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Retirement in the Philippines Is the Best Decision You’ll Make

Written By Mag-Invest Ka Pinoy! on Apr 27, 2014 | 9:24 PM


Expats should feel right at home in the Philippines, a country blessed with great outdoors, friendly and English-speaking locals, warm weather, and a relatively cheap cost of living.

In fact, the Philippines is a country of expats. In 2010, the National Statistics Office (NSO) recorded a total of 177,368 foreigners living in the country, which is equivalent to 0.2 percent of its 92 million population. The majority of these expats are Americans and Chinese, but the country is also fast becoming popular with Japanese, Indians, and Koreans. Tourists also flock the country. In 2013, NSO recorded a total of 4,681,307 visitors from different parts of the world.


Most of the expats living across the country are drawn to the National Capital Region, while others find themselves residing in the provinces of Central Luzon and the Calabarzon Regions, and many choose to retire in Central Visayas where many of the country’s tourist draws, such as Cebu and Bohol, are located.

In recent years the numbers of expats moving to the country have increased because of the entry and expansion of outsourcing and offshoring companies. The influx of expats is due to favorable macroeconomic situation, tourism, and the Department of Labor and Employment’s plan to hire foreigners for local jobs that lack skilled workers.

As a result, the growth in expat population spurred the demand for condominium units in the country’s highly urbanized areas, particularly Metro Manila. Those who chose to live here can enjoy the capital’s busy social life and fantastic shopping and dining opportunities while at the same time be in proximity with the surrounding provinces’ nature draws, such as the picturesque Tagaytay, the beaches and dive sites of Batangas, or the nature trails of Subic.
Cost of Living

Life can be expensive, particularly in the National Capital Region, but it is comparatively cheaper to enjoy a high quality of life for less than in other parts of the world.

Here’s a comparison of prices of housing in Manila and Cebu:
here is a considerable difference between prices of common goods and services in Metro Manila and the Philippines’ rural areas. For one, monthly rent is cheaper in, say, Cebu and Davao; the cost of transportation such as taxi or bus fares is less expensive; and fresh produce in local markets are cheaper because they’re mostly sourced nearby. As a treat, living in the provinces means being close to many of the country’s tourist draws. For example, Dumaguete City in Negros Oriental is close to Apo Island, which is a popular dive site, while Davao City is close to Samal Island and Mount Apo National Park. Many other cities and municipalities have public beaches, parks, and nature landscapes that welcome visitors for free. In some, the government sponsor concerts, beauty pageants, and festivals that locals can enjoy for free.

However, the biggest expense in urban areas, especially Metro Manila, would be rent. Apartments and houses for rent are cheaper in the province because of lesser demand. However, a retiree could save on his or her rent in Metro Manila and other highly urbanized areas if they choose a cheaper apartment.
Visa Requirements

If a foreigner wants to spend an extended length of time in the Philippines, he or she needs to apply for a visa. Broadly speaking, you will also need a work permit and residence visa to work and stay in the country.

Taxes

A retiree will need to file the appropriate tax returns. If a nonresident alien engaged in trade or business within the country, he or she has to pay a withholding income tax rate of 20 percent on the total amount they receive. If a nonresident alien who came to the country and stayed here for more than 180 days within the calendar year, he or she is considered a “nonresident alien who’s doing business in the country,” but will not be taxed for compensation for services performed outside the country.


Education

Public basic education (kindergarten, primary, and secondary) is free in the Philippines. State universities (institutions of higher learning funded by the government) also offer very low tuition fees. For example, the Polytechnic University of the Philippines offers Php12 tuition fee per unit for undergraduate courses, and Php200 per unit for graduate courses, while the average tuition fee in the country’s state university, the University of the Philippines, range from Php200 to Php1,500 (depending on family’s financial capacity).

However, if retirees want to send their children to prestigious private schools like De La Salle University, Ateneo de Manila University, and the University of Santo Tomas, they should expect a tuition fee of at least Php84,000 per semester excluding the registration fees and miscellaneous fees.

Average Expenses 

Filipinos in urban areas claim that their household income is about Php24,000 per month, while their rural counterparts earn about Php15,000 per month. Food expenses range from Php6,500 to Php7,500 per month. The average monthly household expenses range from Php13,500 to Php15,500. Expenses vary depending on the number of children, location, education, medical expenses, and the like.

It’s not easy to live on a small budget but it’s certainly possible given that the cost of living in the Philippines is much lower compared to, say, Hong Kong, Singapore, and most of the Western world.


Contributor: 

ZipMatch The belief that Filipinos can own their dream home inspired us to innovate the real estate industry in the Philippines and make buying and selling of properties faster and easier.

ZipMatch offer information on real estate trends, investment advice, and personalized service by a network of top industry professionals, all with the easy convenience of online shopping—everything you want and need, and nothing you can’t understand, all at the click of a button.

They aid you through the homehunting process from start to finish: meticulous, client-specific guidance from the initial search (whether through our comprehensive online database or via a phone-in or email inquiry) to follow-up consultations and meetings down to all final decisions are facilitated with the help of our in-house real estate experts.
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Bahay Pang-Hanap Buhay - Studio Zen: Private Dormitel and Residences

Written By Mag-Invest Ka Pinoy! on Mar 19, 2014 | 9:26 AM


Discover the best investment you can give your children at Studio Zen, a 21-storey condominium development located along Taft Avenue in Metro Manila.

With a host of student-oriented amenities, Zen-inspired features, and functional building facilities, it is ideal for students living independently and entrepreneurs who want to take advantage of the ready rental market in the area.

AMENITIES:

 
Studio Zen features an array of amenities that are tailor-made for the needs of students.

Reception lobby • Visitors’ lounge • Study loft •Events and theater room •
Game room • Fully equipped fitness center • Sky lounge • Wi-Fi access at amenity areas














LOCATION:

 
Studio Zen is accessible via the LRT 1 line, with Sen. Gil Puyat as the nearest station
Near educational institutions, such as De La Salle University, Arellano University School of Law, Manila Adventist Medical Center and Colleges, St. Scholastica's College, St. Paul University Manila, and UP Manila

Less than 15 minutes away from malls such as SM Mall of Asia, Robinsons Place Manila, and Harrison Plaza

Near Ospital ng Maynila, Rizal Coliseum, CCP Complex, and Manila Bay

UNIT PLAN:

Studio Unit
±18sqm

Executive Studio Unit
±24sqm
  
PROJECT UPDATES:




For Inquiries, Please contact Jo: +65 9879 2248 / Email: maginvestkapinoy@gmail.com

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Bitcoin. The Future of Payments (Part Two)

Written By Mag-Invest Ka Pinoy! on Mar 6, 2014 | 5:33 PM


How long will it take to generate all the coins?
The last block that will generate coins will be block #6,929,999 which should be generated at or near the year 2140. The total number of coins in circulation will then remain static at 20,999,999.9769 BTC.

Even if the allowed precision is expanded from the current 8 decimals, the total BTC in circulation will always be slightly below 21 million (assuming everything else stays the same). For example, with 16 decimals of precision, the end total would be 20,999,999.999999999496 BTC.



 
Where does the value of Bitcoin stem from? What backs up Bitcoin?
Bitcoins have value because they are useful and because they are scarce. As they are accepted by more merchants, their value will stabilize. See the list of Bitcoin-accepting sites.
When we say that a currency is backed up by gold, we mean that there's a promise in place that you can exchange the currency for gold. Bitcoins, like dollars and euros, are not backed up by anything except the variety of merchants that accept them.

It's a common misconception that Bitcoins gain their value from the cost of electricity required to generate them. Cost doesn't equal value – hiring 1,000 men to shovel a big hole in the ground may be costly, but not valuable. Also, even though scarcity is a critical requirement for a useful currency, it alone doesn't make anything valuable. For example, your fingerprints are scarce, but that doesn't mean they have any exchange value.

Alternatively it needs to be added that while the law of supply and demand applies it does not guarantee value of Bitcoins in the future. If confidence in Bitcoins is lost then it will not matter that the supply can no longer be increased, the demand will fall off with all holders trying to get rid of their coins. 

An example of this can be seen in cases of state currencies, in cases when the state in question dissolves and so no new supply of the currency is available (the central authority managing the supply is gone), however the demand for the currency falls sharply because confidence in its purchasing power disappears. Of-course Bitcoins do not have such central authority managing the supply of the coins, but it does not prevent confidence from eroding due to other situations that are not necessarily predictable.

Bitcoin bubble?
Yes, in the same way as the euro and dollar are. They only have value in exchange and have no inherent value. 

If everyone suddenly stopped accepting your dollars, euros or bitcoins, the "bubble" would burst and their value would drop to zero. But that is unlikely to happen: even in Somalia, where the government collapsed 20 years ago, Somali shillings are still accepted as payment.



Is Bitcoin a Ponzi scheme?
In a Ponzi Scheme, the founders persuade investors that they’ll profit. Bitcoin does not make such a guarantee. There is no central entity, just individuals building an economy.

A ponzi scheme is a zero sum game. Early adopters can only profit at the expense of late adopters. Bitcoin has possible win-win outcomes. Early adopters profit from the rise in value. Late adopters, and indeed, society as a whole, benefit from the usefulness of a stable, fast, inexpensive, and widely accepted p2p currency.

The fact that early adopters benefit more doesn't alone make anything a Ponzi scheme. All good investments in successful companies have this quality.

Is Bitcoin open to value manipulation?
The current low market cap of Bitcoin means that any investor with deep enough pockets can significantly change/manipulate the rate. Is this a problem?

This is only a problem if you are investing in Bitcoin for short period of time. A manipulator can't change the fundamentals, and over a period of 5-10 years, the fundamentals will win over any short term manipulations.

How about the Money Supply?
While the number of bitcoins in existence will never exceed 21 million, the money supply of bitcoins can exceed 21 million due to Fractional-reserve Banking.

Total Bitcoins in Circulation (as of Jan 22, 2014)



SUMMARY:
For better or worse, it looks like the crypto-currency is here to stay, at least for the foreseeable future, with the first bitcoin ATMs set up here and more retailers likely to accept it as payment.

1. Bitcoin is a virtual currency “minted” in 2009 by a computer programmer, or group of programmers, known only as Satoshi Nakamoto.

2. A computer programme controls the creation of bitcoins and all the transactions. It is not controlled by a central bank or governing body.

3. There are 12.2 million bitcoins in circulation and, according to how the programme is written, a maximum of 21 million bitcoins will be created.

4. Those who are part of the network that helps to verify bitcoin transactions are called miners, and they are rewarded for their services with bitcoins.

5. Regular consumers may also buy bitcoins online through exchanges or directly from other owners of the virtual currency. At the moment, 1 BTC (bitcoin) is selling for around US$670 (S$850).

6. Owners of bitcoins can trade them to make profits on the wild value fluctuations. When it was created in 2009, 1 BTC was worth less than 10 US cents. At the end of 2011, it was worth almost US$5. The price crossed the US$1,000 mark in November 2013, largely due to demand in China.

7. At the same time, owning bitcoins is risky as the currency is not guaranteed by any central bank. So 10 BTC today may be worth nothing tomorrow if online exchanges suddenly shut down, or buyers and businesses stop accepting them.

8. At least eight merchants in Singapore, including cafe Artistry in Jalan Pinang and 3-D printing company Meka, accept the digital currency as payment.

9. Payment involves launching an app on your mobile phone or computer and transferring bitcoins from your virtual wallet to the cafe’s virtual wallet.

10. The bitcoin is just one of many virtual currencies in the market. Others include peercoin, litecoin and ripple. Even the Royal Canadian Mint is jumping on the bitcoin bandwagon with its own MintChip, backed by the Canadian dollar.

Credits: Wiki, GMANewsCoinDeskRetailTouchPointsInc.com



Jo Valerio is an IT Professional working in Singapore. He is an advocate of Financial Literacy in the Philippines. He founded Mag-Invest Ka Pinoy in year 2012 and started the website www.maginvestkapinoy.com. The mission of the website is to encourage every Filipino to learn how to SaveInvest their money and plan their Retirement.

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Top 10 Countries with the Biggest Density of Billionaires

Written By Mag-Invest Ka Pinoy! on Mar 4, 2014 | 11:57 AM

10. Switzerland – 13 billionaires/7.9 million people

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The land of the Von Trapps is more than just alps, skiing and hot chocolate. Contrary to popular belief that tourism is the driving industry behind its economy, it is actually more manufacturing than anything else. The Swiss produce half of the world’s watches, but they are also home to some of the larges multinational corporations in the world including mining firm Glencore Xstrata, food giant Nestlé and pharmaceutical giants Novartis and Roche. On top of the Swiss billionaire list right now is biotech and investments giant Ernesto Bertarelli and family with a net worth of $10.6 billion. They own Serono biotech which specializes in biopharmaceuticals.

9. Kuwait – 5/2.8 million people

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Currently the fifth richest country in the world, Kuwait has made its fortune in petroleum and petroleum products, fertilizers and financing. Japan is their current biggest trading partner when it comes to petroleum followed by India, Singapore and South Korea. Kuwait realizes it cannot depend on its oil reserves forever; it is now making moves to transform the country into a trade and tourism center. Among its ambitious projects is the Madinat al-Hareer (City of Silk) envisioned as the world’s largest real estate project. Among the most famous billionaires are the Alghanim brothers Bassam and Kutayba, who, despite being family are constantly bickering over the inheritance from their father. Bassam recently sued Kutayba for allegedly hacking into his email account.

8. Singapore – 10/5.2 million people

8
Despite strict government regulations concerning everything from public behaviors to dress codes, Singapore enjoys one of the most vibrant economies in the world. What drives the Singapore economy? Trade. Since its establishment, Singapore has been one of the busiest transshipment points in the world. Singapore also enjoys healthy tourism and hotels are good business. On top of the list of Singapore billionaires are the Ng brothers Robert and Philip who have a net worth of $10.1 billion. It was their father Ng Teng Fong who built over 70 hotels, malls and condominiums in Singapore and Hong Kong. Another prominent family in Singapore is the Khoo family which owns the Godwood Group of Hotels. Their net worth is estimated at $6.7 billion.

7. Israel – 17/7.8 million

7
Considered by World Bank as the top third among the places easiest to do business, Israel enjoys a globally competitive economy despite being surrounded by not-so-friendly neighboring countries. Its economy is financed largely by research and development and skilled manpower. Among its most prominent billionaires are brothers Idan and Eyal Ofer, owners of the Ofer Holdings Groups, Israel Chemicals Ltd. and other companies. Idan’s net worth is estimated at $6.5 billion while Eyal’s is $6 billion. Another figure is the current richest Israeli woman in the world, Shari Arison, the controlling shareholder in Bank Hapoalim and other companies. Her net worth is estimated at $5.1 billion.

6. Cyprus – 3/1.1 million

6
Once known as a tax haven for importers, Cyprus suffered during the European financial crisis and had to secure $13 billion loan from the EU. It is still paying the price for that loan today. However, things are looking up for Cyprus right now with the discovery of offshore natural gas deposits. Earlier threats by Turkey to mobilize its forces if Cyprus drilled in a disputed area did not materialize after drilling was backed by the EU, UN and the US. Currently on top of the Cypriot billionaire list is oil tanker king John Fredriksen whose net worth is estimated at $13.5 billion. He is followed by Suat Gunsel ($1.1 billion) who owns banks, hospitals, universities, gas stations and even cable companies in his native Cyprus and Stelios Haji-Ioannou ($1.05 billion) who owns the EasyJet discount airline.


5. Belize – 1/356,600

5
Sandwiched between Mexico to the north and Guatemala to the south and west, Belize enjoys one of the smallest population densities in the world, one of the highest wildlife diversity rates in the world and a lot of sun, sand and sea. Belize is also blessed with good soil and oil reserves and sugar and petroleum are currently their biggest exports. They also enjoy good tourism all year round with tourists from the U.S. and South America posting the most arrivals. So who is Belize’s only billionaire? If you’re thinking John McAfee(pioneer of the antivirus software) then you are mistaken, he only stayed there a while then ran away. Belize’s only billionaire is Huang Maoru whose family owns Maoye International, a chain or retail stores in China. His net worth is estimated at $1 billion.

4. Hong Kong – 39/7.1 million

4
This island may be small, yet it houses the headquarters of many multinational corporations and their branches in Asia. The dearth of space only makes for the skyrocketing prices of premium real estate. Everyone competes for everything there, so for anyone setting up a business in Hong Kong, it’s either hit or miss. If you can make it big though, you can make it really big. The island has no shortage of contacts and business opportunities, you only have to find them. So who has made it to the top? Li Ka-Shing is number one on the list right now. This self-made man still runs his holdings empire at the age of 85. He just recently bought British gas supplier Wales and West Utilities and now supplies gas to a quarter of the UK. His estimated net worth is $31 billion.

3. Guernsey – 1/65,345

3
Guernsey is one of the channel isles located between the UK and France. Technically it is not a member of the EU but a possession of the UK. Which means the UK will be responsible for its defense but is not counted as part of it. Financing makes up most of this state’s economy, although there is also tourism, manufacturing and horticulture. Guernsey’s only billionaire is Dame Mary Perkins who owns the largest privately-owned optical company in the world.

2. St. Kitts and Nevis – 1/53,051

2
Located in the West Indies, St. Kitts and Nevis is a two-island federation and also the smallest sovereign state in the Americas where population and area are concerned, it’s only 104 square miles. Formerly dependent on agriculture alone, it has gone on to diversify its industries and now has tourism, agriculture and light industry to fall back on. So who is St. Kitts’ only billionaire? Jacky Xu, head of the Trendy International Group, a huge apparel name in China. His net worth is estimated at $1.6 billion

1. Monaco – 3/35,427

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This small sovereign city state on the French Riviera is the playground of the rich. First ruled by the old Italian family the Grimaldis, it changed hands often between the Spanish, the Italians and the French during their wars because of its strategic location. It would also be occupied buy the forces of fascist Italy and Nazi Germany during World War II. Monaco was thrust into the spotlight in 1956 when Prince Rainier married Hollywood actress Grace Kelly in a widely televised wedding. The state’s main earner is in tourism and banking. It levies no income taxes on its citizens or visitors, making it an ideal destination for those with much money. So who is on top of their exclusive billionaire’s list? Michele Ferrero, head of the Italian chocolate dynasty known as the Ferrero Group. It has more than 70 affiliated companies and employs almost 22,000 people all over the world. His estimated net worth? $20.4 billion.
Credits: http://www.therichest.com/

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How Important is it to have your own Health Insurance?

Written By Mag-Invest Ka Pinoy! on Feb 26, 2014 | 10:34 AM



Many of us don’t know how serious it is when faced with a very difficult challenge of suffering from a dreaded disease. It’s uncertain when this can happen but it is definite that one day you will get sick no matter how health-conscious you are right now.

So what happens when you’re on the hospital bed, waiting for the doctor’s diagnosis? What if that’s you in the picture above? I’m sure no one would want to be in that scenario but what if you were; would you be able to handle it?


Here’s some statistics that may be useful to you. The numbers speak for themselves.  


Heart attack, stroke and cancer are the top causes of death in the Philippines.


5 Filipinos die of cancer every hour.


61 people die of diabetes every day.


276 Filipinos people in this country suffer from a fatal heart attack every day.


1 person dies of stroke every 9 minutes.

 
#ItCanHappenToYou



Health is wealth as many would say. We need to live healthy, avoid vices, and stay fit so to become efficient in our work. And it is only fitting to say that we all should be saving up for our medical fund during our prime. Most people would think about saving for it later as they have other priorities to focus on. Then again, do you know that HEALTH INSURANCE COSTS MORE AS YOU GROW OLDER? The older we get, the more susceptible we become to dreaded diseases and critical illnesses.



Non-communicable diseases comprise 60% of total deaths in the Philippines in 2010. And with the increasing population of the elderly, you too can be part of the growing number of those living with heart and lung ailments.




There is also a high probability that insurance companies would deny an application for insurance for a lot of reasons, one of which is due to pre-existing conditions. Think of it this way: If you are an owner of an insurance company that provides big coverage benefits for all of your insured clients, would you be accepting an applicant whose life is but a flickering flame and it would just be a matter of time before it is blown off by the wind? Of course not! You’d be losing millions paying for that person’s insured amount, who by the way, have only just contributed 6 months of premium. It is definite that there would be applications that would be rejected depending on the “life risks” that the each applicant represents. You might as well be taking advantage of the fact that you are “generally in a healthy condition” at the moment to get insurance. 


Although some say that they have HMOs through their companies, most employees can’t enjoy their coverage benefits to its fullest extent because of restrictions like pre-existing conditions and other factors. More often than not, HMO companies would only pay just a portion for major surgery procedures. And no, your Philhealth coverage is simply not enough.  I almost forgot to mention that your HMO benefit would only start to be in effect when you get regularized from your work. Worst case scenario, you would have to still pay out-of-pocket for your medical expenses.




In the span of 2005-2007, the out-of-pocket expenses to cover medical expenses and health services increased by 14%. At this rate of annual increase, a P500, 000 medical expense valued today will be P1, 853,611 after 10 years - PNHA, 2007.

But it doesn’t end there. What would then happen when you retire? I’m pretty sure there’s no company that would continue to provide HMO benefits even when you’re not working for them anymore, wouldn’t there?




So before it’s too late, get yourself a sound plan and start having that peace of mind TODAY!

AXA’s Health Max provides you coverage for an extensive list of 56 major and 18 minor medical conditions. This guarantees that you have an available fund for medical expenses in case you get diagnosed with a critical condition even upon retirement until age 100.

Another product is AXA’s Health Exentials, It's a comprehensive insurance plan that provides cash benefits if you are diagnosed with a critical illness, including cancer, stroke, or heart attack. It gives Daily Hospitalization Income coverage that provides cash allowance to pay for hospitalization to help you recover from unexpected medical crises.

Let us help you plan for your lifetime health needs. Talk to your AXA Financial Partner or email petersalanatin@gmail.com 


Peter SalanatinPete is a financial advisor who shares the advocacy in promoting financial literacy to every Filipino. Before becoming an advisor, he worked for about 5 years in the BPO industry getting paid a reasonably high compensation but still lived paycheck by paycheck. Learning that time is a valuable resource and great ally when it comes to saving up and investing, he now aims to help other Pinoys working locally by sharing knowledge on how to manage their finances wisely.

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Don’t invest in stocks if you don’t have these

Written By Mag-Invest Ka Pinoy! on Feb 24, 2014 | 11:35 AM


Lately, I’ve been getting a lot of queries about investing in the stock market.  It’s probably because the Philippine stock market has been hitting record highs this year.  You can hear many economists and financial experts declare that now is a good time to invest in stocks and equity funds.  Yes, it is indeed a good time. 

But before you jump into the stock investing bandwagon there are several things you need to prioritize first as smart investors do.  Don’t even think of investing your money in stocks, mutual funds or UITFs until you have these three important financial safeguards.




 

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The benefits of starting with the basics


A few weeks ago I began posting personal finance questions in different Facebook groups. The questions were meant to test the analytical and decision making skills of financial planners and advisors and anyone interested in personal finance.

The latest question I posted was about calculating the required amount of funds to live comfortably in retirement.  Susan, a former grade school classmate from down South, was quite candid to admit that she is not that good with numbers.  What she’s very good at though, she says, is “doing the very basics.”   She recounted how she got a free lunch for his boy in a fastfood by simply charging necessary expenses to her credit card which she pays in full monthly.  Smart move!  Why pay if you can get if for free.

I told her that doing the basics is actually an effective way to manage one’s finances.  You don’t need to be very sharp with numbers and have encyclopedic knowledge to properly manage your money.  In fact, I strongly recommend that people start with the basics of money management and master it first before they even consider studying the more advanced stuff. 

Nowadays, more and more people are into personal finance and many are obsessed with accumulating information, particularly advanced knowledge about investing.   This is not necessarily a bad thing.  But if you jump right into the more sophisticated areas of personal finance without learning and practicing the basics first you are likely to commit more mistakes and may fail to achieve your objectives.  You need to master walking first before you can start running, right?  Otherwise, you will just stumble repeatedly.


Here are the basics of money management that you need to learn and apply consistently before you move into more sophisticated territory.


Set clear, specific goals.   Will you attempt to do something if you don’t know what it is?  I guess not.  Define first what it is you are trying to achieve before you act.  Clear and specific goals will give you focus and direction, and it increases your chances of success.  (Investing just for the sake of investing is not really a smart goal.  It’s not even a goal.)  Listing your goals and prioritizing them will also help you decide the most appropriate actions to take. For example, if your top goal is to reduce debt by 50% in one year then your focus will probably be on how to reduce expenses and divert savings to pay-off debt instead of investing the money.

Assess your financial condition.  Take stock of what you own and what you owe.   This will allow you to see any weaknesses in your finances like if you are deep in debt or face possible liquidity problems because most of your assets are in properties.  It can also guide you to make the right investment decisions.   If you see that you already have too much of the same type of investment, you might want to put some of your funds in other investments so you are diversified.

Create a realistic budget and spend wisely.  What good will advance investment knowledge do you if you don’t have any money to invest?   Creating a realistic budget or spending plan can help you manage your expenses and allow you to maximize savings.  You also need to learn how to spend wisely so your budget will work and whatever investment profits you gain will not go to waste.   Planning to celebrate lavishly tonight after your stocks have gone up for 20 straight days?   Poof!  There goes your profit!

Reduce debt to manageable levels.  Most of your excess money should be used to pay off debt rather than investing it. (But you have to maintain an adequate amount of emergency fund.)  You will be losing money if you prioritize investing over settling your debt obligations.  Interest rates on loans and other debts are generally higher than potential investment earnings and profits gained will not be enough to cover interest payments.  You will also suffer a double whammy if your investments lose value.

Create a safety net for financial emergencies.  Make sure you have an adequate safety net to cushion the impact of financial emergencies before you start investing.   This financial safety net will include an ample amount of emergency fund, substantial life and health insurance coverage.

Live healthy and safely.  Do not sacrifice your health in the pursuit of more money.  As the Filipino saying goes, “aanhin ang yaman kung maraming karamdaman?”  You will not be able to enjoy it.  Any savings and investments you have could be gone in a flash if you go down with a critical illness or suffer serious injuries from an accident.  Follow a healthy lifestyle.  Eat properly, exercise, quit smoking, drink moderately rather than desperately, and don’t do drugs.  Avoid or limit activities with higher risk of injuries or death like extreme sports and singing “My Way” in a videoke bar.


Do not plunge into advanced and more complex areas of personal finance until you have done and mastered these basic money management tasks and strategies.  You can never go wrong with the basics.



Alvin T. Tabañag is a personal money management coach and registered financial planner.  He is a member of the US-based Registered Financial Planners Institute, the Financial Planning Association (USA) and the Association of Registered Financial Planners of the Philippines.  

He is also a member of the Professional Speakers Association of the Philippines.  He is the founder of Pinoy Smart Savers Learning Center, an internationally-recognized organization and “Best Provider” of employee financial education in the Philippines.  Mr. Tabañag’s center is at the forefront of a campaign to promote a culture of saving and responsible money management among Filipinos.

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