PERSONAL FINANCE. BASIC STOCK MARKET.

For I know the plans I have for you, declares the LORD, plans to prosper you and NOT to harm you, plans to give you hope and a future. Jeremiah 29:11 (NIV) You will be the head and not the tail. You will lend to many nations, but you will not have to borrow from any. Excerpt from Deut. 28 In all your ways acknowledge Him and He will crown your efforts with success. Excerpt from Proverbs 3:6

Reason #1: Emergency Fund Reason #2: Inflation

Reason #3: Personal Goals

Little Exercise:
Kindly list 3 SPECIFIC personal goals that can inspire you to save?

Saving means to KEEP your money.

Investing means to GROW your money.

Investing is about committing money with the expectation of getting something in return. It is making money work for you NOT you working for the money.
Active income means you physically have to work for the money (salary). Passive income is a state where your money is working hard for you (stock market).

Little Exercise:

a) b) c)

Do you work for your money? Do you let your money work for you? Both a and b.

How do you handle your finances after receiving your pay (sweldo)? Most books recommend these 3 simple guidelines: ** 10% Tithes ** 20% Investment Fund ** 70% Personal Expenses

Investing is NOT only for the rich people. This is a very common misconception. (A Little Extra: Bo Sanchez taught his maids to invest in stock market).

Saving in a bank does NOT beat inflation. Investing does. You do NOT need to be a financial guru to understand the basics of investing. Gains (tubo) does NOT happen overnight!

Time Deposits on the average has 2% - 2.5% rate of return (per year). Philippine Stock Market on the average has 12% - 20% rate of return (per year).

I invest Php 10,000 today. I will leave that money for 15 years in the stock market. I wont add any amount and I wont pull out any as well.

If Ill get the lowest average rate of return (12%) how much should I earn?

Age 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44

Savings 10,000.00 11,200.00 12,544.00 14,049.28 15,735.19 17,623.42 19,738.23 22,106.81 24,759.63 27,730.79 31,058.48 34,785.50 38,959.76 43,634.93 48,871.12

Rate 12% 12% 12% 12% 12% 12% 12% 12% 12% 12% 12% 12% 12% 12% 12%

Gain 1,200.00 1,344.00 1,505.28 1,685.91 1,888.22 2,114.81 2,368.59 2,652.82 2,971.16 3,327.69 3,727.02 4,174.26 4,675.17 5,236.19 5,864.53

Total 11,200.00 12,544.00 14,049.28 15,735.19 17,623.42 19,738.23 22,106.81 24,759.63 27,730.79 31,058.48 34,785.50 38,959.76 43,634.93 48,871.12 54,735.66

I want to be a part-owner of Jollibee.

I cant go to the owner and tell him I want to be one of his partners.
By investing in stock market, I can do that!
Thats how stock market works, we buy shares of stocks and when they make profit, well have our share of money too (profitsharing)!

There are 2 ways to earn from the stock market:

Capital Appreciation Price (per share) of Jollibee last 2010 was Php 47.50, todays price is Php 125.00 Dividends Ayala Land, Inc. issues Php 0.50 dividend per share.
Between the two, capital appreciation is a major way to earn in stock market.

Assumption is you purchased Jollibee shares last 2010 and you leave it for 3 years. Thats it.

Year 2010 2013

Price 47.5 125

Share 1000 1000 Gain % of Gain

Total 47,500.00 125,000.00 77,500.00 163%

Little Exercise:

What are your initial thoughts on stock market? Share

Option 1: Traditional Visit Philippine Stock Exchange (PSE) personally, talk to a broker and tell him that you want shares of Jollibee.

Option 2: Online Open and fund an account with COL Financial and buy shares of Jollibee.

Each time you buy / sell shares of stocks, an electronic confirmation will be sent to your e-mail

Open a COL account. You can either go at their office (Ortigas) or e-mail the requirements, or have your documents picked up by COL messengers. Fund your COL balance. You can either deposit via online banking (my favorite!) or deposit via bank (they have BDO, BPI and Metrobank as their partner banks).

WHY do we need to invest? WHAT are the 3 simple steps on how to budget your personal money?

SAVINGS vs. INVESTING

HOW does stock market work? Basic action items about COL Financial

What are blue-chip companies? Simple ways on how to maximize our earnings in stock market. What stocks should I be buying?