I cancelled my membership with Fitness First gym

A month ago, I cancelled my membership with Fitness First gym as I have realized that most of the essential exercises that I have been doing were all possible at home and at the park. Running around the park, doing jumping rope, swimming in the beach and performing aerobic exercises at home can be done without actually splashing a few hundred bucks a month for gym membership, transportation going to the gym and those post workout meals. In monetary value, I am saving about 5,000 pesos per month or 60,000 pesos per year. But do you want to know the long term impact of this initiative? I am sure the answer is a big yes.

I can do 2 things with my 5,000 pesos. I can either invest it in mutual funds or I can invest it in the Philippine stock market.

Let us say, conservatively, if I invest it in mutual funds the average annual growth will be 12%.  The numbers below demonstrates how my money will grow over a period of 10,20 or 30 years.

After 10 years = 1 million

After 20 years = 4.3 million

After 30 years = 14.4 million

I don’t know about you, but with 4.3 million pesos and with the kind of lifestyle that myself and my wife have, I can secure my ideal retirement fund after 20 years as a result of this initiative only. Of course, I can continue saving until the 30^th year if I want more.

On the other hand, should I decide to do stock market investing for the next 10, 20 or 30 years and the average growth rate per year as per the Philippine Stock Exchange is at 15%, the numbers will be as follows:

After 10 years = 2 million

After 20 years = 8.4 million

After 30 years = 28.4 million 

After doing a simulation of the above numbers in my spreadsheet, it felt better knowing that my decision made a lot of financial sense to me. But not only that, the best thing about it is that I can spend more time with my wife because I can get to do my daily exercise with her. That for me is the greatest investment.

To your financial success,

Anselm Reyes

Do you want to increase your wealth? Join the Truly Rich Club by clicking the below link.

http://bosanchezmembers.com/amember/go.php?r=14027

The Secrets of the Rich People 2

This is part 2 of the Secrets of the Rich People series that I am going to write about for you here. About 4 weeks ago, I discussed the 1^st secret of the Rich People which is investing in mutual funds. I myself invest in mutual funds for about a year now particularly in a type of mutual fund called equity fund. Now there are bond funds, money market funds, dollar denominated bond funds etcetera but personally I have chosen the equity fund because of the high rate of return that it can generate if you will remain invested at least for 5 years.

Just this morning (June 2, 2011) I received a statement of account from Philequity Management Incorporated (one of the mutual fund companies that I invest in) and according to the statement of account (SOA) my investment grew by 7.6% in just 7 months. Now that is what I call “beating the inflation” which at the moment is running at 4-5% per year in the Philippines. This means that if you put your money in a time deposit earning 2-3% per year, be concerned because inflation is just eroding the value of your money and in the years to come, if you continue putting your money in a time deposit account, your money will be devaluated or worst, it will be worthless.

Further, the 7.6% return that I am enjoying is something that I earned at the start of the market rebound from the so called “Great Rotation” wherein the stock market plunged by almost 15% as a result of the shifting of foreign funds from emerging markets (i.e. Philippines, Indonesia, Thailand) to developed markets (i.e. US, Europe) that started in November 2010 and ended in March 2011. Meaning, the Philippine Stock Market has just rebounded from a major downfall in the history of global stock market and with 7.6% return just 3 months after the rebound, it would be conservative for me to expect an investment growth of 15% at the end of the year. Imagine, my money growing at 15% annually without any effort from my end.

There are many great mutual fund companies out there, so I am encouraging you to find them, research and study the investment products that they are offering. Personally, I invest in First Asset Management Incorporated (FAMI), Philam Asset Management and as mentioned in the above, Philequity Management Inc.

Okay let us go now to our main topic, what is the number 2 secret of the rich? It is investing in the Stock Market for the long term. I have been buying companies such as Jollibee, DMCI, SM, Ayala Land, Nickel Asia, AGI and other great companies consistently every month for almost a year now. That is buying small shares every month without fail, whether the market is up or down, I will still buy. The moment I receive my salary, I would simply follow this allocation after deducting my expenses, 50% cash, 25% stocks and 25% mutual funds. Now this strategy works for me but it may not be favourable to you. It is up to you to determine your allocation strategy based on your appetite for risk and reward. More on this later. And don’t be surprised by this, since I started investing the performance has been really rewarding. My Jollibee posted a growth of 30% in just 10 months, DMCI 35% in just 4 months, Ayala Land 19% in 9 months, Philex Mining 20% not to mention the dividends that I recently received from these companies, it has been really phenomenal not only in terms of monetary rewards but most importantly, in terms of learning and in teaching what you know.

A week ago, I had encouraged my brothers and sisters in law to invest and very soon, they will be buying their own businesses. My brother Andrew is a Mechanical Engineer so he prefers real estate and utility companies such as SM Prime Holdings, Ayala, PLDT and Meralco. While my sisters in law love eating at MC Donalds so I told them we will buy Mc Donalds shares through its parent company Alliance Global Group Incorporated (AGI).  And all of us will follow the same strategy. Buy little amount of shares of good companies consistently every month for the next 15-20 years.

When I reach the age of 51, because of my stock investments, work will become an option and not a necessity. When my brother Andrew reaches his 45^th year, he will be a multi-millionaire and when my twin sisters in law are in their 30’s, the two of them will join the group of young millionaires. But mind you, what we are doing is not only for ourselves. We want to be rich because we are aiming to bless more people. True, even if you are not rich, you can still bless people but we would like to become richer so that we can bless more people, not only our families, relatives and friends but other people as well. Again, this is a personal choice.

A friend of mine let us call him by the name of Jess told me that telling people about my experiences in the realm of investing is good but he recommended I also provide a step by step process on how to open a stock market account. So below I am summarizing in 4 simple steps to open a stock market account as requested by my good friend.

1.    My online stock broker is Citiseconline.com so I am recommending it. Personally, I am satisfied with the services that they provide. You may go to their office at Philippine Stock Exchange in Ortigas, Pasig. They are open from Monday to Friday. They have customer relations officers who would be glad to assist you. Their website is www.citiseconline.com. So go and check their website and find out their office timing or call them if you have any inquiry.

2.      Open an account with them, fill up the required documents, don’t forget to bring atleast 2 valid IDs. You don’t need to bring a picture. Upon their approval of your account, you have to deposit an initial amount (minimum of 5,000 pesos). Do not forget to remember your account number as this will serve as your user ID when you log in the following day as you trade in the stock market.

3.      When you log in using your account number as user ID, create your own password then off you go, buy your first company.

4.      To replenish your account, go to any accredited bank i.e. Metrobank, BDO and deposit any amount in your account through citiseconline.com. The following day, the money will be credited then you can buy shares of stock again.

A lot of you might question me why am I talking about putting your money in paper assets such as investing in mutual funds and stock market rather than starting a business. My simple answer is this. In a day or two, you can buy a business or businesses through the stock market or mutual funds. If you are going to start your own business, it would take you more time to build and profit from it. This is especially true for Expatriates like me. So while I am here in Dubai, I invest some of my money in the stock market and mutual funds and just leave it there to allow it to work for me.

But do not get me wrong, having a business is great and that is also one of my goals. In fact, while investing in the stock market and mutual funds, I am  studying the business that I am passionate about and learning other ventures such as real estate and online marketing. I just want to take a proactive approach so that I am taking advantage of the fact that I am still young and about to start my own family.

Yes, I will be starting my own family as my partner in life – the love of my life is 6 week pregnant. This is the main reason why it took me almost a month to write again. The moment I realized that my wife was pregnant I totally ignored what was happening in the market at that time and in the subsequent weeks. My life revolved 360 degrees and all that I could think of was how to be a good provider to my Wife and our Baby. Truly, it was an amazing experience. Now that I am back to normalcy, still I will be the greatest provider my Wife and My Baby will ever have but this time I can write objectively.

When I heard the great news that my wife was pregnant, we immediately proceeded to the hospital for a checkup. I wanted to jump the moment I saw my wife entered the hospital with my Father in law, Mother in law and Twin Sisters in law behind her. Until dinner the two of us were surrounded by great people, my family and inlaws again. They were there all throughout the day, yes, we were surrounded by not only great people but people who love us unconditionally. I didn’t feel a single regret ignoring what was happening in the market during that week. Because at the end of the day, even if I am the richest man alive, the stock market will never love me back. Yes, I may feel happy during the bullish period but such joy is fleeting or temporary. I personally believe that it is in our relationships, in our family most especially that we will find the most genuine and life-long happiness.