What do you do with expired credit cards when the newer, shinier ones arrive in the mail?

Cut them up. Into tiny pieces. I had a few of them hidden somewhere in the house, not knowing what to do with them. After several years, I finally discovered that the official advice is to make sure nobody can duplicate them and with some, err, creativity, put their shopping bill under your tab.

This is probably one of the little things that credit card companies forget to advise their customers, or perhaps I just didn’t pay much attention. But these days, you can’t be too careful about protecting your identity. Remember that Filipinos are geniuses when it comes to IT crimes! Remember the “I love you” virus?
[Read the rest of this entry »]

Share This

How would you like to be part of a publishing project on financial planning? Alijeffty Gonzalez, president of ACG Advisors and Management Ltd. Co., is coming up with a free e-book that would help investors in their quest for financial freedom. All you have to do is to answer the questions below.

I found the questions stimulating. They forced me to reconsider my investment goals and think about whether I am doing enough to achieve them.

So fire away, guys. The person who will really benefit is you ☺. Here are the questions:
[Read the rest of this entry »]

Share This

Last Sunday, I asked my friend who was a businessman if he was still renting an apartment or if he had already bought a home for his family. He asked me if it was really a good idea to buy one, assuming he had the money to pay for the house in cash.

“You see, my Chinese friend pays P85,000 to rent a house in Greenmeadows and says it would be stupid for him to take out his P50 million in the bank to buy a house. He buys a house; his P50 million is gone,” says my friend.

“After all, he tells me, would anybody know that house is not mine?” he adds.
[Read the rest of this entry »]

Share This

Picture this. Assigned bank officers from 38 universal and commercial banks enter names of erring borrowers into their negative lists, send these files to the Bankers Association of the Philippines on a regular basis via file transfer protocol, and the BAP sends the file back to the banks so they can use the database for deciding whose credit application to approve or to junk.

Frightening? What really goes on after these files are modified? Too many points for human errors and no way yet for individual borrowers to conveniently check whether they have hits on their names and whether the hits are justified. That’s why everybody’s waiting for the credit bureau, where transparency will make it possible for people to check their credit score.

I got this email from a reader who is concerned about a hit on his name and interviewed Topper Coronel, executive director of the BAP, to clear things up. The email sender’s name has been changed upon his request.
[Read the rest of this entry »]

Share This

By CFA Institute*

Investing is fun and very rewarding, especially, if you know the “rules of the game.”

There are some simple rules to follow. Ignoring them, or making mistakes in applying them, can be very risky. Making mistakes repeatedly could drain your assets very quickly.

“Creating a program to confidently boost investment success is not easy,” said Mark Yu, CFA, president of CFA Philippines, the local affiliate of CFA Institute, which administers the CFA® (Chartered Financial Analyst®) Program worldwide. “Investors are sometimes their own worst enemy by making common mistakes.” CFA Institute asked selected members to come up with 11 frequent and costly pitfalls that individual investors should avoid.

1. Having no investment strategy. Every investor must develop an investment strategy that will serve as a guide. A well-planned strategy considers time horizon, risk tolerance, amount of investable assets and planned future contributions.
2. Investing in individual stocks instead of in a diversified portfolio of securities. Investors should keep a broadly diversified portfolio incorporating different asset classes and investment styles. Failure to do so leaves individuals subject to fluctuations in a particular security or sector.
3. Investing in “stocks” instead of in “companies.” Invest in finance enterprises that are likely to have a positive long-term growth potential. Analyze the fundamentals of the company and industry, not day-to-day shifts in stock price. To avoid difficulties, examine a company’s corporate governance profile to ensure that it has basic corporate governance protections.
4. Buying high. Many people commit the mistake of investing in stocks that did well in previous years or in “popular” stocks of the day assuming that these will also do well in the future. Remember that the fundamental principle of investing is to buy low and sell high, not the other way around.
5. Selling low. Not every investment will increase in value. Even professional investors have difficulty beating the S&P 500 index in a year. Always have a stop-loss order on a stock that might fall in price. It’s better to take a small loss and redeploy the assets toward a more promising investment.
6. Churning your investments. Too much trading cuts into investment returns, because of transaction costs. The solution is to adopt a long-term buy-and–hold strategy, rather than active trading.
7. Acting on “tips” and “soundbites.” Veteran investors gather information from several independent sources and conduct their own proprietary research and analysis before making an investment decision.
8. Paying too much in fees and commissions. Investors should be well-informed with the associated expenses that accompany every potential investment decision.
9. Unrealistic expectations. Take a long-term view when making investments. Don’t allow external factors to cloud your actions or to cause a sudden shift in strategy.
10. Neglect. Individuals often fail at investing, because they don’t know where to start, or because they neglect their holdings.
11. Not knowing your real tolerance for risk. Investments always come with risks. Don’t wait for a sudden drop of value of assets to determine your level of risk tolerance.

About CFA Institute
CFA Institute is the global association for investment professionals. It administers the CFA® (Chartered Financial Analyst®) and CIPM (Certificate in Investment Performance Measurement) curriculum and exam programs worldwide; publishes research; conducts professional development programs; and sets voluntary, ethics-based professional and performance-reporting standards for the investment industry. CFA Institute has more than 95,600 members, who include the world’s 82,400 CFA charterholders, in 134 countries and territories, as well as 135 affiliated professional societies in 56 countries and territories. More information may be found at www.cfainstitute.org

About CFA Society of the Philippines
In 1995, the CFA® (Chartered Financial Analyst®) exam was first introduced in the Philippines, with the support of the Capital Markets Development Council, Inc. (CMDCI). On July 1997, a group of CFA candidates, practitioners from the investment community and members of the academe gathered to form a society in response to the growing need to set higher standards in the investment community - in terms of knowledge, competence, professionalism and, above all, ethics. Thus, CFA Philippines, formerly known as the Association of Investment Professionals – Manila, was established.

CFA Philippines is the local affiliate of US-based CFA Institute. Its mission and vision is to be the premier association in the Philippines’ investment and finance profession by promoting competence, professionalism and the highest ethical standards.

Share This

Interesting quote from Antonio L. Tiu, president of AgriNurture, Inc., a P3-billion agriculture company that’s braving the stock market blahness and pushing through with an initial public offering in the coming months.

“In Buddhism, there’s an interesting logic. If you are destined to earn a billion pesos, and I’m your father and I let you inherit P999 million, I am reducing your power. You are supposed to work hard and create value for everyone, and then suddenly I give you everything. But suppose I give your inheritance to the public, I am passing on a legacy rather than inheritance. If I give too much money to the next generation, I am actually destroying their future.”

In Filipino parlance, pamana is a measure of how well we love our children. More love means bigger inheritance. We even equate that to parenting prowess. (As if money can measure love, huh?)
[Read the rest of this entry »]

Share This

Young, upwardly mobile Filipinos who spend much of their time on the Internet, are scouring the web for personal finance advice relevant to the Philippine setting, and are flocking to websites like Income-tacts.com, a forum populated by Filipino financial planning practitioners.

“Objective advice” is the operative word, says Efren Ll. Cruz, chairman and chief executive officer of Personal Finance Advisers, the company that owns the website. Cruz says Filipinos are very wary about tainted advice and the one thing that separates Income-tacts from other personal finance websites is that it does not market specific financial instruments.

“There are many products out there to manage finances. More often than not, however, you don’t get an objective view because they are explained from the point of view of the salesman. That’s what we provide: the objective view,” says Cruz.
[Read the rest of this entry »]

Share This

I’m intrigued by the phrase “scrimp and save.” It sounds so crunchy and delicious when it actually connotes discipline and sacrifice. :-p

It made me think of how far people will go to save money. The genetic footprint, as well as cultural background, can impact this tendency greatly. For example, some people can skip lunch to save for something. Some can’t.

While interviewing Jocelyn Sta. Ana, Bank of the Philippine Island’s vice-president for retail mortgage division, for my article “Goodbye easy home loan terms?” published in the Philippine Daily Inquirer today, she shared this amazing story about a friend and gave me permission to share it with you.
[Read the rest of this entry »]

Share This

One million is not so much these days. As many of those who commented on my previous article “Are you a millionaire in the making” said, P1 million can hardly buy you an SUV.

But that P1 million figure remains a psychological milestone, one that gives status and encourages a person to do more. Certainly, someone who has hit a net worth of P1 million will not stop there.

I found myself going through online groups reading how people have made their first million –- and it’s pretty addictive! Heh.
[Read the rest of this entry »]

Share This

By Alexander Villafania*

How do you make money, reduce debt and still smile about it? This was the main question raised during the held “Take Charge of Your Money” seminar at the AIM Conference Center in Makati City last August 2.

Professionals, employees, businessmen and people in debt were invited to attend the seminar organized by Citibank and Inquirer.net. The seminar intended to provide people with tips on saving amid economic problems, how to deal with debt and why Filipinos need financial planning.

Chinkee Tan, a lifestyle trainer and entrepreneur in his speech said that it is typical for most Filipinos to be in debt. Personal debt becomes worse as people find it harder to make ends meet and are forced to ask for financial assistance. He said the most important aspect of paying debt is to have the willingness to actually doing so.
[Read the rest of this entry »]

Share This