Good News: Retail Treasury Bills will be auctioned off this September 15, 2009.
A total of P25 billion worth of Retail Treasury Bills with fresh terms of three years, five years and seven years will be issued and coordinated through BPI Capital Corp., First Metro Investments Corp., Rizal Commercial Banking Corp., BDO Capital & Investment Corp., and state-run Development Bank of the Philippines and Land Bank of the Philippines.
What are Retail Treasury Bills (RTBs)?
RTBs are medium term government issued loans. These are issued to help the government raise funds to finance its projects and expenses.
Why invest in RTBs?
Check your bank deposits. How much have they earned in three years? Five years? Seven years? RTBs will always give you a better deal than your bank deposits.
RTBs are a good way to get you started in the investment game. Most people get derailed because they end up spending their deposits rather than invest them.
Investing in RTBs provides the comfort of dealing with a bank, while providing the discipline to keep the money until the term matures.
Investing in RTBs adds to the diversity of your investment portfolio. Remember not to put all your eggs in one basket. Part of the strategy is to have investments maturing at different times.
If you have money to spare, buy RTBs this September 15, 2009. Your money will surely earn more than your bank deposits. Call your bank now (see list of coordinators above) and inquire about the Sept.15 RTBs.
Friday, September 4, 2009
Thursday, September 3, 2009
Why Invest in Life Insurance
Thousands of years ago villagers didn’t need insurance because relatives always looked after their own. Hundreds of years ago people didn’t need insurance since families took care of their own.
With the advent of the industrial revolution families started living in communities apart from relatives, and people earned just enough just to take care of their immediate family.
Thus the practice of villagers and relatives pooling resources at times of need evolved into individual strangers investing in financial institutions that managed funds for future emergencies.
In a way, insurance has a very unique concept of giving. One shares a fraction of what his family may receive in case of death, accident, or property damage.
At the end of one year would you be sad that you didn’t use you fire extinguisher or thankful that you didn’t?
Compare your family’s financial success as a bus trip to the top of a mountain, the road winds and spirals from the bottom all the way to the top of the mountain. For most people, when the bus stops running their trip up the mountain stops, while others would take a long slow trek to finish the trip, very few would finish it.
If you had life insurance, when that bus stops, your loved ones take an elevator to the top of the mountain.
How to use life insurance
Compute your monthly expenses multiply by 12, multiply again by ten, and then add your loans & debts. This is the amount of insurance coverage you need.
[(Monthly expenses x 12) x 10] + loans & debts = insurance coverage
[(P30,000 x12) x 10] + P400,000.00 = P4,000,000.00
Insurance Coverage = P4,000,000.00
Multiplying monthly expenses by 12 you get your annual expense.
Multiply annual expense by 10 gives you an amount that if invested in the right financial instruments would earn 10% every year; thus your loved ones would not miss your income contribution for a long time.
Adding your loans and debts would ensure that you leave your loved ones debt free without touching your income contribution.
Depending on one’s age a term or accident insurance to cover P4,000,000.00 will cost about P10,000 to P20,000.
Term insurance covers you only for a year, and you have to renew coverage every year? Why term insurance? Because your annual income and expenses increase and decrease, thus you can freely adjust your coverage every year without buying a new insurance. Plus the cheapest insurance is term insurance.
Ultimately, the goal of financial independence is to reach the top of the mountain, and by then you wouldn’t need that elevator. Unless of course you have large properties and need insurance to cover your estate taxes, but that’s another story.
The best time to buy insurance is now. So call your insurance agent now.
With the advent of the industrial revolution families started living in communities apart from relatives, and people earned just enough just to take care of their immediate family.
Thus the practice of villagers and relatives pooling resources at times of need evolved into individual strangers investing in financial institutions that managed funds for future emergencies.
In a way, insurance has a very unique concept of giving. One shares a fraction of what his family may receive in case of death, accident, or property damage.
At the end of one year would you be sad that you didn’t use you fire extinguisher or thankful that you didn’t?
Compare your family’s financial success as a bus trip to the top of a mountain, the road winds and spirals from the bottom all the way to the top of the mountain. For most people, when the bus stops running their trip up the mountain stops, while others would take a long slow trek to finish the trip, very few would finish it.
If you had life insurance, when that bus stops, your loved ones take an elevator to the top of the mountain.
How to use life insurance
Compute your monthly expenses multiply by 12, multiply again by ten, and then add your loans & debts. This is the amount of insurance coverage you need.
[(Monthly expenses x 12) x 10] + loans & debts = insurance coverage
[(P30,000 x12) x 10] + P400,000.00 = P4,000,000.00
Insurance Coverage = P4,000,000.00
Multiplying monthly expenses by 12 you get your annual expense.
Multiply annual expense by 10 gives you an amount that if invested in the right financial instruments would earn 10% every year; thus your loved ones would not miss your income contribution for a long time.
Adding your loans and debts would ensure that you leave your loved ones debt free without touching your income contribution.
Depending on one’s age a term or accident insurance to cover P4,000,000.00 will cost about P10,000 to P20,000.
Term insurance covers you only for a year, and you have to renew coverage every year? Why term insurance? Because your annual income and expenses increase and decrease, thus you can freely adjust your coverage every year without buying a new insurance. Plus the cheapest insurance is term insurance.
Ultimately, the goal of financial independence is to reach the top of the mountain, and by then you wouldn’t need that elevator. Unless of course you have large properties and need insurance to cover your estate taxes, but that’s another story.
The best time to buy insurance is now. So call your insurance agent now.
Wednesday, September 2, 2009
Equity Funds (Stock Market Funds)
The stock market is one of the most profitable investment vehicles available. Unfortunately, most people are wary of the stock market because the value of stocks fluctuate everyday with daily trading, and when the stock market crashes the value of their money may fall.
One thing prospective investors should understand is that the stock market is a long term investment.
Stocks are the most profitable investments over a long period. In any given twenty year period that includes even recessions the stock market outperforms all investment vehicles, even the real estate market.
For novices, the best way to take advantage of the stock market is to invest in Equity Funds. An initial amount of P5,000.00 to P10,000.00 can start an Equity Fund investment.
Equity Funds are Mutual Funds, companies that pool money together and invest in stocks with the purpose of making the most profit for the company and its investors.
Making Equity Funds Work
1. What are you saving for?
Being a long term investment, Equity Funds are best used to beef up funds for future needs like retirement fund, college education, retirement health care.
2. Diversify. Don’t put your eggs in one basket.
Make sure the future does not surprise you. One never knows what the future holds, and one can only predict ones future needs. A good mix for future needs is a guaranteed plan (like an education plan) matched with equity funds.
3. Hitching a ride.
Savings accounts are snails, bond investments are cars, and stocks are jet planes. Investing in equity funds is like hitching a ride on jet plane. You don’t have to be the pilot to enjoy the benefits.
4. How much to invest in Equity Funds?
Invest money that you can forget. If you start an investment of P10,000.00 and add P1,000.00 every month for 5 years, you would have over P500,000.00 in the fund after 20 years at an average return of 14% per year. Not bad for P58,000.00 you set aside for five years and forgot about.
Choose the best Equity Fund that suits your personality. Some equity funds are more aggressive than others. Ask your fund agent the equity fund’s investment philosophy and what type of stocks or companies their equity fund is invested in.
Although equity funds buy and sell shares on a daily basis, they stick to a certain mix that mirrors their philosophy. Some funds would invest more in Real Estate and Telecom shares, while others would invest less in these type of stocks and bulk up on mining and BPOs.
There is a philosophy in each investment strategy. Make sure you understand the company’s investment philosophy and that you are comfortable with it.
One thing prospective investors should understand is that the stock market is a long term investment.
Stocks are the most profitable investments over a long period. In any given twenty year period that includes even recessions the stock market outperforms all investment vehicles, even the real estate market.
For novices, the best way to take advantage of the stock market is to invest in Equity Funds. An initial amount of P5,000.00 to P10,000.00 can start an Equity Fund investment.
Equity Funds are Mutual Funds, companies that pool money together and invest in stocks with the purpose of making the most profit for the company and its investors.
Making Equity Funds Work
1. What are you saving for?
Being a long term investment, Equity Funds are best used to beef up funds for future needs like retirement fund, college education, retirement health care.
2. Diversify. Don’t put your eggs in one basket.
Make sure the future does not surprise you. One never knows what the future holds, and one can only predict ones future needs. A good mix for future needs is a guaranteed plan (like an education plan) matched with equity funds.
3. Hitching a ride.
Savings accounts are snails, bond investments are cars, and stocks are jet planes. Investing in equity funds is like hitching a ride on jet plane. You don’t have to be the pilot to enjoy the benefits.
4. How much to invest in Equity Funds?
Invest money that you can forget. If you start an investment of P10,000.00 and add P1,000.00 every month for 5 years, you would have over P500,000.00 in the fund after 20 years at an average return of 14% per year. Not bad for P58,000.00 you set aside for five years and forgot about.
Choose the best Equity Fund that suits your personality. Some equity funds are more aggressive than others. Ask your fund agent the equity fund’s investment philosophy and what type of stocks or companies their equity fund is invested in.
Although equity funds buy and sell shares on a daily basis, they stick to a certain mix that mirrors their philosophy. Some funds would invest more in Real Estate and Telecom shares, while others would invest less in these type of stocks and bulk up on mining and BPOs.
There is a philosophy in each investment strategy. Make sure you understand the company’s investment philosophy and that you are comfortable with it.
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