HOW TO GET STARTED IN THE STOCK MARKET

Monday, June 22, 2015

HOW TO GET STARTED IN THE STOCK MARKET

By imoney

Becoming an expert investor is hard, and most of us don’t know where to start. But for Marvin Germo, Registered Financial Planner and stock market trader, he had a goal from the get-go. He wanted to have a better future for himself, and saw that investing was the way to go. “My parents never taught it to me. But I saw the effects of not investing, so I said to myself “When I get older, my life should be different than what they’re experiencing right now,” and that pushed me to educate myself in how to invest in different things.” He started investing in his early 20s and hasn’t looked back since.

Now, Germo is a prominent stock trader and investor with two best-selling books about investing in the stock market, who often appears on TV to talk about investing and has given talks all over the world about the subject. But getting to that point wasn’t easy. So iMoney spoke to Germo about how he educated himself in investing, and how you can get started in the stock market as well.

Why Is Investing Important?

“It’s the best way to earn,” Germo says simply. “We’re sitting here talking, but since my money’s invested, it’s working hard for me, and I’m earning as we speak.”

Not only is investing the best way to earn, but it also protects your money from the effects of inflation. “The price of things gets higher each year, so you must find a vehicle that will beat the rate of inflation. A savings account is not the answer,” according to Germo. “For example, college tuition fees go up on average 10% every year. If your money’s in a 1% time deposit, you’re actually losing 9% every year!”

Investing also allows you to take part in the economic boom that the Philippines is experiencing. “Jollibee was only P10 12 years ago, now it’s P202. The only people making money off of this are foreign investors and the super rich. The middle class aren’t investing and they don’t get to enjoy that growth,” says Germo. “It makes me sad. We need more investors.”

But perhaps the best argument for investing is the freedom it can give you. Germo himself has quit his job and lives off the income from his various investments and entrepreneurial pursuits. “Investing gives you the liberty to do that. You know you can beat inflation, you know you can achieve the goals you want, whether that’s education for your kids, your wedding, or retirement.”

“Now I can revolve my life around what I’m passionate about. Achieving this liberty one of the best things I’ve ever done, and I hope more Filipinos get to do the same thing.”

What’s Holding You Back From Investing?

A lack of financial literacy holds a lot of Filipinos back from discovering the freedom that investing can give them. “They always want to buy the latest gadget, go to the latest gimmick place, have a vacation … they prioritize things that aren’t important,” Germo says. “They deprive themselves of opportunities to save and invest.”

Other factors that dissuade the regular Filipino from investing are:

The mistaken belief that you need a lot of money to invest.

No desire to watch their investments every minute of every day.

Not having the expertise of an accountant, economist, or financial analyst.

But Germo says that these doubts are unfounded. You can get started investing in the stock market with as little as P1,000. And if you pick a good company, you can invest your money in it and not have to monitor it every day. And by studying the basics, you can learn enough to make smart investments and earn good returns.

“The stock market is not as hard as people think it is, but it’s also not that easy that you can go into it without studying,” Germo says. “You need to have the right foundation, so when you start investing you know what you’re getting yourself into.”

Lucky for you, there’s no shortage of trainings and seminars available if you want to educate yourself about the stock market. “They get to learn from our mistakes, the things I didn’t know before, and access to information is easier now,” Germo says.

Besides reading books (like Germo’s own Stock Smarts trilogy of books) and attending seminars, another good way for you to build knowledge is by finding a mentor who is actually trading and can share their experiences with you.

How Do You Start Investing?

1. Open an online trial account. If you’re still a little tentative about investing, online brokers allow you to open a trial account so you can simulate the experience of buying and selling stocks without actually spending any money. BPI Trade, for example, gives you a 7-day trial so you can get a feel for investing.

2. Start with a very small amount. Once you’re comfortable with the idea of investing, you can start small. Make sure it’s an amount you can afford to lose, or an amount you don’t plan to touch for a very long time. Even if you have, say, P100,000 to invest now, if you don’t have the knowledge to back your investment up, you could be setting yourself for a very costly fall. “If I plan to invest a million pesos, I would start with P10,000,” Germo advises. “Because that P10,000, I don’t care if I lose all of it, but the knowledge I will get from how I trade that money will allow me to trade larger amounts in the future.” Start with a small investment, and allow your knowledge and skills in the stock market to grow along with your gains.

3. Find the investment approach for you. There’s no magic investment strategy that fits everyone. Learn as much as you can before diving into stocks. If you don’t have the time to learn complicated strategies, start with something simple like the peso-cost averaging strategy. Then, as you gain more confidence, you can start adapting your approach to maximize your investments.

4. Pick companies that are making money. You don’t have to be a financial whiz to figure out which companies are making money. Look at financial statements, easily available on the company’s website, or read the business pages, to make sure that the company you’re considering isn’t suffering net losses every year. “This principle alone would spare you a lot of sleepless nights,” says Germo.

5. Learn, learn, learn. Ultimately, you will have to take responsibility for the decisions you make in the stock market. “You have to understand that when you make a mistake, the broker won’t reimburse you, your friend who gave you the tip won’t reimburse you. It’s your money, it’s your life, it’s under your control so you have to equip yourself to make the right decisions.” To succeed in the stock market, you have to keep learning. Learn from your losses and gains. Seek out ways to develop your investment strategy further, and practice what you learn from reading books or attending seminars. The more knowledge you have, the more wealth you can build.

“Study and start now.”

If Marvin Germo could give you one piece of advice, it’s to study and start investing now. “Studying gives you the confidence to start. And starting now allows you to put that knowledge into action. It’s easy to forget things you don’t practice.”

Hopefully we’ve shown you that stock market investing isn’t just for the rich and powerful — it can also be a powerful tool for you. Time is on your side, so start now.

Fore more financial tips Visit : http://www.imoney.ph/

To start your journey in stock market join us in Truly Rich Club just click the link below

http://bosanchezmembers.com/amember/go.php?r=60865

10 FINANCIAL TIPS FOR YOUNG PEOPLE

Friday, May 29, 2015

10 financial tips for young people
By Barbara Whelehan • Bankrate.com

If I could go back in time, I would do certain things differently. I'm not saying I have a lot of regrets. But when I was younger, I tended to have myopic vision. For instance, it was hard to imagine that one day I would be older. Even today, sometimes I look in the mirror and wonder, who the hell is that?


I wish that, when I was younger, someone had sat me down and told me a few things. Or else I wish that I'd listened when someone attempted to do this.

If you're young, take a seat and listen up. These gems will help you on your quest for financial success.

1. Go to college. You may want to do something that doesn't require a college degree. For instance, you may dream of playing professional golf or running a barn and training horses. But give serious consideration to enrolling in college anyway. Yes, it's a major investment, but if your parents are unable to help you pay for it, make it happen yourself, even if it means taking out loans. One way to save on costs: Go to a community college first; then transfer to a four-year university after two years.

It's easier to get a degree when you're young than when you have a home, family and all the adult responsibilities that go with these things. Your earnings potential increases significantly with a college degree -- which will come in handy if your other dreams don't materialize. Plus, you will likely experience a love of learning that you will never outgrow.

2. Find your purpose. If you're having trouble figuring out what you want to do with your life, look within. You were born with certain talents and natural abilities. You know which subjects you excel in and which ones you struggle with. Choose a career that enables you to maximize your gifts in a way that fulfills you or helps others. As you grow, your career may change along with your desires. But for now, gravitate toward a field that feels like home.

3. Begin retirement planning with your first job. This tip is so important. If the company you work for offers a 401(k) plan, sign up at your first opportunity. If there's no such plan, divert some of your paycheck into an IRA. Believe it or not, if you're lucky, one day you'll find you are older, so it's best to be prepared. Setting up automatic contributions to either one of these retirement vehicles at a young age will help you build wealth painlessly.


Just as an example, let's say you invest $200 a month beginning at age 25, and you earn 7 percent annually on that money. By the time you turn 65, you will have about $525,000 saved up. If you wait until you're 35 to begin saving, assuming the same monthly investment and rate of return, you'll have amassed less than half that amount -- about $244,000. This illustration simply shows the impact that a 10-year head start can make on your savings, thanks to the magic of compounding. Do the math yourself with Bankrate's retirement calculator.Naturally, the more you earn, the more you can stash away. A better way to invest: Rather than target a specific monthly dollar amount, sock away 7 percent of your earnings in the beginning, and increase it each year a little bit until you're diverting 15 percent a year.

4. Place a value on money. It doesn't buy happiness, but it can certainly make you comfortable. Just understand what it's worth. Money is what you earn in exchange for your time in some productive pursuit. Let's say you earn $20 an hour at your job, and you're considering purchasing a TV for $500. You may calculate that you spend 25 hours, or about three days, earning that money. It's worth it, you may think. But that's not an accurate value estimate. If you're single, you're in the 25-percent tax bracket, so you actually spend about 33 hours earning the net income required to make the purchase. It still may be worth it, but there may be competing demands for that money, such as rent and car payments, not to mention your retirement fund. Each purchase represents a trade-off. Make these decisions wisely.

5. Use the credit card sparingly. This tip is also really vital. Bankrate receives tons of letters from strapped consumers who regretfully overused their credit cards and now find themselves in really dire financial situations, some contemplating bankruptcy. It's easy to spend now with plastic and much harder to pay later. Use credit responsibly. Comparison shop for your card. Remember that you'll be relying on your future earnings to pay for today's credit card purchases. And if you keep a running balance, you'll also be paying interest, sometimes at usurious rates. Don't fall into this trap. Instead: Save money to meet financial goals.

6. Follow the golden rule. Contrary to popular belief, the duplicity and craftiness of Machiavellian tactics won't really help you survive, but instead will engender mistrust in your relationships. Treat others fairly, the way you wish to be treated. No one looks good when trying to make others look bad. When you're on the job, avoid gossip. Beware that when someone takes you into his or her confidence to point out someone else's foibles, it's only a matter of time before your foibles come to light. Always be honest in your dealings with others. Seek out the company of people who are positive and supportive of your efforts.


7. Select your partner wisely. Choose someone whose values match your own -- not just where money is concerned, but more importantly, ethical and moral values. Get to know your soul mate over the course of at least a year. Passion is important, but trust more so. Make sure you are free to be yourself. If you hook up with an angry or overly critical partner, you will be subjected to hostility and may lose your sense of self. Conversely, if you're the one with anger issues, resolve them before they poison a perfectly good relationship.

8. Be prepared for the unexpected. Someday you may lose a job through no fault of your own. Prepare today by stashing money into an accessible emergency fund. The easiest way to do this is to automatically divert a portion of your earnings into a savings account in addition to the amount you're contributing to a 401(k) plan or IRA.

Try not to use that 401(k) money for emergencies. It will cost you plenty, between income and penalty taxes. For instance, if you have $10,000 in your account and you're in the 25-percent tax bracket, you'll lose $2,500 to taxes, plus pay another $1,000 penalty for breaking into the money before you reach age 55. (For IRAs, the early withdrawal penalty applies up to age 59 1/2, with certain exceptions.) Bottom line: Your $10,000 dwindles to $6,500. Worse, you will have lost the opportunity for that money to compound and build wealth for your retirement.

But don't leave that money behind with the former employer either, lest you lose track of it. Instead, in a trustee-to-trustee transfer, roll it over into your new employer's plan or into a rollover IRA.

9. Learn about investing or hire help. It's not rocket science; in the beginning you just need to overcome fear and select one or two good, cheap mutual funds. Ask the human resources department for help with that. After you've amassed some wealth, it may be time to hire someone. If you do, you will obviously have to pay for the service. Get referrals and then check out the qualifications and credentials of a prospective financial adviser or broker.

Make sure you understand the fee structure of the services. Is it commission-based or do you pay an hourly fee or a percentage of assets or some combination of these fees? Ask for a complete breakdown. Also, check with the appropriate authority to see if any disciplinary actions have been taken against a certified financial planner or broker before you initiate contact. The Financial Planning Association website is a good starting point to search for a qualified planner.

10. Be thankful for your good fortune. It's not all about money. If you work at it, you will have abundance -- through strong family ties and solid relationships as well as monetary assets. Take some time out each day to reflect on the good in your life. Spend at least one day a week in a recreational activity or hobby that you enjoy, and take a minimum one-week vacation annually if you possibly can. My aunt Genie advises that you travel throughout your life, rather than waiting for retirement to do it. Again, save for the trip.


If you have children, spend as much time as you can with them when they're still young and dependent on you. Before you know it, they'll be old enough to get a driver's license, and you'll see less and less of them from that point on.

Peso-Cost Averaging: The Easy Way To Invest

Peso-Cost Averaging: The Easy Way To Invest
By imoney . 24 April 2015 

The stock market is a tricky beast. You never know when it’s going to go up, down, or sideways. Even the most seasoned of stock market analysts can only predict so much. This volatility in stocks scares a lot of people off from investing, because they don’t have the time to spend analyzing companies and stocks and market movements with the scrutiny required to make the most informed investing decisions. And it’s just plain scary.


But what if there was a way for you to invest in the stock market at amounts you can afford and a schedule that works for you, all while providing lower risk? Even if there are no guarantees with the stock market, you can mitigate the risks by taking the easy, beginner-friendly way to investing: peso-cost averaging.

What is peso-cost averaging?

Simply put, peso cost averaging means you buy stocks or securities for a set amount of money each month or quarter over the medium- to long-term. This could be as low as P1,000 a month for three years, or as high P100,000 every quarter for five years. The amounts and time frames are up to your budget.

Because of the nature of the stock market, when you buy shares at a set limit, you’ll buy fewer shares when the prices are high and more shares when the prices are low. So if one month shares of Company X are at P5 each, you’ll get 200 shares for your P1,000. But if the next month the price goes up to P10, you’ll only get 100 shares for the same amount. You keep doing this for the amount of time you set, ideally at least five years. And then, when you feel that you’ve made a healthy profit from your investment, you can sell your shares and reap your reward.

Let’s say you decided to spend at most P5,000 a month on Universal Robina Corporation shares, a stock that Wall Street Journal analysts believe will outperform the market in 2015. And let’s say you do this for two years, starting two years ago (January 2, 2013). The following chart shows you how much you’ll spend in total for two years of peso-cost averaging, as well as the gains you’ll make:

*notes: historical values obtained from Yahoo! Finance and converted at the rate of 1 USD = 44.20 PHP, and may not directly correspond with the peso historical prices. Stocks are bought in multiples of 10 because of PSE board lot rules, which determine the minimum amount of stocks you can purchase. Stock prices are adjusted closing prices from the first trading day of the month. Costs like broker fees, transaction fees, and taxes are not included in this example for the purposes of clarity.

 As you can see, by simply sticking to the peso-cost averaging system for a blue-chip stock like URC, you stand to gain over 60% of your investment after two years – and maybe even more if you stay invested longer in a good performer. Try to find a deposit account that can beat that.

Of course, nothing is for sure in the stock market, so keep an eye on the trend for your chosen stock, and have a contingency plan for when things go south. But if you choose blue-chip stocks, it’ll be much more likely, but not guaranteed, that you will come out with a healthy profit when you decide to sell after a few years.

What are the advantages of peso-cost averaging?

You can start with a small amount. A main deterrent to investment is the false belief that you need tens of thousands to even get started. But you can start peso-cost averaging at the manageable price of P5,000 a month. If you do that for a whole year, that’s P60,000 you invested in the stock market already!

You can invest at less cost and less risk. Because you’re spreading out your investment, you lessen the risk of “investing a large amount in a single investment at the wrong time,” according to Investopedia. For beginning investors who don’t have the time or expertise to carefully study stocks, peso-cost averaging is a good solution. Instead of focusing on timing the market, which requires a lot of effort, your focus is on accumulating assets. This method reduces your average share cost and spreads your investment risk over time. So your mistakes will be more controlled, less expensive and often offset by the good decisions you’ll make over time.

Even if the whole market is down at the end of the year, you can still come out ahead. Let’s say you had P100,000, and you decide to invest all of it at once in a stock priced at P100 a share in January. But by December, because of bad market conditions, the value of the stock went down to P90 a share. You thus lose 10% of your initial investment, and the market value of your shares is now down to P90,000.But what if instead of investing that P100,000 all in one go, you decided to peso-cost average and invest P25,000 per quarter?  Take a look at this scenario:

Even as the year ended with the value of the stock going down by 10%, the market value of your shares is actually up by 4.58%. Not too shabby.

What are the disadvantages of peso-cost averaging?

You would have less profit than if you studied the market and performed analysis. This method won’t make you a lot of money very quickly since it’s focused on averaging out your losses (and thus your gains) over a long period. But since you’ll still need to buy and read the market you’ll be learning as you go along, preparing you for the real share trading fun!

You could pick the wrong stock and end up losing a lot of money. Cost-averaging by no means insulates you from loss entirely. If you keep using peso-cost averaging on a stock on its way down, and it never recovers, you’re still going to lose. But you can reduce the likelihood of this by investing in stable, dividend paying stocks like blue-chips. “Apply cost averaging on companies which have shown stable growth and performance over the past years to minimize your risks,” writes Fitz Villafuerte of the Ready to Be Rich blog in an email exchange with iMoney.

Studies show that lump sum investments outperform cost averaging 66% of the time. This is true, but if you get the timing wrong, market volatility will affect lump sum investments more. If the effect is particularly bad, you might get scared off by the losses and veer away from investing forever. Peso-cost averaging smoothes over the bumps of the market and gives you an investment plan that’s easy to stick to.

How do you do peso-cost averaging?

1. Figure out how much you can afford to invest. No matter if it’s P5,000 or P50,000 per month, you have to start somewhere. But to maximize the benefits of peso-cost averaging, you must be consistent with your investment amounts. As your income increases, you can increase your set amount as well.

2. Set a schedule for your investment. Will smaller monthly investments be more manageable for you, or would you prefer quarterly investments? Whatever you decide, make sure you can stick to it for years into the future.

3. Choose the right investment.

The best investment products for peso-cost averaging are blue-chip stocks and pooled funds. “Particularly, equity and growth funds perform very well if you do cost averaging on them for many years,” according to Villafuerte.

Do not use peso-cost averaging on a stock on its way down with no bright future ahead of it. If you do this, your losses will add up rapidly.

4. Remain committed to your investment schedule for at least 3 – 5 years. Peso-cost averaging works best in the long term. As long as you’re confident that the stock isn’t going down, don’t fret when you find that at one point in time you’re buying at a higher price than before. Remember, it’s a long term play. Stick to it.

So with a little bit of effort, and a lot of discipline, you can get started on investing right away with the peso-cost averaging method. All it takes is that first step!

Bo Sanchez: From P800 A Month To Becoming Truly Rich

Thursday, May 28, 2015

Bo Sanchez: From P800 A Month To Becoming Truly Rich
By imoney . 13 May 2015 

When Bo Sanchez was a younger man, he hated money. “I really thought that to love the poor, I had to become poor,” he says. So he lived as a poor missionary, just getting by while devoting himself to ministry.
Until one day, he decided to turn his finances around. Today, he’s got at least 16 income streams flowing into his life, from internet businesses to real estate to micro-entrepreneurship. Not to mention he’s a very influential lay evangelist who brings inspiration to countless Filipinos around the world.
But Bo didn’t decide to become rich just for his own personal gain — he did it so he could help his ministry, which was having a lot of money trouble. “I couldn’t give any advice to them because I didn’t know how money worked,” he says in an exclusive interview with iMoney.

Now, it’s safe to say Bo knows a thing or two about money. With his mantra of “everybody deserves to be rich”, Bo has now helped thousands of Filipinos discover financial freedom, and counting.

Bo Sanchez, the founder of Truly Rich Club (among many others), shares the difficult journey from poor missionary to financial guru with iMoney, along with the money lessons he’s learned along the way.

When you were growing up, what was your attitude towards money?

I didn’t like money. I felt that it was an instrument of the devil. So the less I had, the better I felt. I held to this false idea that if someone wanted to really please God, he had to give up all pursuit of money. My entire retirement plan was when I grow old, I’d sleep on the sidewalk with newspapers as my blanket.

You were, in your own words, a “poor missionary” back in the day. How much (or little) were you making back then, and how did you get by?

I earned P800 a month, which was enough for basic food and transportation. But I was giving away whatever I had for ministry work. I was working in the slums and tried my best to help the poor whenever I could.

That’s a very noble cause. But when did you decide to turn your finances around?

When I was 30 years old. That was when I decided to get married and realized I had to change my retirement plan. I couldn’t tell my kids to sleep in the sidewalk with me. The other reason why I changed my thinking about money was the number of people who asked me for prayers for money. I couldn’t give any advice to them because I didn’t know how money worked.

Was it difficult to do that?

It was very difficult to make a shift. I read lots of books, attended seminars, watched videos, listened to audio talks, and talked to financial mentors. I had to unlearn many things and learn many other things, which was a long process. I made many mistakes. I lost a lot of money while doing it.

How did you end up losing money?

My first business never became profitable. It failed. So did my second, and third, and fourth …

Yikes. What kind of businesses did you have that didn’t work out?

I sold herbal juice, I sold memorial plans, I sold engine oils, I organized major concerts. I also owned a squidball kiosk, a hotdog stand, and an ice cream stand … I tried networking. I tried direct sales. I tried everything.

It looks like you truly did! But even though you kept failing, you eventually became a success. How did you find the motivation to keep going?

The needs of the ministry were all around me. I knew I had to become rich if I wanted to help people. So in face of failure, I just had to try again and again and again. I was unstoppable.  Sooner or later, I knew I was going to make it.

So what was your first profitable business?

Doing corporate seminars. Companies would ask me to give seminars on values, which was right up my alley. And I loved doing it because I could reach people who usually didn’t go to my prayer meetings. Today, because I earn from my other businesses, I now donate my speaker’s fees to ministry. My most profitable businesses are my online businesses.

Now that you’re successful, what do you wish you’d known sooner about money or finance or your career?

I just had to stick to my core gift. It was tempting to venture into exciting things that I saw other people around me doing, but if it wasn’t my core gift, I wouldn’t succeed. But now that I focus on my core gift, success has come easier and quicker.

How do you integrate your money advocacy into your preaching?

As spiritual leader, I don’t only take care of people’s souls. I need to teach people how to follow God in their family life, their health, and even their finances. It’s my mission to make them grow in every important area of life.

Has your attitude towards money changed over the years?

Absolutely. As I learned more, my attitude about money, investments, entrepreneurship, and generosity has matured.

A lot of people seek your financial advice. What’s the most common problem they approach you with?

Many people are in debt and many people have zero savings. It’s so sad to see people who earn a good salary but they find themselves buried in debt. Many grow old and poor, depending on their children — even if they earned millions in their lifetime.

That is sad. What do you think holds them back from being “truly rich”?

Two things: a lack of financial literacy and a lack of the right financial mindset. Filipinos don’t know how to save and invest their money. Worse, they have a poverty mindset that traps them from learning new financial habits.

To help them out a little, what financial instruments can you recommend for those looking to increase their wealth?

When it comes to investments, I believe the safest and best place to invest is the stock market. I’m not talking about trading. That’s how people lose their money. I’m talking about investing long term in gigantic companies using peso-cost averaging.

(iMoney note: for more on peso-cost averaging, read our article Peso-Cost Averaging: The Easy Way To Invest here.)

What’s been your best financial decision?

When I got myself a mentor on how to invest in the Stock Market, my finances have never been the same again. [Financial mentorship] is what we provide through the TrulyRichClub. People think they can do it on their own. But that’s how they lose money.

Are you happier now that you have more money?

I’m not a priest. I’ve not taken the vow of poverty. Like every Christian, I’ve taken the vow of generosity. I believe the ultimate purpose of money is to love others. I’m happier today because I’ve got more practical ways of loving people.

Want to learn more about money matters from Bo Sanchez? Like him on visit his official website at bosanchez.ph. And for more on the Truly Rich Club, visit their official website at trulyrichclub.com.