Top personal finance lessons for '08

By Ma. Salve Duplito

2008, the year that bathed Wall Street with doubt and fear and caused financial systems across the globe to stop dead in their tracks, is about to come to an end.

It was a year of chaos and confusion.

It was a year when people wondered whether some of what they have long-assumed about financial markets were way off the mark after all.
Remember Alan Greenspan?

It was a year when that age-old phrase "the first shall be the last, and the last shall be the first" seemed strangely apt.

Isn't it true that in this crisis, the rich and the greedy are feeling the bigger brunt of the financial meltdown? Yet the ones who are at the bottom rungs of society will still feel the pinch from the crisis moving forward, even if they had nothing to do with it.

So, what are the top personal finance lessons that can be learned this year?

Ethel Bondoc, owner of Storytellers Inc., a company that cranks out creative videos for corporate clients, weddings and other events, tied the knot this year and became Ethel Bondoc-Nolasco.

Her personal financial planning, sans the crisis, would have been fairly straightforward with broad strokes she has learned from personal research and observation.

But the events of 2008 are making her extra watchful and careful about how to save for her first child, her first home and her first forays into investment and retirement planning, among others.

"I am more conscious about savings because it is really scary now. On one hand, we are thinking that the crisis might be more advantageous for us because corporations will be budget-conscious and will think about more affordable alternatives, which we offer. But we might also lose clients because of the crisis, so we are thinking about whether to expand or not," she says.

Despite the shaky financial picture, the top personal finance lessons for 2008 are back-to-basics principles that even the worst crisis since the Great Depression hasn't changed.

1. Crisis-proof your finances. A lot of us put everything we have into a hot tip, a popular investment, a moneymaking scheme, especially if we think it is an insider's scoop. We like the idea of striking it rich in one fell swoop and so we withdraw all our money from the bank and even borrow from relatives. The tenets of financial planning say this is a slippery slope to penury and regret. Remember never to bet the house and never to bet everything on one investment. Divide the money you don't need immediately and put them in different investments. Invest only what you can afford to lose.

Joelle Ona-Horca, a 35-year-old credit analyst at a foreign bank, says she realized she was too reliant on American International Group/Philamlife for her family's nonlife insurance plans. She says she is now diversifying.

"Diversify assets, not just the nature of the assets like money markets, stocks or bonds, but also the underlying issuer," she says.

2. Plan for the long term, but revisit your goals regularly. People make more mistakes when they panic in a down market.

Losing everything can drive anyone nuts, so we make the worst decisions especially when we are emotional. A long-term perspective allows us to sit back and watch the market first before jumping into the fray.

However, a biannual or annual revisiting of goals should also recalibrate our financial plans.

Joelle adds that bargains can be found not just in the malls and tiangge sales this season but also in the financial sector. "I'm letting the law of cost-averaging work in my favor by setting aside a set amount of money each month to invest--the bulk of which goes to a PSE index Fund," Joelle says.

3. Before you invest, make sure you have an emergency fund.

Warren Matutino, a 32-year-old government employee who lives in Iloilo City, says for him, having three to six months of untouchable funds is the first step in constructing any serious financial plan. "Without this financial cushion, any unexpected expense can derail your long-term plans," he says.

Mutual funds' net asset value per share has this year dropped more than 40 percent at one point. Having to withdraw at that kind of loss because of an emergency can take a lot of the wind out of investment sails.

4. Don't be too greedy. When we're talking about money for our children's education or for healthcare in our old age, for example, prudence is key. Never chase after returns and put money in an investment that is too good to be true. Know what you're getting into. If you don't understand something, ask for plain English explanation and if that doesn't work, just walk away from any investments being offered.

The recent $50-billion Ponzi scam on Wall Street perpetrated by former Nasdaq chair Bernard Madoff fooled people in banks like Banco Santander and HSBC, as well as charities. Be prudent and ask yourself first if you are falling for a scam or not.

5. Live within your means. Joelle says her mantra during these turbulent times is "distinguish between a need and a want." "Establishing a buying habit based on needs versus wants requires us to be brutally honest with ourselves. We must constantly evaluate what we see, hear and even what we think. Do we really need the latest iPhone? The 50-inch flatscreen?" she shares.

She adds that learning to say "no" is hard to do especially when we are bombarded left and right by clever marketing campaigns. But she warns that people need to prepare for a financial drought.

"This is still a work in progress, but I'm trying to curb my inclination to be an impulse buyer. I have become an obsessive list maker with a notebook in my bag listing all necessary purchases to keep me on track. I'm teaching my (5-year-old) kid to distinguish between a need and a want. He no longer goes on a "pointing spree" when in a toy store and is learning to read price labels to know if his wants fit the prescribed budget," he says.

6. Money is not everything. Family, community, health, emotional and spiritual well-being are more important than the lucre of money. While money is an important tool in keeping our families happy, we end up slaves to it when it becomes the main reason for most of the things that we do.

source: business.inquirer.net
image: crivz.com

5 Financial Rules to Get You Through Good Times and Bad

The current financial crisis on Wall Street has many Americans feeling uncertain about money and investing. Not everyone is panicking though. Here are five rules to keep you on solid financial ground no matter what the economy is like:

1. Beware of over-leveraging yourself

Know the difference between good debt and bad debt, and stay away from bad debt. Good debt provides puts money in your pocket; bad debt just increases your expenses. If a school loan allows you to get an advanced degree and increase your income at work, that’s good debt. If you use debt to purchase a cash-flowing piece of real estate, that’s good debt. If you buy that new HDTV on credit because you don’t have enough money in your bank account, that’s bad debt. (You couldn’t even sell that TV for the same price you paid for it.)

Realize that even good debt can get you into trouble if something in your situation changes and you are unable to make the necessary payments. What would happen if you had sudden unexpected expenses or a loss of income? It is a good idea to have 6-12 months worth of expenses in ready money to cover such emergencies and protect you from too much leverage.

2. Pay yourself first

Before you spend your paycheck, put away at least 10% for savings and/or investing. Put away another 10% to donate to a charitable cause. If you have bad debt you need to pay off, put another 10% aside to pay down your debt. Live on the remaining 70%.

3. Live within your means (so you can increase your means!)

Manage your expenses so that they are well below your income. Start by paying yourself first (see #2, above). Create and follow a budget if necessary. Think about what kind of lasting value your purchases will really provide. Look for less expensive ways to entertain and “treat" yourself for all your hard work.

Even if your ultimate goal is to increase your means and live a more financially extravagant lifestyle, you will only be able to afford such a lifestyle after you have saved enough money to invest in passive-income-generating assets. And saving that money for investing so that you can increase your means in the long term will only happen if you live within your means in the short term.

4. Be careful where you get your financial advice

Are the people who are giving you advice really trying to help you, or are they selling something? Financial advisors don’t make money from investing in stocks and mutual funds… they make money from selling them… to people like you.

A lot of people got burned in the housing crisis because they listened to people who were selling them something: real estate agents and mortgage brokers who said that house values would always go up.

Even if the advice giver means well – a friend or relative, perhaps – do they really know what they’re talking about? Are they experts? Have they personally tried and succeed at what they are recommending? What results have the really gotten?

5. Invest in your financial education

If you don’t understand good money management yourself then you’ll always be at the mercy of people who do… or worse, people who don’t.

If you’re investing you need to understand the investment… by getting some education before you start, and by starting small and learning as you go.

source: kimkiyosaki.blogspot.com

5 Financial Mistakes New Graduates Must Avoid

5 Financial Mistakes New Graduates Must Avoid
By M.P. Dumon


Read How Credit Cards Affect Your Rating

According to U.S. Census figures, more than two million students were enrolled in college in 2005, with hundreds of thousands of students anticipating their degrees. These young adults were largely confined in the relatively safe, secure and structured environment that is academia, but new life lessons are learned as students transition into the real world.

How graduates approach financial planning in the first few years after college can set the tone for their financial habits down the road. By adhering to a strategy and plan, recent college graduates can avoid mistakes in how they deal with their personal finances.

Real World Lesson No.1: Plan To Save

Recent graduates celebrate their recent conquest of college term papers, exams and theses. Undoubtedly, a large chunk of these newly minted grads take whatever jobs they can find. Some are disciplined enough to pursue the right field for them. However, recent grads too often find the traditional workplace routine unfulfilling or unchallenging. Unreasonable spending habits often take over as an escape from the daily grind, and entire paychecks are spent on regular expenses (such as rent and utilities), purchases (such as an automobile and furniture) and luxury items (such as travel and an oversized television).

Although you should enjoy your newfound freedom, you should also strive to save a nice portion of your paychecks. The recurring cash flow can be placed in a combination of stock, bond and money market investments. Once you are no longer living in the comfort of your parents' home, it is prudent to plan for contingencies such as automobile accidents, personal injury, lay-offs and other unforeseen expenses.

Real World Lesson No.2: Money Spent Is Money Lost

Having been broke for four years or so while in college, recent graduates naturally equate a steady paycheck with newfound wealth. No longer subject to the disagreeable taste of dorm food and late-night snacking on hot noodles, young adults easily form a new habit of transforming their recurring income into regular dining at upscale restaurants, bars and clubs.

In the real world, assets either appreciate or depreciate. The purchase of a car is the purchase of a depreciating asset; it diminishes in value as soon as it leaves the lot. The same is true for furniture, clothing and expansive television screens. Flying to Cabo San Lucas over spring break is an expense - it is cash leaving your wallet, never to return. The same is true of costly apartments, fine dining and weekend barhopping.

Several factors can help create real financial security:

• The performance of assets that appreciate over time, such as blue-chip stocks, dividend-yielding bonds and homes.
• Investing in yourself as a professional to improve your prospects for growth and increased income. By investing money each month to improve your performance in your chosen field, you can expect to earn more promotions and higher pay over the long run than your complacent counterparts. These personal investments can take the form of training, online classes, industry certifications, books and seminars.

In a dynamic and competitive marketplace, paychecks provide only the illusion of security; it's how you use your paychecks that determines your financial well-being.

Real World Lesson No.3: Control Debt Before It Controls You

Depreciating assets and reckless spending often lead to only one thing: debt. Debt devours your cash flow and negates your assets, skewing your personal net worth toward the negative side. Set time lines for eliminating your various debts, including school, car, credit card and home loans. Pay off the debts with the highest interest rates first - that's just common sense.

There is good debt; you can use other people's money to buy appreciating assets, essentially using other people's money to make money for yourself. That's how the private equity people do it. But the rule of thumb is to discipline yourself in executing your plan of attack. Kill the debt beast, whatever its form, by a certain deadline.

If a paycheck only provides the illusion of security, then debt should provide real fear of the negative things that can happen to a recent grad if unforeseen contingencies occur.

Real World Lesson No.4: Become a Good Credit Risk

Paychecks are a limited income and are vulnerable to being reduced or cut off altogether. In Lesson No.3, we point out that if poor habits and consumption behaviors are not kept in check, debt can be financially disastrous. However, large transactions do exist that necessitate the use of debt - the wheels of the economy would grind to a halt if consumers had to bring in sacks of cash in order to pay the full value of a car or home up front. That's where credit comes in.

Manageable debt, as a means of establishing a good credit history and acquiring appreciating assets, helps recent grads become financially credible to lenders when it is time to take out an auto loan or mortgage. Additionally, there may be some extenuating circumstances that require a recent grad to take out an emergency loan. Manageable debt means that payments and the principal balance are easily affordable and that there is a target time line for eventual pay-off. It is not an excuse to throw money at the craps table in Vegas. That's an even nastier rabbit hole.

Real World Lesson No.5: Face Facts - Get Life Insurance

As you get older, you will begin to realize certain inevitable facts of life: old age, marriage, kids, grandchildren and, yes, even death. So get life insurance.

These events will happen; either you plan for them and care for those closest to you, or you don't plan for them. In the latter case, lack of foresight and planning can lead to financial distress for your family members. Death is stressful and expensive for survivors. Life insurance can help alleviate much of the stress at a critical time.

Parting Thoughts

Personal finance is a critical area for your mental and emotional well-being. As a student, IQ, grades, standardized test scores, popularity ratings and tolerance for alcohol are the benchmarks against which your teachers and peers judged your success.

But once you graduate, personal finance should become one of your dominant priorities. Unfortunately, the educational system - while providing interesting theories and insights on the universe - provides little in the way of real-world preparation for students in the areas of personal finance, workplace challenges or life's other adversities. A strong personal balance sheet and income statement will go a long way in helping you to overcome these challenges and maybe even find new and exciting opportunities to increase your net worth.


source :denverpost.com
images :business.nmsu.edu
ukdebtconsolidationloans.co.uk

Robert Allen's Multiple Streams of Income

I joined Robert Allen’s mentoring team, few days after I attended the Millionaire Mind Intensive last Nov 7-9 2008 in Singapore. One important thing I learned about the intensive workshop is to TAKE ACTION.

So now I'm embarking on a new learning by joining Robert Allen's Mentoring Program. In this program, I will be mentored on success principles to create wealth. In fact, one of the key benefits from participating in the program is the emphasis on continuous personal development that I will be receiving. Once I learnt something from Robert Allen’s program, I can email you and let you benefit too.


Who is this guy named Robert Allen?

Mr Robert Allen is a financial guru and has written many New York Times best-selling books. One of his books is called "Multiple Streams of Income" and you can get this book from any major bookstore. In this book, he teaches people how to create 10 streams of income flowing into our lives. I am learning how to create two of these streams right now that allows me to run a part-time business from home. More info on Mr Robert Allen is at

www.simplyworkathome.org/robertallen/z.php?id=3189009&eid=InvestorNotebook


If you feel that it will benefit your friends and family , please feel free to share the link with them. Thanks a lot.

Attitudes of Wealth

After attending the Millionaire Mind Intensive, i am now following the 90 DAY Wealth Conditioning Program. It was designed to reprogram oneself for success. One of the daily wealth conditioning process is to read both the Attitudes of Wealth Declarations below.

Winning The "Money" Game

• I am an excellent money manager
• I alway pay myself first
• I put money into my financial freedom fund every day
• My money works hard for me and makes me more and more money
• I earn enough passive income to pay for my desired lifestyle
• I am financially free. I work because I choose to, not because I have to
• My part-time business is managing and investing my money and creating passive income streams

Winning The "Mind" Game

• I create my life. I create the exact amount of my financial success
• I play the money game to win. My intention is to create wealth and abundance
• I admire and model rich and successful people
• I believe money is important, money is freedom and money makes life more enjoyable
• I get rich doing what I love
• I deserve to be rich because I add value to other’s people’s lives
• I am a generous giver and an excellent receiver
• I am truly grateful for all the money I have now
• Lucrative opportunities always come my way
• My capacity to earn, hold and grow money expands every day

image source: richgrad.com

Millionaire Mind Intensive

i recently attended this intensive seminar by T Harv Eker.


The Millionaire Mind Intensive™ by T.Harv Eker

Date: 7th - 9th November 2008 (Friday ~ Sunday)
Venue: Singapore Expo, Hall 2

WINNING THE MONEY GAME

Most of us were never taught how to win the money game and if we were, most likely we were taught by people who weren't very good at it. The first critical element in winning the money game is knowing exactly how to do what rich people do to get and keep wealth.

At the Millionaire Mind Intensive you will learn a step-by-step process for winning the money game. Once you know how to play to win, you will never have to work again…unless of course, you choose to!

Here's just a part of what you'll learn:

• The wealth creation & maintenance strategies of the rich
• How to quadruple your speed to financial freedom
• The 5 key financial habits of the wealthy
• The underlying cause of almost all financial problems
• 12 ways to earn passive income so you can make money while you sleep

THE WORLD'S SIMPLEST SYSTEM FOR MONEY MANAGEMENT
Plus! One of the key elements of this seminar is teaching you a fail-safe, sure-fire money management method. This method not only allows you to save a fortune, it will get you to start investing wisely while allowing you to have some money that is only for play!

Over 500,000 lives have been changed by this system and the Millionaire Mind Intensive is going to show you exactly how to put it into action.

Even if you have very little money, it's imperative that you learn to manage your money to make it grow! This system shows you how; and the amounts you manage don't matter, so long as you learn the system.

INTENSE BREAKTHROUGH LEARNING
Each day of the seminar, you'll take part in groundbreaking exercises that will show you exactly how your outer world reflects your inner world.

If you want to change how you deal with your finances on the outside, you're going to need to change how you think about money. You are going to have to learn the “inner game” of wealth building. Go within, make the changes, and your outer world will manifest what you choose!

At the Millionaire Mind Intensive, we are going to teach you the secret psychology of wealth. One of the first things you will learn is—

YOU HAVE A PERSONAL MONEY AND SUCCESS BLUEPRINT

We all have a blueprint that decides how we handle money. It's deeply ingrained in our subconscious and it determines your financial destiny. It comes from our past programming—things we learned in childhood in three 3 primary ways: Verbal Conditioning - what we heard; Modeling - what we saw; and, Specific Incidents – what we experienced.

But here's the key:

YOUR FINANCIAL BLUEPRINT CAN BE CHANGED!

One of the main objectives of the Millionaire Mind Intensive is to show you:

• How your childhood conditioning is affecting your finances today
• How to identify and change your personal money and success blueprint, forever
• How to recognize your “money personality” and learn to build on your strengths and overcome your weaknesses
• How to use “spiritual laws” to create “real world” success
• How rich people think and how to adopt their ingrained blueprint for abundance
• How to recondition your mind for “automatic” success

“Your income can only grow to the extent that you do!” T. Harv Eker

CHANGE YOUR SETTINGS

So what is your financial blueprint set for? Are you set for success, mediocrity or failure; ease or struggle; consistent earnings or an “up and down” income?

Some of us are set for saving, some for spending, some do both in cycles that keep them financially treading water their whole lives. There are those who instinctively choose winning investments and those who consistently pick losers. But...how do you know which way your blueprint is set?

One way is to look at your results!

Financial settings are like the temperature in a room. If the temperature is 72 degrees, chances are the thermostat is set for 72 degrees. If you are not earning enough, keeping enough, or enjoying your money enough, then your blueprint is set for “not enough”. And unless you change it, your current financial blueprint will stay with you for the rest of your life.

That is exactly what we do at the Millionaire Mind Intensive!

ARE YOU ATTRACTING OR REPELLING SUCCESS?

Another thing you will learn at the Millionaire Mind Intensive is that the universe is dynamic . Everything is in a constant state of motion and change. At every moment, depending on how you think, speak, and act in the world, you are either attracting success or repelling it.

At the Millionaire Mind Intensive, through intense learning exercises, you will change your money, resetting it for “automatic” success.

The course objective is to make success—in all areas of your life—your natural way of being. Having done that, you will find that you will attract all that you have been struggling to achieve…and more!

By the end of this course you will have a completely different attitude towards money and success; you will have a millionaire's mind-set. Best of all, the same principles you learn to enhance your financial life will create inner peace and happiness. The Millionaire Mind Intensive will teach you to be “rich” in every sense of the word.

Friends in UK....i'm inviting you to attend this and avail the discount.

refer to the organizers website Success Resources Pte Ltd

PS. Millionaire Mind Intensive UK (London)

Limited Special Bonus for MMI Graduates Only: Come and support our inaugural 'LIVE' Millionaire Mind Intensive UK by T. Harv Eker. We are pleased to extend a VERY SPECIAL PRICE for you. The current price for MMI UK is £351 (S$949), and now you can come to the program at ONLY S$299.00! You will receive a set of CDs, DVDs, workbooks and more. HUGE SAVINGS OF SGD$650!

If you have family, friends or associates that live in UK, you’re welcome to invite them to attend. So don’t miss out on this irresistible offer! This offer is only valid till 30th November 2008.

Warren Buffet Wealth

I attended one of the seminars during the Investfair08, bought this book and have it autographed by the author himself, Mr Robert P. Miles.

Click Here to preview the contents!!!!!

The strategies and techniques of THE investment legend Warren Buffett Wealth follows the world's greatest investor from the beginning of his career, as he takes a 100-dollar investment and turns it into one of the most successful multibillion-dollar companies in the world. By carefully detailing how Buffett began his career and discussing what he learned from Benjamin Graham, this book reveals the true secrets to Buffett's success. Readers will see how Buffett reached the pinnacle of his profession by following certain key principles such as investing in old-style traditional American companies, holding the companies forever, and hiring and keeping the same managers.

List of Contents

Chapter 1: Study the Best to Be the Best.

Chapter 2: The Making of a Billionaire: A Timeline of Warren Buffett’s Wealth-Building Lifetime.

Chapter 3: What Kind of Investor Are You?

Chapter 4: Developing an Investment Philosophy.

Chapter 5: Know What You Own.

Chapter 6: Invest in Main Street, Not Wall Street.

Chapter 7: Buy to Keep, and Buy a Lot of a Few.

Chapter 8: How You Can Learn from Buffett’s Investment Mistakes.

Chapter 9: Common Myths about Investing, Wealth, and Buffett.

Chapter 10: Five Investment Principles from the Next Warren Buffett.

Chapter 11: Warren Buffett’s Lessons on Having a Rich Life.

Chapter 12: The Journey of a Lifetime.

Appendix “The Superinvestors of Graham-and-Doddsville”.

Recommended Reading.

Index.

About the Author.

Robert P. Miles (www.robertpmiles.com) is a writer, speaker, and consultant. He is a graduate of the University of Michigan Business School and has been a shareholder of Berkshire Hathaway for a number of years. He is the author of The Warren Buffett CEO, a book Buffett recommended to his shareholders, and 101 Reasons to Own the World’s Greatest Investment: Warren Buffett’s Berkshire Hathaway (both published by Wiley). Miles has presented Buffett Wealth workshops on three continents. He has recorded How to Build Wealth Like Warren Buffett, and hosted several Buffett CEO talk television programs. He resides in Tampa, Florida.

source: http://books.google.com , http://as.wiley.com
http://images.amazon.com

The Intelligent Investor

Bought this book sometime in February 2008.

Click Here to preview the PDF contents!!!!!

Chapters includes.

• Investment versus Speculation: Results to Be Expected by the Intelligent Investor
• The Investor and Inflation
• A Century of Stock Market History: The Level of Stock Market Prices in Early 1972
• General Portfolio Policy: The Defensive Investor
• The Defensive Investor and Common Stocks
• Portfolio Policy for the Enterprising Investor: Negative Approach
• Portfolio Policy for the Enterprising Investor: The Positive Side
• The Investor and Market Fluctuations
• Investing in Investment Funds
• The Investor and His Advisers
• Security Analysis for the Lay Investor: General Approach
• Things to Consider About Per-Share Earnings
• A Comparison of Four Listed Companies
• Stock Selection for the Defensive Investor
• Stock Selection for the Enterprising Investor
• Convertible Issues and Warrants
• Four Extremely Instructive Case Histories
• A Comparison of Eight Pairs of Companies
• Shareholders and Managements: Dividend Policy
• "Margin of Safety" as the Central Concept of Investment

The greatest investment advisor of the twentieth century, Benjamin Graham taught and inspired people worldwide. Graham's philosophy of "value investing" -- which shields investors from substantial error and teaches them to develop long-term strategies -- has made The Intelligent Investor the stock market bible ever since its original publication in 1949.

Over the years, market developments have proven the wisdom of Graham's strategies. While preserving the integrity of Graham's original text, this revised edition includes updated commentary by noted financial journalist Jason Zweig, whose perspective incorporates the realities of today's market, draws parallels between Graham's examples and today's financial headlines, and gives readers a more thorough understanding of how to apply Graham's principles.

Vital and indispensable, this HarperBusiness Essentials edition of The Intelligent Investor is the most important book you will ever read on how to reach your financial goals.

About the author
The late Benjamin Graham was one of the greatest investment advisers of this century, and this reissue of his timeless classic covers all the fundamentals of value investing. Plus there's an added introduction by none other than business guru Warren Buffett.

Source: Wikipedia , berkshirebusinessbooks.com

The Rule of 72

The Rule of 72
The Rule of 72 is a great mental math shortcut to estimate the effect of any growth rate, from quick financial calculations to population estimates. Here’s the formula:

Years to double = 72 / Interest Rate

This formula is useful for financial estimates and understanding the nature of compound interest. Examples:

At 6% interest, your money takes 72/6 or 12 years to double.
To double your money in 10 years, get an interest rate of 72/10 or 7.2%.
If your country’s GDP grows at 3% a year, the economy doubles in 72/3 or 24 years.
If your growth slips to 2%, it will double in 36 years. If growth increases to 4%, the economy doubles in 18 years. Given the speed at which technology develops, shaving years off your growth time could be very important.
You can also use the rule of 72 for expenses like inflation or interest:

If inflation rates go from 2% to 3%, your money will lose half its value in 36 or 24 years.
If college tuition increases at 5% per year (which is faster than inflation), tuition costs will double in 72/5 or about 14.4 years. If you pay 15% interest on your credit cards, the amount you owe will double in only 72/15 or 4.8 years!
The rule of 72 shows why a “small” 1% difference in inflation or GDP expansion has a huge effect in forecasting models.

By the way, the Rule of 72 applies to anything that grows, including population. Can you see why a population growth rate of 3% vs 2% could be a huge problem for planning? Instead of needing to double your capacity in 36 years, you only have 24. Twelve years were shaved off your schedule with one percentage point.


Source: http://betterexplained.com

Gusto Mo Bang Yumaman? (Video part 6)

Gusto Mo Bang Yumaman? (Video part 5)

ETF - Exchange-traded funds coming to RP bourse

By Daxim Lucas
Philippine Daily Inquirer
First Posted 17:31:00 03/09/2008

INVESTORS in the local equities market may soon be able to buy securities that mimic the performance of indices or baskets of stocks as part of the bourse's drive to broaden its client base.

In a statement, the Philippine Stock Exchange (PSE) said that it recently drew up draft rules that it proposes to govern the listing of exchange-traded funds (ETFs).

An ETF is an open-end fund that issues and redeems securities on demand, whenever investors put money into or take it out of the instrument. The ETF tracks indices or a basket of securities that are listed and traded in the PSE or on a foreign stock exchange acceptable to the PSE.

It is designed to track the price and yield performance of its underlying index, which may be categorized as a broad market, a sector or industry, a single country or region, or fixed income instruments.

PSE president Francis Lim said the decision of the PSE board to draft the ETF rules formed part of its program "to assure the market's sustained growth" by enticing more investors with an expanded menu of PSE products and services.

The bourse is urging all concerned groups to comment on the draft rules, which can be accessed through the PSE website. After the public comments are considered, the PSE will submit the draft rules to the Securities and Exchange Commission for approval.

source: http://business.inquirer.net

ETF soon atPSE from tolome512 on Comiqs

Exchange-Traded Funds (ETFs)

Exchange-traded funds, or ETFs, are investment companies that are legally classified as open-end companies or Unit Investment Trusts (UITs), but that differ from traditional open-end companies and UITs in the following respects:

• ETFs do not sell individual shares directly to investors and only issue their shares in large blocks (blocks of 50,000 shares, for example) that are known as "Creation Units."
  
• Investors generally do not purchase Creation Units with cash. Instead, they buy Creation Units with a basket of securities that generally mirrors the ETF’s portfolio. Those who purchase Creation Units are frequently institutions.
  
• After purchasing a Creation Unit, an investor often splits it up and sells the individual shares on a secondary market. This permits other investors to purchase individual shares (instead of Creation Units).
  
• Investors who want to sell their ETF shares have two options: (1) they can sell individual shares to other investors on the secondary market, or (2) they can sell the Creation Units back to the ETF. In addition, ETFs generally redeem Creation Units by giving investors the securities that comprise the portfolio instead of cash. So, for example, an ETF invested in the stocks contained in the Dow Jones Industrial Average (DJIA) would give a redeeming shareholder the actual securities that constitute the DJIA instead of cash. Because of the limited redeemability of ETF shares, ETFs are not considered to be—and may not call themselves—mutual funds.
  

An ETF, like any other type of investment company, will have a prospectus. All investors that purchase Creation Units receive a prospectus. Some ETFs also deliver a prospectus to secondary market purchasers. ETFs that do not deliver a prospectus are required to give investors a document known as a Product Description, which summarizes key information about the ETF and explains how to obtain a prospectus. All ETFs will deliver a prospectus upon request. Before purchasing ETF shares, you should carefully read all of an ETF’s available information, including its prospectus.

Currently, all ETFs seek to achieve the same return as a particular market indexes. Such an ETF is similar to an index fund in that it will primarily invest in the securities of companies that are included in a selected market index. An ETF will invest in either all of the securities or a representative sample of the securities included in the index.

source: www.sec.gov/answers/etf.htm

Exchange Traded fund from tolome512 on Comiqs

Pag-IBIG Housing Bond

WHAT ARE Pag-IBIG HOUSING BONDS

Pag-IBIG Housing Bonds (Series 2007)* are bonds issued by the Home Development Mutual Fund (HDMF) to finance its housing loan program. The Bonds have a term of five (5) years and one(1) day.

*Issuance of the Pag-IBIG Housing Bond is contingent upon the prior endorsement of the Department of Finance and the approval by the Monetary Board of the Bangko Sentral ng Pilipinas and the finalization of the HCG Contract of Guaranty.

WHAT ARE THE OTHER FEATURES OF THE BOND?

• Allowable investment of insurance companies
• Acceptable collateral for a developer's loan with Pag-IBIG Fund
• Acceptable deposit in lieu of surety bond for collecting agents of Pag-IBIG Fund and
• For developer-investors, the Bonds are deemed sufficient compliance with Section 18 of R.A. 7279, subject to pertinent guidelines.

Eligible bondholders shall also be entitled to participate in an annual raffle draw with minimum of two (2) units of House and Lot packages/ Lot worth P1 Million each. For every P10,000 Bond held, an eligible bondholder is entitled to one raffle number.

Bond holder eligible to the annual raffle draws are:

• Individuals
• Retirement Fund
• Provident Fund
• Cooperatives

WHO CAN INVEST IN THE BONDS?

Members and non-members of Pag-IBIG, Filipinos and foreign nationals, corporations, developers and insurance companies may invest in the Pag-IBIG Housing Bonds. All Bond investors will be required to open and maintain a deposit account with either the Development Bank of the Philippines (DBP) or Land Bank of the Philippines (LPB).

Denomination of P10,000, P100,000, P500,000, P1,000,000 and P10,000,000 are available to all investors. There is no limit as to the amount of Bonds an investor can purchase.

WHAT IS THE INTEREST RATE OF THE BONDS?

An investor will be paid on a semi-annual basis a fixed interest rate which is tax-exempt by virtue of the Home Guaranty Corporation (HGC) guarantee on the Bonds. The interest earnings shall be automatically credited to the savings account of the bondholders on record with DBP or LBP. The actual rate on the bonds will be based on prevailing rate on Interest Rate Setting Date

Sample Computation ( Interest rate of 5.0% per annum)

Amount Invested	:PhP 10,000.00
Coupon Rate	:5.00% net (**)
Semi-Annual Interest Earnings(***)	:Php 250.00

(**) Indicative interest only and actual interest rate will be based on prevailing rate on Interest Rate Setting Date.

(***) Exempt from the payment of the 20% final with holding tax

WHAT ARE THE INVESTMENT SECURITY FEATURES OF THE BONDS?

The Home Guranty Corporation (HCG) provides a cash guaranty on the entire amount of principal and interest of up to 10.50%. The Guaranty of HGC carries the unconditional guaranty of the Republic of the Philippines. In addition, a debt repayment fund shall be maintained with DBP Trust Services.

AFTER THE PUBLIC OFFERING, CAN AN INVESTOR STILL BUY THE BONDS?

Yes. The Bonds ca still be bought at the secondary market through DBP and LBP at prevaling market rate.

WHAT IS THE PROOF OF OWNERSHIP OF THE Pag-IBIG HOUSING BONDS?

An investor will be issued a Pag-IBIG Housing Bond certificate by the DBP Trust Services.

CAN THE INVESTOR SELL THE BONDS EVEN BEFORE THE MATURITY?

Yes. Since the Bonds are negotiable, an investor can sell these to other interested investors through the DBP or LBP even before maturity.

HOW CAN THE BONDS BE REDEEMED UPON MATURITY?

The Facility Agent shall remit the maturity value to LBP and DBP to further credit to the bondholders' respective deposit account maintained either with LBP or DBP.

WHERE AND HOW CAN ONE PURCHASE THE BONDS?

An investor can purchase the Bonds from selected DBP or LBP branches nationwide.

Requirement are as follows:

For individual investors

• Duly accomplished Application to Purchase Pag-IBIG Housing Bond
• TIN and 2 valid IDs ( bearing photo and signature) Cash or authority to debit deposit account either with LBP or DBP
• Manager's check

For corporations

• Copies of SEC registration, Articles of Incorportaion and By-laws
• Pertinent board resolution authorizing the purchase of the Bonds indicating the authorized signatories and the specimen signature card

Investors will also be required to open a deposit account either with DBP or LBP to facilitate crediting of the interests and the principal upon maturity of the Bonds.

source: www.pagibigfund.gov.ph

Jollibee franchise

How to get a Jollibee franchise
By Ike Señeres
INQUIRER.net
First Posted 14:06:00 01/18/2008

OVERSEAS FILIPINO WORKERS all over the world now have a chance to own or co-own big or small franchised businesses, through payment schemes and acquisition terms that are very friendly to them.

Leo Hernandez, a management consultant, business school lecturer and cooperatives expert, has come up with an innovative program that would enable OFWs to become part owners of leading fast food franchises, by investing any amount they can afford. Hernandez said the key to the success of the program is the cooperative approach, because it is the only way of opening the opportunity to small investors while protecting their investments with ownership certificates at the same time.

As an initial goal, Hernandez is now organizing the first cooperative that would buy a Jollibee franchise located in Metro Manila. Hernandez said that the franchise is sure to cost millions of pesos, but “there is nothing that the OFWs could not afford to buy if they would just put their money together, ambag-ambag (contribution) style.”

Citing some figures, Hernandez said that 100 OFWs investing $1,000 each could already generate close to P5 million. He said that this could have a multiplier effect according to him, since it would be very easy to add more OFW investors to the original 100 because of the security conferred by the ownership certificates.

Hernandez also said that being a part owner of a Jollibee franchise is definitely a better and safer investment than owning a tricycle or taxi, the usual choices of returning OFWs without an investment plan. “That is basically going to be our appeal, our ability to channel their hard earned money into investments that have more chances of earning, and therefore with lesser chances of failure,” Hernandez added.

source: http://globalnation.inquirer.net

related online discussion @ Pinoy Money Talk
Topic : Pooling resources to setup a franchise

Links - Pinoy Money Talk, Entrepreneur, Finance Manila & Trader Central

Entrepreneur.com.ph

Entrepreneur.com.ph is the online home of Entrepreneur Magazine Philippines.
There's an online forum for small-to-medium sized business owners as well as for aspiring entrepreneurs and those in the start-up stage of their business. Visit their website at http://www.entrepreneur.com.ph


Trader Central

A forum on the stock market, both US and Philippines. Forex and commodities trading also discussed. Visit their website at www.tradercentral.ph/



Finance Manila

A Philippine Stock Market Authority Portal. Online discussions on Philippine stock market, daily stock update, charts, graphs, metastock updates.
Visit their website at www.financemanila.net



PinoyMoneyTalk.com

Pinoy Money Talk - Pinoys Making Money Together

Pinoy Money Talk (PMT) is an online community of Filipinos looking for or currently involved in money-making opportunities online and offline.

PMT members discuss and share ideas related to UITF (Unit Investment Trust Funds) in the Philippines, Mutual Funds, HYIP (High Yield Investment Programs), Autosurf, Multi-Level Marketing (MLM), Internet Marketing, Freelance Writing, Work-at-Home Jobs, Forex and Stock Trading, etc.

PMT's thrust is not just to help members make money, but also help them grow and manage it. Visit their website at http://www.pinoymoneytalk.com .

Pinoy Money Talk will turn 3 this coming March 2008. To celebrate their anniversary, they're launching a The P6,000 Countdown to 3 Contest. Contest details can be found here. http://www.pinoymoneytalk.com.

Commission on Filipinos Overseas (CFO) develops biz guide for OFW

Saturday, February 09, 2008
CFO develops biz guide for OFW

THE Commission on Filipinos Overseas (CFO) has developed a compilation called the Investment and Business Guide for Overseas Filipinos, a basic guidebook containing a broad spectrum of business and investment options in the Philippines.

The guidebook, CFO said, was developed to encourage Filipinos, particularly those reacquiring citizenship who have accumulated considerable savings to seriously look into prospect of investing in the country.

The Commission has identified major investment areas that are highly gaining ground in the Philippines such as the development of tourism and leisure facilities, investing in franchise, establishment of pre-schools and independent learning institutions.

Also included are options in highly competitive industries such as export and agribusiness, oil industry, asset and property management, and the operation of banks and other lending institutions.

To help businessmen and potential investors who would choose to invest in areas outside highly urbanized cities, information to help assess the competitiveness of Philippine cities in terms of their abilities are also provided in the compilation. The compilation is in a CD format.

It also contains the fundamentals of doing business in the country such as the basic requirement and standard procedure for the establishment of a corporation, partnership or cooperative, and guides prospective investors in the application for licenses, registration, and accreditation of specific business entities.

source : http://www.sunstar.com.ph
related link : Commision on Filipino Overseas

BAK FOR GUD

Lessons From Francisco Colayco.

• matutong magpalago ng pera.
• income - savings = expenses
• pag-usapan ng pamilya ang lahat ng bagay tungkol sa pera. money is a family matter.
  
• financial literacy is key to success. it's all about mindset.

This is the 1st of a series of DVDs from Colayco Foundation, titled PISOBILITIES 1 Bak por gud. Patikim pa lang ito, it will be available soon and i'm planning to buy one.

New Rules For OFW Hiring

New rules on OFW hiring issued
Saturday, January 19, 2008

Stricter rules on direct hiring of OFW was issued recently by the Philippine Overseas Employment Administration. The rules which takes effect on January 15, 2008 allows direct hiring of OFWs by foreign employers only upon approval by the Secretary of Labor and subject to screening of employers and employment contract verification by the Labor Attaché or the Philippine Embassy.

Direct hiring may be allowed only for members of the diplomatic corps and of international organizations, government officials of ministerial level, and employers who are hiring on one-time or trial basis. The number of employees to be hired directly shall not exceed 5.

Employers will likewise comply with stricter documentation and processing requirements which include the posting of repatriation bond in the amount of US$5000 per employee to guarantee the repatriation of the worker or of his remains, in the event of death, and performance bond of US$3000 per employee to guarantee payment of the employee's salary for the duration of the employment contract. The bonds should be secured from local bonding companies. They will also provide the employees with health and medical insurance.

Employers who do not want to comply with the bonding and insurance requirements or with the standard employment contract will not be allowed to hire OFWs directly. But they may hire thru licensed placement agencies which are willing to assume responsibilities over the employees, including payment of salaries and other employment benefits.

DOLE Secretary and POEA Board Chairman Arturo Brion announced that the adoption of a stricter policy on direct hires is aimed at strengthening the protection mechanisms for the OFWs.

OFWs with employment contracts and work visas issued after January 15, 2008 will be covered by the new guidelines. The new guidelines for direct hiring is posted at the POEA website (www.poea.gov.ph).

Source: http://www.dole.gov.ph/news/

Gusto Mo Bang Yumaman? (Video part 4)

Gusto Mo Bang Yumaman? (Video part 3)

PERA Bill

In March 2007, 9 years after its introduction in the Philippine Parliament, the Personal Equity Retirement Account (PERA) bill became law. Proponents of the new law claim it will encourage voluntary retirement saving and savings portability, promote capital market development, and generate long-term investments. To this end, a provident savings plan called the Personal Equity and Retirement Account will soon be established.

PERA contributors must be citizens of the Philippines, be of legal age, and hold a government-issued tax identification number. After January 2009, contributors will also enjoy a one-time 5 percent nonrefundable income tax credit. Contributors may own up to five PERA accounts; contributions made to each account will be tax exempt up to a maximum of 50,000 pesos (US$1,031) annually. Additionally, interest earned in PERAs and withdrawals made after the owner reaches age 55 will not be taxed.

A PERA contributor may receive a lump-sum distribution or lifetime monthly pension payments upon reaching age 55 and with at least 5 years of contributions. The law imposes early withdrawal penalties except in cases where PERA funds are used for accident- or illness-related expenses. Families of a deceased PERA contributor will receive the decedent's PERA account balance regardless of the contributor's age at the time of death.

The Department of Finance and the central bank will license an entity to manage PERA and invest funds in government securities, foreign currency deposits and investments, and nonspeculative stocks, with individuals making their PERA contributions through banks. Employers may also contribute to employees' PERAs as long as both employers and employees comply with either the Social Security System (SSS) rules or Government Service Insurance System (GSIS) rules. These two systems are described below.

First, SSS is the Philippines' compulsory social insurance system that covers the majority of private-sector workers. With some exceptions, most workers earning at least 1,000 pesos (US$20.99) a month who are aged 60 or younger must participate in SSS. According to government officials, over 1 million SSS pensioners will soon receive a 10 percent increase in their benefit payments because of the plan's improved financial status. Officials say that SSS is in such good standing that increases in individual contributions will not be needed to pay for the benefit increase.

Second, public employees are covered by one of four compulsory retirement plans under GSIS, depending on their date of entry to federal service. At least for now, however, they will not receive the benefit increase that SSS participants will receive.

source: http://www.socialsecurity.gov

PERA - Personal Equity Retirement Account

here's another investment option for us ofws'. PERA - Personal Equity Retirement Account, let's wait and see
how its going to be implemented.



Press Release
February 8, 2007

For benefit of OFWs, domestic labor force
SENATE APPROVES PRIVATELY-FUNDED RETIREMENT PLAN

The Senate, upon the motion of Senator Edgardo J. Angara, on Wednesday approved on third and final reading the Personal Equity Retirement Account (PERA) Bill, which provides for a dependable and sustainable retirement plan for Filipino workers.

Angara , Chairman of the Senate Committee on Banks and Financial Institutions, said that PERA will encourage long-term savings and reduce heavy reliance on the already overwhelmed publicly-funded retirement scheme under the SSS and GSIS.

Filipino workers generally look at retirement with apprehension as it translates to a loss of income and the lack of retirement benefits. The absence of a dependable retirement plan and thus the financial uncertainty that goes with it could make retirement a source of insecurity rather than comfort said Angara .

Take, for instance, the experience of Overseas Filipino Workers who make a huge contribution to our economy in terms of foreign remittances. Their remittances provide for their families present consumption buying a house, paying for their kids tuition, setting up small businesses but leave very little savings for ones retirement, he continued.

Angara added the country has a labor force of about 35.81 million, representing a 64% labor participation rate. Of this, only 78% are members of government-initiated pension funds: 26.49 million for SSS and 1.4 million for GSIS.

About 8 million Filipinos have no pension or retirement savings to look forward to.

With PERA, an individual contributor can make a total maximum annual contribution of P50,000.00 to his PERA account. The contributor shall be given an income tax credit equivalent to five percent (5%) of the total PERA contribution.

Income from the contribution as well as the eventual distribution of the PERA to the contributor shall be tax-exempt. This amount is withdrawable when the contributor reaches the age of 55.

With PERA, we are giving the hardworking Filipinos something to look forward to in their retirement years. By assuring their financial stability during retirement, we allow them to enjoy the fruits of many years of labor, Angara said.

source: www.senate.gov.ph