Key Points to Ponder (Excerpt from Robert Kiyosaki's Rich Dad, Poor Dad!)

Key Points to Ponder:

1. Learn how to make money work for you. Do not work for money.
2. Invest more in financial education.
3. Buy assets not liabilities. Asset is something that puts money in my pocket; liability takes money out of my pocket.
4. Mind your own business. Start building a solid asset column.
5. Don't play it safe, play it smart.
6. Overcome the Fear of Losing Money
7. Pay Yourself First
8. Take Action Now! (not tomorrow)

Wise Points of View:
"The lack of money is the root of all evil" (not love of money)
"How can I afford it?" (not I can't afford it)
"Study hard so you can find a good company to buy." (not a good company to work for)
"The reason I must be rich is because I have you kids." (not the reason I am not rich)
"Learn to manage risk." (not don't take risk)
"My house is a liability, if you're house is your largest investment, you're in big trouble."
"Money is power, money works for me!"

Note: There is a difference b/n being poor and being broke. Broke is temporary, poor is eternal. So, say I am temporary broke but abundance is coming.
 

Thanks to Robert's Rich Dad, Poor Dad!

"Awaken the Financial Genius that lies within you. Your genius is waiting to come out". A solid earth shaking message of Robert Kiyosaki on his book Rich Dad, Poor Dad.

I am one among the millions and thousands of people searching for financial freedom - freedom from finances not depending on your SSS, Phil health, insurances and other benefits the government offers after retirement.  After attending Bo Sanchez seminar, "How To Be Truly Rich" and reading his book the 8 Secrets of the Truly Rich, I continue studying, reading, searching for information related to finance management. Because I am so afraid I will lost my earned income, I invest in mutual fund, the safest investment. I wanted to invest in stocks but I don't know how to start and I don't know how money works in the stock market.

Learning the basics of investment makes me very proud of myself and I am always thankful to Bo, he opens my eyes to the Investment world.

Though I have a mutual fund, I am not confident I have enough funds. So after reading Robert's book Rich Dad, Poor Dad!, it widely opens my mind. My fear in losing my money holds my back so I cannot start investing in stocks. What I'm doing is playing safe - save an emergency fund and invest in mutual fund. There is nothing wrong with that however if my goal is to be financially free, I have to do it smart. But I am really afraid what if I will lost my money - Robert's answer, "If you know what you're doing investing is not risky.". It's common sense. So what to do then is to invest more on financial education. Be financially literate! When I say invest, you have to pay if needed. I cannot deny the fact that if I saw seminars with charges I back out. This should not be if my aim is to learn. On his book, he quoted, "the key to financial freedom and great wealth is a person's ability or skill to convert earned income into passive and or portfolio income."

What are the different types of income?
1. Earned Income - money you work for
2. Passive Income - derived from real state investment
3. Portfolio Income - derived from paper assets ( bonds, stocks, mutual funds)

Robert's book has a lot to say, I recommend you read and you will understand it better. I assure you, after reading the book you will have an idea how to manage your fear and how to play it smart in the field of investing. Again, risk comes from not knowing what you're doing. I am now in the process of studying what he call, the science of making money. I want to share because it is my way of thanking Robert and my way of learning - to put into writing.

There is one thing I love the most that I want to include on my objective to be truly rich, "All you need to be is generous with what you have, and the powers will be generous with you."

Tips for Beginner Investors

I found this guidelines which I hope you will find useful in your own investing decisions. (Source: Ready To Be Rich site)


1. Have an investment objective
Investing because you want to be rich is actually a lame reason, sorry. Before you invest, you should have a specific objective in mind first.
For starters, ask yourself where do you want to spend the money in the future? Is it to buy a car? For your child’s college tuition? For travelling around the world when you retire?
Having realistically optimistic goals will help you immensely in choosing where you should invest.


2. Don’t time the market
Many people ask when is it a good time to invest, my answer is always NOW.
If you have the money, then there’s no reason for you to delay, just do it and don’t wait until the market becomes “favorable” – because no matter how the economy is, there is always an instrument out there that’s good to invest in. Trust me on this.


3. Make a workable regular investment plan
Aside from investing early, you should also invest regularly. This is really important specially if you don’t want to time the market.
Investing exact small amounts, in frequent intervals, on one instrument, allows you to “cost average” – this investing strategy really helps lessen your risk against market movements.


4. Diversify your investments
While your investment decisions highly depend on your investment objectives, it’s important to keep in mind that you must also have a balanced portfolio.
This means you should not bear too much risk, nor have too little. You can’t put everything on the stock market, the same way you cannot just invest in time deposits. Diversify!


5. Shop around
I don’t literally mean that you should go to the mall and shop. What this means is that you should take time to go around, see, ask and learn about all the investment options that’s available and compatible to you.
Aside from the rates of return and potential earnings, be sure to know the investment costs and fees. You must also know their terms such as holding periods, rules for redemption and others.
This could take some time – and that’s okay. In the meantime, while you’re still “shopping”, you can let your money earn a few bucks inside a short-term zero-risk time deposit.


6. Monitor your investments
Regularly monitor how your investments are doing, at least do it once every quarter. Personally, I do mine once a month. It’s up to you, just don’t do too often like everyday because that will be counterproductive already.
The reason why you need to know how your investments are performing is because you want to make sure that you’re still on course to achieving your objectives.
When you see that an investment is not earning as expected, then put a “flag” on it and see if it would be good to wait it out for awhile, or if it’s better to move your money to another investment.
There are no strict rules here actually. I suggest that you just do whatever feels objectively right. Do the computations and adjust your portfolio accordingly.


Once you get yourself started in investing, you’ll see that your financial knowledge will dramatically increase. Soon, you’ll be more savvy in your investment decisions and see better opportunities for your money.


The secret is again, to start investing now.

Investing: The Secret of the Rich People

I shared about mutual fund on my Feb's post, it might be a 'don't know-how' or 'don't know what' if you don't have any idea what is all about investment. To give you an idea, here are some of the lessons I learned that I want to share for you to understand what is mutual fund.

Let us first define what is investing. Simply the act of making money without working. Note: Investing is different from Trading.

One of the safest ways of investing is thru mutual fund.

•          It is where your money will be invested into different sources such as real state, forex, stocks and bonds together with other mutual funds of investors.

•          The money is handled by a professional financial manager.

•          The good thing is that you can start slow and with little money. Initial amount: P5000

•          Is it safe? Yes, it is good and safe investment

Why mutual fund? Why not bank?

Let me share you the story about Ann, Nicole and Mae. Ann, Nicole and Mae are sisters. Gary, their father gave them a test, that is, to increase the 100,000 in 36 years.

Ann thought of saving in the bank, anyway, it has an interest of 1%, it will still grow in 36 years. While Nicole thought of putting in a Time Deposit. (Refer below link for the interest rates for different bank in the Philippines.) The interest varies from bank to bank but on my example I put an average of 4%, Nicole’s earning of course is higher than Ann. Now, its Mae’s turn, Mae did not save in the bank or in Time Deposit. What she did first is to search via Internet some tips of saving and how to make her money grow. After that, she attended seminars on Investment. She read books about savings and investments. She asks for mentors and financial experts who can help her. Then, she learned that one of the safest ways to invest is through mutual fund. Please note this is for long investment.  I  place a note above that trading is different from investing, to give you a very simple difference of the two, trading is that you buy your share today, then sell it tomorrow when you want. But investing is saving in a long period of time. This is what we call the concept of compound interest.  So to demonstrate the earnings of the three sisters, here it is:

Table of Earning per Interest Rate

	ANN (1%)	NICOLE (4%)	MAE (12%)
29 years old	P100,000	P100,000	P100,000
AFTER 36 YEARS
65 years old	P200,000	P400,000	P6.4M

Now you have an idea what I am I talking about.

Want more tips? I learn this in IMG (International Marketing Group) when I attended Finance 101

We call this Pay Yourself First

By paying yourself first, you have to make sure to save before your expenses.

SALARY – SAVINGS = EXPENSES

This might have a 0 negative equivalent because your expenses might be higher than your salary.

SALARY – EXPENSES = SAVINGS

Some FACTS for you to ponder:

•          Some facts: Do you know why banks has this tall, nice and expensive buildings? Because the money that you save in the bank invested in mutual fund.

•          Do you that in the Phils, less than 1% of Filipinos invest in mutual fund and 99% of them put their savings in the bank. But in America, 70% invest in mutual fund while 30% save in banks.

            Why not by-pass the bank? Why don’t you invest your money where the bank invests their money?

Interest rates for different bank in the Philippines Link

http://learnfinancialeducation.com/time-deposit-rates-of-banks-in-the-philippines/

The Concept Of Compounding

http://www.investopedia.com/university/beginner/beginner2.asp#axzz1o9HBcjKL

Mutual Fund Update – The 2nd Best Time to Invest (Share)

Sharing you this message I received from Mutual Funds Philippines

By: jeffreydelara@yahoo.com

I hope this will inspire you…

Mutual Fund Update – The 2nd Best Time to Invest

Posted: 08 Feb 2012 04:33 AM PST

Today is the 2nd best time to invest in mutual funds or in the equities market. Why? Because the Philippine economy is going strong. We just hit a new record high of 4,800+ points and not being affected by the Eurozone debt crisis. This only proves that our economy is getting stronger against the effects of other countries. Just look at the peso – dollar exchange rate, a strong P42.50 to a dollar. Very strong indeed.

A lot of years has passed since I first started this blog for the purpose of documenting my journey in investing and also sharing my experience with our Filipino people about mutual funds. Some people may have started earlier than me and some people might have been encouraged after reading some articles in this blog. I appreciate the fact that I have converted you into a savvy investor and made you think about the future, your future. It is your future after all and it will be a bright one. For those who have not yet started in investing, you are missing out on a lot. Bad times have come, and that is the 1st best time to invest. Stock prices and mutual funds are cheap and you can get a lot of profit and gains once the market picked up again. But a better strategy is to add more money into your mutual funds thru good times and bad times. Especially at bad times.

I have thought how far have I come in this mutual fund investing journey and took a peek at my investment account. To my delight, my mutual fund portfolio has been hatching a lot of eggs and are now producing more money without me working.

From my first ever year in earnings from Mutual fund of P15,000. I have come a long way. From a measly mutual fund with P15,000 in gains and 2 years after, that fund has earned P129,759.48 in profit.

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Who says money can’t buy happiness? If money can’t buy happiness, why is there a smile in my face? This is money that I have never worked for. It is wealth that money made for me. Each penny that is in there is a testament to the ability of a person to be financially free with enough financial education, discipline and living within their means. And also a little bit of sacrifice.

The key is investing consistently and diligently. Invest in good times and bad times. Sacrifice a little bit for a brighter future. Think about your kids, think about your retirement, if you spend all the money you are earning now, be it big or small, would you be able to live comfortably when you retire? When you can’t work anymore? Look at your kids, would you be able to put them to a good university?

Look at what can happen in a span of 2 years of consistently investing your money every month. Then imagine how much you could gain 10, 20, 30 or even 40 years from now? It is possible you can live just by the returns of those investments. And people who started out young will be able to experience that earlier in their lives and will probably enjoy it more for longer time we have in this world.

Happy investing!

Learn to Save and Enjoy at the Same Time

Are you this employee who keeps on working but cannot save for his future?  That after working at night you just thought of going home and take a rest. That you’re routine is just work-home-work and no work life balance. Well, I can relate.

Here is my long story; it might help you -

I am an employee in one of the multi-national companies here in the Philippines (I am not bragging because it’s true J). I am now 4 ½ years old in the company (Loyal, huh!). For the past 3 years, though I can say, I am earning an average salary; I don’t have anything I can be proud of. How could that happen? Maybe because I am helping my parents support my younger sister in her studies. Maybe because I don’t know how to save. Or maybe because I don’t know how to manage my finance.

After 3 years of stay in the company, I come to realize I don’t have anything. I come to realize I will not be an employee forever. To include that I am a little bit envious to my colleagues’ who were able to save. My gush! I can’t be like this.

Sooo, I start searching into books and the internet (thanks to google and yahoo) – I look for some tips in savings, investments, business and the likes.  Also, I have a friend who happens to be an avid reader of Bo Sanchez so I borrowed the book. I forgot the title of the first book of Bo Sanchez that I read but it does mention on the book about How to be Truly Rich. To cut the story short, I continue reading some of the books of Bo Sanchez and I even attended one of his seminar in Mandaluyong.  I could say, it did not ONLY change my financial mindset but also change my negative outlook. Thanks to Bro. Bo Sanchez.

This is one of the lessons I learned from the seminar:

Why do I want to be rich?

Because I want to be able to invest in love.

To have the luxury to do the things I love, things that I am passionate about.

To have the time to spend my days with the people I love, my family and friends.

To have the capability to share my blessings to others, to spread joy and love to those who need it.

You can subscribe to Bro Bo’s site @http://bosanchez.ph/

Bro. Bo as well mentioned on his newsletters about Jomar Hilario, Bo’s guru in Internet Marketing. This is what I’m currently studying into now. I like the way the lessons presented. It’s awesome! You might want to subscribe. It’s free. Go to http://www.jomarhilario.com/

I would like also to include here the site I found that helps me a lot, a site for saving tips, investment and businesses. Visit http://fitzvillafuerte.com/

Yes, this is how I am learning to be financially free. I am searching for mentors. I am doing a replication of what our mentor’s did. Am I enjoying it? Yes, very much! If before I just go home and sleep after work, now, I thought of searching and thinking of topics or ideas to blog.  If before, it’s ok if I don’t have to save, now I am addicted to save at least 20% of my salary. I’m starting now and you should do the same. J