Financial Education Through Investments

Stock Update

2016-06-03T06:58:00.003-07:00

The Economy Looks Promising (And So

Do Your Stock Market Investments)

I guess it happens every time there's a new President.
People keep asking me, "With a Duterte presidency, what will happen to our economy? Will the stock market continue to rise?"

Our happy diagnosis: In the coming years, we believe the economy will continue to rise. We're NOT saying there will be temporary downturns—we will always have them. Up, down, up, down. But our long-term trajectory remains the same: The Philippines will rise!

And so will your investments.

Hallelujah.

But if you want to know what will happen to our economy (and therefore to our favorite stocks) before you look at what the new President will bring to the table, you must first look at the two huge pillars of the Philippine economy...

Our Two Economic Drivers

Economist Dr. Bernie Villegas said (before the elections), "The six to seven percent (GDP) growth we experienced for the last four years is going to be sustained whoever is elected as president."

So even without a new President, our economy was already going gangbusters. Because of these two drivers.

1. OFW Remittances

OFW remittances (sometimes the only good news of our economy at certain stages of our history) gave us $25.8B in 2015. No matter how incompetent past administrations were, this kept our economy afloat.

Today however, there is a real concern that it may slow down, especially from the Middle East, because of low oil prices around the world. (From $100-plus a barrel, it's down to $30-plus.) Note that there are 2.5 million Filipinos who work in that part of the world, 40 percent of them in the Kingdom of Saudi Arabia.

Despite this, the government is still projecting three percent to five percent growth rate of the remittances. But more conservative analysts put it between two percent to three percent growth.

And then there's this sector that was started 15 years ago.

2. BPO Industry (Business Process Outsourcing)

Last year, BPOs employed 1.1 million Filipinos and earned $21.2B for the country. Very soon, its yearly earnings will surpass OFW Remittances, because the BPO Industry grows 17 percent a year.

Some analysts are questioning the future of this industry—particular voice (call centers)—wondering if the demand for them will remain the same if the younger generation is adept at dealing with (mobile) websites, requiring no human intervention. While enjoying the fruits of its aggressive growth, industry leaders will need to adapt to the coming winds. Just based on these two drivers, the Philippine economy will be difficult to beat.
The big question: Will the Duterte Presidency add or subtract to this growth scenario?

Some economists are saying it will add.

4 Possible Pluses of the New Administration

I must repeat what I mentioned in the last Stocks Update:This essay is NOT about Duterte from a spiritual or moral perspective, especially with his conflict with the Catholic Church. This is also NOT the venue for my personal views about him. This is purely an economic discussion. With a Duterte Presidency, economists say there may be four potential positives:

1. Billions to Be Unleashed for Infrastructure Projects

Business people are talking excitedly about the prospect of new airports, seaports, roads, and railways all over the country. Fact: Massive infrastructure spending will prime the economy. And long-term effects? These projects will benefit the provinces, attracting people to go home to their birthplaces to find jobs, start businesses, and (hopefully) decongest Metro Manila.

2. More Open to Foreign Direct Investments

The new administration promises to make it easier for foreign investments to come in. Duterte also wants to create more Economic Zones in Mindanao. If done, there is a chance that the control of our economy by a handful of families (oligopoly) will be broken, and our economy will expand.

3. Remove Red Tape in Government Agencies

Big businesses who've built their presence in Davao report of their hassle-free, bribery-free experience with government agencies there. Transactions that would otherwise take many months to file in other cities would only take 72 hours in Duterte's city. The big question is if Duterte can replicate this "business friendly" scenario all over the country. Only time can tell.
4. Increase Tourism

Last year, Amazing Thailand attracted 25 million tourists. "It's More Fun in the Philippines"? Five million. Why do we only get a fraction of the tourists they get? Doesn't the Philippines have the same glorious beaches and amazing islands? We believe that if enough infrastructure is built and peace is established, we will see an increase in tourism in the coming years—boosting the economy of the provinces.

Will this rosy picture happen?

As always, it boils down to the political will to execute.

Resolution?

Keep investing your small amount each month!

May your dreams come true,

Bo Sanchez

2016-06-01T06:09:00.002-07:00

Why Strategic Averaging Method (SAM) Is So Much Better Than Peso Cost Averaging Method

I need you to read my essay very carefully.

Because you need to understand how terrific your investment strategy is compared to other strategies out there.

In the TrulyRichClub, you use the Strategic Averaging Method (SAM). It's an improved version of the Peso Cost Averaging Method.

Why is SAM better than Peso Cost Averaging?

Answer: Because you'll earn more. How much more? In the long term (20 years or more), you'll earn MANY MILLIONS more.

Let me explain why.

In the Peso Cost Averaging Method, the investor buys stocks of gigantic companies on a regular basis (for example, monthly), always buying, never selling—for decades. He just buys, buys, buys.

In SAM, the investor also buys the stocks of gigantic companies each month for many decades, but we do two things differently:

1. We sell when we believe the share price is very expensive (it hits or goes above our Target Price). This is like a "reset". Because when we sell, we get our cash back and start deploying again to cheaper stocks slowly.

2. We buy only if the price is cheap (we only buy if the price is below our Buy-Below Price).

These two big differences will give you superior returns.

Note: This won't be obvious in the first five years of investing. But it will become very obvious after the fifth or sixth or seventh year... Because at a certain point, Peso Cost Averaging becomes almost a Buy-And-Hold Strategy. (Buy-And-Hold Strategy is another method of investing where you plunk a huge amount and buy a stock—and don't do anything anymore afterwards.)

Why is the Peso Cost Averaging almost like a Buy-And-Hold Strategy? Let's say you invest P5000 a month faithfully. After 20 years of investing, your money would have grown to P5 Million. So your monthly investment

RigNtocks Update

(P5000) is now only 0.1 percent of your total portfolio. It won't make a dent anymore. So it's almost like a Buy-And- Hold Strategy.

But if you follow SAM and—at very strategic times sell portions of your portfolio—you actually multiply your returns because you can buy more stocks at cheaper prices.

I believe that SAM will increase your average growth by a few percentage points. I love giving this example: If a woman at age 25 invests P3000 a month, by the time she retires at 65, she would have P30 million—if her stock market investments grew by an average of 12 percent a year. But if she uses SAM and nudges her average growth upward by just 2 percent, it'll be glorious. At 14 percent growth, she won't have P30 Million, she'll have P55 Million.

NOTE: In the past four years, if TrulyRichClub members simply followed our instructions, our average growth has been 17 percent-plus a year. It's been pretty amazing.

Bottom line, I just want you to appreciate the powerful strategy that you're using here at the TrulyRichClub.

Happy investing!

Bo Sanchez

But if you follow SAM and—
at very strategic times sell portions of your portfolio— you actually multiply your returns because you can buy more stocks at cheaper prices.

2016-05-30T05:38:00.001-07:00

Invest 30 Percent (or More) of Your Income Into 3 Specific Funds

Last week, I urged you to live only on 70% of your income.

So what will you do with the 30 percent that you don't spend?

You deposit it into 3 Funds.

First is an Eternity Fund.

This is your greatest investment with out-of-this-world eternal returns.

This is your tithe to God.

Give 10 percent of your income to this fund.

Where do you give? I urge you to financially support your spiritual family—so that they can continue to support your spiritual needs—and bless the world.

Second is your Emergency Fund.

You need this when the house roof leaks and needs repair.

You need this when the baby gets sick and needs hospitalization.

You need this when the car breaks down and needs a major overhaul.

You can't put all your savings in your long-term investments such as your money in the stock market, properties, and business.

You need some money in the bank.

So put 10 percent of your income into an Emergency Fund—and make it reach at least three to six months of your monthly income. Once it reaches this amount, you can divert this 10 percent into your third Fund below…

Third is your Emancipation Fund.

You put 20 percent (or more) of your income into this fund.

I've noticed that Filipinos love putting their savings in piggy banks, Pringles cans, mayonnaise jars, and under the mattress.

Believe me, nothing will happen if you leave them there.

I strongly suggest your Emancipation Fund is invested in the Stock Market. If you know how to do it, investing in the Stock Market is the safest and most effective way of long-term investments in the world.

What is your goal? When your passive income is equal or bigger than your expenses, then that's when you can say, "I'm free!”

Question: Do you have an Eternity Fund, an Emergency Fund, and an Emancipation Fund? Which should you work on more?

May your dreams come true,

Bo Sanchez

2016-05-30T05:22:00.002-07:00

The Law of Duplication Works in Your Income Too

If you duplicate yourself, you duplicate your income.

Why?

It's very simple.

When you duplicate yourself, you increase the number of people you serve. When you increase the number of people you serve, you increase your income.

If you don't duplicate yourself, your income remains stagnant.

And even if it does increase, your income only enjoys linear growth. If you duplicate, your income enjoys exponential growth.

Employees Who Duplicate Get Promoted

Do you want to be promoted in your job?

Duplicate yourself.

As an employee, duplicate your output. Duplicate your production. Duplicate the great results you're getting.

How? Find a way. Use your ingenuity. Use your creativity.

As a manager, duplicate yourself by training your staff until they can replace you. Believe in them. Raise them up. Develop them. Make them better than yourself.

Some are afraid to do that. "Bo, if I do that, they won't need me anymore and fire me!”

But if your boss is intelligent, the opposite will happen. She'll recognize your leadership. Because only leaders can duplicate themselves. And leaders rise to the top.

I can hear you now. "But Bo, that's the problem. My boss isn't intelligent!”

Remember what I said before? If your present boss won't recognize you, another person will. Word about your leadership will go around. People will talk about you. And you'll be promoted, perhaps not in your company now, but in another company. Or in your very own company.

A Second Job

I'm not a great fan of getting a second job to increase your income, but I need to mention it here. It's also duplication.

When you go to the States, it's very common to meet Filipinos who hold two jobs. They work 16 hours a day, not counting the travel time to go to work.

My friend does that. She sleeps three to four hours a day just to be able to hold two fulltime jobs. She drives a brand new BMW. Yes, she earns more because she has duplicated herself by having two jobs. But it's a weak way of duplicating.

Today, that friend of mine is sick. Her body is caving in.

My advice? This should be a temporary situation.

Move on to a better way of duplicating yourself...

Two Kinds of Income

There are basically only two kinds of income in the world:

Active Income and Passive Income.

1. Active Income

How do I define Active Income?

You exchange your time for money.

A skilled laborer exchanges one day of work for P500.

A manager exchanges one day of work for P5000.

A dentist will pull your tooth for P600.

A heart surgeon will do a bypass for P300,000.

What do they have in common? All of them exchange time for money. When they stop working, they stop earning.

Let me give you an example.

Remember my story of Ate Guy?

Ate Guy is the terrific masseuse of my wife who offers massage and torture at the same time.

Lucky for her, there are enough deranged people in the world who want that type of massage. Like my wife, for instance.

So Ate Guy is always in demand.

She can massage five clients a day—and she usually does.

Because of this, she earns P50,000 a month.

But let's say she takes a vacation.

Her earnings drop to zero.

And when she gets older, let's say she doesn't want to work this hard anymore. Instead of five clients a day, she wants to massage only two people a day. But if she does that, her income will go down a lot.

Or what if Ate Guy wants to earn P100,000 a month?

She can't massage 10 people a day. Sure, she can raise her prices, but by only so much.

My point? Active income is limited.

The only way to earn more is by switching to passive income.

And the only way to do that is by duplicating herself.

First, she can train other women the "Ate Guy Torture Therapy” and form an army of Ate Guy-Trained Torture Therapists—and earn a commission from each of them.

Second, she can create the "Ate Guy Healing Oil” in a bottle, ask other masseuses to sell them.

I repeat: Active income has a limit.

But passive income is virtually limitless.

May your dreams come true,

Bo Sanchez

Live on 70 Percent of Your Income

2016-05-28T07:05:00.002-07:00

Live on 70 Percent of Your Income

I can hear you now.

"Bo, that's impossible. How can I live on 70 percent of my income? I live on 110 percent of my income!”

I want you to look at the list below.

If you cut back on buying some not-so-essential items, and invest it in an investment vehicle that grows at 12 percent a year (or more), you'll be earning millions. (NOTE: If you followed the guidance of the TrulyRichClub

in the past 4 years, your investment would have grown at an astounding 17.3%

You think it's just a few pesos today—so why not spend it?

But when you do, you're also throwing away your earnings.

If you quit smoking, you would earn P6M.

If you cut back on coffee, you could save yourself P10M.

If you give up lotto, you'd have another P6M.

Take a look…

Little Things	Price/Item	Quantity	Month	35 yrs @ 12%
Softdrinks	P20/can	2 cans per day	P1,200	P6M
Coffee	P60/cup	1 cups per day	P1,800	P10M
Internet on-line games, video games, CD rent	P500	1 per week	P2,000	P11M
Ice cream, dessert, junk foods, candy, etc.	P100	1 per day	P3,000	P17M
Cigarette	P40/pack	1 pack per day	P1,200	P6M
Extra cellphone load	P1,000	1 per month	P1,000	P6M
Lotto tickets	P40/ticket	2 tickets per day	P1,200	P6M
Movie tickets	P100/ticket	10 per month	P1,000	P6M
Buying "sale” items	P1,000	1 per month	P1,000	P6M

Total: P74 Million

Fact: You're Throwing Away Millions!

Obviously, you have to watch your big-ticket purchases.

That's where a lot of people lose money.

Example: I've been driving my car for the past four years now. (And it was even given to me!) A lot of people are telling me, "Bo, it's time to buy a new one. You can afford it anyway.”

Yes, I can afford it.

But my car is still in a great condition.

Sure, it isn't as smooth as when it was new. And its interiors are showing its age. Its mileage is pretty huge because I go all over the country.

But I don't have plans to change it yet. Not now. I'm having so much fun investing my money and seeing it grow.

May your dreams come true,

Bo Sanchez

How To Become A Successful Stock Investor

2012-05-14T00:22:00.000-07:00

Location is of utmost importance - proximity to the city centre and allied services. In the outskirts, connectivity and access to facilities, and social infrastructure hold the key. Apart from this, the age of the building, quality of construction, and the returns on investment expected, are other factors. In terms of the rate of returns, commercial property garners up to 12 percent while the returns on residential property is five to six percent. Increase in rentals depends on the market conditions, and the demand and supply equation.
Let us use, for illustration purposes the case of a Filipino residing in the Philippines, employed and with a salary of Php12,500 monthly. He also has a credit card with Php35,000 credit limit and Php10,500 cash advance limit. This beginning investor, following the program suggested in Finding the Money for Investment, decided to pay himself first, setting aside 2% to 10% of his salary or a minimum amount of Php275 every month. His plan is to invest his savings in common stocks listed in the Philippine Stock Exchange (PSE) using BPI Trade for his online stock broker or Citiseconline. He will also open a Bank of the Philippine Islands (BPI) Express Teller Savings account once his total funds is in excess of Php3,000, the monthly average daily balance (ADB) requirement of this type of account.
EB5 is a United States immigration visa that is available to investors from foreign nations. This visa is given to the investors with certain restrictions. If the investors live in the US for two years by the guidelines of the visa, he is eligible to get a permanent citizenship. The immigrant investor visa is given to investors that promise to provide permanent jobs for the people of the United States. The immigrant investors are directly responsible for the creation of thousands of employment opportunities. These jobs might be full time or part time. It is important for the investors to live by the guidelines of visa for at least two years to be eligible for the green card visa. Getting the green card visa helps them to apply green card for their families as well. The main advantage of the EB5 visa program is that it is responsible for bringing billions of dollars to the US economy as capital for the business. The EB5 visa program is helping immigrants to live happily in the US, meanwhile their capital is helping the US to improve the economy.

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Finally, you need to learn the techniques so thoroughly that they become second nature to you. Those techniques will involve finding properties that have great potential, becoming an effective negotiator, structuring deals that will make you the most money with the least amount of capital outlay, and then how to resell the properties for the greatest amount of profit.
The Connecticut Real Estate Investors Association, or CT REIA, is announcing the start of its 3-evening new investor workshop. This program will begin on Thursday, February 3, 2011. Additional dates for the program are Thursday February 10 and Thursday February 17. This workshop will take place at the Comfort Inn, 900 East Main Street, Meriden, CT from 6:00pm to 9:00pm. Tuition for this 3-evening program is $140 for CT REIA Members, and $180 for not-yet-members.
Stock markets generally move in advance of news or supportive fundamentals - sometimes months in advance. If you wait to invest until it is totally clear to you why a stock or a market is moving, you have to assume that others have done the same thing and you may be too late.
The worst thing an investor can do is take a large loss on their position or portfolio. Market timing can help avert this much too common experience. You can avoid making that huge mistake by avoiding buying things when they are high. It should be obvious that you should only buy when stocks are low and only sell when stocks are high.
If you decide to look for angel investors outside of the family, then you are going to have to woo them with more than a keen business plan. If you can somehow get a working prototype of your new company, then you will be able to accomplish this. But that feat is easier said than done. However, angel investors want to be able to see with their own eyes that their investment has a potential for a return.

Additionally, a basic business background, plus biographies, and past experience will make closing new deals easier. For banks, providing a complete package with the investor information can move a transaction much more quickly than waiting for them to reach a point where they request the information. Having all this information prepared in a manner allowing a quick electronic transfer can be useful However, many investors will (and I advise) insist that the information not be transmitted electronically. This is the best course because sending a hardcopy numbered version for a specific individual reduces risk of the misappropriation of the sensitive personal identity information included in the package.http://bosanchezmembers.com/amember/go.php?r=20991

Passive Income Properties: The Sweet Income without Sweat!

2012-04-16T17:04:00.000-07:00

Passive income properties are the best way to get paid for the rest of your life for doing work now. Everyone dreams of just doing whatever they want and getting checks in the mail; it's the new American dream. Short of winning the lottery or your great aunt Mildred leaving you all the money she has been hiding in her mattress, income from passive elements is the best way to achieve this dream.

Passive income is exactly what it sounds like. Any income you aren't actively working for constitutes income from passive elements. Unlike working forty hours a week to get a paycheck, income from passive elements comes from work you did in the past or investments you have. Retirees live off the passive income created by their pensions and retirement plans. Stocks pay dividends and bonds pay interest and both constitute passive income.

Businesses can also create income from passive elements. If you own a business that is set on autopilot or is managed for you by others then you are receiving passive income. While there are many ways to generate this kind of money, the best way has to be through real estate. Passive income properties offer owners the ability to put in a minimal investment of money and time and reap the rewards for the rest of their lives if they choose.

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How much of your income that is derived from passive income properties is up to you. You can own as many passive income properties as you need to fit your lifestyle and financial needs. With some planning and smart investing though, you can easily create a small empire of real estate that funds the rest of your life.

For example, say you budget and save for a year or two and purchase your first property. You study the marketplace so you know how much your mortgage is going to be versus the rent you can charge. After expenses let's say you bring home $500, which may seem like a modest sum. Now what if you repeated this process for the next ten years? You'd end up having ten properties that are bringing in $5000 a month with little or no work on your part.

Besides the money coming in you have built up equity in these properties. Your tenants are paying your mortgage for you, plus a little extra. As you grow older and you need the money for life changing events like kids going to college, marriages or funding your retirement you can sell the houses and liquidate the equity.

With a little planning passive income properties can set you up for life. The best part is you decide your level of involvement. If you want to hire a management company to handle the ins and outs, you can. If you want to mix it up with the tenants, you can. Either way you are going to be collecting checks every month that will add a nice icing to the cake of your retirementor even fund the whole deal depending on how you play it.

Stock Market Investment Tutorial eBook ( Last Chapter)

2012-03-26T00:54:00.002-07:00

Chapter 6

Open an Online Account

I don’t work for Citiseconline.

But I highly recommend that you use it as your way into

the market.

I’m recommending it to you because they’re the best

online trading platform in the country today. They’re also the

biggest. (And to be upfront about it, I also bought Citiseconline

stocks. Yes, they’re a publicly listed company too. I believe in

the team that owns and runs it.)

Do you want to invest using a traditional stock broker?

My mother used to do that.

She’d pick up the phone and give instructions. “Please

buy for me…”

Just for fun, I dare you try doing that with your P5000.

See what will happen.

At least, you’ll give someone a good laugh and de-stress

his day.

You see, traditional stock brokers will never handle the

accounts of my house helpers. I can’t blame them. Manpower

is very expensive.

But Citiseconline will handle the accounts of my house

helpers.

Precisely because everything is done online.

It’s Really Easy

Citiseconline has made it very simple for small investors.

They created the Easy Investment Program or EIP.

If you have P5000 or more, you can start investing. P5000

is the initial minimum amount. It’s up to you how much you’ll

invest after that. After that, Citiseconline won’t remind you to

deposit your monthly investments.

But at the TrulyRichClub, I’ll do that.

That’ll be my service to you.

I’ll bug you every month to invest. I’ll email you my Stocks

Update to remind you to follow your investment plan. (More on

this later.)

For the Easy Investment Program, Citiseconline suggests

the great companies you can invest in—companies that they

believe will be around for the next 10 years or more.

Blow the trumpets please!

Here they are…

Company Name Stock Symbol

Ayala Land Inc. ALI

Bank of the Phil. Islands BPI

Jollibee Food Corp. JFC

Manila Water Co. Inc. MWC

SM Prime Holdings, Inc. SMPH

Phil. Long Distance Tel Co. TEL

Every month, you can deposit P5000 (or whatever amount

you want to put in) into your Citiseconline account. No need to

go to their office to do this. You can do it through a bank deposit

via any branch of BDO, BPI, Security Bank, and HSBC.

From the comfort of your home, you can open your

computer, log onto the website, and buy the stocks from the list

above that you like. You’re doing it. You’re in control.

Very Important Note: All companies require a minimum

number of shares or what they call “Board Lot” every time you

want to buy shares. So if you only have P5000, you won’t be

able to buy shares from PLDT, Jollibee, and SM Prime Holdings.

Because their prices are higher.

Example: As I write this piece, Jollibee is selling at P58 and

they require a minimum of 100 shares. So that means you’ll

need at least P5800 to buy shares from Jollibee.) So if you only

have P5000 to invest, choose between Ayala Land, Manila Water,

and Bank of the Phil. Islands. Those are solid, great companies

that will make you wealthy in 20 years.

So every month, buy.

When will you sell?

Oh, in about twenty years.

I’m not kidding.

Make the stock market your big piggy bank.

Important Note: In the off chance that there’ll be a grave

reason to sell, I’ll tell you about it through my monthly Stocks

Update. (More on this later.)

Now let me speak to those who have more money…

If You Have P1M or More,

You Can Also Do a Variation of EIP

As I write this, Citiseconline has yet to launch this

program.

If you have more money—say P1M or more—and you

want to invest in the stock market, you can do a variation of

their Easy Investment Program (EIP).

From what I hear, they may call it Accumulator Plus. (You

know how they like sophisticated names.)

I just call it EIP with caffeine. Or EIP with boosters. Or

Super EIP.

Or EIP Plus.

Hey, these terms are just between you and me, okay?

Don’t call up Citiseconline and ask for Super EIP. They won’t

understand what you’re talking about.

This is what this EIP with caffeine is all about: There’s

another list of great companies whose share prices are really

low—and who are about to go up within these next six

months.

So if you have P1M, don’t invest it all in one plop.

If the market crashes, you’ll have a heart attack.

Even if you know that it’ll go up again in thefuture, it’s

still depressing.

So why not divide your P1M into five parts—and invest

P200,000 every month? That way, if the price goes down, yourP200,000 will be buying more shares in the next few months

If the price goes up, you’re still earning very well from yourfirst investments. The important thing is that you can sleep at night.. So select two, three, or four companies from the magic list of growth companies below. According to Citiseconline, these are the companies that are undervalued today (meaning: share prices are cheap compared to their real value):

Company Name Stock Symbol Target Price

Energy Dev. Corp. EDC P6.50

First Gen Corp. FGEN P15.50

First Philippines Holdings FPH P75.00

Security Bank SECB P63.50

Engineering Equip. EEI P3.40

Manila Water Co. Inc. MWC P20.75

Note: I’m writing this in March 2010. This list will change!

So when will you sell?

Unlike the original EIP where you don’t sell, the EIP Plus

has a specific price you’re waiting for. Do you see the target

price above? If the price of the share goes very near that target,

sell your shares. Keep your earnings and wait for another

opportunity to invest again.

You may ask, “But Bo, what if it goes higher than the

target price?”

Don’t be greedy. Better to be safe. Unless Citiseconline

analysts set a higher target price for the company, I’ll sell. I’ll

be happy with the profits. I won’t be greedy. I’ll wait for other

undervalued companies.

What Stocks Have I Bought

My house helpers are doing an EIP.

So they’ve bought shares of Ayala Land (ALI) and Manila

Water (MWC). But two of my helpers also bought First Gen

(FGEN) and Energy Dev (EDC), two companies that aren’t

listed in the EIP—but in the EIP Plus. But since I’m monitoring

their accounts, they’re safe. Once these two companies reach

the target price, they’ll sell.

Personally, I’m doing an EIP Plus. (Remember, this is

just our term. Citiseconline will most likely call it Accumulator

Plus.)

I’ve bought First Gen (FGEN), First Phil Holdings (FPH),

and Engineering Equipment (EEI). So far, I’m very happy with

my earnings.

I also have other stocks that don’t fall into these lists. I have

Universal Robina (URC) but I’ll sell this soon when it reaches its

target price of P25. I also have Citiseconline (COL), but I think

this is more of an emotional purchase than anything else. I just

love this company and the people behind it.

Okay, it’s time to open your account.

Log on to www.citiseconline.com now.

4-Step Application Process

1. Go to www.citiseconline.com

On their website, click on their Easy Investment Program or

EIP.

You’ll read stuff that you read in this book, but you’ll

understand it more.

Repetition is the mother of all skill.

So keep reading!

2. Submit an Application Form & Other Documents

From their website, you can download an Application

Form. Simply print it out, fill in the information, and mail

all required documents to their office. And then call up

for any questions. Their phone number is Tel. 6333-777. Or

better yet, visit their office and talk to someone face to face.

Their office is 2403-B East Tower, Philippine Stock Exchange

Centre Exchange Road, Ortigas Center Pasig City. Just walk

right in and say, “I want to open an account.” Someone will

walk you through the application process.

3. Deposit Your Money

If you visit the office, you can bring your cash or a check.

Not going to their office? You can deposit your money to

Citiseconline using any branch of BPI, BDO, Security Bank,

and HSBC. Again, their website will tell you how to do

that.

Epilogue

See You at My Next

Stocks Update

As my TrulyRichClub member, I’ll send you a Stocks Update

every month.

In one single page, I’ll tell you everything you need to know

about your stock investments. Here are the other things I’ll do for you

through my Stocks Update.

I’ll remind you to invest each month. I’ll urge you, push you,

beg you to be faithful to your monthly investments.

I’ll tell you when it’s time to sell the stocks I wrote about here.

I’ll tell you the new undervalued stocks that you can buy.

I’ll tell you what I’m doing with my own stocks.

I promise: In plain, simple English. No financial jargon you

won’t understand

In the meantime, keep learning.

May your dreams come true,

Bo Sanchez

PS. Did a friend pass this Ebook to you? For those who are not

yet members of the TrulyRichClub, I’m personally inviting you

to join me and invest in your spiritual and financial education.

You won’t regret it. Receive my Stocks Update every month,

plus a mountain load of material for your financial and spiritual

growth. To try it out, click at the link below.

~~www.TrulyRichClub.com~~

Stock Market Investment (chapter 4&5)

2012-03-24T03:45:00.001-07:00

...the TrulyRichClub...

Chapter 4

Own a Great Company

When I was 8 years old, I learned that my parents invested

in the stock market. I overheard them say that they owned shares

of San Miguel. (My father worked for San Miguel Corporation for

most of his life.)

I asked my father, “What do you mean by stocks, Dad?”

He said, “If I bought a few shares of stock of San Miguel,

that means I own a tiny part of San Miguel.”

“Wow,” I gushed, “if you own a part of San Miguel, does

that mean they’ll give us free Magnolia ice cream and Coke?” (At

that time, San Miguel also owned both companies.)

Dad shook his head. “No. It means if San Miguel earns

money, they’ll give me a tiny part of their profits. They call

them dividends.”

“Oh, I see.”

Actually, it was as clear as mud to me.

Dad looked at my face and knew I was lost.

So he gave me an example.

“Let’s say your mother puts up a small candy store in

front of our house…”

“But Dad, Mommy doesn’t like candies. She loves

chocolates.”

Dad rolled up his eyes. “This is just an example!”

“Then make it realistic. Let her open a chocolate store.”

“Okay! Mommy needs P50 to buy the chocolates and

another P50 to buy a small table for the store. So she needs a

total of P100. But let’s say she doesn’t have P100. Let’s say she

only has P90. So she walks up to you and asks, “Bo, can you

give me P10? In return, you’ll own 10% of my candy store…”

“Chocolate store,” I frowned.

“Okay, chocolate store. So you give Mommy your P10. At

the end of the year, the chocolate store earns a nice profit of P10.

So Mommy decides to share with you P1, since you own 10% of

the store. That P1 is what you call your dividend.”

“That’s great. So you’re earning dividends from San

Miguel, Dad?”

“Yes, but that’s just one way of earning. The other way is

through capital appreciation.”

“Capital what?”

The Company Gets Bigger

“Let’s go back to Mommy’s chocolate store. Do you

remember how much was the store worth?”

“No.”

“How much did she need to buy all the stuff?”

“P100.”

“Yes. That’s how much Mommy spent to buy the

chocolates and the table. But after a year, business was so good

that she decided to sell biscuits too. From the profits of the

business, she bought an entire pack of biscuits worth P50. She

also bought a second table for another P50. So Bo, how much is

the store now?”

“P200.”

“And how much percent do you own?”

“I own 10% of the store.”

“That’s right. One day, your sister says, ‘Bo, I want to buy

your ownership of Mommy’s chocolate store.’ What will you say?”

I crossed my arms and pouted. “I’ll tell her it’s not for sale.”

“But if you wanted to sell it, how much should she pay

you?”

“10% of P200 is P20?” I flashed a smile, “Hey, I earned

P10…”

“That’s capital appreciation. You pick up fast. But that’s

not all…”

The Company Has More Potential

“You know how your sisters like to buy the same shoes

and clothes? Let’s say your other 4 sisters want to also be a

part-owner of Mommy’s chocolate store. Because they believe

that the chocolate store will spread to 100 branches all over the

world. They foresee Mom opening stores in Paris, New York,

Moscow, Tokyo… So they go to you and beg you to sell them

your 10% share. What will you do?”

“I don’t know.”

“Think.”

“I guess they’ll gang up on me, twist my arm, pinch my

ear, and whoever causes the most pain wins.”

Dad rolled up his eyes to the ceiling again. “Bo, imagine if

all your sisters are kneeling down in front of you, asking, ‘C’mon

Bo, sell me your 10% ownership! Please! Pleeeeeeaaaaase!’”

That was my lightbulb moment. I got it.

“Hey, I won’t sell it for P20,” I said, “since they’re fighting

over it, I’ll sell it for P30. Or P40. Or even P50! I’ll sell it for P100.

Plus, whoever buys it from me must be my slave for the next 5

years.”

Dad chuckled. “So you realize that the price of the stock

is determined by two things: Real Value and Perceived Value.

Real value means the cost of the store—how much are the

chocolates and tables. Perceived value means how much are

people willing to buy it. Perceived value is based on potential.

Perceived value is based on demand.”

What I Do Today

Fast forward 30+ years later.

I now invest in the stock market.

And I teach others to invest too.

Note: I didn’t say “Trade” the Stock Market.

Because there’s a giant difference.

Let me explain in the next chapter.

Chapter 5

How to Retire a Millionaire

“The stock market is dangerous!”

Have you heard that before?

I have. Many times.

And you know what? I agree.

After all, statistics say that 85% of stock market players lose

their money. Believe me, billions have been lost.

But whenever people say, “The stock market is dangerous!”

they’re referring to trading in the stock market. Not investing in

the stock market.

There’s a big difference.

In this little book, I’d like to teach you how to invest in the

stock market, not trade. If you want to trade in the stock market,

this book isn’t for you. Please look elsewhere.

Here’s the basic difference:

Trading is buying stocks and selling them within a day or

a few days.

Investing is buying stocks and selling them in six months

or never!

Warren Buffet, the richest man the stock market has ever

made, said, “Only buy something that you’d be perfectly happy

to hold if the market shut down for ten years.”

Here’s why I believe you should be investors: I don’t

believe ordinary people should be trading. I repeat, 80% of

people lose their money in the stock market. My belief is that

most of those 80% are traders.

Another word for trading is “speculating.”

As Mark Twain said, “October is one of the peculiarly

dangerous months to speculate in stocks. The others are July,

January, September, April, November, May, March, June,

December, August and February.”

In trading or speculating, you don’t look at how strong

the company is. Any company is game—even what they call

“penny” stocks. These are companies whose stocks are worth

centavos. Because they’re considered very risky.

So leave the trading to full-time traders—the people who

do this full-time, studying about it 8 hours a day.

Investors invest only on the great companies. Because

we’re in for the long haul.

And instead of trading, you should focus on your business

or job. Focus on your core competency. Stick to your game plan.

Everything that I’m teaching you here at the TrulyRichClub.

Through your business or job, you create the money

necessary to invest in the stock market.

One of the Greatest Inventions:

Money Cost Averaging

If you want to invest in the stock market, there’s only

one choice: Money Cost Averaging. That’s just a fancy name for

buying stocks of great companies, little by little, each month.

Perhaps P5000 a month.

Or P10,000 a month.

Or whatever fixed amount you’re can set aside from your

monthly earnings.

Can’t afford P5000 a month? No problem.

My maids can only afford to save P2000 a month. So every

third month, they invest P6000 into the stock market.

The important thing is to do it regularly.

Discipline yourself.

The moment you get your salary, divide it according to

the 5 “envelopes” I mentioned in Chapter 1.

When you do this, you’ll find your money growing

steadily year after year.

What About Recessions?

Now here’s a powerful point I want you to read carefully:

When you adapt this Money Cost Averaging strategy, you’ll be

buying without much thought to the bouncing of the market

prices.

You’ll hear a lot of talk like this…

“Is Ayala Land cheap today?”

“Do you think Jollibee will go up tomorrow?”

“Is BPI’s price expensive today?”

“Perhaps PLDT will be lower tomorrow?

Here’s a nice way of answering all these questions: Who

cares?

Because in 10 years—they don’t matter.

An oil crisis explodes all over the world.

Buy your stocks anyway.

A political crisis erupts in the country.

Buy your stocks anyway.

A world economic recession happens again.

Buy your stocks anyway.

Keep buying those great companies.

This is the secret of the wealthiest people in the world.

Do You Want to Become Rich?

Do What the Rich Do.

One of the richest men in the world, Warren Buffet, has a

rule on investing in the stock market: “Be fearful when others

are greedy, be greedy when others are fearful.”

When the economic recession happened last year, Buffet

was like a little kid in a giant candy store that has declared an

“All-Items-Must-Go” Sale.

Great companies were selling their stocks marked down

at half-price.

Some of the best imported chocolates were at 60% off!

Little boy Warren couldn’t believe his eyes. Even with his

vast amounts of money, there was so much good stuff to buy.

So Buffet went on a buying spree—picking up stocks of

solid companies left and right. While people were fearful, he

was brave.

Remember this when you’re doing your Money Cost

Averaging.

Are you ready?

Let’s enter the Candy store.

Here’s a nice way of answering all these questions: Who

cares?

Because in 10 years—they don’t matter.

An oil crisis explodes all over the world.

Buy your stocks anyway.

A political crisis erupts in the country.

Buy your stocks anyway.

A world economic recession happens again.

Buy your stocks anyway.

Keep buying those great companies.

This is the secret of the wealthiest people in the world.

Do You Want to Become Rich?

Do What the Rich Do.

One of the richest men in the world, Warren Buffet, has a

rule on investing in the stock market: “Be fearful when others

are greedy, be greedy when others are fearful.”

When the economic recession happened last year, Buffet

was like a little kid in a giant candy store that has declared an

“All-Items-Must-Go” Sale.

Great companies were selling their stocks marked down

at half-price.

Some of the best imported chocolates were at 60% off!

Little boy Warren couldn’t believe his eyes. Even with his

vast amounts of money, there was so much good stuff to buy.

So Buffet went on a buying spree—picking up stocks of

solid companies left and right. While people were fearful, he

was brave.

Remember this when you’re doing your Money Cost

Averaging.

Are you ready?

Let’s enter the Candy store.

Here’s a nice way of answering all these questions: Who

cares?

Because in 10 years—they don’t matter.

An oil crisis explodes all over the world.

Buy your stocks anyway.

A political crisis erupts in the country.

Buy your stocks anyway.

A world economic recession happens again.

Buy your stocks anyway.

Keep buying those great companies.

This is the secret of the wealthiest people in the world.

Do You Want to Become Rich?

Do What the Rich Do.

One of the richest men in the world, Warren Buffet, has a

rule on investing in the stock market: “Be fearful when others

are greedy, be greedy when others are fearful.”

When the economic recession happened last year, Buffet

was like a little kid in a giant candy store that has declared an

“All-Items-Must-Go” Sale.

Great companies were selling their stocks marked down

at half-price.

Some of the best imported chocolates were at 60% off!

Little boy Warren couldn’t believe his eyes. Even with his

vast amounts of money, there was so much good stuff to buy.

So Buffet went on a buying spree—picking up stocks of

solid companies left and right. While people were fearful, he

was brave.

Remember this when you’re doing your Money Cost

Averaging.

Are you ready?

Let’s enter the Candy store.

To be continued..........

...the TrulyRichClub...

Stock Market Investment (Chapter 1-3)

2012-03-22T06:27:00.001-07:00

My Maid

Invests

in the

StockMarket…

And Why You Should, Too!

Because Everyone Ought to Be Rich

BOSANCHEZ

#1 Bestselling Author of “Choose to Be Wealthy”

Preface

Take Charge of

YourFinancial Future

This little book has been long overdue.

I’ve been planning to write this for the longest time.

But I felt it wasn’t the right time.

Because I was still in the process of teaching my three

house helpers how to invest. My theory was this: If I can teach

them how to invest, I can teach anyone.

Do you know the problem with the stock market

world?

They don’t speak English. Honest.

They speak in some strange dialect that is spoken only in

the second moon of the planet Uranus.

But I’ve solved that problem. If my maids can understand

me, then anyone can understand me.

Today, my helpers are investing in the stock market and

they’re very happy.

I’ll Hold Your Hands Every Step of the Way

Here’s another thing I’ll do for you.

Each month, I’ll send you a very short “Stocks Update.”

I’ll tell you what companies I’m investing in and how they’re

doing.

Why will I give this “Stocks Update” monthly report? To

give you guidance and inspiration.

Especially when there’s a crisis, my “Stocks Update” will

be crucial. It will prevent you from selling your stocks because

of your panic—and lose your money. And it will encourage

you to do the very opposite—buy great companies when the

prices are very low.

If this is the first time you’re investing in the stock market,

I’m excited for you. You’re taking charge of your financial

future.

May your dreams come true,

Bo Sanchez

The Truly Rich Club

Chapter 1

Everyone Ought to Be Rich

I preach to thousands every week.

I write bestselling books that are read by thousands

more.

I also speak everyday on radio and TV to millions.

People think I’m pretty big.

So big that I meet only big people.

Well, I do meet big people.

I lead small groups for big leaders and big businessmen.

We call these small groups Caring Groups. In these groups, we

care for each other. We pray together, chat about our lives, and

study God’s Word.

But people don’t know that I lead a very different kind of

group at home.

Every week, I lead a Caring Group consisting of my three

helpers and my driver.

Each week, we pray together, chat about our lives, and

study God’s Word.

I have so much fun in our weekly meetings.

I’m able to help them in every aspect of their lives.

My driver is married. So I teach him how to strengthen his

marriage and become a great father to his four kids.

My helpers are all single. So I coach them how to relate

with their boyfriends. (My other name is Dr. Love.) I teach

them how to remain pure and discern guys.

Oh, we talk about everything under the sun. Their

relationship with God. Their physical health. And yes, their

personal finances.

“How Much Do You Pay Them?”

When I tell people my helpers invest in the stock market,

people ask me, “My gosh! You must pay them a fortune.”

No, I’m not Sharon Cuneta.

I heard she pays her helpers P25,000 each. (That’s only a

rumor. Maybe it’s true, maybe it’s not.) If it’s true, then that’s

great.

I pay my helpers generously, but not that much. I’ll later

tell you how much I pay them.

But you see, that’s not the main problem.

No matter how high their salaries are, they still can’t save

anything.

Let me tell you why.

Whole Civilizations Depend

On Their Monthly Padala

They send most of their salaries back home.

They send it to their parents, siblings, nephews, nieces,

aunties, uncles, cousins, including their pet carabao. Sometimes,

I feel my helpers are supporting entire civilizations. Without

their monthly stipend sent back home, the economy of an entire

barrio will cease to exist. People will loiter on the road aimlessly.

Children will die of starvation. And the world will come to an

end.

That’s not the only problem.

My helpers know enough to save a little every month. So

they don’t send everything back home. And for a few months,

their savings accumulates. It reaches P2500 and they’re happy.

But then, the inevitable happens.

My helpers receive a text message: A cousin’s husband’s

nephew’s neighbor ’s mother is in the hospital. Could they

please send P2500? If not, the patient will die—and they’ll carry

the guilt of that person’s death in their conscience forever.

So they send it. And they’re back to zero. Again.

Every time their savings grow beyond P2,500, their family

knows.

Call it ESP. Call it telekinesis. Relatives smell it. And they

call.

So to avoid this problem, I taught my helpers a simple

system.

Believe me, the system works.

Let me teach it to you now.

Chapter 2

Follow a Simple System

Today, my helpers have invested in the stock market.

Twenty years from now, they can retire as millionaires.

The system is really simple.

The moment they receive their salaries, they divide it into

five envelopes.

§ First Envelop: Tithe Fund

§ Second Envelop: Expense Fund

§ Third Envelop: Support Fund

§ Fourth Envelop: Emergency Fund

§ Fifth Envelop: Retirement Fund

Two of my helpers earn P7000 a month.

I know that’s higher than what others give, but I like being

generous to them.

My other helper earns much more because I promoted her

to bookkeeper.

Let me explain each Fund to you.

1. Tithe Fund

My helpers are already so generous to their families.

But I explain to them that we also need to give to God’s

work. I share to them the blessings that come from doing this.

“You’ll grow in abundance thinking,” I tell them, “when

you give beyond your family’s needs. This will make you think

rich and feel rich. And when you change your thinking, you

change your living. Soon, you’ll become very rich. And you’ll

have more to share.”

I told them that 10% is a great biblical guideline to follow.

But I never forced them. I wanted them to decide how much

they wanted to give. I don’t even know how much they give. I

ask them to give it directly at the Feast (that’s what we call our

weekly gathering in our spiritual family, Light of Jesus).

But let us say they do give 10%.

That means they give P700 a month.

2. Expense Fund

This is what they spend for their daily needs.

Since they live in our home, they don’t spend too much.

They buy their clothes, toiletries, and perhaps favorite

food not found at home.

But I’m so happy that they’re very disciplined.

They don’t spend too much on cellphone load.

So as not to spend too much, they take a day-off every

other week only. When they do, they spend for a movie or a

meal with their friends.

They generally live a happy life.

For their monthly expenses, my helpers spend P1000 a

month.

3. Support Fund

Like clockwork, each of my helpers send P2000 a month

back home to their province. They send this for the daily food

of their families. As I told you, if they don’t send this, the people

they love don’t eat.

There was a time when I wanted to end this dependence. I

wanted to help their families by providing a business fund.

Many times, I’ve sent money to the province so people

there can buy a pig, chickens, etcetera—anything that will give

them a source of income.

But my attempts have failed. Soon, they end up selling

the mother pig. Soon, they spend the capital. And the business

disappears.

Unless there’ll be people on the ground to guide them in

their businesses, nothing much will happen.

So my helpers—and the domestic helpers around the

world—continue to send money each month to feed their

families.

4. Emergency Fund

This, I believe, is the magic sauce.

My secret ingredient.

I told my helpers that aside from their savings, they should

create an Emergency Fund. Because every once in a while, their

families will call them up.

An uncle dies.

The farm needs seeds.

A niece is in the hospital.

The typhoon ravages the crops.

When these emergencies come up, they have another fund

to send back home.

For my helpers, this is P1000 a month.

They put this in the bank account.

Or sometimes, my wife keeps it for them—whatever they

prefer.

So they have peace of mind that they have money for any

family emergency.

5. Retirement Fund

This is their real savings.

I explained to them, “I call it Retirement Fund because I

want you to retire as millionaires.”

Their jaws drop. They look at me like I said they

would become Barney the purple dinosaur. In their minds,

it was preposterous. How could domestic helpers become

millionaires?

I explain to them the principles found in my other books,

8 Secrets of the Truly Rich and Choose To Be Wealthy.

“Because you don’t have a business, the best way for you

to grow your money is to invest in the stock market.”

Let’s review my helpers’ simple system:

They earn P7000 a month.

They tithe P700.

They spend P1000 for their own needs.

They send P2000 back home to their family.

They keep P1000 as an emergency fund—also for their

family.

So what’s left? P2300.

Remove the P300 for miscellaneous needs.

My helpers invest P2000 a month in the Stock Market.

The next thing I did was to give them a powerful vision.

Chapter 3

Repeat the Vision

“I don’t want you to touch this Retirement Fund,” I tell

them.

Personally, I think calling it “Retirement Fund” was

psychologically powerful.

Why? Because I brainwashed them with a vision of their

future.

That’s why our weekly Caring Group meetings are essential,

where we pray together, chat about their lives, and study the

Bible together. This is where I raise their level of thinking and

their identity.

Even if I don’t say a word, the mere fact that I spend time with

my driver and my helpers each week, their perception of themselves

changes dramatically. They see themselves with a great future.

I had to give them a specific figure so they’ll understand.

So they’ll get excited.

Excited enough not to touch their Retirement Fund for the

next 20 years.

I said, “You’ll have P5 Million in 20 years.”

Actually, just a shade below P5M. With the system I’m

going to teach you, they can earn 20% a year from their stock

investments.

This is on the premise that I don’t give them a raise in the

next 20 years—and thus can’t increase their savings. Which is

highly unlikely. After all, as God prospers me, I want to share

more to them too.

I Scare Them

I also show them the downside if they don’t invest for the

future.

With great audiovisual effects.

Regularly, I bring my helpers to Anawim, my ministry for

the abandoned elderly. For 13 years now, we’ve picked up old

people from the streets. Abandoned by their own families.

Some of these old, frail, sickly women were former

domestic helpers and laundrywomen. After years of sending

money back home to their nephews and nieces, they were left

in the cold.

Now that they’re weak and sickly, they can no longer

work. Abandoned by their employers they served for many

years, they no longer had a home to stay in their old age. They

had no choice but to starve in the streets. No relatives wanted

to take them in.

So Anawim becomes their home.

I ask my helpers, “The choice is yours. Do you want to

be like them when you grow old? Or do you want to retire as

millionaires?”

The effect on them is electrifying.

“Helping your families is fantastic,” I added, “And you

should continue to help them. But you need to love yourself so

that you can continue to love others. You need to keep a regular

amount for your retirement.”

So my helpers don’t touch their Retirement Fund.

Because in their old age, they want to be a donor to

Anawim, not a beneficiary of Anawim.

Now let me teach how the stock market works.

......to be continued.

How to Overhaul Your Financial Life

2012-02-28T20:16:00.000-08:00

Are you having problems with your finances? Do you have a lot of debts? Is making both ends meet a struggle for you? Are you chained and strangled with a web of loans?

This is indeed a real bee in the bonnet for some people, and if your answer is certainly yes, then there may be a problem with your financial system. Maybe, it is designed to drive you towards financial disaster and not to financial freedom.

But as the waves of the sea end up rolling to the seashore and the glare of the sun keeps on shining each day, then there is always hope. You can still overhaul your financial life! But the decision is yours to make. Start now, or start later, or start never!

I am an average Filipino earner. Just like a typical working person who labors 8 hours a day, five days a week excluding holidays. And my payouts are scheduled on the 15^th and 30^th of each month. After receiving my “take home pay,” I usually rushed to the grocery store to buy milk for my 3 kids as my budget for it usually falls short! And the rest of the money goes to food, bills, fare and some “whistles to blow.”

This has been the kind of life I was living. There were times that I needed to borrow money from my colleagues for my kids’ medicines because I never thought of allotting budget for it though it’s necessary. I spent whatever I had left thinking of another payout date to come. Literally, what happened to me was a cystal clear mismanagement of money.

Through a very good friend of mine who invited me to the truly rich club of Bro. Bo Sanchez, I found the solution to my predicament. I started to change the way I used to handle my salary, and that is following the basic rule of managing finances. The formula is Monthly Salary - Savings= Expenses. And the exciting part was investing what I saved. In the beginning, it wasn’t easy to save because I had to practice cost cutting and buying only what was needed, but in the long run, it became a habit to me.

God has really blessed me with this club! I learned how to invest in stock market the easiest way. I started with what I can afford—5,000 php. And each month I faithfully add 2k or sometimes 4k to my online brokerage account to accumulate shares with recommended great companies. In addition, I was encouraged to start a small business with the talent God has bestowed on me!

Discovering that I was like a lot of people who don’t invest who just spend whatever they have is a great realization. It doesn’t matter how much I earn. What really matters is how much I invest every single month.

Finally, seeing the trend of my investment as I earned about 39% last month with my ALI stocks, I come to believe that investment is indeed the way to overhaul my financial life! I’m so blest and so happy with what I have now. Thanks to Bro. Bo Sanchez, my financial and spiritual mentor!

2012-02-15T22:04:00.000-08:00

INVESTMENT: A Road to Build Wealth

Whether we like it or not the truth is we can never be rich, or at least build wealth, when we depend solely on employment. Time has proven it. Only those who engage in investments ought to achieve what they need and want in life. Thus, this is now the right time to venture into the world of investments! But how and where?

It is always difficult to decide to invest because what we have is hard earned money and there are a lot of scams out there that promised real good interest but it is too good to be true. Beware! Make sure that we get into legal investments that would give us high returns. Investments that would give us passive income—that is we earn while we sleep! In other words, let your money work for you. Here are the lists of instruments where you can safely invest your money:

Stock Market

For companies and shareholders stock market has been a significant and interesting source of income especially when they want to expand their business. People view stock investments as a good and fitting only for the rich who have a large sum of money. This might be coupled with the understanding that to be a shareholder is to be a millionaire. This is a wrong notion because with only 5000php one can already start investing in stocks. With the advent of technology, we don’t need to go to PSE to trade. All we need is a computer and an internet connection. So we can do stock investing anywhere where there’s internet.

Stock market investment is based on the principle of buy and sell. Because companies need capitals in expanding their business, they end up selling shares to the people. So when you buy shares of a certain company you become a shareholder of that company. If the company gains, you also gain based on your number of your shares. If it losses, you also do the same. The great Warren Buffett provided us the stock market investment rules: 1. Don’t lose money. 2. Always remember rule 1.

Stocks are considered volatile and prices fluctuate most of the time. Risk is regarded as high in this investment. But risk can be reduced if you follow simple principle in stock investing, that is: Only buy giant companies with tract records of good earnings. Make sure these companies would last 50 to a hundred years from now. Then don’t panic when prices go down but be happy instead for you can buy more stocks at a low price. “Be greedy when others are fearful and be fearful when others are greedy” (Warren Buffett). Sell only if the price value of your stock is high. In other words, buy at a buy-below price and sell at a target price! In this way, you are sure that your investment is at a maximized growth potential.

Mutual Fund

There are investors who don’t want to put their hands on their investments but instead they want somebody to do it for them. So basically, mutual fund is a collection of funds from different investors that are being invested in various avenues like stocks, bond, money markets, or other mutual funds. The fund is managed by somebody, a fund manager.

The risk is low for this kind of investments because your money is diversified and most importantly it is being cared by a professional fund manager. But when there is low risk, your money’s growth is also low. And besides, you also pay for your fund manager for his job. Unlike in stock market, you manage your own investment and your money’s growth is limitless depending on your strategy. It is good especially if you have a mentor or a club that guides you step by step all the way to learning how to buy and sell stocks by yourself.

Money Market Fund

Another cash investment tool is money market fund. It is a kind of mutual fund but the funds are invested in short term instruments and matures at a maximum period of 13 months. The risk of investment is reduced by keeping a short time-frame. In a money market fund, the average maturity of all investments must be less than 90 days. Remember that the longer you loan money to someone the higher is the chance that something will happen and that he won’t be able to pay back.

If people buy and sell stocks in the stock market, then people buy and sell money in the money markets. Buying or selling money simply means loan or borrow money, respectively. Because this is a low-risk investment, the average return is also lower than long term investment in stocks. In addition, inflation will eat up your returns over a long period of time. Interested? Banks offer this type of investments.

Bonds

Lending money to any borrower is called a bond. It is a loan and you are the lender. The borrower could be a company, state, or a local municipality. These entities need money to operate. In exchange for money, the borrower issues a debt security to the lender. The borrowed money will be returned with interest.

Real Estate

If you are buying properties and letting them generate income for you, then you are on direct real estate investment. Rather than living in these properties you bought, you think of making money instead. You gain income from renting or by selling at a higher price as the properties appreciate as time goes by.

For instance, you buy a condo and let somebody lives in it for 8,000php a month as a rental payment. If your condo’s monthly amortization is about the same price, then that already covers your mortgage payments. And if the value of the condo increases, you can sell it for a capital gain.

Like any other investments, there are specific risks and rewards in the real estate investments. Aside from the maintenance especially in a house or a condo, real estate market may fall and prices may go down. A land or lot may not be affected in this scenario as lot appreciates more than a house. But make sure that you are prompt to face any challenges in your investment to defy losing your money.

The author is a Truly Rich Club member of Bro. Bo Sanchez.

Happy investing and may your dreams come true!