I figured – I might as well plunge head-on into the world of personal finance. And what better way to continue my education than by formal training.
Good too that I got a semi-scholarship / discount through MoneyDoctors partner and friend, Salve Duplito, who is a finance guru herself. (thanks, Salve, and to Mr. Henry Ong, head of the RFP – Philippines program)
So my friends, in a few months, I hope to be a Registered Financial Planner. I also want you with me on that journey so I am cooking up something that I hope will positively impact the financial future of one (or two, or three) of you. (hint, hint)
“Did”. I am not sure about that word. Because it is in the past tense and means the fun and the adventures are over. When they are not. We are just beginning.A reader wanted to know how we “did it”. She said she read my first post but that I just skimmed the surface of how we overcame the bleak prophesies of our first financial planner, that I did not really explain how we got that 24% increase in our annual income, and more importantly, how we overshot it. If you have not read that first post, here is what our first 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 99 posts, 453 comments (54 of which are spam which I have not deleted nor approved) and 699 tags, I come to this, my 100th post.
To think that YouWantToBeRich started as just a requirement to get a certificate in MavenSecrets, a professional blogging and internet marketing education seminar that I attended in 2009.
I did not know that it would change my life and give it colors that I never knew existed, or give me opportunities for self-expression and advocacy in a niche that I was just getting really interested in at that time.
At first, I thought I would go into food and travel because like Anton’s OurAwesomePlanet, it was my passion. I even asked hubby to buy me a camera to herald my entry into the blogosphere via a food and travel blog.
But I am glad I went down the path of learning about money and people and their money idiosyncracies (especially my own and my family’s). It felt good to chronicle this journey and to look back and learn from it again.
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.
Some readers emailed me privately wanting to know about stocks and financial statements. Here is my two cents worth.
I remember two things that my financial planner made me do so I will not be overwhelmed by stocks (well) and so that I can understand it:
1. He asked me to look at the business page of the newspaper everyday, the Stock Exchange page to be specific, and to choose at least 10 stocks that I will track and follow day after day after day.
He was right. This gave me more than what I thought it will give me. At the beginning, yes, there was confusion, and then after some time (six months… and going), illumination. I had a “feel” of the market, and somehow, my “gut” was developed. I would know if stocks are on the rise, or if it is on freefall, which is the time to buy. The green and the red arrows in the newspaper actually meant something, but only as supplements to the general, wonderful, engaging world of numbers. And when I recently had a report on my stockholdings and saw a 5% growth rate per month, I knew why a lot of other people play this game, and why they become greedy.