Mommy Enters the Investors World – the World of the Stock Market

Almost decade, my uncle would always encourage us to read about financial management, economics and business. He would also tell us to read the news everyday as there are opportunities in the everyday news. He also encouraged us to invest in the stock market. (The minimum investment amount that time was P25,000.00)

Of course, being young that I was and being at the height of enjoyment, and with no P25K to spend, I just shrugged off my shoulder and let him speak whatever he wanted to without actually internalizing what he was telling us.

Fast forward, now, almost 10 years after that discussion, I begin to regret not following his teachings. If I did, I might have enough money right now. Well, it’s not yet late.

Last September, I was able to convince Hubby-Su that we will try investing in Stock Market. I told him, I was inspired by Bo Sanchez and that we also have the right to be investors. Yippee, he agreed. Thus, the following morning, I sent my application via DHL and deposited the minimum investment amount of P5,000.00 only. Thankfully, they have opened their gates to those who do not have P25,000.00.

Today, im into what, in the 6^th month of happy investing. I tried short term investing but I guess it was not for me, my heart can’t cope up with it. I had my share of losses (around 9%) but I also had my share of gains (18%), now I’ll be receiving my first dividend (I guess approximately P500.00 hehe, but I’m not looking into the “now”, my eyes are in the “tomorrow” when I’ll be needing the money more)

This is my advice to my fellow small time investors ( I call myself small time because the amount that I invest is “tingi-tingi”, just bits from our monthly income) or to everyone who wants to invest in the stock market but only has a little to spare:

Though Invest in Small Amount, Invest it Long time

Consider the amount that you have invested as expenses, don’t think of it anymore (after all, if it is in your hands, you could have also spent it on clothes, cellphones, and other stuffs). Just continue putting a little amount for a period. And then later you will just be surprised to see how much your money has grown.

I have a friend, his dad invested in the stock market 20 years ago. He bought 10,000 shares of a company for P50, 000.00. Every year, he receives around P100,000.00 for dividend alone and what’s more, the price per share of the stock is now at P200+. If he decides to sell his stock today, he will get P2.5M.

That’s why, I encourage my fellow “unrich-working commoners”, we too have the right to be financially wealthy someday. Just save, invest and save and invest. The “Piso” that we invest today can become P100 tomorrow. How much more if we save and invest P100, or P1000.00, or more.

I know, investing is not easy. But for us who are not fully equipped with financial knowledge and yet we really want to learn and have a mentor, try Truly Rich Club. Bo and his friends are very much willing to assist us. 

Making your way to Financial Freedom – Mommy’s Easy step for “Mga Nanay ng Masa”

Imagining yourself debt free, with a nice house, and worry-free on where to get money for hospitalization, and emergency when there’s little or none at all left with your 15-30 salary?

Everyone of us, I know, would always dream that one day, we will just be sitting at home or we are somewhere taking our vacation and yet our source of fund if not running out.

That’s, FINANCIAL FREEDOM!

Financial Freedom or Financial Independence is generally used to describe the state of having sufficient personal wealth to live without having to work actively for basic necessities (Cummuta, John, "The Myths & Realities of Achieving Financial Independence. Nightingale Conant. Retrieved on 14-Sep-2009)

But the way to financial freedom is NOT EASY. We’ve got to make sacrifice TODAY, to attain financial freedom TOMORROW. As an ordinary person, I believe that the following are basic ways and sacrifices towards financial freedom:

Free yourself of debts

 Having borrowed some money subjects yourself to interests which still cover a part of your budget. The interest that you are paying could have been your savings. Also, avoid using your credit cards if you can’t pay everything on time. They will charge you with service fee and that accumulates every month. If possible never have one because to some, it will only serve as temptations, but if it is really necessary to have one, choose credit cards that do not charge Membership Fee.  

Live a simple low budget life

 I don’t mean here you have to live poorly. I mean here, you have to live below your means. Earn P100 and yet spend lesser. How much, it really depends on you. Us, we only spend 70-75%. And that already covers our emergency fund. Limit eating out if you can still cook at home. What’s the difference between a Jollibee Chicken Joy and your own home-made friend chicken? (if there are 3 of your that you cost at around P300.00 at Jollibee, at home around P150.00 you can already have a bucket plus you have a P150.00 savings)

Avoid Buying Unnecessary Things

As much as possible, avoid buying new things when the old one is still functional. Buying a new TV? Why, is it urgent? Is it important? After hubby and I got married, the first TV that we had was the old TV of my parents. It was still functional at that time. We only bought a new one after some series of failed attempts to make “oldie” work.

Buying new stuff while the old one is still functional only increases your expenses and yet not adding to your income. Where does that leave you?

Make a budget allocation

Making a budget list will help you in determining your priorities. And following your budget list will surely help you towards financial freedom. I too have a monthly budget list, with budget priorities. I will make another blog on how to make a budget list later.

What you save, you must invest

For me, it’s not only that we have saved, but it’s that we have INVESTED. What’s the difference between saving and investing?  In my own understanding, saving is just merely putting aside a part of your money or product for future use. Investing on the other hand, is making your money expand. This is coupled with risks though.

In saving,  the P5.00 that you save today is still P5.00 12 months after. But in investing, your P5.00 might become P7.00, P10.00, P15.00 or more. There are a lot of ways on how to invest. And thankfully, these gateways towards financial freedom are all made available to common individuals. We can be investors. (Separate blog about this)

Create Passive Income

Whilst, investing is for the future, passive income for me is for the present. With passive income, we can have more capability to manage our finances. What’s more, with passive income we can also increase our investments.

If you can already live within or below your income, use your passive income to generate more passive income or use it for investments. With this, the way to financial freedom is faster and bigger.

SUMMARY

To sum it up, it all comes down to our present lifestyle. We are what we are and we will be what we want to be. If we want to be well off in the future, that we still have time today to prepare for it. Some choose have a lavish lifestyle today, it’s their choice. 

Now, I can understand what my dad is always telling me. It was because that we lived a simple life that we were able to graduate college and he was able to get all his retirement benefits in full when he retired because he did not have liabilities in Pag-ibig and SSS. He was not used to borrowing money, and we were used to a lifestyle that does not demand a weekly Jollibee or new clothes and shoes. I guess, the only thing that he failed to do was invest a little amount of his salary, if he did, he might have retired a millionaire. Now, with time in my hand, I’m planning to do just that.

BDO EIP (Easy Investment Plan) Program

"Not only plan, but act. Not only dream, but believe"

Making steps towards my goal of a hundred fold, I decided to rearrange our lives. I call it "rearranging" because I really have to start from scratch, and re-align our lifestyle. We have a simple lifestyle, but I have to still change our lifestyle so that there will be room for our savings.

I have also kept my self posted of the things that can make my money grow but those that I can afford and those that can't hamper my day to day work. I am an employee after all and I need to be in the workplace 8:00AM to 5:00PM Mondays to Fridays.

I have visited banks' websites and their investment pages. What caught my attention was BDO's EIP program. The thing that caught my eye the most is its very affordable minimum monthly contribution.At P1,000.00 a month, you can now invest in their EIP (Easy Investment Plan) program.

I talked with my husband about it and said that if only we can allocate some of our earnings per quincena to savings (savings that involve risk but can give higher yields). Thank goodness, he agreed.

So we went to the nearest BDO in our locality and applied for BDO Equity Fund under its EIP Program. We opened an atm account where the monthly payment will be automatically deducted. 

We decided to invest in BDO because i believe that it is stable and currently it is the biggest bank in the country.

Today, I'm on the 2nd month of my investment and hoping for a brigther future. Go go go a hundred fold.

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I, the author, and my husband are by no means connected with BDO or any of its personnel. I have only shared in this post my experience with the said institution.

The Enlightenment... The First journey

"Miracles do happen do happen everyday. It only depends whether man has accepted the gift"

I consider this as a miracle. I never had any knowledge of financial freedom before, of psychological wallet, of asset allocation and fund diversification. Moreover, I never had any basic idea of investments, of stock market. Well, my basic idea about them is that investments mean millions of pesos and stock market is only for the rich, the tycoons and elites. 

I cannot remember the exact date or time but it came when we were financially struggling - we only have meager income, my husband and I, and we are still supporting his siblings who are still in school. Let's say we have this regular expenses:

• Household expenses
• Water Bill
• Electric Bill
• Our 1-year old son's needs (milk, diapers, etc)
• Allowance and projects of Sister 1 (College)
• Allowance and projects of Sister 2 (High school)
• Allowance of Mother-in-Law
• Medicines of my parents 
• Our allowance
• LPG
• St Peter subsciption
• etc

And then we were left with nothing. I was so distraught with our situation and financial status that I researched for ways to earn additional income. I have read of having online business, online jobs and many more. But I felt that they were not for me.

And then, I was able to read Bo Sanchez's "8 Secrets of the Truly Rich". And it was there that I have understood almost everything. Call this crazy but when I was reading the e-book, i really felt as if I am another person, a person who is full of willingness to learn and comprehend; a person who has suddenly become a visionary of her future; a person who wants to better the future of her family; a person whose vision has become clearer.

Aside from the e-book, I have also bought an investment book, which has also increased my knowledge in financial management. I have now additional understanding on fund diversification, treasury bonds and funds, again stocks and others.

Bo Sanchez's e-book "My Maids Invest in Stock Market and Why You Should Too" has inspired me a lot and it really talks about reality. About relatives having this ESP or strong sense when a member of the family has saved a little amount of money - that's true not only for house helpers. I was so inspired by the book that I emailed it to my close friends and to those I want to share my new found knowledge with. (I'm sorry Brother Bo for sharing the e-book without permission)

Now, with still little knowledge, I believe that maybe I am indeed an investor by heart (whit whew!) because I feel it inside me, the balance, and the weight is light.

Indeed, it's as if I've been guided towards this journey by a very powerful force.