I have been getting emails from concerned pre-need plan holders about whether or not a certain company is in trouble, and whether or not to continue paying.

By this time, I suppose most of you know that there are inherent flaws in the products themselves and structural as well as regulatory weaknesses.

Having said that, if you have money sunk in these pre-need products, the practical first step would be to find out if the company you bought is one of those in danger of collapsing, or whether it has been managing your money soundly despite the crisis.
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Celso de los Angeles, owner of the Legacy group of companies, appears to be a financial genius. He created a scheme that fell through the regulatory cracks, and stumped both the Securities and Exchange Commission and the Bangko Sentral ng Pilipinas.

From the Senate hearings, here is the anatomy of de los Angeles’ perfect scam:

1. His companies sell a pre-need plan to an investor.
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By Vandermir Say, CFA
Value Investor

Most investors dream of having a large snowball one day. You want to make sure that the snowball keeps growing, however slowly, and one of the best ways for you to achieve this is by making sure it never shrinks along the way.

Placing a snowball close to grave danger in exchange for possibly large returns is not something an intelligent investor does. A high-yield investment scam is one such grave danger. If you don’t get out before the scam collapses, an investor can find his snowball has significantly shrunk. An investor will have to invest whatever little is left, and start all over again. In the worst cases, snowballs can shrink to almost nothing.

In another example, investing in a business that has owners or management with questionable integrity would be like pouring hot water on your snowball.
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“I tell you this, family is more important than work. I have my priorities straight because my employer will know that they are not the most important thing in my life. So in 30 years, I will tell my children “Money will make me happy” is a lie and “Happiness comes from within.”

This video was created for the AARP U@50 video contest and placed second. It is based on the Argentinian Political Advertisement “The Truth” by RECREAR.

Most of us tightwads would rather bear the discomfort of sitting uncomfortably for hours, clicking through websites on personal finance and reading blogs like MoneySmarts just to learn more about financial management than subscribe to magazines that we can curl up in bed with.

From time to time, though, I make an exemption. Being the first and only personal finance magazine in the country, it truly deserves the P120-per-copy invesmtent you’ll make. MoneySense is a fixture in our home and something that I give as a gift to some close friends. (The fact that I have a column there is definitely not the main reason for this! (smile)

This year, check out its new look and new sections just in time for its second anniversary.

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Reader Dupax sent me an email with a question I know most of you are also thinking about:

I’ve been a fan of your MoneySmarts articles ever since I’ve decided to become a financially literate person. I’m an OFW for over a year now. I have two kids, and my wife is taking care of them full-time. I’ve been reading a lot of stuff about mutual funds and I really would like to start investing in it, even if there’s a global financial crisis.

I know I can put my savings in a time deposit right now but I know that there’s a better way of saving it. Instead of putting it in the bank, I’m willing to initially invest P50,000 in mutual funds, UITFs (unit investment trust funda), or other investment vehicles, and then invest P10,000 every month in the period of three years.

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Malaya Laraya, a registered financial planner, called my attention to what his friend recently experienced with a certain bank.

It’s an eye opener, especially since I have often written that if you think you’ll miss payments on your bank loans, it’s better that you call them before they call you.

So Aya’s friend decides to pay the bank a visit in the spirit of being proactive with pay-slips and bank statements showing his financial situation in tow.
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To hear Senator Mar Roxas say it, the Securities and Exchange Commission is either sleeping on the job, sleeping with the enemy or both.

The problems of Legacy Consolidated Plans have resurrected old ghosts and painful lessons for hapless parents trying to prepare for the future. Issues hounding College Assurance Plans, PET Plans, Pryce Plans, Pacific Plans, TPG and many others raise serious question for students of financial planning.

Do we still trust the pre-need industry? Do we still trust regulators? How in the world can we steer clear of potholes that can endanger our precious savings?
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The brick walls that are in our way are there for a reason. They are not there to keep us out. They are there to give us a way to show how much we want [something].

~~ Professor Randy Pausch, who died of pancreatic cancer in 2008.

This quote was part of his “Last Lecture” at the Carnegie Mellon University, a traditional lecture series where professors are given the chance to say what they would to their students if they were to die soon. For Dr. Pausch, the theoretical exercise literally became true, when he was diagnosed with the debilitating disease. Watch the full lecture on Oprah.