts and time deposits but they all involve risk that you may lose cash. #aralmunabagoinvest

If you can't afford to take risk with your cash as of now I strongly advice to start saving for emergency fund 3 to 6 months worth of your expenses first. To get there, pay yourself first, have a budget and live below your means.

Once you have enough money saved then think of going into other forms of investment para anumang mangyari sayo hindi mo mapupull-out agad ung mga perang nilagay mo sa investment. Tandaan, investment needs time and the earlier you begin investing, the longer your investment has time to grow. These two will not happen overnight ito ay tatrabahuhin natin over time slowly but surely kaya ipon muna bago invest.

Tuesday, July 15, 2014

Double Your Money, Rule-of-72

"How long will it take to double my money?"

Have this question ever crossed your mind? May pag-asa ba ang ating perang naiimpok ay lumago ng doble sa ating naitabi for savings?  There is a powerful formula we can use to help us estimate what we need to save for milestones such as retirement, children's education, etc. 

The Rule of 72 
The Rule of 72 simply calculate how long your savings will take to double in value at any given rate of return.. It lets you approximate how your money will grow in an investment account. 

Here is how you can  calculate it:
Divide 72 by the current interest rate to determine the number of years that it will take to double your initial savings amount.

72 divided by interest rate = number of years needed for the amount to double.

For example, if you invest Php 100,000 in an investment fund at a 4 percent interest rate, it will take 18 years for your initial savings of Php 100,000 to double (This calculation assumes that the interest rate remains the same over time).

You can also use the rule of 72 to determine the rate of return needed to double your money over a specific period of time. For example, if you have Php 100,000 that you want to double for college tuition in 10 years. You’ll need 7.2% annually compounded investment vehicle to reach that goal.

Usually banks offered 0.25% interest in savings account but interest earnings are charged 20% creditable withholding tax, which even reduces the net yield even more. Kaya dito papasok ang ating due diligence upang alamin saan natin pwedeng iparada ang ating perang naitatabi upang ito ay lumago pa over TIME and to beat the inflation. Maging maingat din tayo dahil baka sa sobrang laki ng interest rate of return na maioffer sa atin ay scam na pala ito. Importanteng malaman natin ang simple formula of rule of 72 technique at maintindihan. There are no investments that will double your money without any risk short term.

Start saving today and take advantage of the time and compound interest. Get a quick illustration how time and good investment can help you reach your goal using the Rule of 72. Just 10% of your monthly income invested over time will make a huge difference in how and when you retire someday. 

Wednesday, July 9, 2014

Financial advice to my youngest sister

Yesterday, while having Viber with my youngest sister she told me that she just had employment contract signed. This is her first work,  first company and I'm very HAPPY for her. :) It feels good, ang sarap talaga sa pakiramdam kapag kausap ko ang mga kapatid ko at kapag nagkukwento sila sa akin ng mga happenings sa kanila, mga future plans and goals, etc.

Kaya kanina during lunch time I send a link I found online Financial advice to my 20-year-old self and I added some of my input for her to understand (medyo nagmamadali lang ako mag-explain because I'm running out of time hehe).

I want to introduced her basic finance na hindi ko naunawaan when I was in my early 20's or when I started working. 5 years na akong working and only last year when I started #aralmunabagoinvest. To my surprise after work, I saw this picture posted on her Instagram. My sister took down notes (yung mga payo ko kaninang lunch time sinulat pala ng kapatid ko) and it touched my heart a lot (super na-appreciate ko ito sis) and that's why I decided to put these on my blog. :)

Her handwritten note means more to me

I want to share here some of my added inputs from the blog I share to her.

Save more than you earn.

Habang nagkaka-edad mas lumalaki gastos kaya habang bata pa save more than you earn dahil mas konti pa ang gastos ng mas bata. Halimbawa, wala pang binabayarang bahay, bills, anak na pinapalaki, etc. take advantage to save more..

Write down your long-term money goals.
Halimbawa gusto mo bumili ng kotse i-write down mo how much ba un gusto mong kotse?

Kotse - 1 Million
House & Lot - 5 Million

Kailangan kasi maging visible at alam mo ang presyo ng long-term money goals mo :)

Pay yourself first before other expenses.
Ito ang bayad mo sa sarili mo. Gawin mo lang ang Pay yourself first formula Income - Savings = Expenses

Invest; don't just save.
Ito yung sinasabi ni Ate na un Savings ilalagay natin sa Mutual Fund. Ang mutual fund ay isang type ng investment mas malaki ang interest rate nito kumpara sa banko. Let your money work for you.

Invest in real estate.

We can go here on later on.. dahil kapag naginvest sa real-estate or un mga bahay naka tie-up usually ng 25 years to 30 years to pay. The earlier you start paying your home the better.

Invest in art but because you love art, not for money.
Ito pang mayaman to they buy art (paintings, artwork) and later on they sell.

Diversify investments.
Ang ibig sabihin ng Diversify ay ikalat (put money in more than one place). Halimbawa you have money in Mutual Funds, you have money in banks (emergency fund), you have VUL (ito yun Sunlife ni Ate Gadz), you have Stocks, Bonds, etc.

Buy life insurance for protection.
Life is full of uncertainties kaya we buy insurance as financial protection for our family. This is so important to bring peace in mind. We are transfering risk kaya bumibili tayo ng insurances.

Never lose money.
Rule No.1: Never lose money by Warren Buffet. Mahirap kitain ang pera don't lose money lalo na sa mga gambling.

Take care of liquidity.
Ang ibig sabihin niya dito ay kung madali ba makuha un perang pinasok mo sa investment. Kapag madali makuha liquid yun beh. Halimbawa, bumili ka ng bahay ang ganun investment ay hindi liquid dahil matagal ibenta yun bahay hahanap ka muna ng property agent, buyer etc. it would add extra cost such as valuation and agent fees.

Sit down and study basic finance.
Dito tayo kailangan bhe kailangan natin mag-aral kc once and for all para sa atin din ito at para mashare din natin sa iba.

Keep track of expenses.
Ilista mo lang kung saan napupunta un pera mo na pinaghirapan. Keep your receipts, and write on your budget tracking worksheet all your expenses until now ginagawa namin ito ni Jey nasanay nalang talaga kame.

Don't buy what you don't need and delay buying anything.
Dont buy things that you dont need meaning dont buy wants. If you need it go and buy it. :) Halimbawa, ang relo need natin yan pero pag ang gusto mo ay yung mga mamahaling relo halimbawa 10K un relo na type mo hindi na siya need wants na siya. Delay buying anything sometimes we just need to think twice or overnight if you really really need it (delaying gratification).

Always try to bargain and compare prices before buying.
Ito naman practice bargaining means don't buy agad-agad think first do I really need this? Can I get a good deal? Compare similar products, learn to negotiate for a lower price on anything. In short manghingi ng tawad.

Avoid unnecessary debt.
Kung hindi naman need un uutangin please avoid. Avoid getting credit cards dahil nagkakaroon un ng interest at pwedeng may mga nakatagong hidden fees and charges na hindi lang alam. Live below your means to avoid it.

Set aside cash for emergencies or hard times.
By right, your emergency fund should comes first before we invest but in your case unahin na natin ang mag-invest sabay na ang saving and investing.

Increase positive cash flow or have more income streams.
Habang tumatanda lumalaki ang gastusin kaya dapat lumalaki din ung kita. By owning assets and investments that actually create income you are then increasing your positive cash flow overtime.

When it comes to money, don't trust anyone.
Don't trust sales on networking if they guaranteed na agad-agad you will be rich. People who are successfull in networking worked overnight. Don't trust sales people when they tell you that their product have guaranteed results. If it sounds to good to be true baka scam yan. Look at the mirror yan ang una mong kakampi when it comes to money. Seek advice to right people with experience.

Invest in yourself.
Learn. Learn. Learn. Knowledge is power. Attend seminars and read online. Bago ka matulog kapag inisip mo un mga bago mong natututunan you will feel good.

Tithe or donate to charity regularly.
Tithing means mag-bigay sa church, or give portion of your money to people in need it will teach you to be unselfish.

This is all for you. Share what you learn.

Talk soon,

Monday, July 7, 2014

(OFW in Singapore) Understand your bank fees

It is really important to check your bank charges and fees posted in your statement of account. Through your online banking you are able to see your accounts and check where those fee's came from.

Be aware that your bank may apply charges to your account (see my screenshot) AWF (ATM Withdrawal Fee) charged me $2.00. Please check some of the fees below and be reminded.

DBS eSavings Plus and POSB eSavings Account
(S Pass and EP Holders) Fees

  • S$2 fall-below fee if the average daily balance falls below S$1,000
  • S$2 ATM withdrawal fee will apply if the customer makes more than 4 ATM cash withdrawals in the month
  • S$2 fee will apply for each cash withdrawal at any DBS/POSB branch for amount within your ATM cash withdrawal limit
  • S$20 early account closure fee if the account is closed within 6 months
For more information, go to DBS and POSB.

UOB Uniplus Account - Fees
  • Minimum balance fee S$2 if the average daily balance for the month falls below S$500
For more information, go to UOB: Uniplus Account.

OCBC Account - Fees
  • Minimum monthly balance S$1,000, S$2 fall below fee applies
For more information, go to OCBC.

Whatever your bank are it is important to take note and understand basic bank fees and charges to minimise your monthly banking fees.

Happy Saving!

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We're Glaiz and Jey
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