money Financial Planning

[MRROUGHSEX]

20190308 Updates:

* Reduce total debt to $58K by year end (currently at $70.7K)

* Grow retirement savings to $170K by year end (currently at $155K)

* Anticipate house value to appreciate to $280K by year end (currently at $267.9K)

* Increase college savings of children to $20K by year end (currently at $13.5K)

* Buttress business fund to $65K by year end (currently at $56.1K)

* Expect condo value to appreciate to $50K by year end (currently at $48.4K)

[neville]

Looking at my stock and mutual fund portfolio yesterday, it appears that the market is recovering from the backlash.

 

Of course, that is my simplistic view of things. I'm no analyst 😁

 

Waiting for my funds to be wired to my account. I have a bit more time to go to the bank to funnel fresh cash for my portfolio.

 

On the flip side, I am stopping myself from stepping foot a supermarket. A one-time bill of PHP8550.00 for a single person is not the logical thing to do.

 

Credit card debt manageable still. No more of the factors that pushed me to start this thread in the first place. 😁

 

So far so good.

[JohannBeckham]

ako nmn base sa forecast ko sa mga gastusin this year e.g. masters ni misis (tuition, books, etc), just bought new dell XPS 13 9380 4k, plus a couple of short holidays (around Australia and Singapore), mukang di namin mabi beat yung savings rate na 55% last year of take home pay. Pero ganyan tlaga minsan kailangang mag compromise.

 

May ETFs are all doing good this year but im still keeping $10k cash just in case the market tank (U.S., Australia or Europe because of Brexit).

[PenetrayShawn]

Dream dreams session:

When you reach financial independence, what do you dream doing?

 

For me it's this:

https://m.facebook.com/story.php?story_fbid=241440400069949&id=548013005612377

 

get into development work since i won't have to worry about bills as much. continue learning as well so i can mentor others who want to be financially independent too

[MRROUGHSEX]

With a 97% average mark in the past 6 grading periods and a perfect 600 out of 600 score in the State-wide exam, my kid got offered to enroll into the 2nd best and most prestigious High School in Tennessee - Hume-Fogg. The 1st is University School of Nashville, tuition $25K/year. The 3rd is Saint Mary's Episcopal, tuition $22K/year. Essentially I am paying a tuition between those 2 worth $23.5K/year.

 

But since Hume Fogg is all about academic scholars, my tuition is FREE! It only accepts 7 out of 100 applicants with a cap of 225 freshmen and a 3-year wait list.

 

If I accept their offer to enroll my kid there, it will have a favorable turn for me financial planning-wise:

 

Prior

High School Education budget: $23,500/year

 

Now

High School Education budget: $0/year

 

Edited March 23, 2019 by MRROUGHSEX

[JohannBeckham]

Congrats Pre! Ang mahal talaga ng Education sa U.S.

[redeswaq]

Congrats sir.

 

 

Reading your and Johann's insights was very informative for me. Gusto ko rin sana mag invest for my retirement but don't know where to start, so far I only have a savings account that's been sleeping for a year now at the bank.

[JohannBeckham]

 

Reading your and Johann's insights was very informative for me. Gusto ko rin sana mag invest for my retirement but don't know where to start, so far I only have a savings account that's been sleeping for a year now at the bank.

Thats good nkapag start ka na! Starting is always the hardest part. Well, i dont know your personal situation so feel free to ask us any financial planning related stuff for we are happy to help. Ang number one usually na advice ko for a beginner is to have a budget every month at the beginning of the month para alam mo where your money is going. I've been tracking mine since 2014 and i can tell you how much it helps me in my finances. I use spreadsheet to generate a budget, track expenses and my networth. Nkaka encourage looking how you become better with money as the year goes on. You do not have to compare your financial situation to others, you can only compare yourself to your past self and make necessary adjustment (kaya ita track mo sya sa spreadsheet). Grabeh, a budget is so powerful, it can change your life for the better.

 

Having some sort of savings in a bank is a good thing for short term needs or for emergency(lahat tyo nkakaranas ng emergency situation kung saan kailangang kailangan mo ng pera kya maigi na may pera ka sa bangko when that happens). Ang rule of thumb na gamit ng marami for initial emergency fund is $500 to $ 1,000 kung nkatira sa abroad. Sa Pinas di ko sure ang rule of thumb how much ang usual. Maybe this community can share some ideas.

 

Once meron ka nang na alot na money for your living expenses, at napunuan mo na yung initial pang emergency at may natira pa sa sweldo mo, ibayad mo sa consumer debt e.g. credit card or other personal loan. There's no point investing your money that can earn 8-12% per annum kung nagbabayad ka ng credit card with interest of 20-25%. Pay your debts in full(except mortgage syempre kasi mahirap bayaran in full yun kasi sobrang laki).

 

Next once bayad mo na lahat ng utang mo, punuan mo yung initial emergency fund, at palakihin mo sya na enough na para mabuhay ka for 3 to 6 months just in case mawalan ka ng trabaho.

 

Then start investing in mutual fund or ETF (this is my preferred investment vehicle if real estate investing or starting your own business is not for you).

 

Yan lng muna masa suggest ko, work muna ulit

[PenetrayShawn]

Thats good nkapag start ka na! Starting is always the hardest part. Well, i dont know your personal situation so feel free to ask us any financial planning related stuff for we are happy to help. Ang number one usually na advice ko for a beginner is to have a budget every month at the beginning of the month para alam mo where your money is going. I've been tracking mine since 2014 and i can tell you how much it helps me in my finances. I use spreadsheet to generate a budget, track expenses and my networth. Nkaka encourage looking how you become better with money as the year goes on. You do not have to compare your financial situation to others, you can only compare yourself to your past self and make necessary adjustment (kaya ita track mo sya sa spreadsheet). Grabeh, a budget is so powerful, it can change your life for the better.

 

Having some sort of savings in a bank is a good thing for short term needs or for emergency(lahat tyo nkakaranas ng emergency situation kung saan kailangang kailangan mo ng pera kya maigi na may pera ka sa bangko when that happens). Ang rule of thumb na gamit ng marami for initial emergency fund is $500 to $ 1,000 kung nkatira sa abroad. Sa Pinas di ko sure ang rule of thumb how much ang usual. Maybe this community can share some ideas.

 

Once meron ka nang na alot na money for your living expenses, at napunuan mo na yung initial pang emergency at may natira pa sa sweldo mo, ibayad mo sa consumer debt e.g. credit card or other personal loan. There's no point investing your money that can earn 8-12% per annum kung nagbabayad ka ng credit card with interest of 20-25%. Pay your debts in full(except mortgage syempre kasi mahirap bayaran in full yun kasi sobrang laki).

 

Next once bayad mo na lahat ng utang mo, punuan mo yung initial emergency fund, at palakihin mo sya na enough na para mabuhay ka for 3 to 6 months just in case mawalan ka ng trabaho.

 

Then start investing in mutual fund or ETF (this is my preferred investment vehicle if real estate investing or starting your own business is not for you).

 

Yan lng muna masa suggest ko, work muna ulit

 

good points, just to add my take:

 

track expenses first without making any conscious effort to change your routine

 

after a month they can categorize expenses into more general concepts ex jeep and bus would fall under transportation

 

from there rank expenses from biggest to smallest then consider where changes can be made. for me a 30 minute walk after work could substitute for riding one jeep due to traffic

 

necessities expenses (food, shelter, load, water) would probably be the core of emergency living expenses but costs would likely depend on where the person concerned lives

 

after debt is paid off i would suggest getting insurance and considering this as super emergency expense as opposed to not-having-work emergency money

 

investing would be ok once insured na to avoid the temptation of getting greedy with investing. mutual fund or uitf would be a good start to offload the thinking/effort. i would then suggest investing in a little financial education (one good book would be enough for starters) especially personal finance in general, the financial system/economy, and one asset type that appeals to them and is understandable. for some people that would be real estate, others, franchising, others still, business

 

also congrats mrroughsex, hopefully namana din ni kid yung financial sense mo. i can imagine how hard it is to raise kids in the US since tingin ko materialistic na ang culture diyan in general

Edited March 27, 2019 by PenetrayShawn

[redeswaq]

Thats good nkapag start ka na! Starting is always the hardest part. Well, i dont know your personal situation so feel free to ask us any financial planning related stuff for we are happy to help. Ang number one usually na advice ko for a beginner is to have a budget every month at the beginning of the month para alam mo where your money is going. I've been tracking mine since 2014 and i can tell you how much it helps me in my finances. I use spreadsheet to generate a budget, track expenses and my networth. Nkaka encourage looking how you become better with money as the year goes on. You do not have to compare your financial situation to others, you can only compare yourself to your past self and make necessary adjustment (kaya ita track mo sya sa spreadsheet). Grabeh, a budget is so powerful, it can change your life for the better.

 

Having some sort of savings in a bank is a good thing for short term needs or for emergency(lahat tyo nkakaranas ng emergency situation kung saan kailangang kailangan mo ng pera kya maigi na may pera ka sa bangko when that happens). Ang rule of thumb na gamit ng marami for initial emergency fund is $500 to $ 1,000 kung nkatira sa abroad. Sa Pinas di ko sure ang rule of thumb how much ang usual. Maybe this community can share some ideas.

 

Once meron ka nang na alot na money for your living expenses, at napunuan mo na yung initial pang emergency at may natira pa sa sweldo mo, ibayad mo sa consumer debt e.g. credit card or other personal loan. There's no point investing your money that can earn 8-12% per annum kung nagbabayad ka ng credit card with interest of 20-25%. Pay your debts in full(except mortgage syempre kasi mahirap bayaran in full yun kasi sobrang laki).

 

Next once bayad mo na lahat ng utang mo, punuan mo yung initial emergency fund, at palakihin mo sya na enough na para mabuhay ka for 3 to 6 months just in case mawalan ka ng trabaho.

 

Then start investing in mutual fund or ETF (this is my preferred investment vehicle if real estate investing or starting your own business is not for you).

 

Yan lng muna masa suggest ko, work muna ulit

I generally have no loans to pay at the moment, very minimal expenses. Been able to save 10,000 monthly in my savings for the past 2 years. Pero I feel nasasayang ko yung potential if sa bank lang siya nakalagay.

 

What book would you people recommend for starters?

[MRROUGHSEX]

I generally have no loans to pay at the moment, very minimal expenses. Been able to save 10,000 monthly in my savings for the past 2 years. Pero I feel nasasayang ko yung potential if sa bank lang siya nakalagay.

 

What book would you people recommend for starters?

Magandang rate of savings yan. I remember I was so happy when I reached Php10K per month savings. Tapos every year lumalaki with interest earned and as salary increases (kasi % of take home pay savings ko).

 

At that time, wala pa internet to ask for advise kaya puro time deposit lang ako.

 

Now people can advise you to go with mutual funds or ETFs. Parehas na good investments yan. Just research the fees (loading fee, expense ratio, transaction or trading fee). Try to minimize the fees but also research the holdings of the fund. Much of the battle IMHO is won by the quality of holdings. Blue chips should be a good start and frankly, that's where bulk of my savings go as I do not have time to monitor the papers for growth or value funds or individual stocks. Over time, say 15 years, it will grow on average 7%/year while TDs only grow around 2 to 2.5% a year.

 

As such, TDs are just hedge investments. They hedge against inflation so that you don't lose money while prices go up also at 2.5%. T-Bills and T-Bonds give about 3% and 4% respectively. So, not only were you able to hedge, but you gain some without market risks.

 

The stock market, gives higher returns but also higher risks so like they others mentioned, don't risk what you will need for the short-term (i.e., less than 1 year). In fact, try to invest with the mindset of not touching/selling for 3 years at least and just regularly buy (aka PCA or Peso Cost Averaging). .

 

As you can glean, investing is long-term. No Book needed. But if you want to trade (short-term), then you need to learn to read charts. So look for a book re chart-reading. But hey, internet is free and there are a lot of materials on youtube and others about this topic. Maybe start there.

 

Books about fundamentals is no good. This is because the market is not based on rational thought. Technical (chart reading) is the key and would actually help if you are going to do some market timing on your investments. While I don't trade, I do marrket-timing a bit

 

For your first buy, divide your stock/fund money (not emergency money or short-term money you will need) by 10 and invest only 4/10th (40%). Then invest the remaining 6 parts over the course of the next 6 months. This helps you sane because many times, people put all their savings in 1 initial transaction and then, if the market suddenly drops, they sell and get traumatized into not investing again. By spreadking your hard-earned savings in 6 months, you could actually take advantage of a market drop by being able to buy at discounted prices.

[JohannBeckham]

I generally have no loans to pay at the moment, very minimal expenses. Been able to save 10,000 monthly in my savings for the past 2 years. Pero I feel nasasayang ko yung potential if sa bank lang siya nakalagay.

 

What book would you people recommend for starters?

 

I've read lots of books nung nagsisimula pa lng ako from Rich Dad Poor Dad to the latest one on the list that i attach here in this post.

I dont normally read paper books but listen to Audible books so yan ang list of books na currently nasa phone ko.

[redeswaq]

I'm more of the place and forget kind of guy as I still have my day job which takes up most of my time at the moment.

If I understand it correctly, my options are Mutual funds, ETFs and long term investments in stocks?

[JohannBeckham]

I'm more of the place and forget kind of guy as I still have my day job which takes up most of my time at the moment.

 

If I understand it correctly, my options are Mutual funds, ETFs and long term investments in stocks?

Yep, you're what is called in the industry as a "passive investor". I'm a passive investor myself. 100% of my investment (outside tax sheltered account called superannuation which is the equivalent of 401k in the U.S.) is invested in ETFs. All of my ETFs I bought here in Australia since dito ako nkatira and most likely ito ang magiging base ko pag retire ko (primary because as an Australian citizen, we get great free HealthCare system, unlike other country like the U.S. where their healthcare system is not free).

Dati i bought Philippine Index Fund ETF with the ticker code FMETF and it was the only ETF available sa Pinas pero im not sure kung may mas low coast ETF pa sa kanya kaya you do your research.

[MRROUGHSEX]

(primary because as an Australian citizen, we get great free HealthCare system, unlike other country like the U.S. where their healthcare system is not free).

 

Just an off-topic thought on this if I may.

 

It's all just allocation. In a sense, one can argue nothing is free. Either you pay your health care via taxes so that it is "free" or you save the money upfront via lower taxes so you can pay a private health nsurance later on. If it is becomeing a system where more people are truly getting it free, that means someone ELSE is paying for theim and that is not a good country to be in for productive people. Initially, it will be good/advantageous for for the non- and less-productive. But how would it make the productive people feel? It is a disincentive for them to work hard and be productive if they know they will be relied upon to pay for someone else's healthcare and hence the system of socialism takes in and people become all non-productive citizens.

 

Can you imagine yourself working out, eating a balanced diet, taking good care of yourself and hence not incurring too much medical bills and then your neighbor does the opposite and is getting it all free? Now extrapolate that to majority of Aussies and it becomes a simple case of having to increase more taxes to shoulder the "free" health care system.

Edited March 29, 2019 by MRROUGHSEX