equities, investment, life insurance, Personal Finance

Poorman’s Grave:What You Can Learn From this Eraserheads Song on Financial Planning

I grew up listening to Eraserheads, I love their songs. I bought their albums as well and up to this days I still listen to their songs. This is also one of the reasons why I studied at UP Diliman because Eraserheads was formed in UP. Who would not know Ely Buendia,Raimund Marasigan,Buddy Zabala and Marcus Adoro? They are the most influential rock band in the Philippines. Most of their songs represent what we can observe in our culture that is why it is easy for most of us to like the Eraserheads.

eraserheads-rappler-interview-rappler-20140403
The Eraserheads(From Left to Right): Ely Buendia, Marcus Adoro, Buddy Zabala and Raimund Marasigan. (Photo courtesy of Rappler)

One of my favorite songs is Poorman’s grave from their album Cutterpillow.  When I first heard it, it was a surreal experience. It was a happy up-beat song but the lyrics were sad. It was a story of a poor man who wished not to be buried in a poorman’s grave when he died. It was a tragic song because the guy was hopeless.

If you have not heard the song, you may check this link from an Eheads fan who created a youtube video with lyrics.

In this regard, I would like to share some things that you can find useful on this song about Financial Planning.

He was a poor man all his life..  Becoming a poor is a choice. It may sound harsh but in everything that happens to our life,it is our choice, no one is  to blame but all of our actions from the past. But it is never too late to improve and change our life by learning how to handle our finances well even though we think that we only earn small income for us not to be poor for the rest of our life.

He said Good Lord, why have you forsaken me.When everything I did I thought was right.. Never blame others for the bad circumstances that happen to our life that is why it is important to learn and look for someone who can guide you to the things that you want to achieve in life. Keep on learning and invest in yourself. Talk to Financial Planners for you to learn to create a Financial Plan. In the lyrics he was thinking that the Good Lord forsaken him, if he was blaming the Good Lord, who else he cannot blame?

All my days I have never sinned,So I hope you wont ignore what I’m asking for… The poor man thought that he never made a mistake in his life, thus , he is not willing to change to be better in his life. If someone advised him to save, insure himself and invest his money, for sure, he will not listen because he will simply say that he is doing the right things on his finances.  Listening to constructive criticism is one good practice to be financially free.

Oh honey when I die Dress me up in a coat and tie Give my feet a pair of shoes/Oh honey when I die Give me a bed of roses Where I could lie… He does not think about what will happen to his family when he passes away. Instead of preparing for the future of his wife and his children like for education, food, etc., by getting a life insurance, he only focuses on the things for the present but not for the future of his family, imagine he will use up all of his savings just to have a grandiose burial.

He comes home drunk every night… The poor man should have saved his money instead of spending money on things that are not important. He never creates a budget plan where he can use his money well so that he will be out of poverty through saving money and eventually he can invest.

All my days I have lived in shame.. The poor man thinks that there is no hope in his life. He is a pessimist obviously that is why opportunities shy away from his life. It is very important that if you want to get out of poverty, you need to become an optimistic person.

Understanding the song Poorman’s grave represents the attitude of most of us Filipinos on handling our finances. We should not do what the poor man did to his life.  It shows that our Financial Literacy is really low that is why even though we earn money from our job or even small business, we will never get out of poverty because we never learn Personal Finance.

I always believe that if you are born poor, it is not your fault, but you if you die poor, it is your fault. It does not matter how small your income is, but what is important is you can discipline yourself to save first before you spend your money and you will reap the benefits in the future.

Let’s aspire to become Financially Free for our God, our country, and for our family.

 

Archie M. Yuki
Financial Adviser,Investment Consultant and Insurance Specialist
4th floor Karina Bldg., No. 33 Shaw Blvd. Pasig City
Tel No. 571-3274
Mobile Number. 0917-5769607, 0923-4941362
Email Address: archieyuki30@gmail.com
equities, investment, Personal Finance, stockmarket

Investing in Stock Market Can Surpass Your Salary

Investing in stock market can surpass your salary

Creating a passive income can make you financially independent, you can afford not to work anymore which you can do what is more important to you. Investing in stock market is one tool that you can do to achieve passive income. While we are earning through active income, it is good that you start to invest also for you to create passive income in the future.

Let me share with you how it is possible to surpass your salary through investing in stock market consistently.

Here is the illustration of an employee who earns a salary starting at age 23 until age 60:

Annualsalaryincrease
Let’s assume that an employee at age 23 has a salary of ph18,000  per month,so in a year he is earning Ph216,000 including the 13th month salary. Let’s assume that the annual increase of his salary is 5% per year but in our country,it is very rare to get a job that can give you an annual increase of 5% per year. If that employee will work in a job until age 60, his monthly salary will be Ph101,044.92 Ph or Ph1,313,583.90 per year if his employer will give him an annual increase of 5% per year. This only means that if your employer now is not giving you an annual increase of 5% per year,your salary will be lesser from this assumptions in the future. But these days, there is no job security. That is why it is advisable for us to invest for us to prepare for our future expenses.

On the other hand, if the employee decided to invest Ph3,000 per month for only 10 years,look how his money will grow over time for him.

salaryvsinvestment

We can see that he only invested Ph3,000 per month or Ph36,000 per year for only 10 years. He let his money grow for long term and let’s assume that his investment will give him 12% annual returns in long term. You can see that on the 6th year his investment has surpassed his annual income, Annual Salary is only Ph275,676.82 and the value of his investment is Ph292,146.81 and on the 12th year his investment doubled his salary already. His annual salary is Ph369,433.30 and the value of his investment is Ph792,472.80. You will notice that his investment funds compound over time which can give more income than his salary. If he decides to still continue his job, he can use this money to create another investments for him to grow his money by diversifying to real estate or business. If the employee stops working at age 60 he will already have Ph15,088,739.23 which he can use for his retirement. With this strategy, it is possible to surpass your salary through investing consistently in stock market which it can help you to achieve your financial goals in life. Can you imagine if how much money he will have if he invested more than 10 years?

To summarize, this is the chart of the growth of investing in Stock Market compared to salary increase.

growth of stock market

In conclusion,  it is important that we need to save and invest while we are young and earning from our job so that we can create another source of income through investing in Phil.Stock Market rather than we only depend income from our job which is too risky in the future. We see that the increase of our salary will never surpass the returns that you can get if you invest in Philippine Stock Market long term. Which will you choose? Will you just stick to your salary? or you start to save and invest so that your money can work for you while you are earning from your job.  It is wiser to create another source of income for us to secure our future financial needs.

Thank you for reading my blog. I hope you learn about the importance of investing. Start to create your financial plan now to reap the benefits in the future.

 

Archie M. Yuki
Financial Adviser,Investment Consultant and Insurance Specialist
4th floor Karina Bldg., No. 33 Shaw Blvd. Pasig City
Tel No. 571-3274
Mobile Number. 0917-5769607, 0923-4941362
Email Address: archieyuki30@gmail.com

 

equities, investment, Personal Finance, stockmarket

How to Beat Inflation?

How to beat inflation

A lot of us don’t realize inflation. We thought that if we have money in the bank will guarantee us safety in the long run. It may be safe for now but you are actually losing money if you park your money in the bank long term. Shockingly, bank deposits in our  banking system reached Ph10.4B as of December 2016. It shows that most of the financial portfolios of the Filipinos are not well diversified. Nothing wrong putting money in the bank but you have to know your purpose why do you put all your money in the bank.

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Let’s define inflation. According to Investopedia: Inflation is the rate at which the general level of prices for goods and services is rising and, consequently, the purchasing power of currency is falling. It is inevitable that you will surely lose the real value of your money if you do not invest it.

Let me illustrate:
What can you buy  with Ph500 from these different years?

inflation

The illustration shows that your Ph500 in 1998 cannot buy the same value of goods as time goes by because prices will surely go up. The value of your money gets smaller long term because of inflation. Inflation Rate ranges from 1%-5% depending on the economy’s situation. Now, how you can beat inflation? You have to look for a Financial Instrument that can give you an interest rate more than the inflation rate. There are many ways how to beat inflation but for this blog post, I recommend investing in Equities or Stock Market.

Here in this illustration, if you put your Ph1,000,000 in the bank and you leave it for 20 years, this will what happen to your money.

1M in a bank for twenty years

It clearly shows that the real value of your money loses over time with an assumption of 1% interest rate per year. Inflation beats your money,the real value of your Ph1,000,000 is not the same after 20 years and even though you see that there is an increase in nominal value because it is Ph1,208, 108.95, the amount increased will not make up with the loses due to inflation. You cannot buy the same items after 20 years if your money did not beat inflation.

Now, if you put your money in an Equity Fund that can give on the average returns of 12% per year after 20 years.

1M in equity after years

In investing in Equity, the real value of your money will grow long term. You can buy more for your future financial needs because in the illustration, your money from Ph1,000,000 grows to Ph8,612,761.69.

Given these illustrations, it means that you have to look for a Financial Instrument that can beat inflation rate of 1%-5% per year. If you put your money in Equity or Stock Market, it can give you an average of 8%-12% per year. This way, you can beat inflation so that you can prepare for your future financial needs. Now, the questions is if you have a plan to achieve a financial goal for more than 10 years in the future like for your Children’s education, Retirement, Business Funds or buying your dream House? Where will you put it? You can now decide where to put it, will you just save it or invest in Stock Market?

Inflation is real, that is why while we are earning now, we need to learn how to diversify so that our money can work for us as well. You will see the benefits of investing in the future because it will give you income in the future if you cannot work anymore. Let’s beat inflation by investing our money now.

 

Archie M. Yuki
Financial Adviser,Investment Consultant and Insurance Specialist
4th floor Karina Bldg., No. 33 Shaw Blvd. Pasig City
Tel No. 571-3274
Mobile Number. 0917-5769607, 0923-4941362
Email Address: archieyuki30@gmail.com

 

life insurance, Personal Finance

Why you should have a Financial Plan?

why you should have a Financial Plan

Have you heard about the adage: “If you fail to plan,you plan to fail. In all aspects of our life,planning is important. But it should not be all plans,it should be well executed and evaluated for you to achieve your goals in the future.

In our life, money is important for us to achieve our goals. It is unusual,if you say that money is not important. We have to understand that our income is not there always to sustain us. There is a study that upon retirement, 63% of us will be broke. It means that a lot of us will be dependent to other people. Even though, while we are earning good while young will not guarantee Financial success in the future. That is why, it is advisable that we need to have a Financial plan. Let me share with you the reasons why do need to have a Financial Plan.

1. You can prepare for your retirement needs when you get old. How much monthly income would you like to receive? You can complement your SSS/GSIS which you can be comfortable that you will not depend to your children or grandchildren.

2. You can prepare for your children’s education. Tuition fees are increasing every year, ranging from 10%-20% increase per year. If you start to create a Financial Plan earlier,the amount that you have to set is smaller compared if your kids will go to college next year than 10 years ago.

3. You can prepare for your dream house. You can set aside money now for you to buy the house that you like in the future. It is possible to pay it in cash!

4. You can prepare for the business that you want to start in the future. Let’s say you want to start a restaurant, you prepare for it by creating a Financial plan.

5. It is possible that you can have a passive income where you can make your money work for you. All you have to do is just withdraw from your investments to sustain your lifestyle.

6. You can bless more people if you achieve financial independence. If today, that your income is not that big but you manage also to give, how much more if you will be wealthy?

7. You can inspire people to become financially independent thus if more Filipinos are wealthy, our country will be also a wealthy nation because everyone knows how to create a Financial Plan. Philippines will be a great country.

With these reasons,you should start your discipline in handling your finances. Even though, your salary is not big as you think or there are so much expenses, you can start right away just by saving money everytime you earn consistently,until it becomes a habit for you and eventually, you can now look for opportunities how to grow your money in a Financial Plan. Always remember, if we don’t  save and invest, we will never achieve financial independence. Start your Financial Plan now!

Thanks for reading my blog!

 

Archie M. Yuki
Financial Planner,Investment Consultant and Insurance Specialist
4th floor Karina Bldg., No. 33 Shaw Blvd. Pasig City
Tel No. 571-3274
Mobile Number. 0917-5769607, 0923-4941362
Email Address: archieyuki30@gmail.com