ROUNDUP: How to get rich

Gotcha!

Here’s a snappy secret from publishers. Use words like “how to get rich in ten simple steps” or “secrets of wealthy people” in title and promotional materials. Never use “retirement.” Malayo sa bituka. (Far from the gut).

Like everyone else on this planet, Filipinos don’t like to think about the future. But think of this: it wasn’t too long ago when Bill Gates was a young upstart who started Microsoft in his garage at 17 years old. Yesterday, he clocked in his last full day of work at the office after 33 years of building that icon of technology.

Makes me wonder what I can show for 33 years of work. Hmm. Lots of bloopers and nasty comments on this blog, for sure :-). Here’s a spoof of Bill auditioning for -– and getting turned down –- by Bono, Steven Spielberg, Hillary Clinton, and Obama. When Bill started asking Jon Stewart if he can co-host of The Daily Show, I couldn’t stop shaking with laughter.

Economy

Roundup this week is all gloom and doom. Oil looks like it’s on its way to a record $150 per barrel. Getting smaller cars, commuting and telecommuting is now a matter of time and not of choice. This is going to cause economic planners much grief. Public outcry is getting pretty shrill already. A photo of a Filipino activist throwing a plastic bag filled with paint at the Petron oil company office here made its way to International Herald Tribune today.

What’s the difference between a forecast and a projection and a target? The numbercrunchers have been busy this week trying to guess the future. When the government issues a statement, watch closely whether the figures being presented are forecasts or projections, or is it a target?

The International Monetary Fund, for example, is now looking at 5.2 percent gross domestic product for the Philippines in 2008, as opposed to 5.2 percent earlier. That slowdown is very much expected under the present scenario, and credit rating firm Standard & Poor’s projection is not far away at 5.5 percent. Another rating agency, Fitch, affirmed the country’s sovereign ratings and said it was keeping the outlook stable, meaning it sees no big downward adjustment in the coming months. HSBC joined the chorus, saying the Philippines is now the weakest Asian economy after Vietnam.

I always take these projections with a grain of salt. I trust local economists more especially those who do their homework well and have an objective eye. Many visiting experts from the IMF and these credit rating companies have been known to, well, base their projections on less than thorough interviews and research.

The central bank’s public statement that it was expecting a 68 percent drop in net portfolio investments –- stocks, bonds and bank products — this year, however, is something that should command a more than cursory glance. Normally, the government would shy away from saying anything that would scare the market further. Could it mean the outlook is worse than we think?

Financial products:

Medium- to long-term bonds have fallen out of favor these days with rising inflation and there is no letup yet seen in the stock market. Government will be issuing around P85 billion in bills and bonds in the third quarter.

Shares are very much in the flatzone that news on getting help from the New York Stock Exchange on new opportunities in trading system architecture and technology, exchange-traded products, market-participant connectivity and market data management almost made traders stop twiddling their thumbs. The PSE’s system is now the most backward in Asia and has been the cause of much frustration among market participants. The market downturn, however, has not deterred Sultan Mining and Energy Development Corp. in going ahead with its IPO but moved it to the latter part of July.

Agri-Nurture Inc. is also one of the brave companies that will try to raise money from the market, an agriculture company that challenges local farmers to become a millionaire in a year. I was a bit skeptical, but if you think about it, if ANI can make a farmer a millionaire in a year through the use of its post-harvest facilities, processing plants, logistics solutions and its planned agricultural estates, then the owners will be an instant billionaire. Makes sense. Tell you more about that next week.

With bonds and stocks out, where to invest now? Two banks thought tier-2 notes would be good alternatives. Metropolitan Bank and Trust Corp., the country’s biggest bank in terms of assets has announced a P10 billion offering, while Philippine National Bank said its offering raised P6 billion from the public. Coupon was at 8.5 percent. Lower tier-2 notes are interesting-bearing notes with limited tenor (mostly five years) and are subordinated to the claims of bank depositors and senior creditors.

Meanwhile, pre-need sales went down a whopping 21.8 percent in the first five months of the year.
Filipinos are not buying as much of pension and education plans these days. Thank the doofuses that made such a mess out of companies like College Assurance Plans.

Personal Finance Habits:

Sometimes, improving spending habits can only go so far. The other side of the equation – raising income – also becomes a necessity. Our MoneySense article last Monday talked about direct selling and how to do it well. Either go for popular brands or niche products that already have a following, writer Raymond Calbay said.

Another part of raising income is making sure you’re not underpaid. This article Are you paid what you’re worth? says you can try looking at classified ads for clues on whether you’re getting the right pay. Click on the link for more tips.

From personal finance bloggers, I found FrugalPinoy’s post on 5 Money Lessons I’ve Learned from Freelancing very enlightening especially the part about making sure you don’t sell yourself too low. This is a common problem among freelancers – how to charge for your services.

if you’re trying to improve your spending habits, ask BoneMD how he stopped himself from buying something he had been drooling over for the longest time. Congratulations for being money-smart, BoneMD! Consider yourself P17,000 richer

Till next week! Have a great weekend, guys.

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