September 2008 Archives

By Alijeffty Gonzales Managing Partner, ACG Advisors It was the Black Monday of 2008. Stocks fell by nearly 9.0 percent on Monday — the worst single-day drop in two decades — after the government’s bailout plan, touted by its supporters as a balm for the current market stress, failed to pass the House of Representatives, setting off a fresh wave of anxious selling. In yet another day that has shaken the embattled canyons of Wall Street, the Dow Jones industrials fell 777.68 points after it became clear that the legislation could not muster the support it needed to pass the House. WHAT TO DO IF YOU ARE INVESTED IN THE STOCK MARKET? First, try to recall why you invested in the stock market in the first place. Did you invest in the stock market to build up your retirement fund? If you did, may I ask if you are retiring in the next two weeks? If not then I see no reason why you should even be concerned at this point.

Stock prices are a "perception", while intrinsic value is the "reality", when prices soar way above or drop way below the value, the gap must inevitably be closed in favour of value. --John R. Nofsinger, Washington State University

With regard to value, the question in my mind now is whether “PLDT” lost hoards of subscribers to justify the price drop, or did SM close down a number of malls, or has the size of the Ayala conglomerate suddenly contracted to warrant its current price level? The Philippine market is not a direct extension of the US market! I’d like to quote one of the persons I respect and whose opinion I trust, Atty. Raul J. Palabrica who says in a recent column, “There is so much to live for in our country...” In this particular instance, US stock prices reflect a pervading sense of "fear" with the US Congress rejecting the $700 Billion bailout plan, equity investors everywhere feared that the current credit crisis would get worse before it gets better, venerable financial institutions would continue to fall by the roadside, and woe to the investor who would be left holding the bag. This basically led to a mad scramble out of the door, causing prices to drop even more. I remember reading a statement attributed to John Maynard Keynes: he says that investors fool themselves thinking that "liquidity (the ability to sell at will)" is a positive attribute in an investment, what they don't realise is that it is impossible for investors to exit all at the same time, as these selling pressures will cause the price to fall further starting a negative feedback loop. The question now is "would it give you more comfort to get out NOW even at fire-sale prices or can you just tolerate the "pain" of seeing the value of your stock portfolio drops and hope that it eventually recovers? In my opinion either way is wrong! You should not let the market dictate to you what to do! Prices would always go up and down. What are enduring are your goals. Remember your goals! Are you retiring today? If not, relax, sit on the sidelines and watch one of the best "learning lessons" on the financial market unfolds; hopefully, lessons learned would make us better investors in the future.

Finances On The Edge Photo by DeadAir For the purposes of analysis and policy-making, there is no escaping the pounding on the table and the endless debates on what caused this crisis, who is to blame, what could have been done to avoid it etc. etc. But at the end of the day, reducing all that talk to doable measures is a process that could end to be as convoluted as the shadow play that caused this crisis in the first place. Personally, I would rather focus on things that we all can do—now—to deal with what’s happening. After all, crises are part of life, whether financial, emotional, relationship, spiritual. They will happen, again and again. Only the details will change, but the fact that they will railroad our lives and make us shift our priorities will not. An excellent series in the Philippine Daily Inquirer has been showing readers how different households are dealing with the crisis. Some are moving to condo units near mass transit systems to reduce travel time and stress, some are really cutting down on expenses especially dinners outside the home—even if they are only trips to fast food places. Shoppers are also going for lower-priced items and dropping non-essential ones from their grocery list and dropping their brand loyalties while others have shifted from using gas for cooking to sawdust, charcoal and rice husk. The Hotel and Restaurant Cost Controllers Association of the Philippines (HRCCAP) have finished another survey of groceries in Metro Manila and concluded that Cherry Foodarama is still the lowest-priced grocery in the Metro, while South Supermarket and Waltermart (surprisingly) have the highest prices. Cooking oil and canned goods’ price increases were steepest. Supermarket shoppers can take advantage, however, of vinegar, soap and bathroom tissue freebies, which store owners use as a marketing strategy to attract buyers since they have been reporting less sales recently. We can talk till we’re blue in the face about investing, but the truth is, increasing earning power and practical habits on reducing spending can affect our personal finances much more significantly. It’s a good thing that Filipinos are masters of ingenuity, and time and time again, the best of us have adapted to the numerous financial crises we have experienced in our history. Another way to deal with the crisis is equipping yourself with the knowledge and determination to make it through. Your favorite public speakers Francis Kong (The Right Pursuits In Life) and Chinkee Tan (The Right Perspective On Money) have teamed up with Efren Cruz (Prosperity Begins with an ‘S’) and Randell Tiongson (Managing Personal Risk and Insurance) to help you weather-proof your personal finances. Details: October 29, 2008, 1-5 pm, Makati Sports Club. Cost P1,800. Early bird rate: P1,500. Please call Rachelle at 634-2204. See you there! How about you? How are you dealing with the crisis?

If you’re buying a house and taking out a loan to pay for it, you’re probably being asked to pay for mortgage redemption insurance, a kind of insurance that protects the bank in case of the borrower's sudden death or disability. This also means, of course, that your beneficiaries don't get saddled with a loan on the house in case the breadwinner, you know, goes. An MRI is prohibitively expensive, and if you’re the average type of bank borrower, you won’t know that unless it’s too late. You may also fail to realize that there are other options, and would likely just sign the contract just to get the entire process over with. Here’s a tip I learned from an insurance professional: ask your bank if you can assign a term insurance instead to the creditor. You will pay much less in premiums but get ample coverage. However, you will have to make sure that the insurance company you get your term insurance from is accredited by your bank. *** While surfing, I discovered some new personal finance bloggers worthy of your time and some from our friends around the web. Here are some of them: The Serious Nuts: Estimating When Your Money Will Double (The Rule of 72 Explained) Pinay and Money: High-Interest Time Deposit Ang Piso Ko: Sometimes It’s Good To Procrastinate Frugal Pinoy: 5 Ways To Make Saving Less Painful The Digerati Life: Financial Crisis In The Media: Is the Economic Crisis Overhyped? *** I don't know who to credit for this photo and the Photoshop work done, because this has merely been circulating on the Internet. Laugh out loud! It will release the stress :-) Happy weekend everyone!

(Photo courtesy of Kleyr) Since the Personal Equity Retirement Account (PERA) Bill was signed by President Gloria Macapagal-Arroyo last August 22, 2008, those who have been conscious savers and investors were fairly bursting at the seams with excitement. Ah, the joys of tax-free savings and investments. It’s enough to make hearts skip a beat despite the gloomy global environment. But wait. This news should be something that excites the nation as a whole. Particularly OFWs and their families. I don’t see that happening. Yet. Let’s see what we can do with that. For starters, here are the things that you need to know about the PERA Bill. At its core, it will allow you to create a voluntary retirement nest-egg from accredited savings and investment instruments based on YOUR preference and give you the chance to grow this nest egg faster by not slapping you with taxes on its earnings AND rewarding you with a 5.0 percent annual tax credit for your contributions if you keep your money in the PERA until age 55. If that's still too complicated, just think about this: tax incentives, baby. They are the cake and the icing on this thing. Oh and the fact that, if you’re tired of how the Social Security System and the Government Service Insurance System are handling your contributions, here you get to make your own call on where to put your money! Here are some other details from the law, demystified: 1.    Who can set up a PERA? If you can get a Tax Identification Number, you can set up a PERA. This money is yours and not given to the government, like in your traditional SSS or GSIS funds, for them to manage. You choose where it goes. 2.    How do you begin? To set up your account, you need to get an administrator that will oversee your account. This will be a company approved by either the central bank, the Insurance Commission and the Securities and Exchange Commission. You can have only one administrator, but open up to five PERA. 3.    Where to send your contributions? You also need to choose a custodian, which will receive the funds that you contribute. The custodian will operate independently from the administrator. Administrators and custodians are required to charge only “reasonable” fees that are approved by the government. 4.    How much can you contribute? Maximum of P100,000 for those living in the Philippines, and P200,000 for those living and working overseas, per year. Couples together will have a P200,000 maximum contribution, or P400,000 for those living overseas. The Finance Secretary can adjust this from time to time. 5.    Will your employer be required to add to your nest egg? No. They are encouraged, but not required. But employers who wish to use the PERA to enhance employee benefit packages on top of the SSS and GSIS contributions, are allowed to deduct their contributions from their taxable income. Now even if your employer contributes to your PERA, it does not have any authority where to put your funds. You still get to choose your investment outlets. 6.    Who can help you decide where to put your money? You may or may not get an investment manager to help navigate the waters of investing, but choose carefully one who will act always for your best interests, not his. And one who is, of course, qualified. 7.    What investment or savings vehicles can qualify under PERA? This would include unit investment trust funds, mutual funds, annuity contracts, insurance pension products, pre-need pension plans, stocks, exchange-traded bonds, and others approved by the government. 8.    Why would you want to set up a PERA? You get three sweet deals: a tax credit of 5.0% of your total PERA contribution per year. This means if you max out your contribution to P100,000, you get to deduct P5,000 from your annual taxable income. Aside from that, your money gets to compound faster because all income earned in your PERA is tax exempt. Third, once you retire at age 55 and need your money, it still won’t be taxed. If you die before reaching 55, the money goes to your heirs without going into probate. 9.    What are the disadvantages? Since the PERA encourages long-term savings and investments, make sure you contribute only the money that you can spare. Early termination or withdrawal means you get slapped with a penalty (still has to be determined by the Finance department) and taxes. 10.    What if you have an emergency? You may withdraw money penalty-free only if you need money to pay for hospitalization of more than 30 days and if you are suddenly totally disabled. Make no mistake about it, the PERA Bill will not make everyone wealthy. Unless we take advantage of it. Unless we actually know what to do with it. Unless we in fact take the time to spend less and invest more. Unless we stop complaining and start doing. So get ready to start doing! If the Finance department is on schedule, the PERA Bill should be effective by January 1, 2009. Happy New Year indeed. Any comments? And what’s on your wish list for those who are drafting the IRR?

The not-so-friendly bundle of grocery receipts have been winking at me for quite some time, so I finally got around to putting all the figures down into an Excel worksheet to make a Grocery Booklet—an exercise that reveal some pretty interesting lessons. Here are some of those lessons: From January to August, these items showed the biggest jump in prices: 1.    Condensed milk and other dairy products like cheese. If some stores are crazy enough to still have dairy products from China on their shelves and are selling them at bargains, I hope no one buys them just for the savings! 2.    Canned goods like sardines, tuna etc. 3.    Toothpaste, soap, and shampoo 4.    Olive and canola oil 5.    Bread 6.    Sugar 7.    Bacon 8.    Ready-made soup mixes 9.    Longanisa Where brand substitution can work: 1. dishwashing liquid 2. bathroom tissue 3. pride detergent (washing machine and all purpose) Most effective strategies for cutting corners: Avoid snack items, canned goods, use more tomato paste instead of real tomatoes when prices of tomatoes at the market go up, and make your own soup stocks. Those who want to have a copy of my Grocery Booklet can email me at lightdream (at) gmail (dot) com. In the booklet, you will find comparison prices of everything I have bought from the grocery since January. You can enhance it by inputting your own figures. I promise, it will make you squirm sometimes, but taking the time to jot everything down will be worth it. ☺

(Photo by Din Cordero) Personal Finance Reminder: avoid busting your budget by shopping early for Christmas. Early birds get more time to look for bargains, more time to stretch artistic skills to create unique and personal  (and less expensive) gifts, and avoid overcharging credit cards and paying hefty fees. Sometimes, the late birdies do get rewarded, because retailers have been known to cut down prices at the last minute. But would you like to fall prey to an "if?" What are your plans for a money-smart Christmas? Let me hear those ideas!

Last week’s pace was frenetic, and for most of the time, I tried to get all the market shrillness out of my head. Talking to a friend over the telephone, we had a laugh about whether we would see a different world if we looked out the window, just because of the weekend that changed Wall Street—and the world’s financial markets—forever. Grass was the same kind of green, my lonely Acacia tree was still a tree as lovely as a poem, bugs were still great magnets for my young boys, and all in all, I was happy to note that the sky wasn’t falling on my head. Sure, some of the ricocheting bullets from this crisis will probably leave marks forever. Some may be losing their jobs, suffering deep gashes in their investment portfolios, losing their retirement money, and the list can go on. Some changes will, hopefully, stay for good. For example, I hope this crisis taught us to be more careful in choosing financial institutions. Size matters, yes, but more so the values of the management handling our money. However, since anyone’s batting average in choosing the perfect firm can never be perfect, being well-read, quick on your toes, and flexible can help minimize financial risks. Some recommend tuning out the media. Believe me, that was tempting even to me. But if you have your head on the sand, it’s not just your rear end that will get hit. Johnny Noe Ravalo, who is by the way now a managing director at the Bangko Sentral ng Pilipinas, said it very well: “The lesson is to stay calm, but vigilant. And reconsider whether we have chased returns too much,” he said. Mark Yu, director of the Chartered Financial Analysts of the Philippines, said diversifying and rebalancing portfolios regularly, and preparing for uncertainties by bolstering emergency funds should be the biggest lessons from the crisis. Makes sense. If you had ALL your savings in the stock market, you would be hopping mad too. Alijeffty Gonzales, managing director of ACG Advisors, taught me about this neat concept called residual risk, where pushing people to get ahead of the line when recovering funds in mutual funds, pre-need or insurance is foolish. The fact is, in case a company folds up, everyone gets an equal share because the funds will be divided over the number of investors. Not like in a bank run where the last man on the line gets little or none. Here, a wait-and-see attitude would be more beneficial, because if the company rights itself eventually, you wouldn’t have lost anything. Clearly, being informed and calm trumps acting out of fear. As we all know, the sky will never literally fall. Ask those who have gone through the 1997 financial crisis, or even the Great Depression.

We’ve been too serious lately. Let’s play a little game. For the contrarians out there who like to buy when there’s blood on the streets, what are your favorite investments and businesses in this time of market shrillness and panic? You don’t have to limit your choices to stocks or bonds. Some people don’t like them because they are too complicated and these people get by pretty well. An agri-industrial company was being interviewed on Bloomberg this morning, which seemed pretty much immune to the Wall Street fiasco, clocking in a 170+ percent growth rate year on year. Hmm. Start voting and we’ll track what happens to the prices of those investments every month from now. May the best contrarian win!

Official and audited figures on Philam Asset Management Inc. (PAMI)—mutual fund business--investment portfolio as of Aug. 31: GSIS Mutual Fund Top 10 Holdings: PLDT (18.04%) Ayala Corp. (7.28%) Globe Telecom (6.41%) ICTSI (6.36%) BPI (5.51%) SM Investment Corp. (5.42%) SM Prime Holdings (5.18%) Philex Mining Corp. (4.82%) Energy Dev’t Corp. (4.77%) Piltel (4.15%) Total: 67.94% Sector and Fund Allocation: Telecoms – 28.60% Real Estate – 13.28% Banks – 13% Conglomerates – 8.10% Finance – 6.46% Transportation – 6.36% Electric Power and Gas – 5.45% Mining – 5.44% Electric – 4.77% Total Fund Size: P3.28B Domicile: Philippines Valuation Method: Marked-to-market Fund Classification: Balanced Fund Risk Profile: Moderate Custodian Bank: Citibank Philam Bond Fund Inc. Top 10 Holdings RP Global Bonds 9.125% 9/04/16 – 17.44% RP Global Bonds 14.625% 9/1/10 – 7.29% RP Global Bonds 14.5% 7/20/10 – 7.16% Fixed Rate Promissory Notes 10.25% 9/10/10 – 5.72% RP Global Bonds 12% 9/10/10 – 5.72% SMPH 9.75 8/15/16 – 4.33% RP Global Bonds 12.75% 03/27/13 – 4.03% Globe 6/27/12 – 3.46% SMPH 9.6951% 6/17/015 – 3.25% RP Global Bonds 13.875% 03/30/10 – 3.16% Total: 61.56% Fund Currency: Peso Domicile: Philippines Valuation Method: Marked to market Fund Classification: Bond Fund Risk Profile: Low Philam Dollar Bond Fund Top 5 Holdings: ROP 11 – 18.69% ROP 24 – 16.67% ROP 17 – 9.72% ROP 13 – 8.78% ROP 24old – 8.53% Total: 62.39% Fund Currency: US Dollar Domicile: Philippines Valuation Method: Marked-to-market Fund Classification: Bond Fund Custodian Bank: Citibank Philam Fund Inc. Top 10 Holdings: PLDT – 17.97% Ayala Corp. – 7.36% Globe – 6.52% ICTSI – 5.76% BPI – 5.51% SMIC – 5.38% SMPH – 5.16% Philex Mining – 4.87% Energy Development Corp. – 4.77% Ayala Land – 4.33% Total: 67.63% Sector and Fund Allocation: Telecoms – 28.71% Real Estate – 13.66% Banks – 12.99% Conglomerates – 8.30% Finance – 6.46% Transportation – 5.76% Mining – 5.5% Electric Power and Gas – 5.49% Electric (Other) – 4.77% Equity: 65.08% Fixed Income: 34.92% Fund Currency: Peso Domicile: Philippines Valuation Method: Marked-to-market Fund Classification: Balanced Fund Risk Profile: Moderate Custodian Bank: Citibank Philam Strategic Growth Fund Top 10 Holdings: PLDT – 14.62% Ayala Corp. – 7.78% Globe Telecom – 6.92% ICTSI – 6.05% SMIC – 5.93% BPI – 5.86% SMPH – 5.51% Energy Dev’t Corp. – 5% Philex Mining – 4.92% Manila Water – 4.25% Total: 66.84% Sector and Fund Allocation: Telecoms – 25.71% Real Estate – 13.91% Banks – 13.81% Conglomerates – 8.70% Finance – 7.02% Transportation – 6.05% Mining – 5.55% Electric Power and Gas – 5.52% Electric – 5% Equity: 78.98% Fixed Income: 21.02% Fund Currency: Peso Domicile: Philippines Valuation Method: Marked-to-market Fund Classification: Equity Fund Risk Profile: High Custodian Bank: Citibank A senior official disclosed to MoneySmarts that PAMI has zero investments in AIG debt or securities. An independent check with the life insurance business, however, showed that on the life insurance side, they have investments in AIG, the percentage of which “is very small.” The senior official will not say how much at the time of the interview, saying “he could not recall.” The Insurance Commission should have the exact figures since the life insurance business is required to disclose regularly their investment profile. As of this time, these are all I have. Rest assured I will keep pressing them for information. Will try to get more figures to you as soon as I can. Thanks for the insightful and helpful comments.

So the US government is taking over American International Group. What now, asks one reader. Lines of clients at Philamlife branches, and similar scenes in other Asian countries have many people asking: Is my insurance policy now worthless? What happens to all the money I have paid? Should I withdraw my investments? I asked several insurance and investments experts and found that there are only five things you need to know: 1. AIG is not directly responsible for the contract that you hold. The responsibility for that lies in the subsidiary whose contracts will have to be respected even by the Fed. It is thus perfectly possible for AIG to be taken over or even to file for bankruptcy, and your policy to be fine. Now even if Philamlife, being one of AIG’s profitable businesses, is sold, the Insurance Commission will require anybody who buys Philamlife to service claims now, or when the contract matures.

“The mother company can’t just get the assets of Philamlife and the company cannot be sold to anybody that is not approved by the local regulator. The Insurance Commission will make sure that every policy that is in force will be serviced,” Vida Chiong, deputy commissioner at the Commission, told MoneySmarts.

Imagine a bank and its branch in the province, say, Davao. When the main bank in Manila closes shop, it can easily pull out the branch in Davao. Not so with a subsidiary. It has its own capital, independent board and its own regulator whose rules even the parent company has to respect. 2. The assets that back up insurance companies, especially the life business, are said to have the best quality, even compared with those of banks, investment houses, securities companies, or industrial firms. This is because the nature of the business requires insurance companies to live virtually forever. Even AIG is considered to still have the best assets. Its problems stem from liquidity issue because of their exposure to subprime loans.

Audited figures from the Commission shows that Philamlife has: P108 billion -- total assets (insurance business) P170 billion -- consolidated assets (including affiliate businesses) P1.65 billion -- paid-up capital (versus P50 million minimum requirement by the Commission) P23 billion -- net worth (all assets minus liabilities) P76.4 billion -- reserves P98 billion -- invested assets, around 95 percent of which are invested locally Last year, it paid out P6.6 billion in benefit payments.

While its total life insurance in force is P391.8 billion as of end-2007, Chiong says this will not mature all at the same time and can be serviced by the company, as shown by its financial standing. 3. How tight is the regulation in the insurance industry and how conservative is conservative when it comes to investments? Chiong says an insurer should be very well diversified to ensure it does not get hit badly when markets go bust.

“Even if certain stocks are good for example, we limit their exposure to these stocks to make sure they are very well diversified. There are very strict limits in their investments, like only 10 percent of assets that can be converted to cash. We require them to match their assets with their liabilities and make sure they adhere to the principles of safety, liquidity and yield,” says Chiong.

Then of course, AIG got away with its credit default swaps and its regulators didn't have a clue. I mean, nobody had a clue. 4. In worst-case scenarios, any insurance company that goes belly up will go through receivership and liquidation, and a third party assigned to service claims by policyholders. In Philippine history, there has been little news of life insurance companies going bankrupt. Sold, yes, but not liquidated. In the event of liquidation, if the life insurance company has ample assets, it is possible to get 100 percent of your policy depending on the quality of assets. For non-life policy holders, it’s different. Assets in this industry is mostly short-term in nature. Policyholders may get 100 percent or less than their claims, and delays like one or two years in getting their payments. Oh and by the way, investment-type insurance contracts like VULs have more embedded risk than pure life insurance. It's not hard to see why. If you want to know if your insurance company is in good standing, check whether its name is on the Commission’s list. If its not there, surrender your policy and get protection from another company. 5. For investors in Philam Asset Management Inc. (PAMI), the trust business of Philamlife, you are more likely to lose money if you take out your funds now, because the market is down. Shareholders--that’s you--can terminate the contract of the fund manager (in this case PAMI) and hire a new one, if push comes to shove. This has been done before.

“The fund is owned by investors. The money is not AIG money but investors money…Shareholders can decide through a special meeting to appoint someone else. It is not a unique phenomenon,” says Fernando Jose Sison III, chairman of the Investment Company Association of the Philippines (ICAP).

There’s reputational risk now in PAMI to be sure, but not much aside from that. PAMI is most insulated from AIG's troubles than any of Philam's businesses. The risk, if any, would be if PAMI invested fund assets in AIG debt or securities. A source familiar with the matter told me the fund has none. I am still working on getting information on the pre-need side. If pre-need companies were regulated this tightly, we wouldn’t have seen the likes of CAP, etc. Stay tuned and I hope this helps.

The casualties of the Lehman collapse are popping up, one by one. First, the Philippine economy. Socioeconomic Planning Secretary Ralph Recto now has a worst-case scenario forecast of 4.7 percent to 5.5 percent for gross domestic product for the year, down from an already revised 5.5 percent to 6.4 percent. You know already that two of the nation’s biggest lenders, Metropolitan Bank & Trust Co. and Banco De Oro have hits on their portfolio. Rizal Commercial Banking Corp. (RCBC) today also revealed its exposure to Lehman. Together, the three banks have set aside $120 million in provisions—meaning there’s cash made available for any write down in the future. All in all, the central bank says the total exposure of the banking system is 0.3 percent to 0.4 percent of the banking system’s total assets. That’s around P15 billion, but one industry estimate says the exposure could go up to as high as P23 billion. Not worrisome, says the central bank. The amount may look huge, but it will not drive banks to suffer any liquidity problems, it says. Worst thing that can happen is some erosion in net incomes. We can only wait for reality to unfold--and hold our breaths. Are depositors panicking? I don’t see any lines, thank heavens. Whether that's because Filipinos are not worried or they don't understand what is happening, I don't know. In this case, ignorance can bring about bliss. Those who do not have exposures and are confident enough to come out and say it are: Sun Life’s Philippine unit (it’s the mother company that has exposure), Bank of the Philippine Islands, Union Bank of the Philippines, Government Service Insurance System and Social Security System. Those who would like to know how the subprime crisis began might want to read Reyna Elena’s blog here. And if you are wondering what the ultra rich are doing these days, they are paying $970,000 for a contemporary oil painting of kitchenware by Indian artist Subodh Gupta. Sigh. Wouldn't you like to be filthy rich in this day and age?

Now it’s no longer just a rumor. The US Fed is bailing out American International Group with an $85-billion package (you read that right). Apparently, AIG is indeed too big to fail. I tried to camp out of Philamlife chief Joey L. Cuisia’s office this morning (well, I really meant sit really demurely in the lobby) just in case he has time to talk to a lowly journalist. Understandably, however, he was up to his ears with teleconferences and board meetings with this new development, but I’m on call the whole day. Some thoughts that come to mind: Wall Street’s latest convulsions show there might be more casualties out there and all that’s part of the restructuring happening in financial markets. I’ve heard the phrase “the market corrects itself” too many times that it hardly means anything anymore. Now, I think the great white economists might not be speaking in tongues, after all. Second, does AIG’s case reinforce the principle to “go big” when you’re choosing financial products to buy? Certainly, in this case its size saved it, but I’m not yet sure what that means on the regulatory side. The debate is heating up in Wall Street on whether this is the dumbest or the smartest move made by the Fed. What do you think?

Like dominoes, the effects from convulsions in the US financial system will begin unraveling and regulators, investors and market players are hoping there will be more pieces left standing than those that are toppled over. Late breaking news that the Federal Reserve is now considering providing a bailout package for American International Group is providing a soothing balm to Wall Street, especially after the company was downgraded yesterday by major ratings agencies. We will know more as the day unfolds whether the “unnamed source” in Bloomberg’s report has just given markets an early Christmas gift. Because Lehman Brothers, Merrill Lynch and AIG are all complex financial companies, the reckoning may take months, not days. AIG’s dilemma, in particular, has had everyone’s knickers in a twist because its demise will hit every big Wall Street name and is expected to have huge ramifications all over the world. Government economic managers are largely expected to talk about this issue during their mid-year economic briefing at the Shangri-la Plaza in Makati at 10 a.m. today. So far, three local firms, Banco de Oro, Metropolitan Bank and Trust Co. and Sunlife have disclosed Tuesday they have set aside provisions to protect them from their exposure to Lehman. The Bangko Sentral ng Pilipinas, the Philippine central bank, is ready to pump liquidity into any bank with exposure to Lehman, but  does not expect local banks to be significantly hit. State pension funds Government Service Insurance System and the Social Security System have also been asked to disclose their exposure to the Lehman, Merrill and AIG. Any exposure of the pension funds, especially GSIS, which announced early this year it was going to invest globally, could be potentially alarming for ordinary Filipino workers. Philamlife, the 100-percent owned local company of AIG, has issued official statements to the media that it is well capitalized and can service any claims from its plan holders—a statement that was echoed by government regulator Insurance Commission.

“While AIG is our parent company, we are separately capitalized, we have the largest and the most stringent capital base in the industry, our investment funds are separate, the funds managed by PAMI are separate and the US operations have absolutely no impact on Philippine operations,” said Joey L. Cuisia, president and chief executive officer of Philamlife in a television interview at ANC.

Based on official financial figures from Philamlife’s website, it’s consolidated assets in 2007 was at P170 billion, it paid out P6.6 billion in benefits during the same year. Its life insurance in force is at P391.8 billion. Its market share as of 2006 is 24.6 percent in terms of premiums, 31.9 percent in terms of assets and 33.6 percent in terms of total investments. Bandying billions of funds in capitalization, however, still kept investors everywhere, not just in the Philippines, wondering if these funds will be enough under a worst-case scenario. The New York Times and  CNN have informative question and answer articles for plan holders and investors worried about their policies. Unfortunately, the Philippines does not have a PDIC for insurance policies, the way they do in the US. When I get my interview with regulators, I will update you on that. For now, even ordinary Filipinos without a Philamlife policy or investment are advised to be wise to save more, spend less, err on the side of caution but stay the course and keep a long-term perspective, as the macroeconomic fundamentals domino pieces will get jarred again and again by convulsions in stock, currency and debt markets. The ADB is expecting Asian economies to get badly hit until 2009. However, you've also got the International Monetary Fund (IMF) saying Lehman, Merrill and AIG's woes are all part of a restructuring in the financial system and once the uncertainty over exposures such as theirs are all worked out, we'll all see a healthier Wall Street and American economy. I've seen other experts being quoted in BBC and Bloomberg, saying these are all positive in the long-run, but no mistake about it, the restructuring will come with much pain. At times like these, when a lot of the shrillness in the market will result in babies being thrown out with the bathwater, some experts say buying opportunities abound. As agreenspan says: We are all in a serious situation, and there is no place for sugar-coating here. Let us not get crippled by fear, but let’s also not hide under a rock and hope everything will be the same when we emerge. Meanwhile, the earth is still revolving, and we know that good ol' Oprah has decided to manage Charice's US career! Weee! (Humor is good for the soul and no I am not really a fan hehe). UP NEXT: Your Philam questions answered

The Brad Pitts of the world couldn’t have unglued me from Bloomberg television and my computer since yesterday, watching every little blip of news regarding the debacle happening in Wall Street and thinking about the ramifications locally. Unlike Lehman Brothers, it seems that American International Group (AIG) has friends in high places. So far, it has been allowed by regulators to raise another $20 billion by borrowing from its subsidiaries and no less than Federal Reserve officials have asked Goldman Sachs and JPMorgan Chase to set up a $75-billion facility to stave off a crisis at AIG. Gov. David A. Paterson of New York said the magic words: “It’s a systemic risk.” Meaning he thinks if the government let’s AIG fail, this could shake the entire financial system. Having said that, the government has shown reluctance in bailing out any financial firm using public money, of course, so expect more creative means to help out financial companies in trouble. All this brings to fore what will happen to those who bought Philamlife insurance policies and investments in Philam Asset Management Inc. (PAMI). I just got off the phone with PAMI president and chief executive officer Karen Liza Roa. Here’s the exact transcript:

MoneySmarts: How is PAMI affected by AIG’s troubles? Karen Liza Roa: First of all, we must be very clear. It’s not the funds that are in trouble. It’s the fund manager’s parent company. We should all be very clear on that. MoneySmarts: But what does that mean? That information will be going over everyone’s heads and eventually what they want to know is: Is our money safe? Roa: Yes. Your money is safe. AIG is a different corporation. The assets of PAMI are with a third-party custodian which is Citibank. You are shareholders of the fund. The Board of Directors are separate and independent. The fund is a legal entity of its own. It will follow investment restrictions of the Securities and Exchange Commission and the Philippine’s Investment Company Act. Your money is not co-mingled with AIG. They do not capitalize our funds. One example would be the GSIS mutual fund. That used to be managed by GSIS and then eventually by us. That’s an example that will show you the relationship between the fund and its fund manager. MoneySmarts: Under Philippine laws, the mutual fund company is required to buy back shares at any time the investor wants to redeem the shares, right? So, it’s not like the money will disappear into thin air? Roa: Yes, that’s what the law requires. The company will follow whatever restrictions are in the law. Besides, take a look at your investments. They are still in Philippine blue chips, they are in prime grade fixed income securities. MoneySmarts: Thank you, Karen, for your time.

Translating all that: worst-case scenario, if AIG closes its doors, is that you get a new fund manager. Read the news article here. I also found Floyd Norris' blog over at the New York Times particularly interesting. I have been getting emails and inquiries on whether to pull out investments in PAMI. Here are the facts and the official statement. Investors, you'll have to decide for yourselves. I am reminded of how one successful banker handled a bank run years ago. He went to one particular branch in Makati City, displayed cash and served cookies and juice. Visibility and being calm saved the day. Let’s see how Philamlife handles this thing. Watch this space for more updates today.

Wall Street giant Lehman Brothers has fallen, Merrill Lynch has sunk into the arms of Bank of America and traders smell blood from global insurer AIG. Who’s next? The New York Times has called this one of the most dramatic days in Wall Street’s history. The whole thing brings ominous tidings, says Fortune magazine. Expect more dramatic articles in the coming days as the media is whipped up into a writing frenzy. Lehman employs around 3,000 staff in Asia and everyone must be on pins and needles waiting to find out what will happen to them. On the local front, only AIG among the big names mentioned in the news today, has a big consumer base in the Philippines, Philamlife being a member-organization of the insurer. (UPDATE: My local source says Philamlife has its own financial resources and will not be affected much by AIG's troubles. I am waiting for an official statement from the company.) But its no wonder gold prices are again on the rise (people tend to flock to gold whenever they are scared). This level of fear has gotten 10 big banks to come together and create a $70-billion fund to protect financial institutions from fallout coming from Lehman’s collapse. The mechanics for this fund is not yet clear (for example, AIG is asking the Federal Reserve for a $40-billion lifeline to survive. Can it access the fund if the Fed demurs?). As it is, market watchers are concerned that bailing out companies in trouble may give financial markets temporary uppers, but it doesn’t mean the costs will not show up somewhere else. The US taxpayer’s bill, for instance. All in all, this is a recipe for sleepless nights. Get ready for financial ramifications as this time, Wall Street’s troubles could really end up, in a big way, on our shores.

Here's a little plug for a personal finance seminar that's totally recommended by MoneySmarts :-) Do you want a better life for yourself and your family? Are you tired of having too little and not enough? Do you want to achieve a more prosperous life? Then it's time for a change! What does it take to become a millionaire? To become a millionaire, you have to think like one! This is the premise of the upcoming seminar entitled "Developing a Millionaire's Mindset" featuring two of the country's most inspiring speakers – Francis Kong and Chinkee Tan. This seminar is aimed at professionals and entrepreneurs who want to take their finances to the next level – the multi-millionaire level. The seminar has been moved to October 16, 2008, 1:30-5:30pm. Our speakers, both millionaires in their own right, will share the right mindset and attitude that millionaires have. Francis Kong is the country's most sought-after motivational speaker. A successful entrepreneur, he has a multimedia presence as a best-selling book author, radio host, columnist, broadcaster, and publisher. Chinkee Tan, who found financial success in sales, is a lifestyle trainer and author of "Till Debt Do Us Part." This seminar is co-organized by DL Media Focus International and Learning Curve. To register, email events@mediafocus.com.ph. For more information, visit www.iluvlearning.com, email info@iluvlearning.com or call 996.4610.

Would you pay more for a bag made from rags designed by Rajo Laurel but created by poor mothers in Antipolo, or nicely designed Green Leaf katsa bags made in ac family-friendly factory in Paranaque, or health and beauty products that do not use chemicals harmful to the environment or tested on animals? That the calculus is not as tough as the thousands of dollars premium Honda Accord Hybrid owners pay for earth-friendly wheels is obvious. But the brains behind these products hope that the result will be the same: consumers get a warm, fuzzy feeling for being socially responsible. What’s the price tag you can live with for being socially responsible? Personally, I wouldn’t buy things I don’t need even if they are good for the environment or can help disadvantaged groups. But I would pay more even if the benefits will not be immediate. Organic produce, for example, are much more expensive but long-term benefits far outweigh the costs. In Echostore, a new one-stop shop in Kape Isla at Serendra for products that are environmentally friendly and made by disadvantaged groups, I found several treasures: Malunggay pesto in a jar, Lyf Saver (a minty, camomile preparation for de-clogging nostrils and removing nausea, no addictive chemicals), Messy Bessy environmental home cleaning products that are made by sexually abused young adults trying to get their lives back, beaded bags (they are really gorgeous!) made by women in a correctional facility, export-quality and organic-certified muscovado sugar and brown rice grown by farmers in Negros province. Were they more expensive? Some were priced competitively, some more expensive. Yeah, I like the warm fuzzy feeling. The store is the new advocacy of Pacita Juan (of Figaro Coffee fame), writer-artist-curater Jeannie Javelosa and Reena Francisco—three friends who decided they can’t save the world from cavities—but that they can use their marketing and organizational prowess to help marginalized sectors and make a sustainable business at the same time. This is the “doing good” part that shows people are not just talking about changing the world. This is the part that can swing the fight in favor of getting the Philippines away from The tipping point of poverty. “A lot of these great products made by women in their homes for example are out there and we see them in bazaars but we don’t know where to find them after the season ends. Now, you can find them all here in the store,” says Juan. Juan and her partners make sure the products in the store are sustainable and usable. “If we sell Nito products, we actually find out if they are also planting Nito,” says Javelosa. Apparently, they were turned off by the Zesto bags that were the rage for some time because they discovered that makers were not recycling the materials, but were actually having those Zesto plastics printed! The products retain their own branding, and when they can eventually make it out there in the consumer world on their own, Echostore will make space on their shelves for newer products that need help. “That’s the whole point, make these small businesses sustainable. This is a concept that we want piratable,” says Javelosa.

When a mother makes her children drink a bottle of toilet bowl cleaner and then drinks the same poison herself afterwards, is it the mother’s fault, society, or government’s? Is she to blame for not finding another way to put food on the table when her construction-worker husband cannot send home money, or is it the fault of society that is apathetic to the plight of people who are suffering? Or can this sin be placed solely on the shoulders of the government, for the failure of its cash subsidies and other fixits to bring hope to the poor? I remember hurting this way when Mariannet, a young girl, hanged herself last November 2, 2007 because she was desperate about life itself. I am not a stranger to poverty. I know how it feels to see a single parent worry about where to get money for the next day. There is no security; no hope. What if your toddler’s hunger brings you to the tipping point? I don’t have the answers. I'm also not fond of pointing fingers. I just know that something has to be done. And just as I know that we can’t all save the world from cavities, maybe one good deed for others and one intelligent personal finance deed for one’s self tomorrow (we can't help others if we are not standing on higher plane), could make a difference, if done by 1,000 people all at the same time.

(Part two) Career planning is an integral part of personal finance because it has a direct impact on the size of paychecks we bring home. Successful careers don’t just happen because we wish for them, says Augustus J.V. Ferreria, senior executive vice-president of Generali Pilipinas in an interview. Successful careers have to be planned. Ferreria advised using Stephen Covey’s “begin with the end in mind” motto for career planning. “People normally have a career cycle where every so many years, you want to move. For example, I have a 5-year career cycle,” he says. The idea is to think about what you want to happen to you every five years and plan accordingly. Say, if you’re in your 20s, you decide that by age 30, you’re a senior manager, vice-president at age 35, senior vice-president at age so and so. You can also decide to be your own boss at age 30. That works too. “People move towards their dominant thoughts. If a parent tells a child who is walking down the stairs: 'Mahuhulog ka, mahuhulog ka! (You’re going to fall, you’re going to fall!)' There’s a high likelihood he will. You instead ask him to hold on to the railings,” Ferreria says. He explains that our bodies and our minds naturally follow a pattern where we will do things unconsciously that will bring us closer to where we want to go. “There are several people who are happy already with a 15 to 30 paycheck. What most people should do is to plan their careers, by asking themselves where they want to end up,” Ferreria says. Now, knowing where you really want to go or what you really want to be is not as easy as it sounds. Bigger pay, bigger responsibilities, but how about quality of life? What’s the tag price for the level of stress at the top? “You better make sure that what you really want is what you really want,” Ferreria warns. This advice is also crucial in salary negotiations. When you name your price, demand for a package of benefits and sign-on bonuses, have the decency to quit your job when a prospective employer makes the offer. “Ask yourself, what will make you jump without even thinking about it? A 50 percent increase? A 100 percent increase? You need to put a circle on that amount. What else do you want? What car do you want? What benefits do you want? When you negotiate, negotiate on the basis of strength and not what is given to you,” Ferreria says. After the courting is over comes the really hard part: performing. “If you want to be at the management committee level, you have to be a multi-dimensional person. You have to know all aspects of operation, finance, information technology etc. Don’t be contented with your specialization. Good thing is, you don’t need to go out there and learn by experience. Learn from others. If you want to think like a Harvard graduate, you don’t have to go to Harvard. Buy books of your favorite Harvard professors. It’s kind of dumb to just rely on experience,” he says. This do-it-yourself learning may not help you much with stuffy certification-addicted organizations. But who wants to be employed by such? Among headhunters or really good human resource managers, however, it may be an asset. “When you talk with a potential recruiter, he will know whether you are pulling his leg or not. What they are really looking for is a pearl in a pig sty—someone who has the know-how but is not very expensive, yet,” Ferreria explains. “You have the knowledge, now you have the opportunity to perform. You kill yourself doing it,” he adds. Personally, I wouldn’t go as far as literally losing my life for a job. There has got to be quality of life or else a job becomes a pit. Or a cage. But I know what Ferreria means when he talks about “killing yourself” to do your job well. It means the ability to deliver on the expectations. It even means the ability to surprise your employer with the stuff between your ears. After all, if you have to be in the rat race, at least do well and squeeze all the juice out of it. ☺

I barely blinked as I watched videos on Youtube of this “gentleman grafter,” as he is called by Vanity Fair, selling peelers on the streets of New York and in the process probably make more money than your average New Yorker. Courtesy of Get Rich Slowly, I also found this amazing May 2006 piece by Howard Kaplan on Joe Ades where he said:

At the end of each day he returns with his gear to a commodious three-bedroom apartment on Park Avenue, the home that he shares with his present wife, Estelle. (In spite of the polished ways of the patterers, their typical abode was the “vagrant hovel.”) Then it’s out again for an early dinner in a style unheard of in London Labour. Six nights a week, accompanied by Estelle, he hits some of the biggest-name restaurants in town—Elio’s, Jean Georges, Milos, Centolire. He never has trouble getting a table. In the soft light his hands glow pink from the half-hour hot-water-and-nailbrush treatment he performs as part of his evening toilette.”

Yeah, and you thought he was poor. If you’re stuck in a career, 10 minutes invested in watching Joe Ades pitch his $5-peeler will teach you a few things about making sure your career—whether as a salesman, office worker, admin guy, entrepreneur etc.—brings home the biggest bacon you can find. Some lessons from the Joe Ades business school on the streets of the Big Apple:

1. do something you love to do and sell something you believe in,
2. know your craft in and out,
3. find the best mentors and learn from them,
4. keep reading books for personal improvement,
5. be willing to get your hands dirty and work really hard,
6. don’t underestimate little things like good manners (in Joe Ades case being a “gentleman” from the suits he wore to his well-cared for fingernails), good hygiene or small amounts of money.

(Part two of career planning tomorrow.)

Sunlife President Henry Joseph Herrera talks about how Filipinos can be financially free by age 60. Every person has unique personal finance challenges. This makes writing about the topic quite tricky. However, going through the questions you send me tells me that certain age groups go through similar logjams. And similar exciting turns, too. The best resource I’ve seen so far on financial planning through the ages is The Wall Street Journal’s Lifetime Guide To Money. I thumbed through it to share with you some principles that might help beginners going through the maze of life and finances. I adjusted some of them for Filipno-centric concerns. This could also work as a reminder to those who need to reassess their paths. For 20 and 30-somethings

“Whatever your goals, the sooner you start saving, the less painful it will be. Once you have made a start, you will find that there is a special satisfaction in facing up to the challenge. Honest.”

Important things to remember:

• Automate your savings
• Start with saving at least 10 percent of your income and increase from there
• Start setting up an emergency fund up to six months of your living expenses
• Invest unexpected windfalls instead of spending them on gadgets or gimmicks
• Try mutual funds
• Inquire about your company’s retirement plan package
• Invest in stocks if you have the stomach for the roller coaster ride in the market. Over long periods, stocks have gone up much more than they have gone down
• Consider bonds if you are a conservative investor
• How much to invest for the long-haul? A rule of thumb says you should subtract your age from 100 and then add a percentage sign
• Just say no to debt other than a home mortgage
• If you can’t live without plastic, pay the entire balance each month
• If you have debt and have savings, take out your money from the bank and pay your debt. Paying off a loan can be one of the biggest investments you can make
• Review your health benefits at work to make sure you have the coverage you need
• Even if you are just renting an apartment, be sure you have insurance on the contents
• You do not need life insurance if you have no dependents. Once you have children (or if your parents are now dependent on you), you will probably need more than at any later time in life
• No-frills term insurance is usually the simplest and lowest cost option
• Think carefully about buying a house versus renting. Since the fees can be steep, buy a home only if you are going to live in it and do not need to relocate in a few years
• Buy only a house you can afford. A lot of people end up getting strapped for cash because of the tendency to stretch themselves to buy the biggest house they can
• Start thinking about writing a will

For 40 and 50-somethings

“These years can be a real juggling act, particularly for people who had their children in their 30s. With retirement beginning to loom in the horizon, these are the years when most people become more serious about setting money aside. Ideally, these are high-earning years in which you have plenty of income to sock away.”

Important things to remember:

• Take a hard look at what you can really afford, making sure you are providing for future needs
• Be realistic about retirement
• Watch out for tax-advantaged retirement funds that may begin due to the recently-signed PERA bill and prepare to maximize them
• Structure your portfolio for strong performance, while working to keep it simple
• Check your safety net (insurance) for holes. Find out whether you have enough
• Plan your career well. Leaving your long-time employer for a lucrative offer may affect your retirement benefits
• Consider getting additional academic training or start a sideline business that might grow into a new career
• Be extra cautious about trying to retire completely while still in your 50s because of the risk of outliving your money
• Talk with your spouse about how much of your children’s college costs you can bear while saving for retirement at the same time
• Beware of the temptation to dip into your retirement fund for a vacation or buy a new car
• Think twice about moving to a bigger, more expensive home that could seem way too large when the kids move out
• Go through the clutter of your investments to make sure they are working hard for you
• Think about how your family would fare if you are disabled and unable to bring home a check
• Even if you do not feel wealthy, figure out how much estate-tax bite would affect your estate

Your 60s and beyond

“The period of life that begins at 60 is characterized by sweeping lifestyle changes—and by some momentous financial decisions that can affect you and your family for many years to come.”

Important things to remember:

• Have a vibrant, active retirement but do not rush into it before you can really afford it
• Tend your resources carefully by investing prudently but not too conservatively
• Arrange your affairs so that a surviving spouse will be provided for and assets divvied up appropriately after death
• Review your medical coverage when deciding when to leave work
• If you receive a lump-sum payment from your employer upon retirement, that can be the biggest lump sum you will ever get. Make sure you learn all about investing and don’t invest it in scams
• Be wary of taking too much risk and too little risk
• Stick to time-tested vehicles such as mutual funds and bank accounts
• Watch for how fast you draw down from your accumulated savings. In the early years of retirement, unless your wealth is immense, you should use only a small part of your savings for living expenses
• Get help on estate tax planning
• Do not feel obliged to preserve all your wealth for others.
• Enjoy your retirement

Nothing like a checklist to keep things simple and clear :-)

I have always been scared of the kitchen and insecure about my cooking skills. Yesterday, the world’s noodle king, Chef Liu Zheng Hsiung of the Lao Dong restaurant chain in Taiwan, taught me how to cut cooked beef strips like a pro and I am happy to report that I survived!  The charming Chef Liu is in Manila on a 5-day visit to train Chowking chefs in making greater tasting beef noodles, his specialty. (Chowking entered into a joint venture with Lao Dong three months ago as part of the Jollibee Group’s global expansion strategy.) Chef Liu deftly handed me an ominous-looking chopping knife and made me hold the handle as if my life depended on it! It was a little bit ouchy, but I got the message, even though he spoke only Mandarin. Then lo and behold, before a hungry group of media people and food bloggers, I cut my teeth into the cooking industry. Obviously, I will never be a chef, but I learned a few tricks about money-smart cooking from my brush with the noodle king. He says great-tasting food does not have to be expensive. The secret is in the preparation and the freshness of the ingredients. For the cooking demonstration, Chef Liu himself chose the huge slabs of beef from the Farmer’s Market in Cubao, Quezon City yesterday morning. I first thought the cut would be one of the first secrets, but I was mistaken. He said the cut doesn’t matter; you don’t need to buy the most expensive part of the beef. For the recipe we were using, he used the chest part of the beef and cooked it with beef bones and Chinese seasoning for 24 hours under very low heat. This brings out all the flavors and makes the meat extremely tender so that it almost melts in the mouth. I was already computing how much gas will be consumed when boiling meat for 24 hours! I therefore conclude that I need a different way of cooking the meat, perhaps using coal? Going back to the cooking demonstration, he sliced the meat across the grain into very thin strips and arranged them on top of oodles of white noodles, along with thinly sliced leeks. Then he poured on the clear beef soup, for which he is famous. One food writer called it “heaven in a bowl.” The noodle king was pleased. So will Chowking customers who will soon be tasting more of these beef noodles. Chowking President Erwin M. Elechicon pointed out that high-end restaurant goers in the Philippines shift to fast food when budgets are strained. I’ve also observed the same trend, and I suppose so do stock market analysts who always recommend Jollibee as a good stock to buy during economic downturns. Agree or disagree?

When you’re in your 20s, you’re probably just starting out in your first job and concerned with making a good impression. Even if you might still be living with your parents, buying a new wardrobe, going out to fit into your new environment, enjoying your independence will become paramount concerns, rightly or wrongly. In your 30s, you are most likely raising a family, saving for your children’s education, taking out a home mortgage, paying for your first or second car, and some of you might be taking care of an aging parent. If you are in the 40-something age group, you might have bigger salaries and bonuses, but will be dealing with health issues too and higher cost of living. At what point do you seriously start thinking about investing for retirement and how much do you set aside? With all these financial concerns at the back of your mind, it’s no surprise that retirement will be taking a backseat. I read a rule of thumb in The Asian Wall Street Journal’s Lifetime Guide To Money (Dow Jones & Co., Inc.,) that to figure out how much to invest in the long haul, you should subtract your age from 100 and add a percentage sign. Using that rule, I’m under-investing and spending too much on current concerns! That is, unless I count the money hubby and I are putting into our home. How about you?