Dont Cry for Me Lucena City

As of today, my hometown Lucena City has two mayors. One suspended by the DILG but retained by the Supreme Court and the other installed by the DILG and recognized by COMELEC. Both of them holding office in two different places.

If you are busy making money and all of these political circus keep on pestering your brain you might be correct that Lucena City is going nowhere.

Our forefathers who created Lucena City vision it as the center of commerce not only in Quezon but in the whole Southern Tagalog. It was carved near 2 ports: Dalahican and Cotta , located between two rivers (Dumacaa and Iyam) and strategically accessible in all directions. So the vision is outstanding. The heirs are spoiling it by focusing on short-term strategies that benefits only their inner circle.

Meanwhile those who are working hard and raising their families in honest ways are penalized by having a dysfunctional local government. We can not stop their wrangling but they should be ashamed that the Filipino Investors based in Lucena City deserved a better local governance. History is harsh to those who are ineffective, look at Saleh, Gaddhafi.....

Buying Individual Stocks

Those who have experienced buying individual stocks directly instead of mutual funds will give you one common advice: be very careful. Why? because buying individual stocks will not need the diversification test required to minimize the risk.

If you have already investing in mutual funds you have experienced receiving annual report from you fund managers informing you how they picked the stocks they invested in. You noticed that they have strict limits on the number of companies they invested in.

It is only wise that you act like a fund manager in picking your own individual stock by buying only stocks that are favorites of fund managers. Check your mutual fund annual report and you will see the stocks that I am talking about.

Second step is to research the stock you selected by checking the company and the management team handling the company. Judge them based on their style and management experience.

Third, once you bought the stock, you have to make sure that you manage it. You made a choice of buying directly therefore devote time to manage it.

Fourth, what will you manage? the checking how the volume of shares traded in the stock market. You have to check your stock on a daily basis or weekly basis if you are too busy. The bottom line is you should make a historical perspective of your stock's price usually for 52 weeks to establish a basis whether to keep or sell your stock.

This is my personal experience on stock buying. How's yours?

The Consumer Country (a re-blog)

Mario (not his real name) was an MBA classmate of mine when we were working then in Ayala. We have a lot of qualities in common that’s why we were at eased with each other for at most 10 years.

One thing that differ him from me is that he is a spendthrift.

Every payday I save money to invest in my house and college education of my children. Mario is different, he spend as if there is no tomorrow. Branded clothes, shoes, neckties, handkerchiefs and regular dining in fine restaurants are his usual “investments”. He is known in his office for being maporma.

When we reached 30 years old, Mario and I decided to have a small drink at the Greenbelt. After we downed 2 bottles, Mario got under the influence. He began to tell stories to me that he was heavily in debt. More than hundred thousands because of the plastic (credit card!!!). He can not pay anymore the loan because he has other loans with lots of people. He is about to be kick out from his apartment if he will not pay the rent which is due for 3 months. His girlfriend abandoned him when she learned that he was bankrupt. Mario was totally devastated. Victim of zero savings habit and 100% consumptions propelled by his eveready credit card.

My life was reversed of him. I am not rich but I have a house and lot , college plan for my two children are paid in full and I have investment in mutual funds all before I reached 30.

Mario and I parted ways when I left PILTEL in 2001. I never heard any news about him. But I see a lot of Mario’s in our country. Children of OFWs, government or private workers and sabungeros. Only few people I know who has the propensity to save and invest.

Our country is a consumer country. With the exception of the Tsinoys and some enlightened countrymen the norm in our blood is to spend and consume. Postponing pleasure today in order to have a pleasant future is somewhat a blasphemy in our culture.

To exorcise this spendthrift demon, some like Mario need to suffer first before expelling it while others kill it even before it step on their door mat.

The roads are difficult for the latter but sure as the sun shines it brings reward.

Bank Passbook and ATM

When I was in grade school one of my memorable moment was getting my very first bank passbook (no ATM then!). I recall the bank was Solid Bank and the memory of seeing my name on the passbook and checking the amount reflected on it I still vividly remember.

When I saw the first interest earned by my savings, I began to asked myself how did they computed the amount. I realized then and there that my money can earn in a bank but I wondered why was it so low.

Today I am convinced that banks don't pay much interest on my money even though they charge high interest rate when they loan it for me. No wonder banks earned record profit margins last year and at the expense of their customers.

What is insulting nowadays is that the small interest earned on your savings account they add tax charges on it. They will charge you more if you use your ATM in other banks not affiliated with them.

Second, we Filipinos treat our passbook as deferred savings account because we withdraw the money as frequent as possible. The banks made sure that you do spend because ATM's are easily accessible.

Let us be honest here. Most of us can not accumulate money in our bank savings account.

The Real Savings Account? It is when you save your money, not withdrawing it every time and forgetting about it because it saved for specific long-term objective like college education or buying a house. You can not do that in your passbook savings.

Use the banks as temporary custodian of your money and when you accumulated enough for investment then it is the right time Mutual Funds and Stocks step in.

For the 20 to 30 Year old Filipino Investor

I received an e-mail from Slovenia (Yes, Slovenia!} sharing that he was influenced by my blog.

I am very happy that I have a reader from Europe but I am in my best mood if more Filipinos will appreciate the Filipino Investor blog.

Why? because personal finance in my country Philippines is not being taught from basic to tertiary education (unless you major in Finance). This unawareness is contributory to the poverty that engulfing millions of Filipinos.

The Filipino people are the reason behind my passion to write the "Filipino Investor"because the destiny of our country we shared whatever the outcome . This is my share for patriotic purposes.

My friend at Slovenia benefits also because personal finance is universal and surely can be applied to his personal investment strategies.

Now to my blog:

If you are on your twenties to early thirties, a Filipino Investor can afford to be aggressive. As Money magazine said " You have nothing to lose but few more years of your working life. You have nothing to gain but an earlier retirement?.

Once you saved P50,000 to P100,000 you can now invest strategically in the following ways:

1. 70% in growth stocks.
2. 20% in equity mutual fund
3, 10% in money market fund or Time Deposit.

The above strategy offer you an annual returns of 9% or more based on past performance or the worst case scenario of 7% or less.

nelcadelina@blogspot.com

next topic: For the 30 to 40 years old Filipino investors

Buying Your First Home

For my blog readers you noticed by now that I write only articles based on my own experiences. It is my guiding principle that I will share only what i did passed through.

Now, those who would like to buy their first home, your own time factor is critical when designing an investment and savings plan for home ownership.

Please do not be surprised if i tell you now that I planned my first home five years before I wanted to make a purchase. I was 25 then.

Today young people I know ,including my own business students, they can not wait five years to buy a house. Really the trend today is to be fast and furious.

I can not blame them since they are experiencing their own rat race.( which surprisingly this race is abhorred nowadays by my generation)

But what is the benefit then of preparing for 5 years before buying a first home?.

The primary reason is that you will have more for downpayment or equity and less loan to pay for.

Here are my further advise to you then:

1. Review where your money is going and where you could save.
Can you forget that Starbucks coffee and drink Nescafe instead?. Trim your expenses like a possessed person and save a lot in mutual fund preferably balanced fund.

2. Visualize your dream house. Photograph it or draw it. Put in places you see everyday and set the date when you will build it.

3. Open a savings account intended only for your first home. Make regular deposits whatever the amount you got.

4. Monitor your progress to remind you that you are determine to have your house.

Remember this my dear-first-time-buyer-of-their-first-home your first house is the best investment you can make. It will be your sacred nesting ground.

May your house blessing happen soon.

nelcadelina.blogspot.com

Stock or Equity Mutual Fund

In mutual fund the best way of earning money is investing in stock or equity mutual fund. Judging from my past investment history, I did earn more in equities than in balance or money market fund for the reason that the rise of the price of stocks will carry the NAV upward.

Since 2003 I've been investing in mutual funds and over the years I gravitated to the First Metro Equity Save and Learn Equity Fund and ATR Kim Eng Equity Fund primarily because of their low cost structure, a reasonable initial minimum investment, the availability of performance data in their website and the ease of redeeming the funds.

What I learned over the years is that a Filipino Investor should primarily focused on knowing the consistency of performance of a stock mutual fund company. Do not be impressed with those 1-year, 3-year and 5-year performance tables you see in Business World newspaper everyday.

Here are then my tips for you:

1. Analyzed the stock mutual fund based for its total return for full calendar years .

2. Give more weight for the most recent year's performance than the prior year's because fund grows in size.

3. Check the stocks bought by the mutual fund company through their website if it provides the investment style of growth, core and value classification.

The following are the stock mutual fund available in the Philippines:
ATR KimEng Asia Plus Recovery Fund Inc.** (USD$)
ATR KimEng Equity Opportunity Fund, Inc.

First Metro Save and Learn Equity Fund, Inc.

Philam Strategic Growth Fund, Inc.
Philequity Fund, Inc.

Philequity PSE Index Fund Inc.

Philippine Stock Index Fund Corp. *
Sun Life Prosperity Phil. Equity Fund, Inc.

The best way to start if your interested is to visit their website and compare the funds with each other including their investment style. From then , you are already halfway of having passive income.

My best wishes always,

nelcadelina.blogspot.com

Mutual Funds

Investing in mutual fund is easy but the Filipino investor should read the fine print first before any money is parked in mutual fund. It is a common mistake for those without background in Finance that they think Mutual Fund is only for the rich but the reality is it is the most suitable investment for the common man as it offers an opportunity in diversified securities at a lower cost.

A mutual fund is an investment company that pools the funds of individual investors to form a massive asset base and the money is invested by a professional fund manager.

The income earned through these investments are shared by its share holders in proportion to the number of shares owned.

There are many advantages of mutual funds but the foremost are liquidity, diversification and tax exemption benefits.

My tip is to parked your money for 7 years since it grows over time.

Mutual fund is the best medium for retirement and college education.

Since mutual funds qualify as securities and not deposits, they are not guaranteed, their values change frequently and past performance may not be repeated

However, fund managers and the funds themselves operate under strict securities regulations. For example, mutual funds are owned by the shareholders and are separate legal entities from the companies that operate them.

In the Philippines there are only few kinds of mutual funds namely:

1. Stock or equity fund
2. balanced fund
3. fixed income
4. money market

Those who are in their 20's and late 30's I advised that you invest in stock or equity mutual funds because time is on your side.
For the 40's and 50's balanced funds are the best and for the near retirement fixed or money market.

Browse www.icap.com.ph and choose mutual funds that fit your taste. In my case, I am inclined to First Metro Save and Learn equity and ATR KIM ENG equity.

You can invest online therefore take advantage of it and you can monitor your investment by checking the Net Asset Value (NAV) at Business World Newspaper or the website of your chosen mutual fund company.

Remember, mutual Fund will make you earn provided you have the patience.

Good luck.

nelcadelina.blogspot.com

next topic: The equity mutual fund

Pag-IBIG Fund as Retirement Savings

I worked in Pag-IBIG Fund for 3 years right after graduation. During that time the Fund was voluntary because of the backlashed that the Fund was a creation of Marcos. I have an open mind being a neophyte that a job in the government is better than not earning a single cent.

Im an activist during my college days but being with Pag-IBIG Fund for 3 years convinced me that the Fund was one of the good legacy of Mr. Marcos.

The idea is simple, Pag-IBIG will be provident savings program that is fast, easy and affordable way to save for future needs.

Since we as a people are slackers when it comes to savings, the government forced us to save thru salary deduction. The process is proven correct because the contributions I made as a member makes together with my employer counterpart are credited to my Total Accumulated Value (TAV).

This means double savings immediately with the addition of the employer counterpart contribution.

Aside from being fully guaranteed by the national government, members’ contributions are deducted from the gross income prior to computation of the income tax.

Members’ savings earn annual dividends that are also tax-free. The dividend rate varies depending on the net income of the Fund at yearend.

I bought my house thru Pag-IBIG Fund Housing program and I now have around P100,000 total accumulated savings since I started to be a member in 1989.

The vision of Pag-IBIG Fund is to promote and integrate a nationwide sound and viable tax exempt mutual provident savings system suitable to the needs of the employed and other earning groups, and to motivate them to better plan and provide for their housing needs by membership in the Home Development Mutual Fund, with mandatory contributory support of the employers in the spirit of social justice and the pursuit of national development.

My Pag-IBIG savings will be my supplementary retirement pay and because of this I am convinced that Pag-IBIG Fund is doing a good job and deserve a praise.

My friends at Pag-IBIG Fund, specially in Lucena Regional Office, I salute you!

nelcadelina.blogspot.com

next topic: Investing in Mutual Fund

The 3 months cash reserve for Emergency

Before we begin to invest, many financial advisers plead, ask and urge us to have a 3 months cash reserve fund for emergency. It is a very wise advise because if we have none we will be force to use our credit card or even worse withdraw our retirement savings to pay for hospital bills, funeral or home repairs.

It is therefore a priority for a Filipino Investor to build a 3 months cash of living expenses as an emergency fund that you can withdraw anytime. This can be in a savings account, time deposit or money market fund.

The amount to be saved differs for everybody but the rule of thumb is how much you need to survive in a month and then multiply it by three.

Be careful though in determining the amount by distinguishing what are your wants and what are your needs. You will be amazed how easy it is easy to build a 3 months cash reserve.

My best wishes, always.

nelcadelina.blogpsot.com

next topic: Pag-IBIG Fund as Retirement Savings

Insurance, why we need it

Majority of Filipinos are not taking advantage of life insurance. It is their least priority resulting to the low penetration of insurance in the country. The less or no exposure in personal finance, the complex requirements and the pushy insurance salespeople aiming only for commission contributed to slow investment in insurance policy.

But life insurance is a must for a Filipino investor. The death benefit that a beneficiary or dependents can collect can make the family of the Filipino investor start all over again. Life insurance is designed to protect the survivors of the insured.

The Filipino Investor should study the companies offering insurance. In the Philippines, I recommend you focus on the top 6 namely:
1. Philam Life
2. Sunlife
3. Insular Life
4. Philippine AXA
5. Manulife
6. Pru Life
source: Business World Top 1000 Corporation Year 2010

In my case, I opted to Insular Life because it is a mutual fund Filipino company which gives dividends every year to all policy holder. It is up to you however to decide which is the best insurance company for you.

As a rule you will need significant amount of insurance if you are:
1. working spouse married to a non-working spouse with or without children.
2. You are a single parent
3. You are a business owner

You will need NO or LITTLE insurance if you are:
1. single person with no children
2. nonworking spouse with no children
3. young child

In the Philippines there are different kinds of insurance such as term, whole life and variable.

In my case, I only need term insurance because it is ideal to be covered for a specific period of time.

Study well what will fit your requirements. just remember as a Filipino Investor you need a death benefit protection in order to provide money to your loved ones who will be left behind.

Again, my best wishes to you.

nelcadelina.blogspot.com

next topic: The 3 months cash reserve

Stay Healthy and Pay your Debt

How can we invest if we are frequently sick due to unhealthy living and vices?.If we are always visiting our old good doctors and paying his hefty fee, what will be left to our pocket will not last for the next pay day.

Same , if we are addicted to debt just to buy the latest gadgets and the latest shoes by our favorite brand will leave us spending our savings to finance these expenses.

Truly the enemy of investing are many but nothing beats the twin evil of being unhealthy and consistently in debt.

The best way to be a good Filipino investor is to start to do things we supposed to do:

1. Exercise
2. Eat Right
3. Get Preventive health care
4. Pay our debts

Again, stay healthy and pay your steal-tomorrow debt.

Cheers!

Next topic: Insurance, why we need it.?

nelcadelina.blogspot.com

Preparation before Investing

Filipinos now are not anymore ignorant on investing. They read business newspapers, blogs and browse finance websites.

But what is available in the print or new media are mostly written for western investors and the investing instruments they offer are mostly not available or applicable to the average Filipinos.

To close the gap and promote investing for the Filipinos, this blog is now aligned to the goal of propagating awareness of the Philippine Capital Market.

As a start, Filipinos are encouraged to follow the following eternal virtues BEFORE investing:

1. Live within your means or below them.

2. Shun credit card debt.

3. Don't borrow money except for education or a house.

4. Don't start investing unless you have a 3 months reserve fund.

5. Don't borrow money to buy stocks.

6. Don't use eating money or next year's college tuition to buy stocks or equity mutual funds.

7. Invest only money you you can afford to tie up for years if not decades and that money you can afford to lose.

nelcadelina.blogspot.com

Blog for Investing.

I received 25 e-mail from my blog readers requesting more articles on investment. For the past several days, there are signs everywhere that I should proceed.
Thank you for your trust and beginning this week this blog will focus on investing, personal finance and wealth accumulation strategies.

Arnel L. Cadeliña
nelcadelina.blogspot.com

China is the next Superpower

Brushed up your Mandarin.

China will be the economic and military superpower power in the next ten years.

Yesterday, China rolled out its fastest train yet on Tuesday and announced that the Three Gorges Dam, the world's biggest hydroelectric project, is now generating electricity at maximum capacity.

They are building more nuclear power plants and the Beijing-to-Shanghai high-speed railway will be open in 2012.China's average economic growth rates of more than 9 percent per year over the past two decades have laid the foundation for rapid progress.

The dizzying upward economic speed of China made her the center of gravity. Physics 101 says that those who are near the center will experience gravitational pull.

Countries such as the Philippines will be pulled towards China.

Leaders who will go against this gravity will float in the atmosphere of stagnation.

Philippines, can't you feel the predictable force that China is creating?

Lucena: A Nowhere City

The Business Process Outsourcing of the Philippines, the Commission on Information and Communications Technology and the Department of Trade and Industry announce the TOP 10 NEXT WAVE CITIES 2010. The cities are as follows:
Top 1. Davao City
2. Sta, Rosa, Laguna
3. Bacolod City
4. Iloilo City
5. Metro cavite
6. Lipa City
7. Cagayan De Oro City
8. Malolos City
9. Baguio City
10. Dumaguete City

The General Criteria of the 2010 NEXT WAVE CITIES are the availability of graduates and workers, infrastructure, cost, and business environment.
(Source: Computer World August 2010 issue page 6}
Nowhere in the list is my beloved city of Lucena. The leaders of our city need to focus on the following:

1. Make a strategic plans to absorb new employment requirements.
2. Improve the quality of roads.
3. Identify an area within the city as a property site for IT and BPO. Possibly tying up with PEZA.
4. Reduce regulatory fees and taxes for IT and BPO investors.
5. Market Lucena as a viable investor site because of less vulnerability to natural disaster (very true!), and reliability of water and electric utilities.
6. Improve the peace and order situation.
7. Create an ICT council for the city.
8. Partner with colleges and universities in the City to promote ICT.

nelcadelina.blogspot.com

Gutter Politics

I voted yesterday because it is my civic duty. But the sights were ugly. There were fistfights and shouting matches outside my voting precint.

Democracy in the Philippines is chaotic. While other countries and people are willing to risk their lives in order to be allowed to vote , here we are cutting each other throat for just a barangay post.

Our democarcy is not mature where the voters vote based on family ties and political relationships. Those who are more qualified refused to be a candidate because they don't have the money nor means to win convincingly in this erratic electoral process of ours.

Yesterday was ugly. Neighbors against neighbors, friends against friends and families against families. Added to that the delay of COMELEC election paraphernalia and you will have a powder keg for fistfights and shouting matches.

With the culture of the country that family first at all costs, those who will lose in this barangay election will not be on speaking terms with their neighbors for a long time. This is gutter politics at its best.

nelcadelina.blogspot.com

Positive Energy

I am a believer of positive energy. Persons who possessed strong vortex of positive energies influenced me in creating juices of creativity. They made me develop my natural strength.

Discouragement and insecurities are absent because I a have leeway for my creative expansion.

I also discovered that the antidote for prejudices and personal interest is the development of my natural strength. This results to inspiration caused by the positive energy that permeates the air.

Friends, May you be blessed by meeting people with positive energies!

nelcadelina.blogspot.com

Letter to the People of Burma(Myanmar) (re-blog)

Myanmar (Burma) will not allow international monitors to oversee its elections on November 7, 2010. The country ruled by their military SINCE 1962 has a constitution requiring more than 100 military nominees in their parliament.A reflection on how the junta will tighten their power grip. I wrote a blog 2 years ago about Burma and I am re-blogging it in solidarity with the people of Burma.

Dear Brothers and Sisters:
Your country is experiencing a decade long repression that as a people you are not only given scarce but misleading information. You can not communicate outside of your country whether mobile or internet because the junta cut it off. Do not be intimidated my dear brothers. What is happening to your beautiful country , we experienced 20 years ago when the Philippines was under a dictatorship.

Hold on to your belief. We know that the junta raided your sacred monasteries, beat up monks and shooting unarmed students. These acts are desperate attempt to salvage their decaying regime. Remember my dear brothers that everytime they hurt you, their morale were attacked in return.

We are praying for your country. May you find consolation in our EDSA revolution 20 years ago when we marched unafraid. We were students who at that time were not thinking to oust a regime but to express our outrage to the assasination of Ninoy Aquino. But our outrage was rewarded by ending a 20 year dictatorship.

The Burmese people will also be rewarded and the Junta knows it. That is the reason my brothers why they are using violence. They inflict fear but deep inside their heart they are the one afraid.

I pray for you courageous Burma and may the faith continue to guide you. One day when the darkness is defeated (because it will surely come), I am the first Filipino to salute you.Even though we are ocean apart my heart is with you. Because once I stood up with more than a million Filipinos in 1986 against a regime quite similar as yours.

At the end you will be triumphant just like us. Just hold on!.

Arnel L. Cadeliña

The songs of Paolo Santos

Last night I fell in love again with my wife Nanette. The songs of Paolo Santos in his Back to Basic album bring back a lot of good feelings and memories. The lyrics and the melody in the songs Kanlungan, Gaya ng Dati, Walang hanggang paalam, Moonlight in Paris, Photograph, Naglalambing, Million miles away and yakap are enough for us to reminiscence our teen years.
To my friends and blog readers, try to hear the songs of Paolo Santos, you may get the loving feeling again.

nelcadelina.blogspot.com