I have written extensively on the Rule of 72. I firmly believe that knowing this rule is important because it is the foundation of all financial planning. In order to further understand what the Rule of 72 is all about watch this short youtube video clip on the Rule of 72. Knowing what vehicle of investment to use to get a higher interest rate in order to quickly double your money will be the subject of other posts. If have made a special highlight of this rule in my blog and subjected it to outdoor lighting so to speak. If you would like to know more about the Rule of 72 and it's application read my previous posts on the subject: Want to get wealthy ? Think like the bank The Magic of the Rule of 72 … [Read more...]
How to invest in the Philippine Stock market – Part 4c
Stock Market Conventions and Terms This is the third installment of Part 4 on how to invest in the Philippine stock market. In the first 2 parts of this series we discussed what a stock is and how to search for stock information. Now we will discuss the first half of the stock information sheet in detail. If you wish to view the previous posts click on Financial Management and investments in the categories section and you can find the stock market series there. 3.) Understanding the stock information sheet The Stock information sheet in the Philippine Stock Exchange has two columns. We will discuss the first column first. 1.) ISIN - The first thing that you see is “ISIN.” This is the stock’s International Securities Identifying Number. This number is unique for all kinds of securities worldwide. (A security is an instrument representing a financial value, such as common stocks, bonds, debt securities, bank notes etc. ) We don’t want to go into how they assign the … [Read more...]
How to invest in the Philippine stock market – Part 4b
Stock Market Conventions and Terms 2.) Searching for stock information Previously we tackled what a stock is and other things that are fundamental in order that we might be better equipped to become stock market traders or investors. Always remember that we live in the information technology age and in this age, knowledge is power. That is why it is very important that we have a good grasp of stock market terms and conventions before we tackle the nuances of actual buying and selling. The primary source of information of stocks that has been traded in the Philippine stock exchange is no other than the Philippine Stock Exchange (PSE) itself. So we will go to the website and try to make sense of the data that is presented there. Point your browsers to the Philippine stock Exchange website (PSE)(www.pse.org.ph) You will then be presented with the front page of the PSE website. Don’t worry that you cannot understand the stuff in there, we will just tackle them later on. We will … [Read more...]
Want to get wealthy ? Think like the bank
Once upon a time an Overseas Filipino Worker (OFW) started working abroad. At the age of 29 he had already saved a total of P 100,000.00 (Philippine peso) Since the only investment vehicle he knew about was putting his money at the bank he went to the bank and deposited his P 100,000.00. The bank manager gladly accepted the money and even recommended that he put it at a time deposit account so that it would yield a higher interest rate at 4 % per annum. So he placed his money in the time deposit account and waited until he reached the age of 65. At the age of 65 he went back to the bank and asked to withdraw the P 100,000.00 in his time deposit account. Lo and behold his P100,000.00 already became P 400,000.00 because of the interest. So he withdrew his money from the bank and lived happily ever after. Is this a “live happily ever after” story or not? Do you consider this OFW as somebody who has “wisely” handled his money? Is he really earning the maximum potential for his … [Read more...]
Buy term invest the difference?
Some of us has probably heard of the saying “Buy term, invest the difference” when it comes to buying insurance and considering investments. But do we really understand what this means? And if we do understand what this means, why do financial planners recommend that you buy term and invest the difference while your insurance agent is pushing you to buy their recommended product instead. Most whole life insurance products in the market today are considered rip offs. In fact, these kinds of products have already been considered obsolete in the United States. (Term insurance refers to insurance with life coverage only, whole life on the other hand refers to term policy with an investment component. These kinds of products are usually presented as helping you “force” to save for retirement. The problem with the investment part is that they do not usually give a good rate of return) Sadly insurance agents are still selling products like these in the Philippines. What is more sad is that … [Read more...]