Choose to become rich!

A lot of people wants to get rich, yes but for what purpose? What is your real purpose that you want to get rich? Is it for your family? For comfort? To get all the things you want?

We may have a lot of reasons to become rich but here is my 1 of my reason why I want to get rich. Recently, 2 big calamities hit us (Philippines) particularly in the Visayas. I have seen on the news that a lot of people suffering, no food, nothing to eat nor drink, they are very desperate to get help.

I truly, truly want to help in a very big way, sure we have donated as much as we can in our own way but in me, there is a voice saying "do more!".

"Only if I am super duper rich!" I said to myself. As much as I want to do a lot for the victims, specially in Tacloban, I am only able to do so little.

What triggered this as 1 of my goal? One day, I was shopping for flash light, unfortunately I could not find any but what I saw in the hardware store was people buying generators.

"Why are they buying so much generator?" I asked the sales clerk.

"They are going to Tacloban, they are going to do a rescue operation" Said the sales clerk.

Right there, I realized that if I had so much money, I could do the same. I could lend a hand personally to those people in need.

On the other hand, I am so happy that the world lent out their hand in helping the victims of Yolanda.

My point is, we should get rich not because it is for us, but for the many who needs help. Getting rich is not easy, if it was, then everyone is rich!

If you have chosen to become rich, then I am with you. It's a difficult road but at least we are not alone. :)

God bless you!

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Difficulties are opportunities!

One day, there was a man named Juan, Juan lived in a small village as a water carrier.

Everyday, he would go to the river with his 2 wooden buckets and deliver it to his customers. He has been doing this for years but one day, as he was carrying water to the village, he noticed that his buckets were dripping water slowly to the ground.

The buckets were already old and worn out. Juan inspected the buckets and found out that it had a hole on it. Every time Juan would get water, it would be already half a bucket when he reaches the village.

This would mean that if Juan needs a bucket full for his customer, he would need to go back to the river twice! Juan was already getting tired and frustrated.

"This is useless, I don't have enough money to buy a new bucket. I am so tired.." Juan said.

Regardless, Juan still did his job as this was his way to earn money.

As months went by, Juan was already so tired and wants to give up. As he was getting his final bucket of water he noticed something on the road where he usually passes. 

On the sides of the road where his buckets were dripping water, beautiful flowers grew. He was so surprised that his holed bucket was actually watering beautiful plants! Because of that, Juan was able to start a new business, he now sells beautiful flowers in the village and is adding up to his income!

Why did I tell you this story? Friends, in life, it's not always easy, there are times that we want to give up on our difficult situation. We may have mountain of debts, a broken family, a broken heart, an illness.

Let me tell you this: In our difficulty, there is always an opportunity that would grow! All we need to do is endure it and wait for God as He sees everything. There is always a purpose for our difficulties.

I write this as well for the families that were affected by typhoon Yolanda (Haiyan), I pray for you that you will prosper more a midst the damage done, I pray that your grief will be replaced with the joy of the Lord, I pray that you will become a stronger person, In Jesus name. Amen!

God bless you always! 

Picture is not mine. All credit goes to kenglye, http://www.deviantart.com/art/simple-life-28842394

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Is inflation eating up your money?

Inflation, it’s a word we hear from news, tv and banks but what really is inflation? According to the Merriam-Webster dictionary, inflation is a continuing rise in the general price level usually attributed to an increase in the volume of money and credit relative to available goods and services.

Too complicated? Yeah! Let me simplify it as much as I can, inflation is when prices goes up and our salary does not! (hehe) Kidding aside, Inflation is the increasing of prices for the goods that we buy from food, appliances, or even services.

The last time I remembered, the Jeepney fare was still 1 Peso per person, now its 8 Pesos per person. When you go to the grocery before and just have 500 Pesos with you, you can feed your family for a week! Now, 500 is just for your midnight snack. The taxi before, it was 16 Pesos plug down and 1 peso add-on, now it’s 40 Pesos plug down and 3.50 Pesos add-on.

How prices have changed! This is the effect of inflation, it lowers our buying power. So how does this affect our savings? By so much! Imagine you are saving in somewhere which only give you 1% interest a year and our inflation rate per year on average is about 3% to 4%.

It goes like this:

100,000 savings

x      1% Interest

---------------

     1000

x      20% Witholding tax (let’s not forget this!)

----------------

      200

(1000 - 200 = 800 total interest)

So, 100 000 + 800 = 100 800. This is how much money you will get after 1% interest, now let me put in inflation.

100 800

x        4%   (for example sake, let’s use 4%)

--------------

    4032

So, 100 800 - 4032 (as inflation) = 96768 Pesos

What does this mean? It means that the value of your 100 800 is not actually 100 800, it’s 96768, why? That is because of inflation, it devalues your money! How to beat inflation? Simple, Invest in the the mutual fund. Mutual funds, when the market is good may go up to 12% in interest. And the mutual funds does not have any tax!

Here's how it goes:

100,000 savings

x     12% Interest

---------------

   12000

So, 100 000 + 12000 = 112 000

112 000

x       4%   Inflation

---------------

    4480

So, 112 000 - 4480 (as inflation) = 107 520 Pesos

This actually beats inflation! Your 100 000 is still growing and the value is still more than 100 000!

This my friend, is a way to beat inflation and you are sure to have the value for your money! Save and invest now!

God bless you!

Picture is not mine, all credit goes to pokemonstevenstone found at http://pokemonstevenstone.deviantart.com/art/money-86937002.

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The Types of Mutual Fund Investments

Not many people know that there are types of Mutual fund, I will just name 3 just to simplify things. So here are the 3 types:

1. Equity fund

2. Bond fund

3. Balanced fund

What is an equity fund?

Equity funds are the high risk stocks, these are the stocks with so many movements, really up and down in the charts. Please note that these stocks are also the good type (high grade), for example, we have Ayala here, SM, BDO, BPI etc., these are the big companies.

Of course, with high risk, you can get high returns and since it’s called high risk, you may also lose big here. (But with proper financial education, there is nothing to be worried)

This is the fund type that would make money for you, returns from this fund may be somewhere at 12% or even higher a year! (Depends on the markets)

So if you plan to make money, choose this fund, this is ideally for people who still have the capacity to work or make money.

What is a Bond fund?

Bond funds, from the word bond (in finance) means to lend something financially, so when you invest in bond funds, you are actually lending your money and since you are lending your money, you will earn interest.

Interest in the bond funds, unlike the equity, are very conservative. Interest per year in the bond funds may reach somewhere around 5% more or less. (I’ve seen it grown up to 10% though)

Bonds are mostly from government securities and corporate securities.

It so conservative that it rarely goes negative in returns. Back in 2008 when the global financial crisis erupted, the bonds in the Philippines had a return of 2%. Yes! Positive 2%, so if you have invested in the bonds back in 2008, you still earn money.

Bonds are ideal for our retiring friends, why? Because in the bonds, it rarely goes down, so you can be confident that money still grows even if you have retired.

What is a Balanced fund?

Balanced funds are just combined Equity and Bond fund, so the earnings here are not as much as the equity and the losses are not much as the equity as well. These are ideally for people who are not willing to take so much risk in investments.

In our practice though, we do not go for balanced funds, we balance them ourselves by having 1 equity account and 1 bond account. The reason for this, in worst case scenarios, if my equity losses, my bonds does not, so I still have money. In balanced funds, normally if the equity goes into negative, the balance funds does as well.

So in summary:

Equity funds - will make more money for you because of its high risk profile. The higher the risk, the higher the return.

Bond funds - this will keep your investment afloat but is conservative.

So which is best? Everything, it all depends on your risk intake and purpose.

Have a blessed journey!

God bless!

Picture is not mine, it belongs to recycledwax from http://www.deviantart.com/art/Money-Tree-141825169

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How to open a Mutual Fund account?

A lot of my friends ask me how could they invest in the Mutual Fund. How do we put our money in the Mutual Fund?

Quite frankly, I had these questions too! I was so excited but I thought that "Hey, with all these stocks and what not, I m pretty sure that investing is going to be difficult." WRONG!


Mutual fund investing is as simple as ABC. Here are some steps to help you open a mutual fund account:

1. Just like opening any savings account in the bank, you fill up forms and show some identification plus the cash. It is the same with opening a mutual fund account. All you need to do is fill up so forms, show some identification and VOILA, you're good to go!

2. Just like opening any savings account as well, there is an initial deposit. When you open a mutual fund account, all you need is 5000 Pesos and with that, you're off buying your first few shares! Please note that most mutual fund companies offer 5000 Pesos as initial investment.

3. When adding additional investments, the minimum amount is 1000 Pesos. All you need to do is fill up some forms still. :)

Since the mutual fund takes away the stress from the investor by letting experts manage it, there is a little, teeny weeny fee every time you invest in a form of percentage. It often ranges from 2% - 3.5%. Consider it as a fee for your funds being managed by experts.

Well, there you go. Simple and easy, isn't it? So are you ready to invest in the mutual funds?

God bless you!

Have a successful journey!

Picture is not mine, it belongs to EndlessSecrets from http://www.deviantart.com/art/Questions-268221719

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