Juan Liners: Start Your Investments Small, Start Now

January is actually a good time as any to get started with your investments. We just prefer January and New Years since they are “new beginnings” so says the calendar. Why do we even need that outside “nudge” to tell us “Hey, it’s a new beginning, you might want to invest now”?

As they say, the best time to start investing is now. Most Pinoys say they do not invest due to lack of two things: knowledge and resources.

But I’d like to challenge that.

On knowledge, after 2015 of browsing Facebook and the web almost daily, have you gained a bit of additional knowledge in terms of investing? Was there any deliberate effort to learn? At this age of information technology, knowledge is really within our fingertips. It is up to us to reach out, to grab it. It must come from within.

On resources, was there any deliberate effort to free up resources: increase income and / or reduce expenses? Again, the key is to start, to begin, now, even with small amounts.

Start now.

Coins

Start with those coins in your pocket. Do you mindlessly spend them on trivial stuff? Why not put them in a coinbank?

Start Small

Key to Juan’s investments is starting small early on. It doesn’t have to be big, but preferably you start early on. This is what we have seen in the case of friends Juan, Maria and Jose.

Auto-Saver

Seek some help and do not rely on your own strong will to save regularly. Let others do it monthly or more frequently for you. Enroll your accounts to auto-debit arrangements such as EIP or Pag-Ibig MP2 or regular investment plans in COL Financial. It doesn’t have to be these providers, I’m sure your favorite bank or online broker have these.

Multiplier Effect

If you’re saving up for a family or other beneficiary, consider getting an insurance coverage. This will easily boost your savings for your beneficiaries in case something happens to you. Much faster than saving certain amounts on your own.

Track Your Progress

Track your net worth, not just your savings, not just your loans. You will never know if you’re progressing towards your financial goals if you don’t know where you are to begin with.

I’ll leave you with this encouraging quote:

May all Pinoys have a richer life!

Photo: Water Drops (74 of 83) (CC BY 2.0) by  Soma Kondo 

Juan Liners: Are You Successful? Or #Blessed?

Why not both right?

While commuting on my way home, I caught myself doing a self-check on my sense of self-entitlement, on how I celebrate the small successes in life, on how I feel about these, whether they are rightfully deserved, of whether they are blessings.

Things that traffic jams make us do.

Don’t get me wrong, I’m a firm believer of fighting for your own, holding your ground, ensuring your survival, and if possible, comfort.

Further, I believe that God has so much more in store for us, that He wants us to succeed, and that our small successes can’t be “just it” — there’s more to come. We’re destined for greatness.

But therein lies the important difference. I believe every Juan’s destined for greatness and success, not because we deserve it, but because He wants us to. Call it love if you wish.

To borrow a lyrics from an inspiring song:

Not because of who I am, but because of what You’ve done.

Not because of what I’ve done, but because of who You are.

Advanced Merry Christmas every Juan!

Photo:
42-15529695 by  meridican 

To OFWs and Dependents: Learn Personal Finance and Invest

Here in Investment Juan01, we say any Juan can invest and every Juan should. OFWs and their dependents included. We say, may all Pinoys have richer lives.

Was blessed enough to spend the past few days overseas, as a tourist, and was even more blessed to spend some time with some OFW groups. Hearing their stories further drove home the point that we have miles to go in terms of educating every Juan on financial literacy, especially our modern day heroes abroad.
 

But I do hope we’re on the right track.I’ve been to 3 Asian countries only, all of which are hands down more developed compared to the Philippines in terms of economies, transport system, financial system, etc. Life, as it seems, in worldly standards at least, is better and easier in these countries. And yes, being a tourist in these countries is a worthwhile experience. In Filipino, masarap maging turista paminsan-minsan.

But as the OFWs point out, relatives back home tend to see only the beautiful parts, the tourist attractions, theme parks, dazzling lights and shopping. What’s behind it all, the sacrifices, the loneliness, worse the discrimination and abuse, the higher costs of living, albeit very much real, are not highlighted and acknowledged. Being an OFW is not easy. They don’t lay golden eggs, and their time away from home to have a relatively higher income, also comes at a high price.

Not all OFWs suffer in other countries. Some, I hope majority, hit the jackpot in earning fortunes for their relatives here at home through good employment and employers. Especially if Juan is an overseas Filipino professional, engaged in white collar jobs. However, vast majority of our countrymen are actually in blue collar jobs, with less pay, less benefits, more demanding, and sometimes even less foreign friends and support groups that is why they tend to form smaller groups of their own, spending their limited “day-offs” huddled in parks, overpasses, sidewalks, malls, sharing stories of pain and hope. Of tears and laughter. Matiisin ang Pinoy.

I previously asked on Twitter whether Lotto winners are given a seminar on financial literacy so they can wisely invest their winnings. If there is, I hope it works, if there’s none, there should be.

OFWs and their dependents should also have the same. Their hard earned money should also work harder for them. And please, not in scams. With the right financial education, our modern day heroes should not only work hard, but they should also work smart. Dependents back home receiving remittances should make these seed moneys grow, and accelerate the time that loved ones abroad can once again go back home, this time for good.

We heard of moms who have been domestic helpers for years, travelling a number of countries and working for various nationalities. Mrs Internationals. For a tourist, being to many countries might have been pleasurable albeit expensive. For OFWs, I hope being to many countries has been pleasurable to them as well, because it is definitely expensive not just financially but psychologically.

I do hope that in all those years working for money, OFWs and their dependents have saved some money which can in turn work for them. Invest in financial instruments and businesses instead of spending on unnecessary luxuries. It is one thing to reward oneself but another to splurge now and deprive oneself of a better future. I hope that their dependents are equipped with the attitude, discipline and know-how to make these grow.

Lastly, I wanted to ask, whether they also wanted to bring their relatives and children abroad as tourists, so they can see for themselves what’s beautiful and what’s painful in living in a foreign land.

But I did not as most likely, they do, but in the meantime, they won’t, as they’ll find it expensive and counter-productive. I hope in time, they also go to other countries, not as employees, but as tourists, with their families.

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May we all have a richer life!
Photos: 
Crowded Mong Kok by  Luke,Ma 

 

Relaxing in the beating heart of Hong Kong by  Kwong-kwan Wong

Pope-Inspired Juan Liners: Personal Finance Quotes

Every Juan’s beloved Pope Francis is now headed back to Vatican, leaving us to face our challenging realities, but armed with many blessings, words of inspiration, renewed faith and hope, and of course calls to loving action.

I don’t know, I may have been stricken by the Pope Francis Fever as I feel like I’m overflowing with words that I want to share with every Juan today. Realized as well that we’re halfway through 2015’s first month (just like that!), and as sort of reminder and boost for every Juan, to sustain that light feeling left by Pope Francis, I decided to compile some Pope-inspired personal finance quotes. 

These are either a product of my few witty moments, (with the help of divine inspiration), lines from previous posts and reflections, or quotes that I have read from various sources.

Yes, some families we know in the country may have wealth levels we can only dream of. But I believe every Juan has the capacity to change his/her family’s fortunes, starting from him/herself. The wealthy families that we know, the Sy’s, Ayala’s, Tan’s, etc, their wealth must have started from someone somewhere before reaching levels that we know of today. So can we. Ours can too, through us!

I always say great things take time to build and in investing and building wealth, time should be on our side, our ally. And we should not delay in making time our ally because time and life will not wait for us, it just keeps on running and flowing. So the sooner we start, the better.

Likewise, I always say we have to “work hard and work smart.” Not just either but both. In relation to this, I read from somewhere that “Luck is the offspring of Preparedness and Opportunity.” Successful people did not reach where they are not right now just in a wink of an eye, it was a process of good turns outnumbering the bad turns. Some will admit that they were blessed, that they got lucky, that they were at the right place at the right time. Looking closely though will reveal that they were able to grab the opportunities because they were prepared. That’s how they got lucky. They made the most out of every situation because they armed themselves to begin with. They allowed themselves to be blessed, they were open, and they knew how to maximize resources given to them. Just like the millions who waited to catch a glimpse of Pope Francis. They were blessed afterwards but they prepared for the opportunity by patiently and strategically waiting.

We should do the same. We should not wait for blessings and luck to fall on our laps, but rather pursue it, claim it, envision it, pray for it. Let us be armed and ready when golden opportunities arise, because they only pass by once in a while (split second in the case of Pope Francis), and they pass by for those who are ready.

And eventually, as we keep on building our wealth, as we become more and more financially free and truly rich through addition, multiplication and subtraction, I hope we bring other people with us. We divide and share our blessings, our knowledge and wealth of information and material things to lift other lives, to change the lives of every Juan.

At the beginning of each day, as we slowly and patiently progress towards financial freedom, let us give thanks to the blessings and graces we have received, and remember that the overflowing good breaks and opportunities that we get cannot be just for our consumption, it cannot be just “this.” For sure, we are destined for something much more greater (use of too many comparatives and superlatives intentional). “We are meant to live for so much more…”, as a favorite song goes.

Base Photos:
Plumeria Seedling by  ewen and donabel 

Hour Glass by  andrusdevelopment 

Sunrise on the Trossachs by  J McSporran

Note: I don’t wish to claim ownership to quotes I don’t own, I just wish to impart the wisdom I gained from them. As such, if some of these quotes are actually originally yours (with proof), please get in touch with me for proper attribution.

Better to Start Small and Early Than To Invest Bigger Later On

Before we bid 2014 goodbye, here’s an obligatory post on compounding.

A year older, hopefully a year wiser and another year of compounded income.

Compounded interest is a very powerful tool that many of us tend to ignore even if we don’t need to exert much effort to make it work for us. All we need is for time to make our investments grow on the side.

In fact, many quotes on compounded interest have been attributed to Albert Einstein because of the sheer brilliance of the two (despite the disputes on its accuracy). Quotes such as the one above.

I’ve seen various versions of the following illustration from other personal finance websites so here’s my own rendition.That’s why I call this an obligatory post.

We have three scenarios named Juan, Maria and Jose. Their investments are all assumed to grow at 10% annually (which is average and achievable), then compounded every year thereafter. As follows are the details:

Juan

Started to invest at 20 years old, PHP1K a month so equivalent to PHP12K a year. (Doable?) Stopped investing by age 30, for a total of 11 years of investing.

Maria

Started to invest at 25 years old. Wanted to catch up with Juan so she invested a higher amount at PHP15K annually (equal to PHP1.25K monthly), and invested longer, for 15 years.

Jose

Took his time as he wanted to build his income stream first (sounds familiar?), and invested double the amount of Juan (PHP24K) starting age 35. Again, wanted to catch up with Juan and Maria so he invested every year non-stop until aged 65, for a total of 31 years.

By the Time They Retire

By the time they retire at 65 years old, which one do you think has the biggest retirement fund? Let’s find out from the table below.

Juan’s investment reached PHP6.87M, Maria’s at PHP6.25M while Jose only at PHP4.80M. Juan’s cash outlay is only PHP132K, Maria’s at PHP225K while Jose at a whopping PHP744K.

Juan’s investment multiplied 52x by age 65, Maria’s 28x while Jose, sadly only at 7x.

Juan’s investment started the earliest but it was the smallest amount. Still it beat a bigger amount and a longer investment horizon (Maria’s 15 years and Jose’s 31 years!)

Compounded interest proves a Filipino saying: Daig ng maagap ang masikap. Rough translation goes something like “The early Juan beats the hardworking Juan.” What more if you are both early and hardworking right? As I often say, don’t just work hard, work smart. Smart such as starting early on.

Below is a graphical visual representation of above points:

Investments grow exponentially but Juan’s still end up as the highest by age 65. This just shows that there is nothing wrong with starting small. What matters is starting early.

To summarize:

What’s best is starting early, even if small, increasing the regularly invested amount as cash flow grows, and continuous investing even beyond 30s, 40s. Even beyond 60s.

In fact, if Juan continued to invest PHP12K until age 65, his investment will reach PHP10.4M and yet his cash outlay is still lower compared to that of Jose (PHP552K vs PHP744K).

Juan cannot bring back time, but Juan can always start now. And as we approach another new year, may compounded interest be your ally in the years to come. Happy new year every Juan!

Photo: Pocket Watch by  vidalia_11  

Juan Liners: Uberkill LTFRB, Pera sa Basura, Betting and BLOOMing, Divisoria Adventure

Last week, news came out that LTFRB is apprehending Uber drivers as they are considered colorum. MMDA meanwhile asked for LTFRB’s reconsideration since, as MMDA argues, Uber can actually be considered as a private arrangement between the vehicle-owner/driver and the passenger, similar to carpooling or bridal cars, hence not to be considered as public transport.

Haven’t tried Uber myself but I find the one who created it very clever. Uber is a very creative business model. So creative it makes our government agencies argue. It makes commuting easier as it allows passengers to pre-book and use private vehicles for their needed travel, for a premium payment. Mind you these are not your usual taxis, since as passengers shared, they are usually high-end sedans and even SUVs. Some got to ride on Camry, MonteroSport, Hummer and even BMW. Chances are there is a Camaro too.

Testimonials from uber-satisfied Uber users: Clean, safe, reliable and uber cool.

Upon hearing how it works, after I was amazed, I also asked myself. So how is it regulated, if need be? Can it remain as a private arrangement between two parties, or should it be considered a public mode of transport, hence regulated by LTFRB? Borderline really.

Some Uber users think LTFRB is uberkill on this issue. What do you think?

May Pera sa Basura

After a steep fall last October 13, PSEi has been showing some signs of rebound and uptrend, amid the very thin volume. It seems like investors prefer to remain on the sidelines, still waiting for more positive indicators that the tide has indeed turned for the better. Traders and tsupiteros meanwhile are feasting on basura stocks, or those with very minimal capitalization, some gaining 40% and 50% on a daily basis based on rumors, jockeying or simple scavenging.

I myself am not good in trading basura issues. My investment OHA and budget do not suit such high frequency risky transactions. So I patiently wait on the side too. My unsolicited advice to those who play with fiery basura:

May pera sa basura. Pero huwag papaiwang may hawak na basura. Lalo’t higit, huwag sasaluhin ang basurang itinatambak na ng iba.

Caveat though, this refers to stocks and not to literal trash. LTFRB este MMDA please don’t apprehend me.

BLOOMing Industry

Shares of Solaire (PSE: BLOOM) showed a very strong bullish trend amidst the weak market and thin trading. For the past 5 days, BLOOM shares climbed up, ending at 15.02 as of Friday, from a low of 12.90 during the drop coinciding the TWD premiere. What’s up Forum posters say that there will be a good news to be disclosed soon.

A might-be-related news refers to a big time US casino named after a Roman leader planning to join the PH gambling industry. It seems that in casinos, the more players, the better since it leads to great competition and robust international marketing (like what happened to the boom in Macau casinos), attracting the moneyed gamblers around the world. Unlike in other industries where more players lead to saturation of the market.

Yours truly was fortunate enough to cash in on the recent upswing. I don’t gamble but I don’t mind betting on casino stocks with growth stories. Not sure with the other listed casino shares though. As of this writing, I’m still BLOOMing.

More Business Ideas

Went to Divisoria yesterday along with seemingly millions of other Juan and Juana’s who want to buy bargain items. Uber daming tao. Got a headache afterwards but mission accomplished nonetheless. If you are looking for business ideas, you might want to pay Divisoria a visit, and do some window or actual shopping especially by the streets of Juan Luna, Tabora, Ilaya, and Sto.Cristo. You might just get your next business idea, business machines and business improvements from these streets.

Went to Divisoria yesterday to explore some expansion options for the coffee business. In corporate lingo, capex. In my small time entrepreneur lingo, investing in more equipments and packaging gimmicks.

My unsolicited advice to Divisoria goers, aside from be alert, be careful with your belongings and avoid the Christmas rush:

Be frugal and be practical. But don’t be cheap.
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Photos: 
Chevrolet Camaro by  henrymaxm 
Casino Chips with houses on top by  Images_of_Money 

Juan Liners: The Walking Dead Cat Bounce, Odd Odds and Oil Megasale

The PSEi dropped by almost 200 points on Oct 13, 2014, falling to 6,968, the biggest drop since Sept 2013 amid concerns of a global slowdown. What’s with -ber months anyway?Last year’s drop reminded me of the red wedding and bloodbath in Game of Thrones. In an unrelated news, The Walking Dead season 5 also premiered the same day as the October pullback.

It was the most watched episode of TWD to date. What is it with the stock market alluding itself with gory series? Or is it just me? You know nothing, Jon Snow.

Other major markets fell too, with US markets and European markets on a downtrend for some time now. Most local traders meanwhile have been expecting a pullback as PSEi remained once of the most expensive stock markets in Asia. So I hope this one is a healthy correction and that the bullish trend remains intact.

Some analysts predict a bounce from oversold levels, then the downtrend or sideways direction might continue for quite some time. Some predict that we are in wave 5 already of Elliot wave, or maybe we have started with corrective the wave A? Who knows, Jon Snow? 

I say we can call it The Walking Dead Cat Bounce. Pun intended.

Time to brush up on Elliot Wave Theory and Fibonacci Retracements.

Odd odds?

Filipinos still prefer betting on lotto even if the odds of winning is very very small. But the odds of winning and burning the ticket is much much way way smaller. This is what happened to a man who claims he won the PHP12M pot but unfortunately, his ticket got burned by a flat iron. Odd odds.

Pera na naging abo pa. The ticket was badly burned that the numbers are no longer visible. All is not lost though as the outlet where the man purchased the ticket confirmed that the winning combination was indeed purchased from them. Now, PCSO just needs to connect the winning combination to the man who claims he was the one who bet on it. I hope the man can prove his PHP12M claim. Any CCTV’s in the vicinity which could show that the man was indeed buying a ticket around the time that the winning combination was bet on? Maybe PCSO should require CCTV in all their outlets for security and claiming purposes.

PCSO says the man can claim the winnings after one year assuming no one else claims it. Can’t imagine how the man must feel. Is it tormenting to wait for 1 year to get PHP12M? Or better than nothing, right?

Maybe he can ask PCSO to factor in time value of money since the PHP12M right now is more valuable than PHP12M 12 months from now. That is if he knows how to grow it. But for most Lotto winners, it might be that the PHP12M now is close to zero 12 months after. Or maybe it’s asking too much for a burned ticket.

Oil Megasale

For the second consecutive week, oil firms rolled back their prices by more than PHP1. Global oil prices are on a downtrend as well. Many factors are at play here, but among them is the lower US demand for imported oil since they have been increasing their local production of oil. Yes they found oil in the US. As such, when your biggest consumer lessens its offshore demand, there’s more oil for the rest, hence lower prices.

This bodes well for Cebu Pacific (PSE: CEB) and Philippine Airlines (PSE: PAL) as this means cheaper fuel oil for their flights. Delays in NAIA flights while the engine is running, coupled with expensive oil is bad for business. So at least now they can buy cheaper oil.

Good news too for public and private vehicles. We should also ask for fare rollback though.

This seems bad news though for oil companies such as listed Petron (PSE:PCOR) and Phoenix (PSE:PNX) whose month’s worth of inventory may have been purchased during higher oil prices. And with the rollbacks, it means less revenue for every liter sold.

Maybe they can do some cost-averaging with the inventory? Or come up with promos to incentivize higher consumption of oil given the lower prices. Sorry, sounds too capitalist.

Petron’s shares plunged from 11.7 to 11.5 to 11.3 in the past few days, also aggravated by overall bearish sentiment. This is in spite of their press release of the start up of their multi-billion refinery project which enables them to refine oil locally, increase their production and save up on importations costs. Full operations of this new refinery by early 2015.

For the local Juans, with all the road repairs, truck bans, relatively lower gas prices, sudden rains and flooding, top it all with mall sales and Christmas rush, this may mean more horrible traffic jams.

Photo: Zombie by danhollisterduck