My father is a businessman and a very good one indeed. When I was kid, I never imagined myself to be one. I was a free spirit, curious about the wonders and mysteries of that nature and this world has to offer. I had a lot of things that I wanted in life and I wanted to explore the wonderful world that God has created. I wanted to be an Indiana Jones, a Lara Croft (male version though) or somebody like “The Librarian.”
When I grew up, I realize that there was a problem with all my childhood fantasies. All of what I wanted takes money. As I grew into adulthood, I realized that life was not what I saw in the movies or read about in novels. Real life is real people working hard to make ends meet. Real life is becoming a channel of blessing to other people. Real life is not about what I want; it’s about what God wants for me to do.
I slowly took on the reigns of my family business and learned the art of making money. Then I discovered the Rule of 72 and the power of compounding interest. Above all I discovered the ultimate money making machine, the Stock market! Ever since I discovered it, I have learned to love it.
But what about exploring the world? Should I just put aside my childhood fantasies? Well not really, I know that time will come by God’s grace than I can explore the world together with my family when I reach my financial goals. So with that introduction, let me give you my top ten reasons on why I love stock market investing.
1.) Investing in the Stock Market gives potential for great returns
Warren Buffett, is undoubtedly the world’s best stock market investor and perhaps the only person in the top ten richest in the world who derived his wealth solely from stock market investing.
If you had invested $1,000.00 (U.S) (The equivalent of which is only about $7,760 in 2008) with Warren Buffett in 1956 (about 53 years ago) it would be worth an estimated $30.6 Million (U.S). That’s the wealth generating power of investing in the stock market! In the early part of his investing career Warren Buffett’s return almost reached 30 % compounded per annum.
You might say, “Well that was Warren Buffett and it is only applicable to him, besides he lives in the U.S.A and I don’t think that will apply in the third world countries.” You are absolutely wrong. The same principles apply in any stock market. I have made a personal study about the Philippine stock market and my findings reveal that if you had invested from in a span of 10 years time from 1997 to 2007 your returns would be similar to Buffett’s ranging from 25 % to near 30 % compounded annually. With this rate of return, a P 100,000.00 would become a million pesos at the end of 10 years. I will be revealing details about my personal research in another post.
2.) Investing in the stock market would make you “part owner” of the company that you are investing in.
It would cost you somewhere between 20 to 25 million pesos to get a Jollibee franchise. Add to this the time, effort and headache that goes in managing the franchise. Instead of franchising a Jollibee outlet to “own” Jollibee why not by stocks of Jollibee Food Corporation (JFC) ?
Using present market prices, you only need about P 5,000 (or even less) to invest in 100 shares of Jollibee. Since stocks represent a part of a business, this means you are part owner of close to more than 1,500 stores in the Philippines and around the world. Not only that, you are given a “bonus”. You also get to own other great fast food restaurant chains like Red Ribon, Chowking, Mang Inasal, a popular fastfood chain – Yonghe King in China and popular teahouse chain from Taiwan and Jollibee’s recent crown purchase Cofee Bean and Tea Leaf ! Now isn’t that the coolest!
So next time you eat at Jollibee, you could proudly say to your friends and relatives that you enjoy eating there because you are one of the owners of the company.
Always delayed in paying your utility bills? Perhaps owning stocks of PLDT, Globe, Manila Water or Meralco will make you become more prompt in your payment.
3.) Investing in the stock market make you belong to a special group of people –
A study made by the Asian Development Bank revealed that by 2005 only 600,000, out of the of the Philippines’ 87 million population invest in the stock market. Whoa ! That’s less than 1 % or roughly around 0.7 %! (Fast forward more than a decade letter it is still at less then 2%) It can also be observed that most of the market players are from the Class A and B segments.
Well, investing in the stock market is not a race or multilevel marketing wherein, the first people who invest will be the one that will get the bigger share. However I consider it a privilege that among 90 million people I am among the few pioneers who braved it out in the stock market. Certainly investing in the stock market is not also just for the ultra rich.
Another thing to consider is the fact that the Philippine stock market is still at its infancy. Exciting new things are coming in the next decades. It has been proposed that we will be linking to other stock markets in Southeast Asia. This unified trading system will make us trade stocks with other Southeast Asian Countries at the click of the mouse! Now, isn’t it exciting to invest globally !
This unified Southeast Asian stock exchange, will be among the top ten biggest stock markets in the world! Wow! Isn’t this exciting!!! I just fee like I was among those who rode with pioneer explorers like Ferdinand Magellan or Christopher Columbus or as if I was working with Steve Jobs or Bill Gates in the early years of the computer revolution Wweeeee !!!
Anyway, I don’t want to be carried away by my emotions on something that is not yet realized. But it is indeed exciting! Watch out for the next installment of this post “Ten reasons why I love investing in the stock market – Part 2.”
Hi ! my name is Zigfred Diaz. Thanks for visiting my personal blog ! Never miss a post from this blog. Subscribe to my full feeds for free. Click here to subscribe to zdiaz.com by Email
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