Getting To Huge Savings Even If You Are Earning Less Than 20k/mo

[red_one]

Nose bleed na ba? Kung may tanong ka, just shoot.

Mas madali ang Q & A, kaysa brain dump.

LOL, i think so. pero i can't ask pa, di ko pa rin kasi alam kung ano yung itatanong ko. i'll read your post na lang muna then i'll ask later. 

[melmedrano]

ok, i will check on that... :-) oo nga, sana sometime ago pa when the stocks are still low naginvest na ako, pero why cry over opportunity loss, it's not a real loss anyway... i just have to do my assignment this time! :-) thank you so much

[IAmMarlo]

^

Opportunity is always present, you just have to look.

I believe this so.

Matt 5:45
... for he makes his sun rise on the evil and on the good,
and sends rain on the just and on the unjust.

Blessings are for every one.

If interest rates go up, move accordingly, if they are moving
down, same, act accordingly.

@red_one: LOL, i think so. pero i can't ask pa

Hmmm... siguro nga technical pa yung guide.

I will make adjustments as soon as I get the motivation
again.

Thanks for the comment.

[sweetliz_boinks]

Very interesting

[celsky]

i know out of topic ako, baka me sumagot lang. since mababa palitan ng usd ngayon, tama ba na magpapalit then ideposit ko sa dollar account ko. who knows tumaas ulit. now ko lang naisip. kaso sabi baka end of 2011 usd magiging 37.50. TIA sana si sir Marlo me input.thanks!

[IAmMarlo]

The dollar is already weakening. Personally we sold
all our dollars years back.

It's not my thing, but the relative prices of currencies
depend on the economy of the country.

According to Warren Buffett, arguably the greatest
investor of all time, he don't even want to get his
nose in it.

W/c means currency trading is very risky for him.

I share the same opinion.

[celsky]

Well, now I'm convinced. Warren Buffett na yan eh thanks sir!

[IAmMarlo]

The rationale is this:

In investments, the real earnings comes at the
point of buying or acquiring.

In his writings, Buffett stated, (reword ko na lang,
have to search through books for the quote pa...)
something like, "how can you predict the future
value of your investment in foreign currencies?
There are too many variables, such as political,
which can affect greatly how currencies perform."

The way Warren Buffett invests is this:

1. a. The business should be simple and understandable
1. b. The business must have a consisten operating
history
1. c. The business must have favorable long term
prospects

2. a. The management should be rational
2. b. The management should be candid with shareholders
2. c.  Management resists the institutional imperative

3. a. The business focuses on return on equity, not
earnings per share
3. b. The value of the business should be computed on the
owner earnings, and not the current market value
3. c. Preference for companies with high margins
3. d. The business should create at least one dollar of
value for each dollar it retains

4. a. The real value of the business should be easily computable
4. b. It should be purchased at a considerable discount to its
computed value.

Notice that a lot of these factors he uses to invest revolves
around the business itself, not the stock market condition.

As a note, these tenets are what I follow in my businesses.
(but not the early ones when I was more naive)

[celsky]

woooh! i so love that! just finished watching the show regarding financial literacy, at yon nga never invest / engage in a business that you dont fully understand, even if it promises you higher interest pero di mo naman naiintindihan how it works, then JUST WALK AWAY! (so simple) lol

[IAmMarlo]

^ Except for MLM.

I was negative way back 2003, until I listened to alot
of Robert Kiyosaki tapes.

MLM is not just for the income you'll get.

But for learning how to do business.

Instead of going to school to learn business, you pay
less, and it's hands on.

It's the only business where you can have a
mentor or several mentors to let you learn
the ropes.

In my other businesses, just to learn the ropes
requires you to literally work for no pay, or even
pay to learn what other more successful entrepreneurs
in the same industry.

Hard to find a mentor in a traditional business.

But in MLM mentors are built in.

Of course I'm biased, cause I do MLM.

And I sort of follow most of Kiyosaki's advise.

-Marlo

[celsky]

i agree, you dont have to enroll in a business school, and get MBA degrees and spend half of your parents income on your tuition fee just to learn. if your wise enough, there are lots of free seminars, blogs, forums etc.

re MLM skeptical at first, but am considering USSANA kaso the products naman are too expensive. 

[cestmadonna]

If you want to learn Financial Literacy for free, you can attend the Wealth Academy on King's Court, Makati. They will teach you how to have a SOLID Financial Foundation. Paano di kayo babagsak sa panahon ng nawalan ng income. The lecturers are certified Financial Planners. You can learn how to  bypass the middleman & become your own financial adviser. Kailangan lang talaga ng disiplina at open mind na MAGTIPID.

TOPICS:
Series 1 FINANCIAL SOLUTIONS TODAY
6 Steps to Financial Independence
How Money Works
The Wealth 4mula
How 2 Build a Solid Financial Foundation

 

Series 2 FINANCE & INVESTMENT 101
Diff. Investment Vehicles & Strategies
How to Bypass the Middleman & Become Your Own Financial Adviser & Broker
Mutual Funds, Diversification, Money Cost Averaging, etc

 

[IAmMarlo]

^ While I do want people to eventually do their own
financial decisions, I advise against using the above
strategies, such as diversification and money cost
averaging.

These only work in bull markets.

[cestmadonna]

Kung sa stocks, with the current volatility of the US stock market, it would be better to stay liquid.

But if people invest, for the long term, they would earn more in stocks or mutual fund.  Some of my colleagues started investing during the Great Recession in the US, now they're gaining from their investments. Remember, Warren Buffet said, "Be greedy when others are fearful, and be fearful when others are greedy." 

I only invest in mutual fund & stocks because I receive higher returns compared to my TD. Although I still have TD, because it's safer and for my emergency fund. 

We need to beat the inflation. Inflation rate is now 5%. Banks, give less than 5% interest. Balewale, talo na ng inflation.

[IAmMarlo]

But if people invest, for the long term, they would earn more in stocks or mutual fund

True for stocks (if properly done), not true for mutual funds.

According to Robert Kiyosaki, mutual funds only do well in bull markets.
And they are the riskiest investment during bear markets.

The fact is, you, as an investor, don't have much control where your
investment goes.

In bear markets, an investor must be more reactive, and mutual funds
simply don't give that option. i.e. you can't select specific stocks to
place your cash to.

As for dollar-cost-averaging (termed money-cost-averaging, because
maybe we're in the Philippines)...

I can't state the exact quote, but roughly here's what Buffett says:

Great baseball players only hit the ball when it's in their "zone". If you
picture a baseball player trying to hit a ball, the great ones don't try to
hit the ball from any position, but a small, almost 9inch by 9inch imaginary
square between their shoulders and hips and about an arms reach.

If the ball goes anywhere else they don't try to hit it.

This gives them the best chance to score a homerun.

In investing he applies the same thing.

If you found a very good stock, wouldn't it be
wise to put in a huge amount into that investment?

If you found a mediocre stock, wouldn't it be
wise to skip it and wait for a better opportunity?

I think playing Cashflow will teach you this.

It's better to learn from having it simulated for you,
since you will see the results for yourself, rather
than doing something just because it sounds or it
looks nice.

^^

[cestmadonna]

Perhaps it depends on where you invest. Why choose a mutual fund that has not been awarded consecutively as BEST PERFORMING?

Besides, my cousin, who is a stock analyst and an Economic Adviser here in the country, advised me to invest in mutual fund. 

I know I am safe in the mutual funds I invest in because they have been awarded consecutively for the past years.

[chacha.12]

i know out of topic ako, baka me sumagot lang. since mababa palitan ng usd ngayon, tama ba na magpapalit then ideposit ko sa dollar account ko. who knows tumaas ulit. now ko lang naisip. kaso sabi baka end of 2011 usd magiging 37.50. TIA sana si sir Marlo me input.thanks!

my mom asked me the same thing nung nasa news nga na bumaba credit rating ng US and tumataas na yung piso. though sa pagkakaalam ko bumababa yung halaga ng piso pag palapit na yung pasko (please correct me if im wrong  ) mahirap pa ring sumugal since may mga sabi-sabi na pababa pa yung dolyar. yes, SUGAL sya in a way kasi tataya ka kung tataas or bababa yung value ng $. since ayaw ng mom ko sa sugal, hindi na lang daw hehe. very risky. kaso ang iniisip nga nya, sayang nga naman kasi parang natutulog lang ang pera sa bank.

Sir Marlo question po. Ako po kasi if I have 10K, i'll put in a small business, like buy and sell, and nagoonline selling din po kasi ako. But if hindi ako marunong magbusiness, san po ba mas okay and safe ilagay? sa bank, or yung sa mga Mutual Funds? hindi naman po kasi yun naturo sa school. hindi po ba risky yung mga bonds-bonds? and how does stock trading works? TIA!  (and sorry po ot ba? hihi)

[IAmMarlo]

@cestmadonna

Awards mean nothing, results do.

... That's a very hard statement. But I think it's warranted.

I believe 99.99% (a book says it's 100%) of our actions are
based on emotion.

We believe people because he/she has a degree, because
he/she has position, because he/she is a relative, because
he/she makes us feel good, and among alot of other things.

This point was deeply ingrained to me by a --very-- (and
uberly to the infinite degree) blunt mentor years back, and
I'm very glad I took it in, despite my protests...

... and that point is, that your belief should only be sealed
if you can answer the question "why", and that your answer,
is connected directly to the results you want.

So if I say, oh that is true because he's my friend and he's
a nice guy, he would slap me vehemently, "stupid" and "you'll
be eaten by sharks".

In investments, you should be able to state directly why you
chose this or that investment, and back it up with specific
results.

Questions for you to answer on your own:

1. How does your mutual fund perform when stock prices
are going down?

2. What strategies are they using to invest and why are
they doing so?


@chacha.12

Haha... ang daming questions...

1. Regarding dollar: There's a fundamental flaw in the US
economy, and it goes way way deeper than just having a
lower credit rating.

And it's about over-leveraging.

Buffett spoke about it last year, and you can easily find
that video through Google.

(So talagang weak ang $, strength lang niya yung trust
ng tao, pero bumababa na)

2. "if hindi ako marunong magbusiness"

---> Put it in a bank. It's too small, and you don't think
like a businessman.

3. "hindi po ba risky yung mga bonds-bonds?"

---> depends. Government bonds are ok, hindi naman tayo
tinatakbuhan ng government diyan.

Corporate bonds, depends on the company, you should look
through their history if they have issued bonds several times
before.

4. "how does stock trading works"

---> later na lang, no time right now ^^, may magshashopping
na naman dito, mahirap pigilan eh. hehe.

[chacha.12]

haha! thanks Sir Marlo may mga Sale nga naman kasi today :p

[cestmadonna]

Investing is not just plain investing. It must be based on your Financial Plan.

I don't invest my money in stocks or equity mutual funds that I will be needing in a few months. It's calculated risk. So, the CURRENT value of my money in stocks and mutual funds don't matter.  I will be needing those 5 years from now.  When I withdraw it, there will be no tax unlike in the US. 

I have emergency fund just in case I will need some. The money I MIGHT be using in the next 2 years are in Time Deposit.

I would like to share this article: Lessons on Investing From America's Richest Familyhttp://online.wsj.com/article/SB10001424053111904823804576500813872123254.html?mod=sf2tw