Tag Archives: Financial Services

Money Concerns After A Stroke

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TEDxWooster-Peter Abramo: Entrepreneurship and...

TEDxWooster-Peter Abramo: Entrepreneurship and the Liberal Arts (Photo credit: jonny goldstein)

Inquirer:

i’m a stroke victim and i am now 57 years old. i am totally broke. i was able to read the investment in mutual funds. can you share me your ideas how would i do it.? i am planning to have a loan at bank of the philippine island with the amount of P30t. the 5t i’m going to invest it for mutual funds and the rest of 25t for food business.

Guita of Colayco Foundation

A loan is a serious financial obligation. When you take out a loan you should know how you intend to pay it back, regardless of the outcome of your business and investments. Manalo, matalo kailangan binabayaran pa rin ang utang.
Both business and mutual funds carry risks – businesses can fail and mutual funds are affected by the growth and decline of the stock market. For both, returns, income, growth are NOT GUARANTEED.
So if you have a fixed obligation (loan) and you use the money in something NOT GUARANTEED you need to have a good payment plan for the loan (just in case) otherwise you’ll be in deeper trouble compared to where you are now.
Are you earning any income? If yes then this could be ‘plan b’ for paying off your loan if your business and investments don’t do as well as you hope.
It would be more prudent at this point to find an income earning opportunity and save up for a mutual fund investment and for part of your capital for a business. This helps you manage the risks and obligations of running a business and taking a loan to fund that business.

Can MFs Fail?

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Faith and Failure

Faith and Failure (Photo credit: Wikipedia)

 

Inquirer 1:

 

sa experience nyo po ilang Big companies sa mga mutual funds na ang nakita nyo na bankrupt? at sa insurance industry like CAP….

 

 

 

Inquirer 2:

 

may chance po bang bumaksak ang isang mutualfund company? and kung sakaling bumaksak po, makukuha paba po namin yung perang nainvest namin? salamat po.

 

 

 

Guita of Colayco Foundation:

 

A mutual fund company is the manager of a mutual fund. When you invest, you invest in a mutual fund and not the company. When something unfavorable happens to the company managing the fund, shareholders (investors of the fund) can make actions to change the management of the fund in order to safeguard the value of the fund. More often than not, management of funds are transferred from one company to another.

 

 

Mutual funds that are not performing as well as the managers intend are often sold to other mutual fund management companies. For example the Odyssey Funds were formerly managed by ING Asset Management and now are managed by BPI Asset Management.

 

 

 

Inquirer 1:

 

ah so ni buy out pla po… malas na lng pla kung ang nag buy out nun company eh unreliable… like sa All asia plans na ni buy out ng Legacy… kaya halos lahat ng plan holders wala nakuha…hmmmp…

 

 

 

Guita of Colayco Foundation:

 

In mutual funds, investors have some measure of control. When you invest in a mutual fund, you are a shareholder of the fund. And thus you have voting rights. In other financial instruments like pre-need plans – you are a client.

 

 

 

 

 

 

 

 

Too many Mutual Funds?

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Inquirer:

 

Growth

Growth (Photo credit: AdamSelwood)

 

I have invested on the following at BPI :

 

1. BPI Balanced Fund

 

2. BPI Equity Value Fund

 

3. BPI Global Phil Fund  ( $)

 

4. BPI Phil Dollar Bond Index Fund  ( $)

 

5.ALFM Dollar Bond Fund ( $)

 

6. Phil Stock Index Fund ( Mutual fund )

 

7. ALFM Growth Fund ( Mutual fund )

 

8. Odyssey Diversified Capital Fund

 

9. Odyssey Diversified Balanced Fund

 

10. Odyssey Phil Equity Fund

 

11. Odyssey Phil High Conviction Equity

 

12. Odyssey Asia Pacific High Dividend Equity Fund ( $ )

 

13. Odyssey Phil. Dollar Bond Fund ($)

 

 

 

I don’t have any professional basis why I have chosen and put my money on the above investments . I want to know if what I did was right and I want to know if I should consolidate some of the investments into fewer investments / simplify and group some of them into one  instead of having 13 .

 

 

 

What do you suggest ? Do you have other investments( UITF or Mutual fund )  other than BPI to invest ?

 

 

 

I am asking your advice what to do .

 

 

 

 

 

 

 

 

 

Guita of Colayco Foundation:

 

First, it is good that you are invested in many different funds. This helps you diversify your risks. However, I need to point out areas of caution:

 

 

 

Thought BPI is a reputable and good performing company, by investing only w/ BPI you are exposing yourself to the following risks:

 

1. What if something happens to BPI / BPI Asset Management?

 

2. BPI Asset Management has a certain investment style and philosophy which is applied to all the funds. Investing w/ a different fund manager is also prudent.

 

 

 

In addition, several of the funds are very similar to one another – you are exposing yourself to the same risks.

 

 

 

For example the following are all Philippine Equity Funds:

 

2. BPI Equity Value Fund

 

6. Phil Stock Index Fund (Mutual fund)

 

10. Odyssey Phil Equity Fund

 

11. Odyssey Phil High Conviction Equity

 

 

 

Invested in one stock market by the same fund managers, your savings are exposed to the same risks and it’s growth dependent on the same skills/knowledge of the fund managers. The only thing that differentiates these funds are the guidelines that govern the management of the fund and the asset base of the fund.

 

 

 

The same is true for:

 

1. BPI Balanced Fund

 

7. ALFM Growth Fund ( Mutual fund )

 

 

 

and

 

4. BPI Phil Dollar Bond Index Fund  ( $)

 

5.ALFM Dollar Bond Fund ( $)

 

13. Odyssey Phil. Dollar Bond Fund ($)

 

3. BPI Global Phil Fund  ( $)

 

 

 

For the above – Of course performance depends on the management of the individual funds. But risk wise, this exposes you to foreign exchange or currency risks. Whether the fund is invested in Asia vs. US or Europe also matters.

 

As a rule of thumb however, we recommend that you invest in the currency you earn or spend in as converting PHP-USD and vice versa just to invest starts you off in a negative position

 

 

 

Take note of the following:

 

1. What is your purpose for each fund? Why are you invested there?

 

i.e. I invested in Phil Stock Index Fund ( Mutual fund ) for my retirement…

 

Match a fund (or 2 funds) with a specific purpose – or use for the money (and its growth). You don’t need 13 funds. Consolidate based on purpose.

 

 

 

2. Consider other fund managers. The performance of a fund is heavily dependent on the skill of its fund managers. BPI Asset Management is consistently one of the best. But there are other fund managers that have proven that they are equally if not more adept at growing and protecting their funds. A full list can be found for MFs on http://www.pifa.com.ph and for UITFs onwww.uitf.com.ph

 

 

 

3. Consider other investment instruments. Growth is important but so is protecting your wealth. While other instruments may have less return they are also less risky. Depending on your needs in the future, age and risk profile you can study long term savings plans such as (pension plans or endowment plans), certain tips of investment linked insurance products and government securities.

 

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Debt Dilemma

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Debt Payment

Debt Payment (Photo credit: Images_of_Money)

 

Inquirer:

 

I am in a dilemma right now with 2 credit card company where I was a member since 2004. I was able to pay my obligation with this bank for few years while I am still living in manila where business is fine. But due to inevitable circumstances, we transferred our residence in Bicol. Business didn’t went well and ultimately wasn’t able to pay even my minimum due since it swell bigger than I am able to pay. I cut off all my communication with them because the 2nd month I’ve been answering their call and trying to negotiate to give me a longer (5years) term they couldn’t give me. I don’t have any means to pay. I have maxed out the 2 credit cards to 120k each.  But now, I received a postal mail from one of the bank’s legal collectors, it jumped up to 240k. They said, they will file a case against me and my wife.  My wife doesn’t know about my dilemma, should she know, it will another dilemma.  I admit, failures on this and willing to get out of this. But It seems growing and growing.

 

May I appeal to your good heart to give me a good advice on how I could get out of this mess, except for killing myself.

 

 

 

 

Guita of Colayco Foundation:

 

 

To get out of this problem, you and your wife need to work together so find a way to tell her of your dilemma. The presence of a counselor (or priest/pastor) may help you explain the situation to her.
Do you have a job or any means of earning regular income?
Do you have other financial obligations? I.e. Children, other debts?
Do you have any assets?
Here are initial steps you should take:
Step 1: Get in touch with the credit card company itself. The letters and calls are probably from a 3rd party debt collection agency. Ask for a statement that lists exactly how much you borrowed and also how much interest and fines were added resulting in the current total. This is important because when renegotiating, some of the interest and fines can be waived.
Step 2: Identify what assets you can quickly sell and approximate how much that would give you. This is because when you renegotiate, they will ask for a lump-sum payment.
Step 3: Spend only on what is EXTREMELY necessary and Identify how much monthly payments you can afford regularly. You and your family will have to give up luxuries and divert all excess funds to paying off the loan. Otherwise you will be in debt for a long time.
This is the start of your journey to Being GOOD – Growing Out Of Debt. It is do-able and MANY people have done it in the past. The following article can help you in greater detail: Debt Repayment Plan to manage your debt. But before all of that you need to be honest with your family, they are the ones that will assist you in growing out of debt.

 

First Time Investor

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Inquirer:

I read that for first time investors, we should try first investing in mutual funds. Let’s say that I have invested already, what are the things I should do next? How many years should I invest in a mutual fund? Thanks po. :)

wrong decision pic

Guita of Colayco Foundation:

Yes, I recommend you start investing first through mutual funds until you have sufficient savings.

While you are investing in mutual funds, use the time to STUDY other instruments such as stocks, business, real estate, deposit accounts, etc.

‘Sufficient savings’ will really depend on your personal financial and lifestyle profile and not a specific amount or length of time. It’s important to first have a plan. You need to set your financial targets. This determines 1) how much you need to invest, 2) what kind of investment instrument, 3) when you can/should redeem your investment.

Learn Financial Planning for yourself. Join the Pera Mo Palaguin Mo Workshop this May 25. 

Sell House Quick!

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Metro Manila - Quezon City Metro Manila Philip...

Metro Manila – Quezon City Metro Manila Philippines Townhome For Sale (Photo credit: International Real Estate Listings)

Inquirer:

Gusto ko pong advice on How To Sell my house quickly before the end of this year.

I got a few querries from Sulit.com from state agents and private individuals.

However, the state agents in Pinas work differently with what we are used to here in London. In Pinas they want money upfront before they do the job, whilst in London’s state agents works as in ‘No sale No fee’ which is more secure and dependable! And the buyers and the house owners do not communicate directly but through their own representing lawyers. Unlike in Pinas, its very dodgy, they even asked for my bank account to put their payment in without me agreeing with their pulling bet yet! Oh what a Laugh, absolutely ridiculous!

Thank you po.

Guita of Colayco Foundation:

If you are looking to sell fast, there are usually ready buyers however note that you will most likely have to sell it at a low price (lower than market value).

For better or worse the situation is different in London and in Philippines.

If this is your concern it would be best to go through a licensed real estate broker, they will of course charge a certain commission but in return they will handle everything for you.

One of our contacts, Ms. Grace Pekson may be interested in your property please send her an email with details at gracepekson@gmail.com.

Please note that Ms. Pekson is not a member nor representative of Colayco Foundation. Any dealings with her will be between the two of you only and we are not liable for any communications and agreements you may engage with her in the future.

What are you craving for? & Other Tips

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A few months back, Renzie Bailon, Arthur Ladaga and I were working on really short articles to publish in a lifestyle magazine…some of the articles didn’t make the cut. Still we’d like to share them with you. :)  

family_finance_resolutions_18emslf-18emslm

What are you craving for?

Want to buy that fierce dress or delicious designer bag? Begin with the end in mind. Write down how much you need and the number of months you have to get it. Figure out how much you need to save and invest to get it. Concretizing your goals will motivate you to achieve them.

The Incredible “Bulk:” Stop wasting money on packaging! Buying sachets or single serve portions are more expensive by the liter/gram than buying in bulk. Not only will you save on your pocket money, but you’ll save on your shopping time and help Mother Nature too!
The Big Cable Switch: What channels do you regularly watch? Once you know that, check your cable operator (and it’s competitors) to see which package has those channels included. Let’s face it! You probably only watch 20 channels anyway. Why pay more for the rest?

Gusto magtayo ng negosyo?

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Software Freedom Day Singapore 09

Software Freedom Day Singapore 09 (Photo credit: ruiwen)

 

Inquirer:

 

Magandang araw po. Nais ko po sanang mag-inquire kung meron kayong service or program sa mga baguhan na gustong mag-tayo ng business. Gusto ko po sanang magtayo ng sariling negosyo pero hindi ko po alam kung anong negosyo ang papasukan. Sana po ay masagot ninyo ang aking katanungan. Marami pong salamat.

 

Ito po ang mga sagot ko sa inyong katanungan.

 

1.      Ano ang hilig mo?

 

Ang hilig ko po ay gumawa ng computer system at mag-drawing o mag-sketch.

 

Ang asawa ko naman po ay maghilig sa pagtitinda, buy and sell.

 

2.      Ano ang alam mo?

 

Ang alam ko po ay gumawa ng computer system analysis and design.

 

Medyo marunong din po ako sa Photoshop.

 

Ang asawa ko naman po ay marunong sa pagluluto.

 

3.      Magkano ang capital na mayroon ka?

 

Ang capital po ay balak kong hiramin sa bangko.

 

4.      May trabaho ka ba ngayon?

 

Meron po akong trabaho ngayon. Pero ang asawa ko po ay plain housewife.

 

 

 

Guita of Colayco Foundation:

 

Sa pagnenegosyo mas magandang magumpisa ka sa linya ng negosyo na pamilyar sa iyo dahil may hilig, kaalaman o karanasan ka dito.

 

1. Computer systems, analysis and design, is an area much in demand. Kung kaya mo marisa o di kaya ay makabuo ka ng team of 2-3 persons, puwede kayo kumuha ng mga project bilang freelancers.

 

2. Para kay misis naman, puwede niyang pasukan ang buy and sell subalit ano ang i-bebenta niya. Suriin ang network ninyo ng kamaganak, kaibigan at kapitbahay, ano ba ang mga bagay bagay na binibili o gusto o kailangan nila? Kung pag-kain ang papasukan, anong klaseng food business? Karinderya, baked goods, catering, etc.

 

3. Capital. Kung maguumpisa ka pa lang ng negosyo hindi ka makakakuha ng business/enterprise loan sa bangko. Kadalasan, gusto nila tumatakbo na ang negosyo at kailangan nila na legal entity ang kukuha ng loan. So kung sakali ang i-offer sa iyo na loan is a personal loan. At this point, mas maigi na hindi ka muna kumuha ng loan para sa negosyong naguumpisa pa lang. Mag-save ka muna ng pangkapital at siguraduhin na may pag-asa yung negosyo mo bago umutang. Ang utang – obligasyon yan, kahit hindi maging ok ang negosyo kailangan pa rin itong bayaran.

 

 

Inquirer:

Ang iniisip ko lang po ay kung paano kami makaka-survive ng pamilya namin kung papasukin namin ang bagong business o pagkakakitaan.

Kasi po kung gagawa po ako ng program ay kailangan ko pang i-market ito bago kumita, ang misis ko naman po ay kokonti pa rin ang contacts kung magba-buy and sell sya. Survival po ang pinaka-malaking problema na nakikita ko. Kasi po may 2 kaming anak na nag-aaral, isang grade 4 at isang 1st year high school.

Paano po kaya ang magandang solution dito?

Guita of Colayco Foundation
Gaya nga ng nabanggit mo, may mga obligation ka – pamilyang kailangan pangalagaan.
Mahirap kung aalis ka sa trabaho para magnegosyo kung saan hindi mo pa maassure sa sarili mo na kikita ka.

It’s more prudent if you keep your job in the meantime and build the program you can sell on the side while you are employed.

Inquirer

Marami pong salamat sa inyong advise. I appreciate it very much.

 

Hindi ko po nasabi sa inyo na 8 years na po akong OFW dito sa UAE.

Kaya halos dito na ako tumanda at hindi ko po gaanong nakasama ang family ko.

 

Tama po ang advise ninyo na hindi po sigurado kung kikita agad ang plano ko.

Ang isa pa po ay wala pa akong nauumpisahang program para ibenta.

Kaya siguro po ngayong taong ito ay uumpisahan kong gumawa ng computer system habang nandito ako sa UAE.

Dati po kasi akong gumagawa ng Payroll System sa isang Software Development Company sa Pinas.

 

Ang isa ko pa pong balak ay mag-alaga ng mga baboy, manok, kambing atbp. para may dagdag na kita.

Pero ang mag-aasikaso naman po ang problema.

 

Guita of Colayco Foundation

Kung matutunan mo ang pag-aalaga ng mga baboy, manok, kambing, atbp. puwedeng magandang negosyo yan. Pero isang negosyo muna ang pasukan mo, pag established na ung isa tsaka asikasuhin ang bagong negosyo. Kung ituloy mo ang pagaalaga ng mga hayop, isang uri muna. Dahil iba’t iba ang pag-aalaga at kalakal ng mga hayop na ito.

 

 

What are T-Bills?

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s_investmentsInquirer:

magtatanung lang po kung anu po yung T-bills. how it functions? baka merun po kayung magandang link na pwedeng makapagpaliwanag sakin ng malinaw bout po diyan.

bale ang question ko pa po e mga banko lang po ba ang me hawak neto??salamat po sa inyong drive! to educate pilipinos..may God bless you in your endeavor…;))

salamat po

 

ANSWER:

Government Securities | Colayco Foundation for Education

WHAT ARE THEY? : Loans that you give to the national government to pay off its expenses.

Government securities are classified to the following:

  • Treasury Bills- short term securities (usually 1 year) requires big amount of money (P100K above)
  • Treasury Bonds- long term securities (5 years or more), requires big amount of money (P50K or P100K above)
  • Retail Treasury Bonds- long term securities, requires small amount of money (P5,000/unit)

HOW DO THEY WORK? : The money you lent to the government will be used for a specific period of time to fund its expenses. The government will pay you the interest. The terms of payment – interest rate and schedule of interest and principal repayments are based on  the specific offering.

WHY CHOOSE THEM? :

  1. Gives annual interest rates from 5% to 10%, higher than bank products.
  2. Can be bought and sold in any Government Securities Eligible Dealer – usually banks and investment houses
  3. Less risk since the government guarantees to pay you.
  4. Good for your short term and long term goals

Ideal instrument for retirees as it gives regular income and is low risk.

GOVERNMENT REGULATORY BODY: Bureau of Treasury
Others: Bangko Sentral ng Pilipinas and the Securities and Exchange Commission

You can get a complete list of GSED (Govt Securities Eligible Dealers) on the Bureau Of Treasury website - www.treasury.gov.ph

Automate It!

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A few months back, Renzie Bailon, Arthur Ladaga and I were working on really short articles to publish in a lifestyle magazine…some of the articles didn’t make the cut. Still we’d like to share them with you. :)  

pcb

Make It Automatic: Make saving easy and hassle free! Once you know how much you want to save per month, you can:

  1. Do it with Love – Consider saving in Pag-IBIG Fund II which historically has given returns of 5% per year. Learn more on www.pagibigfund.gov.ph
  2. Bank on the bank: Most banks have savings programs where you can auto-debit your payroll account and credit to a savings account.
  3. Company Savings Programs – Your employer may have savings programs where they auto-deduct your contributions and place them in special savings or investing programs. Some companies even match the savings up to 100%!