I think I first heard about Mutual Funds from Bo Sanchez. He likens it to a vehicle that almost anyone, with some funds to invest, can jump into, and that it should be a staple in the portfolio of any smart investor.

I was not entirely convinced (I did not really understand).

To further dispel the mystery of this so-called staple – Mutual Funds – I did some further reading and some interviews. It is simpler than I thought.

Mutual Funds, turns out, is an investment vehicle where people can pool their resources to take advantage of the magic of larger numbers, that is, because a lot of people invest into “the fund”, they have a large number, and thus, the mutual fund manager – a professional who will manage the investment – can get better rates of return for them. The mutual fund manager trades the “pooled” money on a regular basis and the net proceeds or losses are then typically distributed to the investors annually. As my friend Salve Duplito said in one of her articles in MoneySmarts, with as little as USD$100, the regular John or Juans can get their feet wet in an instantly diversified portfolio of stocks, bonds, or both.

A sort of safe haven for the cautious investor.

…To read the full article, please click on the title…

Parents, more often than not, are, really, well-meaning. But sometimes, their good intentions do more harm than good. That dole-out would only teach my brother that mommy is there if he gets into straits, that it is okay to spend because mom is there, always there, and she will pay…? No need to stand on his own two feet.

Please click on the title to read on.

In fact, in his report, the financial planner said, “While the couple’s Emergency Fund Ratio (EFR) will be over 1x by the end of 2007, the ideal ratio is 3x. The couple would need to add around Php149,000 to their annual income to meet such a ratio. To raise their savings rate to 18.1% from 6.7%, the couple would need additional annual income of Php262,000, or add 24% to their current annual income.” After this analysis, without ever explaining what the hoot it meant, or if there was any hope for us, we never saw him again.

Please click on the title to read more.