Tag Archives: personal finance

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.

 

Alternative to Informal Lending

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Loans

Loans (Photo credit: zingbot)

 

Inquirer:

 

I’m considering investing in 5 6 loan for small scale businesses.How does it work? Say, someone borrowed P1,000.00 from me, how long must be the term? How much per cent must be the interest? If he is going to pay daily or weekly, and the interest is 10%, how much does he need to pay daily or weekly? What must I do if after the term he is still not fully paid? How much should be my starting capital? Thanks.

 

 

Guita of Colayco Foundation:

 

 

 

I do not recommend informal lending as in our experience it has created more problems than gains. Specifically relationships between family and friends break down when things don’t go as planned.

 

 

 

As an alternative consider joining a credit cooperative where instead of you borrowing money, you are investing the money. It is a less risky way of growing your money via lending and there is added protection since a cooperative is a legal and registered entity with the authority to lend money. Moreover they often have established rules and guidelines on who to lend, how much to lend and what to do if the borrower fails to pay.

 

 

 

Insurance, Investing – Financial Freedom

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Better City Better Life

Better City Better Life (Photo credit: Wolfgang Staudt)

 

Inquirer:

 

ask lang po ako ng advice. i had the chance to talk to one of the financial consultants of INSULAR LIFE. she shared a promising and guaranteed investments. in accordance to my own research, investments are unpredictable. how can i know if INSULAR LIFE is a good investment house and not a scam. sir, kung alam nyu po itong company na ito at may negative feedback po kayu i’l keep this confidentially.naka-pm naman po tayo e.gusto ko lang talagang matulungan nyu ako.mahirap na po kung isusugal ko yung hard earned money ko. tnx poh!God bless yu! ;)

 

 

 

Guita of Colayco Foundation

 

First of all Insular is an INSURANCE company and not an investment management company. It is a legitimate insurance company. But if you compare the returns of its investments with others, there are others that are better. The primary reason for the difference is that it is an insurance company and not an investment company.

 

 

 

You are probably being sold an insurance product linked with an investment. Answer the following for me:

 

1. Do you have insurance? If yes, how much is the total coverage? Are you finished paying for it?

 

2. Do you have dependents?

 

3. Do you have other investments?

 

4. Do you have savings?

 

5. How much can you save every month?

 

 

 

Answers to these questions will help identify what instruments you can look into further.

 

 

 

Inquirer:

 

cge po matutulungan nyu po ba ako kung anu ang pd saking investment + insurance house… i am a bachelor with 15k income monthly i save 10%, 10% for the church; 5% for my mutual fund; 5% for my family, 70% for my other expenses..

 

 

 

Guita of Colayco Foundation

 

How much do you have invested in mutual funds? What type of mutual fund are you invested in?

 

 

 

Inquirer:

 

i started 5k then 1k monthly. sa Philam Asset Management Investment po ako. nag iisip pa po ako ng other investment house z po sayang ang pera ko sa bank ang baba ng tubo..ala naman po akong experience sa business..3 months ago na po ako sa PAMI. yung insurance naman po.papasok palang ako sa Asian life. shoulder po yun ng work ko.

 

 

 

Guita of Colayco Foundation

 

Insurance is for financial protection. It is technically not an investment. Don’t put too much of your money/savings in insurance products. The return that they project will be lower than the potential return of your investments from mutual funds or other ownership investments.

 

It would be good to invest in another MF company so you can diversify, included in the top 4 MF management companies are:

 

- First Metro Asset Management

 

- BPI Asset Management

 

- Philequity Asset Management

 

- PhilAm Asset Management

 

 

 

Other investments:

 

1. Stocks are something you can consider but it will require more investment into learning and understanding how it works.

 

2. Real Estate is a good investment. Don’t purchase condominiums unless you can manage renting it out and maintaining it. Instead, look for property in growth centers (Cebu, Batangas, Laguna, Davao, CDO, etc.).

 

3. Government Securities. While the returns may not be very high it’s a good investment to consider as it is the least risk.

 

 

 

 

 

Inquirer:

 

citisec is for investing on stocks, how about for investing on mutual funds? can i also do that online? Where can i find list of fund manager for mutual fund?

 

 

 

Guita of Colayco Foundation:

 

For investing in mutual funds there is no ‘online’. But you can make fund transfers to their bank accounts when you want to invest. And when you want to redeem your investment they credit to your bank account. List of Mutual Funds can be found on www.pifa.com.ph

 

 

 

 

 

Inquirer:

 

regulated po b ang mutual fund? How risky po ung mutual fund compare sa buying stocks? Are there cases po b na si fund manager bigla nlang nawala kasama ung investments? How secure po ung investment sa mutual fund?

 

 

 

Guita of Colayco Foundation:

 

Mutual fund companies registered with the SEC. Mutual funds are less risky than stocks because mutual funds provide you with instant diversification. Since you do not have the time to learn more about this instrument i recommend you read through this website www.pifa.com.ph and get in touch with a sales agent of one of the funds and they can answer your questions about mutual funds. Just remember that their goal is to get you to invest.

 

Related articles

 

 

Trust Fund for my Kids

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Inquirer:
ok lang mag pasok ng pera sa trust fund para sa mga anak ko?

Guita of Coalyco Foundation:
Yes that is a good goal. Be sure however that you’ve got the basics covered: insurance, emergency funds and cash reserves. While you are saving for your children be sure to also set aside and invest money for your retirement

Can you recommend a stock investing book for beginners?

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Inquirer:
ano po magandang book for stock market for beginner…thanks

Guita of Colayco Foundation:
Try Building Wealth With Stocks by the Philippine Stock Exchange available for free download on http://www.pse.com.ph If you want something more comprehensive the Intelligent Investor by Benjamin Graham is a good book to start with. Just remember that the US Markets are different from the Philippine Market.

 

______________________________

Discover your options for taking hold of your personal finances, growing out of debt, and building wealth through Colayco Foundation’s publications and training.
Upcoming Seminars:
July 27 (Friday), 1-5pm            Pera Mo Palaguin Mo Workshop
Aug 4 (Saturday), 1-5pm          Pera Mo Palaguin Mo Workshop
Sept 1 (Saturday), 9am-12nn    InvestAbility: Stock Market
Sept 1 (Saturday), 2-5pm         InvestEd: Analyzing Stocks
Email renzie@colaycofoundation.com or SMS 0917 808 8857 for more information and to check if you qualify for BIG discounts!
Avail free personal finance articles on www.colaycofoundation.com
We look forward to building One Wealthy Nation with you!

Clarification: Investing in Insurance

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Inquirer:
ask ko lng puh kung ok lng puh bang mag invest s mga life insurance???
like ng philam life???

Guita of Colayco Foundation
Paalala lang, ang insurance ay HINDI investment. ito ay financial protection-prinoprotektahan mo ang kakayahan mong kumiti para kung sakali na may mangyari sa iyong hindi mo inaasahan mayroon ka (at ang iyong pamilyang) matatanggap na pera katumbas ng iyong buwanang kita hanggang sa panahon na makaahon ka.
Ang PhilamLife ay lehitimong kumpanya, suriin mo kung ang mga produkto nila ang tama para sa iyo.

How to avail RTBs?

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Inquirer:
How does one avail RTBs?

Guita of Colayco Foundation:
You should get in touch with a government securities eligible dealer. A list can be found on http://www.treasury.gov.ph

Inquirer:
ngpunta na po kami sa BDO cebu sm branch.. mas priority dw nila BIG clients.. sa PNB fuente cebu nmn wala dw silang alam sa minimum na 5k dahil ang myron sila 250k lng. pano ba talaga mgavail.

Guita of Colayco Foundation:
For banks you need to speak directly with the Bank Branch Manager or their Trust officer – they do not encourage small investors because the paperwork they have to do is the same whether you are a small/big investor. You need to have a personal relationship with them. Insist that you know there is/was an RTB offering.
Try getting in touch with VicSal Investment, they cater to small investors or other non-bank GSEDs.
Take note however that if the sale period has passed, available government securities will be those that are already within term.

Inquirer:
hindi po ba unfair yan sir, akala pa nmn namin pwede sa mga ordinaryung tao ang mga inu offer nyu

Guita of Colayco Foundation:
RTBs are not a product of Colayco Foundation. We are merely sharing this information. Financial institutions have their own processes in servicing clients, that is unfortunately out of our control. Check the other GSEDs.

 

What’s a sure investment?

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Inquirer:
any suggestion of investment na sigurado kahit dito kmi abroad makapag invest kami sa pinas..yung hindi na kami kailangan umuwi pa..thank you po

Guita of Colayco Foundation:
Walang investment na ‘sigurado’ ang lahat ng investment ay may risko. Mula sa riskong tinatanggap mo ang paglago ng iyong investment

What investments are available

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There are many different types of investment however the Colayco Foundation recommends the following especially for those with little experience in investing so far:

1. Time Deposit and Special Deposit Accounts – These are bank based investments. Low Risk, PDIC insured and may have tax advantages. Average Return: 2.5-5% annually. Minimum investment: can be as low as Php5000.
2. Retail Treasury Bonds – These are government securities. Low Risk, Guaranteed by government, and may have tax advantages. Average return: 5-8% annually depending on the offering. To avail you must have an account with a government securities eligible dealer (GSED). For a list of GSEDs visit http://www.treasury.gov.ph. Minimum investment: in multiples of Php5000.

Guita’s note: I recommend you approach a non-bank GSED as they are often easier to interact with.
3. Mutual Funds – These are security or equity investments. Medium-high risk. Volatile (price changes daily). No guarantee and no-insurance. Average annual return: 10-20% (but in some years i.e. 2008 it could be -40%). You can read more about mutual funds on http://www.pifa.com.ph or check out the links below. A list of available mutual funds can be found on the PIFA website. You need to be willing to remain invested for at least 3-5 years. Minimum investment: usually as low as Php5000.
If you are retirement age/nearing retirement it would be best to put most of your money (at least 70%) in #1 & #2 as these will give you regular income (from interest earnings) and are low-risk which means that the chance that your investment doesn’t give you what you are expecting is low.
There are other traditional investments available such as stocks, corporate bonds, real estate, business and franchising as well as non-traditional investments: foreign exchange, gold (and other precious metals), etc. however these require more knowledge and skill for you to be able to utilize them effectively in your wealth generation.

Can I invest in stocks while abroad?

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Inquirer:
very interested po ako mag invest sa ating local market. Pero di ko po alam kung san ko uumpisahan. I have PLDT shares po dahil Ito lang po ang Phil. Company na listed dito sa NYSE. Meron na po ba tayong brokerage company na pwedeng mag trade online? Pano po ba ang best way na mag open ng account sa isang brokerage company diyan,na di na kailangan pang umuwi ngPinas?

Guita of Coalyco Foundation:
Our laws require you to be in the Philippines to open a stock trading account with online brokers.