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Saving for Retirement


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#51 tonyboy

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Posted 30 December 2004 - 07:01 PM

wolv, is that condo in roxas blvd called antel? one of my frequent balikbayan pals and advisers bought one two-bedroom unit there. pero he bought it with cash, not by installment.

ty!

hi doc tonyboy,

Antel is located along roxas boulevard between San Juan De Dios Hospital and Hyatt. The location is very good because it is near the developing Macapagal hi-way, home to the new Manila Doctors Nursing School, Pricesmart and a lot of fastfood chains and upcoming sm mall of asia. Good investment! :eyebrows:

thanks! it's one of the areas where i will be looking at. as a matter of fact, the condo worth investing into for rental or retirement purposes, according to my gurus, is something close to schools, groceries, hospitals and public transportation.

greenbelt in makati is one being touted by friends of mine. they say that one can walk to landmark grocery, mrt, movie houses and glorietta mall.

rockwell is another area they recommend.

as far as raw lands, cavite, tagaytay or laguna. they say half an acre would cost around a fraction compared to california land.

with this recent asian tsunami scare, maybe i will stay away from looking at roxas blvd properties facing manila bay and just explore makati high-rise condos, tagaytay and/or baguio city...nakakatakot talaga ang killer tidal wave (+80K dead)! :(

#52 longvestor

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Posted 30 December 2004 - 07:36 PM

Hmmm... only $60 after 3 years of time deposit for $1000. Parang masyadong maliit. Di pala pwede pang passive income yang time deposit. :huh: Hay naku, mukhang kailangan pang mag-kayod ng konti. Pangarap ko sana na kumita ng malaki tapos live off on interests lang. Mga magkano kaya kailangan para mangyari yan.

Will definitely have to look at real estate for more promising passive income.

Mike,

Patience, patience, patience.

:)

#53 dantia

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Posted 30 December 2004 - 07:39 PM

Thanks for all the tips! My wife and I are looking into saving in dollars but spending in pesos. It's not that much yet, but as I continue to live below my means here in the US, I can slowly save up some dollars.

Any dollars I send home are not converted to pesos but are just saved up. I think longvestor's advice about education is good. I will just continue to save up and study about Stocks and Real Estate slowly. Once I am confident with my savings, that's the time I will invest. Save muna ngayon.

tonyboy, why was citibank recommended? Do they have better rates or plans for dollar accounts?

Thanks everyone. :D

mike, citibank was recommended because the forum member's parents were living in the philippines where a branch is located. i guess, i can do the same..open an account there...and deposit funds here sa states towards a collateral.

don't really know about the difference of interests between states and philippine banks...guessing uli...same..very low.

but us citibank deposits are protected by fdic up to 100k..is pinas the same?

correction...pinas citibank branch does not have reciprocity with stateside branch. kindna strange but a pmd forum member whose parents are presently residing in pinas informed me this. i guess, am advised to search another way to transfer funds.

is there another bank like pnb with us-pinas reciprocity? might have to open a pnb bank in ny and another in manila but am not sure it won't be the same again..parang intra-bank compartamentation. not customer friendly. :(

back to square one for me..more questions..will my us citibank checking account be honored..cashable ba ang personal check ko in pinas bank, or any pinas bank for that matter..and how long ang clearance of a personal check before i can get cash? is there a limit as to the amount to be cashed?

:rolleyes:

ty again, dantia for the links/info! :)

walang anuman, tonyboy!

Any bank will honor your dollar check. However, there is a waiting period of 30 days or more depending on which bank. No limit as far as I know.

Will search for you and check with our Banco de Oro bank.

#54 dantia

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Posted 30 December 2004 - 09:00 PM

BDO will release your funds after sixtry days but it starts earning right away after you deposit.

Metro Bank will release it after 30 days. BPI will release it after 40 days. BDO has the biggest interest.

As for mortgage interests, BDO charges 14%/yr., Metro - 11$ and BPI is 12%

Btw, home loan interest rate changes every six months. For example, I think Metro is raising theirs 1.5% more this coming May. :(

#55 sonny

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Posted 30 December 2004 - 11:18 PM

It's never too early to start thinking about retirement.

My husband and I have been maxing out our contributions towards our 401K (or its federal equivalent, in my case). For 2005, the maximum contribution is 15% of total salary, as long as it does not go over $14,000 per annum. The nice thing about this is, (1) the company matches our contribution up to a certain percentage, and (2) it's all pretax, so our taxable income is smaller - and we don't even feel the pain, because it is automatically deducted from our paycheck (and LBYM).

Yes, real estate is the way to go. We bought our house recently as an investment. We live in an old community, where the older houses are worth nothing, but the land has appreciated in value in leaps and bounds over the past 15 years. If you've singled out a place to live in, look for properties where values have exponentially grown (or will have the tendency to grow). My husband has been in Houston for 4 yrs and when we decided that we were staying, we searched for months. When we zeroed in on our community and the house, we scouted around for mortgage companies. Luckily, my residents told me about the Doctor Loan program of Bank of America -- no down, no PMI. (Yes, a lot of our residents purchase their own homes/condos!) The loan officer was really nice, working overtime to meet the closing date.  We brought VERY minimal money towards closing. It was a great deal, especially with the interest rates being as low as they were in 2004. And again, what we pay for the mortgage interest is a tax deduction!

Fully agree! :)

Here's another very inspirational post/article about a neighbor of ours, Atty Damaso Bangaoet, a great role model!

Highlights:

Couple retires, creates health and beauty in a farm

Posted: 2:04 AM | Dec. 26, 2004
Maurice Malanes
Inquirer News Service


LA TRINIDAD, Benguet -- Retirement, for many people, means sitting on their rocking chairs as they contemplate on what awaits them.

But for lawyer Damaso Bangaoet and wife Laurel or Bing, retirement is an opportunity to do freely what they had dreamed of doing when they were tied to their 8 a.m. to 5 p.m. jobs.

"You slouch on a rocking chair and your mind and muscles get atrophied. You should continue to be productive," says Bangaoet, a retired executive vice president of the John Hay Management Corp. and former president of the John Hay Poro Point Development Corp.

Retirement is an auspicious time to launch one's second or third career, says Bing, a retired director of the Institute of Physical Education and former acting director of the Center for Culture and the Arts at the Saint Louis University in Baguio City.

For the couple, retirement is a chance to do anything in the world, like traveling overseas, which they did and continue to do.

After having seen much of the world, the Bangaoets feel they must leave some worthwhile legacy for their own community.

From the couple's desire to leave a legacy and make an innovative business dent in their village, Tomay Farms, which was named after their barangay here, was conceived.

Tomay Farms, seven kilometers north of Baguio City, along the Halsem Highway here, is not just a business proposition. It is "a community-based farm experience," says Bangaoet.

As an experience, clients or guests do not only munch on fresh organic vegetable salads, roasts and desserts; they savor them. When clients order lettuce salads, a staff runs to the garden to gather the vegetable so clients are assured of life-giving nutrients straight from a patch of organic earth.

It helped a lot that the place sits on a more than 2,000-square-meter rolling hill, most of which are owned by the Bangaoets. Surrounded by pine trees that the Bangaoets planted more than 30 years ago, the place has been landscaped into an organic farm and a mini-park.

There are patches planted to lettuce, beans, strawberry, celery, parsley and various herbs like dill, lemon balm, mint, basil and many more. Surrounding these edibles are various ornamentals such as morning glory, various varieties of daisies, roses, birds of paradise, mums, dahlias, poinsettia, marigold, angel's trumpet, sunflower, and others.

On a fenced off 100-square-meter area, farm animals like chickens, ducks, goats and rabbits live together.

Above the animals' den is a fishpond, which will be filled with tilapia fingerlings when the rain comes in May or June next year.

Part of the experience in Tomay Farms is not just dining, but also walking through the vegetable and strawberry patches, feeding the animals, learning to plant and asking questions about organic farming and its business side. Visitors can also enjoy conversations here over tea or Benguet coffee under a pine tree.

Tomay Farms is like a charming lotus amid murky waters. This is not surprising because Bangaoet is an art critic and his wife is an artist and both of them love and cultivate flowers, trees and vegetables.

As a former Camp John Hay official, Bangaoet conceived the Panagbenga or the Baguio Flower Festival, an innovation that has become a tradition, and which helps earn income for the Baguio City government and for the business sector.

Tomay Farms, which opened in November, continues to evolve as it seeks to make a difference in doing business.

And if the Bangaoets stress on the plural (farms, not farm), it is because other farmers are involved.

"More importantly, we are not just farmers. We are friends and neighbors as well," says Bangaoet.

Such friendliness and neighborliness, which cannot be valued in monetary terms, are indeed among the bonuses clients and guests get to experience at Tomay Farms.


copyright ©2004 INQ7money.net all rights reserved

I really don't mind the thing about atrophied mind and muscles. I can live with that legacy. :lol:

#56 tonyboy

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Posted 01 January 2005 - 08:03 PM

BDO will release your funds after sixtry days but it starts earning right away after you deposit.

Metro Bank will release it after 30 days. BPI will release it after 40 days. BDO has the biggest interest.

As for mortgage interests, BDO charges 14%/yr., Metro - 11$ and BPI is 12%

Btw, home loan interest rate changes every six months. For example, I think Metro is raising theirs 1.5% more this coming May. :(

hmmm..you seem to be an expert on pinas banking..can you open another thread on banking interest, which banks are okay for a balikbayan investor like me, how much collateral or down payment is needed for a home loan, etc?

again, thanks very much!

#57 longvestor

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Posted 03 January 2005 - 06:53 PM

Hmmm... only $60 after 3 years of time deposit for $1000. Parang masyadong maliit. Di pala pwede pang passive income yang time deposit. :huh: Hay naku, mukhang kailangan pang mag-kayod ng konti. Pangarap ko sana na kumita ng malaki tapos live off on interests lang. Mga magkano kaya kailangan para mangyari yan.

Will definitely have to look at real estate for more promising passive income.

Mike,

Patience, patience, patience.

:)

Savings 101 Basics - an advance course after the alkansya method

Understanding savings

When it comes to savings, interest is what it's all about. Interest is what a borrower pays a lender for the use of the lender's money.

When you deposit money in a savings account, a money market account, an interest-bearing checking account or a certificate of deposit (CD), you're lending that financial institution your money. The institution uses that money to make loans -- essentially, borrowing money from you and paying you interest for the right to use your money to lend to someone else.

Of course, the institution then charges that loan customer an even higher interest rate to more than recover the interest it's paying you. Interest is calculated as a percentage of the amount of the loan.

Interest can get complicated, especially when the terms "rate" and "yield" are involved.

You may see a $10,000 CD with a 5-percent annual interest rate (APR), but right next to it is the annual percentage yield (APY) number and it's higher.

The difference between rate and yield is determined by how frequently interest is paid, and how it is paid.

Rate is the nominal, or stated, interest rate on the investment. If you have a CD with a 5-percent nominal rate, then interest is calculated by multiplying 5 percent by the amount invested and by the fraction of a year the money is invested.

Let's say interest pays annually. A $10,000 investment will earn $500 in interest. ($10,000 x 5 percent x 1 year.) When an investment pays interest annually, its rate and its yield are the same.

The more frequently interest is paid, the higher the yield. That's because the interest payment is credited to the CD and it starts earning interest along with the invested principal.

If the 5 percent CD paid interest semiannually, the six-month interest payment would be $250, ($10,000 x 5 percent x .5 years.) The $250 payment starts earning interest and earns $6.25 in interest during the next six months, ($250 x 5 percent x .5 years.) That's what compounding interest is all about.

The first CD earned $500 in interest after a year and the second CD earned $506.25 in interest. The rate and yield on the first CD is 5 percent. The rate on the second CD is 5 percent, but its yield is 5.06 percent. If interest was paid daily, the rate would be 5 percent but the yield would be 5.13 percent.

These yield computations assume that the interest is reinvested in the CD at the CD's nominal rate.

To get the best rates and yields on CDs, checking and money market accounts, check out "Savings & CDs" page.

How interest rates are determined

Interest rates are affected by a number of factors. The Federal Reserve, which is charged with maintaining the stability of the nation's financial system, raises or lowers short-term interest rates in an effort to maintain that stability.


Ready to invest in a CD? Find the best yields in your area.


The Fed regularly takes these actions in response to economic expansions and contractions that the country goes through on a fairly routine basis. Short-term rates are raised in expansions -- good times -- to keep the economy from building too fast and risking inflation, which is caused by too much money chasing too few goods and services. Raising rates makes it more expensive for companies and individuals to borrow money.

The Fed will lower short-term rates when the economy is contracting -- slowing down. Lowering rates makes it less expensive to borrow money, the idea being that businesses and consumers will buy more products and services and speed the economy up a bit and keep the economy from sinking into a recession. A recession happens when consumers hold on to their money and don't buy the products and services that keep companies afloat and employees employed.

When the Fed cuts short-term rates, it is cutting the rate that banks charge each other to borrow money. Those cuts are eventually passed on to businesses and consumers. The same thing happens in reverse when the Fed raises short-term rates.

Other factors affect interest rates, too, but on a more irregular basis. A crisis involving the foreign oil-producing nations, for example, could have a major economic impact that could affect interest rates.

Long-term interest rates aren't affected by economic conditions as much as short-term rates, but there is a trickle down factor and they reflect the impact eventually.

What works for you, as a saver, works against you as a borrower. When rates are high, you're earning a hefty amount of interest for your deposits, but you're going to pay a high interest rate if you need to borrow.


Mike,

You might want to explore Bankrate.com's on-line banking. Posted Image

Using the Internet, you can transact your banking business where ever you are e.g., deposit into savings account, withdrawing funds via ATM or paying bills, etc. Assuming you already have a TIN or SSN.

BTW, for most everything short/long-term, Wifey and I use this:
Posted Image

#58 sonny

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Posted 03 January 2005 - 08:16 PM

We have PDIC in RP. Peso accounts are insured up to 100K pesos. I am not sure about dollar accounts.

To Mike and Tonyboy,

From Citibank, Pinas website:

Basic Features

Withdraw up to US$3,000/day (or its equivalent in local currency) or inquire about your balance through your international Citicard (ATM Card) at over 860,000 ATMs worldwide.

Access your money at over 3,000 BancNet and selected MegaLink ATMs nationwide.
Through Citibank Online or 24-Hour CitiPhone Banking, you can now monitor your account balance/activity, pay your Citibank credit card and utility bills, or transfer funds among your Citibank accounts or to other banks.
Other Features

Monthly consolidated statements.

No minimum balance required as long as you maintain a Total Relationship Balance (TRB*) of US$10,000.

Earn 0.1% interest rate per annum starting at a deposit of US$5,000.*TRB (Total Relationship Balance) refers to the combined average daily balance of a customer's deposits and investments.

Sobrang liit. :(


A member of the Philippine Deposit Insurance Corporation [PDIC]. Deposits (peso and dollar) insured up to PhP250,000 only.

Something about Citibank:

http://news.inq7.net...&story_id=23188

:(

#59 longvestor

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Posted 03 January 2005 - 09:07 PM

In the Philippines, treasury bills have high yield.  However, not a lot of people know about this and it is not easily available because most of its buyers are the banks.  Talk to your financial adviser. 

CD's are low yield but can easily be liquidated if you need the money for an emergency.  You will pay a small penalty if you terminate it early.  However, if you have a certain amount of money that can stay long term like 20 years or more, it is still a good. low-risk investment. 

docyoda

Don't know much about Philippines Treasury Bills. Perhaps you can enligthen us.

Back to basics:

Take 5 steps toward early retirement

It doesn't take an unexpected windfall to make early retirement happen. It takes a strategy, careful planning and a little sacrifice. Here's how to get started. By Leah Gliniewicz, Bankrate.com

Even if you don't win the lottery, don't give up your dreams -- you can still plan for an early retirement. But wait too long, and you won't have a nest egg to sit on.

According to the 2003 Retirement Confidence Survey by the American Savings Education Council in Washington, D.C., only 21% of saving Americans are very confident of having enough money to live comfortably after they retire. The study also found that three in 10 workers have not saved for retirement.

Debt can play havoc with retirement planning.

"Debt is a deterrent to growth," says Jeffrey Levine, a certified financial planner in Albany, N.Y. and a member of the Financial Planning Association. "You want to get rid of debt, especially if you have high interest rates like credit cards."

So how do you begin?

Step 1: Develop a plan

Figure out how much your present lifestyle costs you. Then think about the type of life you want to lead after retirement. Realize that you could be retiring at the midpoint in your life, and you'll be on a fixed income, Levine says. Don't forget to consider your long-term health care costs.

Step 2: Think in twos

Make financial plans for two stages of retirement: the periods before and after you are 59½ years old, says Les Abromovitz, author of "You Can Retire While You're Still Young Enough to Enjoy It." First, secure the after-59½ stage of retirement with investments such as 401(k)s, Individual Retirement Accounts, pensions, annuities, Social Security and savings.Regular IRA? Roth IRA?

"If you're serious about early retirement, you also want to look for ways to fund the pre-59½ stage of retirement," Abromovitz says.

Figure out what assets you have that produce income. And you might want to begin investing more aggressively, with investments that produce a greater rate of return.

If your home won't suit your retirement lifestyle, remember that the Taxpayer Relief Act of 1997 allows you in many cases to keep the capital gain when you sell the home, Abromovitz says. That money could help carry you through the first years of early retirement.

Step 3: Take advantage of tax-deferred opportunities

To secure the back end of your retirement, maximize the money you put into your retirement fund, says Ileen Malitz, certified financial planner and author of "The Modern Role of Bond Covenants." She stresses starting a 401(k) and a Roth IRA from the first day of employment.

"If you're willing to enroll in a 401(k), you're taking a major step to retiring early," Abromovitz says. "401(k)s and IRAs are can't-lose situations as long as you continue investing in the long haul. You take advantage of tax shelters and compounding for decades by doing so. So it's hard to go wrong."

Putting money in an IRA or 401(k) does not mean paying penalties if you go fishing earlier than planned. For the purpose of early retirement, you can withdraw from your IRA if you take advantage of the annuity payout, which allows "substantially equal" withdrawals over your expected life span. And the standard 10% penalty for early 401(k) withdrawals is waived for those older than 55.

Step 4: Invest it

The third place to stick your leftover money is in non-tax-sheltered mutual funds. Figure out where to invest it so it produces a decent return. Look in the mutual-fund column of the newspaper (and the mutual fund section of this site) for funds with no custodial fees and no commissions, known as loads.

"It's best to combine it into a money market that earns good interest and stock mutual funds. It will be taxable, but it still is probably the best place for it," Malitz says.

While mutual funds outside an IRA or 401(k) may not be tax sheltered, they can be tax efficient. In the case of mutual funds, this means the fund managers buy and sell the fund's assets with an eye to tax consequences.

No matter where you invest your money, your best bet is to do it on a regular basis. "For people who don't find it easy to save, the best thing to do is to get into an automatic investment program," Abromovitz says. A fixed amount, perhaps $50 to $100, is deducted from your paycheck monthly and invested in mutual funds. The result is dollar-cost averaging, which means you buy more shares when prices are low and fewer when prices are high.

Abromovitz says the last thing a would-be retiree should consider is investing on hot stock tips: "To me, you should have all of these solid investments first. If you hear about something, it should be money you're ready to lose. It should be a lower priority."

Step 5: Stick to your plan

Early retirement requires a long-term savings and investing plan, and it takes discipline. This means keeping debt down and perhaps not living as lavishly now, so you can reap the benefits later.

You make a choice between lifestyle and high wealth accumulation. If you want wealth accumulation, you have to live a modest lifestyle. It has to be a written, conscious choice.

Time is on your side. The earlier you start and the longer you leave your money untouched, the more compounding can work for you.

When you haven't saved, it's hard to go back and make up for it. Malitz says the easiest thing is to decide to save 10% of your income. You'll probably never miss it.


Source: www.bankrate.com



:)

#60 sonny

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Posted 06 January 2005 - 05:51 PM

A little off-topic, but why would anyone want to retire in Pinas? A worried American asked.


'We want to retire in the Philippines!'

http://jobmarket.inq...-01-06&artnum=1

His request: "I wish that you would write and push for better security in the provinces so people would return to the provinces and feel safe in doing so."

:(

Advice for the anxious person at work.

#61 dantia

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Posted 06 January 2005 - 05:55 PM

BDO will release your funds after sixtry days but it starts earning right away after you deposit.

Metro Bank will release it after 30 days. BPI will release it after 40 days. BDO has the biggest interest.

As for mortgage interests, BDO charges 14%/yr., Metro - 11$ and BPI is 12%

Btw, home loan interest rate changes every six months. For example, I think Metro is raising theirs 1.5% more this coming May. :(

hmmm..you seem to be an expert on pinas banking..can you open another thread on banking interest, which banks are okay for a balikbayan investor like me, how much collateral or down payment is needed for a home loan, etc?

again, thanks very much!

Am no expert, but will be glad to share with you the results of my search for another borrower-friendly bank to pay off our mortgage loan.

#62 longvestor

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Posted 15 January 2005 - 06:31 PM

It's never too early to start thinking about retirement.


Thanks miadaj and back to topic.

Basics from www.forbes.com:

Saving For Retirement At Any Age

Excerpts, bolded and italic items are mine:

To everything there is a season...a time to rend and a time to, ahem, save.

For retirement, that is.

"The second you earn income, you should put something aside for retirement," said Matthew Tuttle, president of Tuttle Retirement Solutions in Stamford, Conn. "You should start as early as possible."

The investment strategy varies with age. In general, the younger you are, the more aggressive your investments can be. As you age, move into more conservative investments such as bonds because you have less time to make up for market dips.

Those who don't save and invest for retirement will soon understand the wisdom of this insight: Anyone who digs a hole is bound to fall into it.

Investing In Your 20s

Investing In Your 30s

Investing In Your 40s

Investing In Your 50s

To avoid that hole, click on the links above for seven basic tips to help you prepare for retirement at different stages in life.


:)

#63 longvestor

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Posted 18 January 2005 - 07:19 PM

Seems..the link doesn't work.

Investing In Your 20s

Excerpts:


Get Started--Now

OK, you've graduated with a pile of debt from student loans, and you're making real money at a real job for the first time in your life. Retirement seems as distant as the Himalayas, but now's the time to get started. (No kidding.)

Get The Facts

Some of your friends may attempt to extend adolescence by going to graduate school to study arcane subjects. But if you're out of school, you've learned life's basic lesson: You're on your own, and everything is up to you. Devote your studies to the beauty of the 401(k). Read up on taxes. You can't plan without information.

Make A Plan

Your stylish friends will hoot, but develop a written retirement plan. Set goals and determine what you need to achieve them. The plan will change over time, but without a goal and a blueprint, it's easy to do nothing--and nothing will get done.

Start Saving

Consider setting aside 10% of your gross pay each month. Stupid-proof contributions to your 401(k) by making them automatic. This means you won't have to run to the bank each month, and you can't spend the money foolishly. You'll soon discover that it's easy to adjust your expenses to meet available cash.

Stick With It

Once you've set up a 401(k), don't tinker with the automatic contributions and don't borrow against it for a glorious trip to Europe with your sweetie. Keep an eye on your investments and broaden your study of investing. It's positive feedback: The more you know, the easier it is to learn more--and you'll make better investment decisions.

Burgeoning Gut

Shocking but true: The 28-inch-waist jeans you wore as an undergraduate may be tight in your late 20s. So, work on keeping your gut under control and that other peril of youth, debt. Many young people run up huge credit-card debts. This is stupid--check the interest rate. It also delays putting money aside for retirement.

Don't Count On Uncle Sam

The world has changed since the 1930s when Social Security was created. People live longer and will spend more time in retirement. The Baby Boomers will break Social Security, or force it to be changed beyond recognition. That means you can't depend on government programs in retirement. It's up to you.


Reference: http://www.forbes.co...tirement_2.html

:)

Edited by longvestor, 18 January 2005 - 07:20 PM.


#64 mikemuin

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Posted 04 February 2005 - 02:46 PM

Here's an article that went a bit over my head :o :

How to discourage savings

Today, the Philippines has one of the lowest savings rates in the region. Part of the reason is that our government has not been actively supporting savings programs and, as with many initiatives in the past, it has shown inconsistency in the implementation of established policies on savings.


Are Filipinos really not prone to savings? :unsure:

#65 Pexxerdoc

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Posted 08 February 2005 - 05:23 PM

Here's an article that went a bit over my head :o :

How to discourage savings

Today, the Philippines has one of the lowest savings rates in the region. Part of the reason is that our government has not been actively supporting savings programs and, as with many initiatives in the past, it has shown inconsistency in the implementation of established policies on savings.


Are Filipinos really not prone to savings? :unsure:

Unfortunately, the evidence points that way. Sad isn't it?

:(

#66 longvestor

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Posted 16 August 2005 - 08:42 PM

In case the links don't work.

Reposting excerpts:

Investing In Your 30s



Retirement Vs. College
Where'd those kids come from? Think! Don't make the mistake many young parents do by putting saving for college ahead of retirement. There are scholarships and loans available for college, but there are no grants for geezers. You can't walk into a bank and say, "I'd like to borrow $200,000 for my retirement."

Save For College
Money set aside for your kids' college education should be money available after all routine household expenses and your 401(k) contribution. Read up on 529 Plans, but don't panic after calculating that you'll need $750,000 to get three kids through private universities. You made it--and you didn't graduate from Cowflop U. Your kids will make it with a similar mix of savings, scholarships, financial aid and work that got you through.

Boost Your Contributions
You're advancing in your career. That means more responsibility--and better pay. So, consider boosting your 401(k) contribution to 12% or 15% of gross pay. There are at least 1.1 zillion reasons not to do it, but if you don't do it now, it won't get done.

Creeping Luxury
Desires are infinite, but don't let your desire for a fancy car, bigger house and the latest style in clothes eat up your rising income. In Shakespeare's Henry VI, Part 2, the first order of business was killing the lawyers. Hmmm. Then comes the marketers, eh, young parents?

Do Your Homework
If you haven't started investing for retirement, now's the time to get going. Read everything. Don't pattern your 401(k) allocations on Fred, the office nerd. Do your homework. Don't be lazy by putting 20% of your monthly contribution into five different investments. Read. Study. If you're behind the curve, run faster. Develop a retirement plan. Write it down.

Keep Accurate Records
Financial planning will become more important as you age, and you'll need accurate records to make good decisions. Shopping bags and shoe boxes don't qualify as filing systems. Know what you earn and how you spend it. Keep an eye on your retirement investments and your college savings plan.

If You Take A Hit
If your retirement portfolio gets hammered in a market downdraft, don't despair because you've got plenty of time to recover your losses and build for the future. A well diversified portfolio should limit the bleeding. If you weren't diversified, you've learned something, kiddo.

Source: Scott Reeves, a Personal Finance Editor at Forbes.com

#67 longvestor

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Posted 19 August 2005 - 07:00 PM

In case the links don't work.

Reposting excerpts:

Source:  Scott Reeves, a Personal Finance Editor at Forbes.com


Investing In Your 40s

You're Not Immortal
That sound you hear is time whistling in your ears. Ahead are the first foothills of middle age, not to mention a double chin, thinning hair and teenage kids who drive you nuts. But relax, Old Timer, because there's still time for aggressive investments in your retirement portfolio.

Up The Allocation
By now, you're established in your career and should consider setting aside 15% or 20% of your salary for retirement. You're also an experienced investor and can make wise decisions with the help of your financial advisor. Set up a meeting. It's time to get serious.

Pencil It Out
How do you want to spend your retirement? What will it cost? Crank up the spreadsheets and match your projected retirement income with estimated expenses. This is a good reality check. There's still plenty of time to make needed adjustments.

Trappings Of Success
Yeah, yeah--a BMW, Lexus or Mercedes is nifty. But remember that the life cycle of a car involves boobs backing into it in parking lots, crazies crunching it in traffic and birds bombing it. Moral: Don't let the trappings of success smother your retirement plans.

Update Plans
The numbers in the early draft of your retirement plan may have been yanked out of the air. You've now got years of experience to draw on. Update the plan and make needed adjustments.

Review Performance
Sit down with your adviser and review the performance of your investments. What did you do right? Wrong? What could you do better? Differently?

You Haven't Started?
Duh! If you haven't started planning for retirement, remember that it won't get any easier with age. If you're just starting, consider setting aside as much as possible. Talk to a financial adviser about where to put your money--don't exceed your risk tolerance.


#68 longvestor

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Posted 26 January 2006 - 05:53 PM

Investing In Your 50s


Switch On The Turbocharger

If the calendar doesn't focus the mind, your eyes aren't open. If you haven't started saving and investing for retirement, it's time to get busy. You probably won't be able to retire at 65, but with careful planning and shrewd investments, you can call it a career in your 70s.

Check The Actuarial Tables

The average life span is increasing. What was a sufficient retirement plan in the past may not cover the additional years many are expected to live in the future. This means setting aside more money now.

Be Realistic

A late start limits your options. Focus on what can be done. Be realistic. Don't expect too much. If you've been investing for years, check your portfolio and think what you can do with what you've set aside.

Get An Adviser

If you're late to the game, meet with an adviser ASAP who specializes in retirement planning. Don't panic. Make a plan. Set aside as much money as possible. If you don't develop a plan and stick to it, you'll have to develop a taste for dog food and ketchup in retirement.

Stay The Course

If you've been investing for years, review your plan and make needed adjustments. Now may be the time to start moving into less risky investments such as bonds and maybe some real estate. The closer you come to retirement, the more conservative your investments should become.

Redefine Your Needs

Some say you should have at least 70% of your income in retirement. Sounds reasonable, if you can live comfortably on 30% less. If you can't or simply don't want to cut way back, get busy on rustling up additional money for retirement.

The Non-Traditionalist

Retirement is changing. It's no longer just a matter of moving to warmer climes to play golf. Many people are doing consulting or part-time work. The extra income and additional years in retirement may alter your plans. This is an opportunity. Check it out.

Source: Forbes.com

#69 longvestor

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Posted 26 January 2006 - 10:07 PM

Reinventing Retirement


Retirement: From Disorientation to Empowerment

by Ken Dychtwald, Ph.D.
Thursday, January 26, 2006

Bolded excerpts mine:

Most retirement-oriented studies focus exclusively on money, but that big life transition is also a psychological and emotional journey. Comprehensively mapping this mental passage and the stages retirees go through is the Ameriprise New Retirement Mindscape study, which my company, Age Wave, conducted for Ameriprise Financial. Examining the most complex stage, which occurs 2 to 15 years after retirement, and the varied experiences it encompasses reveals plenty about how to better prepare for the golden years, emotionally as well as financially.


We discovered five distinct mental stages of retirement (please see "Mapping Retirement's Mindscape")


Imagination (approximately 15 to 6 years before retirement)

Anticipation (approximately 5 years before retirement)

Liberation (beginning at retirement day and lasting for about one year)

Reorientation (approximately 2 to 15 years after retirement)

Reconciliation (on average, 15+ years following retirement day)

Complex Reorientation

Some of the most interesting and complex results came from the Liberation and Reorientation stages.


For instance, we were surprised to find out that the Liberation stage, while the most positive, was also the shortest. Thousands of articles and books may tout the joys and pleasures of retirement living, but unfortunately the reality doesn't quite live up to the fantasy for most.


This came into sharper focus when we drilled down into the Reorientation stage. This turned out to be the most complex and interesting phase of retirement: After the honeymoon phase of Liberation ends, it appears that people discover retirement is often more challenging or just different from what they expected.


Priorities, activities, relationships, and lives shift dramatically during the Reorientation period, the study revealed. Health and financial anxieties weigh more heavily as retirees worry about how they will be able to handle a health crisis. Nearly everyone worries that they haven't saved enough. And large numbers of people complain of depression, frustration, and just plain boredom.


But within this phase are a wide range of experiences. In fact, as the study showed, they run the gamut -- from the "Empowered Reinventors" and "Carefree Contents" to the "Uncertain Searchers" and "Worried Strugglers."


Empowered Reinventors


"Empowered Reinventors" (19 percent of respondents) are the most likely to say they feel adventurous and empowered. They have done more planning and preparation than most others for traveling, spending time with their families, volunteering, and ensuring a healthy lifestyle. Three-quarters of them are either working or intend to reenter the workforce, possibly in a new job or career. They're the most likely to say that doing more meaningful or satisfying work is very important to them and that they don't really want a life of pure leisure.


In addition, engaging in hobbies, traveling, and enjoying their newfound freedom from the daily grind are all high priorities. For them, reorientation is a chance to engage in some personal reinvention -- a prospect they're excited about pursuing.



Carefree Contents


Also reorienting successfully to this new life stage are "Carefree Contents" (19 percent). Almost all of this group told us that they find this is a time of great optimism and satisfaction, but, unlike the Empowered Reinventors, they're not that interested in pursuing new challenges or adventures.


Instead, these folks are perfectly content adjusting to a less frantic lifestyle without the stresses of work and multiple responsibilities. Few say continuing their education, doing meaningful or satisfying work, or pursuing hobbies is very important to them. In addition, more than 80 percent indicate that they'd be happy to never work or experience a pressured life again. For this group, reorientation is essentially about shifting their life focus from work to leisure.


Uncertain Searchers


The "Uncertain Searchers" (22 percent) do not share such undaunted optimism. Instead, they're still trying to figure out what to make of this time in their lives. They report mixed feelings about this stage -- neither very positive nor very negative. In a sense, they reflect a sense of disorientation more than reorientation: Having given very little forethought to how they wanted to spend their retirement, they're still trying to discover the goals and activities that will now give them purpose, meaning, and fulfillment. For example, only 18 percent have made plans to pursue their hobbies in retirement, compared to 41 percent of Empowered Reinventors.


They're also somewhat less likely to say they're "on track" financially, compared to the other groups in the Reorientation stage. This may be attributed to their lower level of pre-retirement preparation. Only around a third had crafted a financial plan and, in general, 36 percent have determined the amount of money they need for retirement. Most feel kind of rudderless and lost in their retirement years.


Worried Strugglers


Unfortunately, the "Worried Strugglers" were the largest segment of Reorientors (40 percent). They're having the most difficult time in this stage. They're more likely to admit being worried, bored, or sad, have very few aspirations, and feel a sense of emptiness resulting from the absence of work and social connections.


Less than a third say they're enjoying their retirement. The overall majority are simply unhappy being retired. Lack of planning and preparation likely played a role here: Of all the groups, they're the most likely to say they gave little thought to what they wanted to do in their retirement years.


In many ways, Empowered Reinventors are the poster men and women for the Baby Boomers' dream version of retirement. Boomers, who began turning 60 from the start of 2006, have typically redefined every life stage they pass through, and it's likely that the golden years will be no different. For Empowered Reinventors, this stage of life is a fantastic time of adventure, new challenges, and fulfillment. My hunch is that this style of personal reinvention will become the most popular version of retirement to which Boomers will aspire.


However, this study showed that a fulfilling retirement doesn't happen by accident. Empowered Reinventors were far more likely than any other segment to have:


Crafted a new dream or vision for their lives after retirement.

Remained active and engaged as retirees.

Started their financial planning early in their lives.

Utilized professional help from a skilled financial planner.

Envision Your Dreams



The study made it clearer than ever that a satisfying and empowering retirement depends, in part, on planning, preparation, and a clear vision for what retirement can potentially mean.



Source: Yahoo.finance


Wifey and I might be right between imagination and anticipation.

#70 tonyboy

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Posted 28 January 2006 - 04:45 AM

am imagining... anticipating.. liberation.....:lol:

#71 Pexxerdoc

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Posted 28 January 2006 - 05:04 AM

Very informative as usual, snop!

:D

#72 longvestor

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Posted 19 March 2006 - 07:36 PM

Very informative as usual, snop!

:D


Thanks! ;)


Updating Reinventing Retirement
by Ken Dychtwald, Ph.D.

The Four Faces of Retirement
by Ken Dychtwald, Ph.D.

What does it mean to retire?

Red and blue color-bolded excerpts mine:

Webster's dictionary lists some foreboding terms when defining the word. To retire means to "withdraw," "disappear," "wind down," or "stop." And that used to be the norm: Put in 40 years at a company, then say goodbye to work for good at the age of 65 in exchange for a gold watch and, hopefully, a comfortable pension. Then? Just relax. Above all, don't push yourself. You're no spring chicken anymore.

So it sounds a little boring. But isn't that what retirement is all about?

Not anymore.

Roger, age 67, former president of his family's large business, chose to retire at 65 not because he was tired, but because he wasn't. In fact, he was raring to go to the beach house, where in just a couple of years he renovated the entire house, took up sailing, actively pursued his second career as a painter (represented by a gallery, no less), took care of grandchildren, and visited old friends all over the world.

His wife Carol, on the other hand, has no intention of retiring -- yet.

"If I can think of something I'd rather do than work," she says, "then I'll retire."

Retirement today is becoming anything but boring. Those on the verge of retirement face an unpredictable, exciting path. It's a longer path as well: The average retiree has between 18 and 20 years of life ahead. That's quite an increase from retirement's duration in 1900, an average of 1.2 years.

Several years ago, I oversaw a massive survey of more than 1,000 retirees to explore how they were doing and whether retirement was all it was cracked up to be. What we found is that there are actually four different models of retirement, ranging from exhilarating to downright miserable.

Take a closer look at these four versions of retirement. Which one do you think you're headed for? More importantly, where would you like to wind up? Have you charted a course to your desired retirement lifestyle?

1. The Comfortably Content

The Comfortably Content, 19 percent of retirees surveyed, are the closest to our parents' generation in terms of how they view retirement. For them, it's an extended vacation, full of chances to travel, relax, and enjoy. They have no interest in working. They've already done that, thank you. In fact, they are less willing than other segments to risk feeling stressed in retirement. Contribute to society? They are the least likely group of retirees to feel the need to do so. But this group is also the most likely of all retirees to say they are perfectly happy as they reap the benefits of good health and good financial planning, living a "golden years" lifestyle that values the good life above all.

The comfortably content may move to a new part of the country, take the vacation of a lifetime, or participate in recreational activities such as tennis or golf. But they are also happy to stay put, enjoying the fruits of their labor. Having enough money means they can spend freely on the leisure activities of their retirement and, most importantly, relax. To achieve this, they saved for an average of 23 years -- the second-longest of the four retiree segments. And they are often very satisfied with the planning they've done, as well as with retirement itself.

2. The Ageless Explorers

The Ageless Explorers, 27 percent of retirees surveyed, personify a new ideal for retirement. Not satisfied with the traditional norm, they strive to stay active, engaged, and independent. They would sooner be too busy than bored. In good health, they want to live life to the fullest, participating in numerous recreational, leisure, and personal growth activities. They desire fun, security, personal freedom, and flexibility. They are driven to explore and tap into their human potential. They are also the least likely to say people should live primarily for themselves and the most likely to say people should contribute to society.

Ageless Explorers have the resources to achieve their goals. They are well educated and well prepared, have earned and invested significant amounts of money, received investment advice, and developed an overall investment strategy for financial independence. They started saving 24 years before retirement -- the longest of any segment -- and have the highest net worth. Asked what they would change about their retirement, their most likely answer is "nothing."

Even though they saved for 24 years, they are the least likely to say they would stop working. And though highly educated, they still want to learn.


3. The Live for Todays

The Live for Todays, 22 percent of retirees surveyed, aspire to many of the same new retirement ideals laid out by the Ageless Explorers. They dream of having time to do the things they haven't had time for earlier in life, including spending time on hobbies, traveling, and community affairs. Live for Todays also view themselves as adventurous and exciting. They view retirement as an opportunity for a whole new life and possibly a transformation.

But the Live for Todays are burdened with enormous worry and regret. They did not adequately save, invest, plan, or prepare for their retirement. This group appears to have been so focused on the "here and now" during their working years that they did not build a sufficient financial base for their retirement years. They are not nearly as financially well-off as either the Ageless Explorers or the Comfortably Contents and wish they could change how they prepared. But they are overwhelmed by the information about retirement planning available to them. They are anxious they will outlive their finances and are worried about healthcare costs. Because of their regrets and financial anxieties, for them retirement is a less-than-happy lifestage.

4. The Sick and Tireds

The Sick and Tireds, 32 percent of retirees surveyed, are living the worst possible scenario for retirement. Less educated, with fewer financial resources than the others, a significant portion are also likely to be widowed and in poor health. Retirement, for them, is just a period of winding down and trying to hang on. More than any other retiree segment, they are inclined to maintain the conviction that strong religious beliefs are the key to living a long life.

This group has taken few steps to prepare or save for retirement, much less develop an overall financial strategy. Their anxieties about meeting their financial needs weigh heavily on them. Whether they arrived at this meager retirement by not planning, investing, or saving or by getting waylaid by an unexpected tragedy -- such as the death of a spouse or a long illness -- they are in a very difficult place with little hope of getting out of it. Sadly, as they move past their years of good health and employment, they can do little to improve their situation. For the Sick and Tireds, retirement is a truly unhappy stage of life.

To Protect Your Picture of Retirement

One of the more interesting insights from this highly acclaimed study was that the highest correlating variable to happiness in retirement was not wealth. It was planning. Those people who had taken the time to dream up their future and then taken steps (usually with the help of a financial advisor) to put the right financing in place, were having the best time in their later years -- by far.

What will retirement look like as baby boomers begin to retire? I expect that the Four Types will persist even as a new generation enters its retirement years. But the size and importance of each will change significantly. The old-fashioned Comfortably Contents will appeal less to future generations. The Ageless Explorers will step up and take center stage: Dynamic, productive, remarkable retirees will emerge in the media, in the workplace, and in your community, surprising the world with their creativity, productivity, and energy.

But a caution: Anyone -- even an Ageless Explorer or a Comfortably Content -- can fall on hard times due to unforeseen financial or life tragedies. To secure a safe retirement takes a thorough financial plan, which may include more savings, more complete health coverage, and additional protection such as long-term care insurance. It also includes cleaning up debt with less reliance on credit.

Unfortunately, while everyone says they want a retirement filled with fun and security, many boomers, to their dismay, will find they have been heading down the wrong path. They embarked on this course years ago, by living on credit cards, cashing out retirement accounts, and putting away little savings. As a result, they are destined for a "Live for Today" retirement of anxiety and uncertainty. And if hit by an unexpected illness, devastating loss of spouse, or other life tragedy, they could easily become a Sick and Tired -- that worst of all possible scenarios. Unfortunately, I worry that this segment will grow.

Your retirement future is up to you and your financial advisor, who will certainly play a vital role. Adhering to smartly designed life goals and making sure that your strategy is in place is crucial. So, set your sights, chart your course, and take all the steps necessary to fund your dreams.


We should all strive to get to number 2. The road map is there. Let all of us have a nice, safe and happy trip! :) :bye:

Source: Finance.Yahoo

#73 Pexxerdoc

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Posted 20 March 2006 - 04:34 AM

Why not aim for number 1 i.e., comfortably contented? :D

#74 mikemuin

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Posted 20 March 2006 - 11:26 AM

Both 1 and 2 saved an average of 23-24 years. Only the activities during retirement differed. If I plan to retire by 65, I should start saving by 40, but the earlier the better, I guess.

#75 tortuga

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Posted 20 March 2006 - 12:58 PM

I also started late in my savings (late 30's). However, I can't even think of retiring as I enjoy my current job a lot. I plan to work as long as I can and maybe just work part time when my mortgage is fully paid. However, this attitude might change if I go back to the State (more stressful) and might slow down earlier than planned.

#76 crocodiledundoc

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Posted 20 March 2006 - 10:34 PM

It sounds morbid, but the real secret to retirement is not to live too long. Most reasonably successful professional people can support themselves from accumulated savings and investments until around 75. The problem is - with modern medicine and treatements etc. - what 75 was in our parents' time is now 85. Routinely, people live into the 85 - 95 bracket, and those last years are very costly because of medical costs.

Make way for the younger ones! Die on time! Work part-time until the end and die in harness, that's the best way, from a financial point of view.

#77 crocodiledundoc

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Posted 21 March 2006 - 01:56 AM

Here's an article that went a bit over my head :o :

How to discourage savings

Today, the Philippines has one of the lowest savings rates in the region. Part of the reason is that our government has not been actively supporting savings programs and, as with many initiatives in the past, it has shown inconsistency in the implementation of established policies on savings.


Are Filipinos really not prone to savings? :unsure:



Oh, a subject dear to my heart. The average household in the Philippines saves less than 10% of the combined income of the husband and wife.

The average household in Japan, Indian, Korea, China, and just about everywhere in Asia saves OVER 30%.

The Philippines is a CONSUMPTION ECONOMY. We do not save; we have parties, barrio fiestas, a poor salesgirl in SM will spend her last peso on cosmetics/cellphone cards etc. THE PHILIPPINES IS NOT PART OF ASIA - IT IS PART OF LATIN AMERICA. Our savings rates, social structure, religion, many factors about our country are Hispanic, not Asian.

Japan was wiped out after World War II - two atomic bombs pa on their cities. They SAVED tremendously, and used those savings to rebuild their country. We never did.

Very sad. No money, no honey. We just have to save more and invest savings into building up our country. But we never will. This is of course related to the high rate of population growth - how can a poor family with 5-8 children save anything? CONTINUOUS, UNREMITTING DISASTER until very basic values change, IF EVER.

#78 tonyboy

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Posted 21 March 2006 - 01:39 PM


Here's an article that went a bit over my head :o :

How to discourage savings

Today, the Philippines has one of the lowest savings rates in the region. Part of the reason is that our government has not been actively supporting savings programs and, as with many initiatives in the past, it has shown inconsistency in the implementation of established policies on savings.


Are Filipinos really not prone to savings? :unsure:



Oh, a subject dear to my heart. The average household in the Philippines saves less than 10% of the combined income of the husband and wife.

The average household in Japan, Indian, Korea, China, and just about everywhere in Asia saves OVER 30%.

The Philippines is a CONSUMPTION ECONOMY. We do not save; we have parties, barrio fiestas, a poor salesgirl in SM will spend her last peso on cosmetics/cellphone cards etc. THE PHILIPPINES IS NOT PART OF ASIA - IT IS PART OF LATIN AMERICA. Our savings rates, social structure, religion, many factors about our country are Hispanic, not Asian.

Japan was wiped out after World War II - two atomic bombs pa on their cities. They SAVED tremendously, and used those savings to rebuild their country. We never did.

Very sad. No money, no honey. We just have to save more and invest savings into building up our country. But we never will. This is of course related to the high rate of population growth - how can a poor family with 5-8 children save anything? CONTINUOUS, UNREMITTING DISASTER until very basic values change, IF EVER.


you paint a very depressing picture, prof. but you're right..my own relatives don't seem to get it..control the number of children...get a grip on personal finance.

it seems that their sexual needs..instant gratification.. are more paramount. :crazy:

#79 journey

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Posted 22 March 2006 - 06:40 AM

What are the short and long term effects on the Philippine economy crocodiledundoc, if Filipinos do not learn to save more?

#80 longvestor

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Posted 22 March 2006 - 07:05 PM

Why not aim for number 1 i.e., comfortably contented? :D


You're right. I was thinking about my own personal realistic goals. I wouldn't mind at all being comfortably content.

#81 crocodiledundoc

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Posted 23 March 2006 - 08:41 AM

What are the short and long term effects on the Philippine economy crocodiledundoc, if Filipinos do not learn to save more?


Insufficient savings in our economy means that borrowers- both the RP government borrowing via T-bills and other gov't. instruments, and private companies - must offer a lot of interest to suck in the limited amount of savings (high demand for these savings, low supply of savings).

GDP is INVERSELY proportional to the level of interest rates. Higher interest rates than necessary because of the above paragraph means lower GDP than otherwise would be possible for the Philippines. The RP cannot make a dent in its poverty without a higher GDP : GDP should be at least 7% for several years. Won't happen. So poverty is here to stay in the RP.

Higher interest rates are also bad for the stockmarket.

Local savings are not enough to fund requirements, so a lot of foreign borrowings must be resorted to. No significant reduction in the RP's foreign debt is forseeable.

The peso has been relatively strong in recent months , but the fact is it would be stronger if Pinoys didn't CONSUME so many Pringles potato chips and all sorts of imported things (We are a CONSUMPTION economy.) Some imported things we really need - many types of medicines for instance must be sourced from abroad - but there are a lot of things we import because we just like junk food/luxuries/gas-guzzling SUVs etc.

There are many other bad effects of our not saving enough.

Americans don't save enough either. The Chinese and Japanese and other foreigners recycle the dollars they earn by exporting to the US by investing in US government securities. If those foreigners didn't, interest rates in the US would go up, with many resulting bad effects, including putting more strain on the the US housing bubble, and maybe bursting it.

#82 journey

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Posted 24 March 2006 - 04:47 AM

Many thanks for the comprehensive explanation. :)

#83 longvestor

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Posted 27 March 2006 - 07:40 PM

What are the short and long term effects on the Philippine economy crocodiledundoc, if Filipinos do not learn to save more?


Hi journey!

There's a thread here somewhere and in PEx (presently down) that discussed terrible short and long term macro-effects on the Philippine economy.

On the micro-side of it was the tragic case of a PMD who became a notorious kdinapper. :( Most probably, he wasn't advised by his wiser senior PMDs to save and on top of that, he must also have lived way above his means.

My two centavos!

#84 tortuga

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Posted 28 March 2006 - 02:30 PM

Here is another article by Jim Jubak. It's about the United States but we have the same predicament as we are the only CONSUMER nation in Asia. The same problem will haunt us.

5 ways to face our nation's Wimpy mentality by Posted Image

Like the cartoon character who offers to pay tomorrow for the burger he wants today, our nation is addicted to borrowing -- despite the painful consequences.

When it comes to paying our bills, the United States is a nation of Wimpys.

That's not "wimps," mind you, but "Wimpys." Wimpy, for all of you who have less gray hair (or just more hair) than I do, or who spent fewer hours in front of a TV when you were a kid, is Popeye's perennially mooching friend. He was famous for his plea, "I'd gladly pay you Tuesday for a hamburger today."
Which is why the big debts that we're running up to pay for today's consumption -- ranging from the federal budget deficit to the current-account deficit -- worry me so much. In my last column, "The trade deficit's deep bite," I argued that the record $805 billion current-account deficit that the United States ran up in 2005 was even worse than it sounded.

That's because:

  • · The long-term trends, if left unchallenged by our politicians, would make the problem bigger year by year.
  • · There's very little chance that our political leaders will tackle any of our debt problems -- from the federal budget to the current account deficit -- until the handwriting on the wall is written in letters of fire six feet tall.
In this column I'm going to take a look at the way that these deferred bills are putting the squeeze on all our futures and what you and I can do about it as investors and individuals.

The global tease

In my column on the growing current-account deficit, I estimated that the period between 2010 and 2030 will see overseas investors gradually present their IOUs for payment. Right now, the world is awash in excess capital, largely the result of mind-boggling savings rates in Asia. That makes it easy for the United States to fund its twin deficits by selling bonds, equities and assets to overseas investors. And borrowing this money is cheap. A 10-year U.S. Treasury bond yields just under 4.7% right now. That's near 20-year lows for yields, which averaged 6.4% from 1986 through 2005. You've heard of teaser rates, the ultra low interest rates that mortgage lenders use to entice you into buying a new house or borrowing on the equity you've built up in your old one. Well, that's exactly what this low 4.7% rate -- just 1.1% after inflation -- is. It's a teaser rate being offered by global investors to U.S. consumers and taxpayers. And it has the same problem as any teaser rate. The low initial rates encourage massive borrowing because the monthly payments at the teaser rate are so low. Once that teaser rate expires, however, those monthly payments skyrocket and may indeed turn out to be more than the borrower can afford.

Why should the global teaser rate go up for the United States? Two reasons.
  • · Overseas investorsa re going to need their own money back to pay for their own old age. Japan is the biggest holder of U.S. Treasurys, and, demographically, it is the oldest country in the developed world. Europe isn't far behind. The U.S. is aging, too, but at a comparatively slower rate. The real demographic story, however, is taking place in China and India. By 2020, the median age of China's huge population will be higher than that of the United States. India is further behind, but by 2050, the median age of its population will be 37.9 years, making the country as old as the United States is today. China and India are both going to get old before they get rich. Because of global demographics, we're looking at a world in transition from a period of surplus capital to a world of tight capital as aging populations go from savers to consumers of savings. Tighter capital means higher interest rates.
  • Overseas investors may lose faith in our intention to pay our debts. Sovereign nations saddled with too much debt have an option that's not available to the overstretched homeowner. Instead of declaring bankruptcy, they can just roll the printing presses and create money in order to inflate their way out of the debts. But overseas investors aren't likely to sit still as the value of the dollars they hold and the dollars they receive in interest are slashed as the presses roll. As countries such as Argentina have learned, once investors have decided that the government has lost all discipline, they will demand punitive interest rates. Short-term interest rates broke 100% in Argentina in 2002, for example. Once a country has forfeited the faith of the markets, it takes a long time to earn it back. In Brazil, now lauded for its fiscal responsibility, the equivalent of the U.S. federal funds rate was above 16% in December.
Stealing from the future

Look at a recent bit of budget sleight of hand in Washington and see how much confidence you'd feel if you were a lender to the United States. The Bush administration and the Republicans want to extend the tax cut on dividends and capital-gains investment that will otherwise expire at the end of 2008. Whether you think this is a good idea or not, you'll have to agree that it's expensive. The cost of the two-year extension proposed by the House of Representatives is $51 billion, according to the Center on Budget and Policy Priorities. That's a hard sell when, even by the government's accounting, the budget deficit is set to swell to $423 billion in fiscal 2006, a new record in dollar terms.

But Congress knows how to fix the problem. It's called, "Shove it into what are called the 'out' years." Those are the years beyond the five-year period covered by the government's budget projections. So here's one idea currently in discussion between House and Senate committees: The extension of the dividend and capital-gains tax cut would be paid for by a measure to allow individuals to convert their current retirement accounts, which require you to pay taxes when you withdraw the money, into new retirement accounts that offer tax-free withdrawals. Investors would have to pay taxes at the time of the conversion, which would produce a huge short-term boost to tax revenues. Of course, the government would lose all those future taxes on the withdrawals. And that just adds to a huge future deficit in the years when baby boomers start to retire, when spending on health care and Social Security are set to soar.

The politicians who created these problems will be long gone by the time the digestive waste product hits the rotating ventilation enhancer. But we're going to get stuck with the bill -- for the federal budget deficit that's being piled up in the out years, for the trade and current account deficits, and for the consumer debt that's powering the consumer-spending boom.

A 5-step plan

So what do we do about it? I promised some suggestions in my last column and here they are.
  • · Since you can't trust their accounting, do your own and be brutally honest. You've probably got some plan for retirement, but do you have a plan to pay for health care after you retire? Fidelity Investments does an annual calculation of how much a couple without employer-sponsored health care should set aside to pay for health-care costs after 65. This year, the recommended health-care nest egg hit $200,000, up 5.3% from last year and up from $160,000 in 2002, when Fidelity started its surveys.
  • · Save, save and save some more. It won't do the trick alone, but, without capital, you're at a huge disadvantage in a capitalist society. Right now, you should be saving for retirement, and for health care in retirement, and for the kids' college education -- and for a rainy day, too. There's no way you can do all of that without some pain, so grit your teeth and think of saving like exercise. You may not enjoy it, but your future will be a whole lot brighter if you do it every day.
  • · Invest what you've saved as intelligently as you can. Every dollar you receive from your investments is a dollar that you don't have to save or earn at your job. I'd divide my portfolio in half. Use half as a core that -- either through individual stocks or mutual funds (or ETFs) -- puts you on the side of identifiable long-term trends.
If the world is aging, buy health-care stocks that will take advantage of that trend -- take a look at the product pipeline at Sanofi-Aventis (SNY, news, msgs), for example, or buy dialysis-center owner and operator DaVita (DVA, news, msgs) on the next dip. Think the dollar is headed lower over the long term? Think stocks in countries such as Australia and Canada with lots of hard-asset exports backing their currencies. In Australia, BHP Billiton (BHP, news, msgs) is well stocked with projects that will bear fruit in the rest of this decade. In Canada, look at Encana (ECA, news, msgs) a natural-gas producer that has traded international assets for reserves closer to home. Think younger (populations) are better, at least for a while? Look at Brazil's iron-ore giant Companhia Vale do Rio Doce (RIO, news, msgs) or Vedanta Resources (VDNRF, news, msgs), a zinc-and-copper producer with major mines in India. And look for shares of companies that are working, for a good profit, to solve the problems looming ahead. A solar-systems wholesaler such as Conergy (CEYHF, news, msgs), for example. Or an insurer such as American International Group (AIG, news, msgs) with a big presence in the exploding market for insurance in Asia.
·

Put the other 50% into shorter-term opportunities that are likely to be created by the volatility of the years ahead.
  • · Pay up for education. Whether it's for yourself or your kids, it's the single factor likely to make the most difference in the years ahead. Wage growth stagnated last year, with real wages -- that's wages after inflation -- actually falling from the fourth quarter of 2004 to the fourth quarter of 2005 by 0.8%. If that's the beginning -- or, some would argue, the continuation -- of a trend, then the only way to fight back is by constantly upgrading your skills. And our children are now competing in a global economy where the best jobs are increasingly likely to go to the best educated -- no matter where they live -- and where the only way to justify higher pay is by higher competence or productivity.
  • · Throw the bums out. I'm not here to preach to you about how to define a bum, but it's clear that we aren't getting the foresight and leadership we need out of our political leaders of either party. So why put up with them? Do more than vote -- that's a minimum. Give money, organize, stand on the table and yell, whatever. Force them to pay attention.
Otherwise, we'll deserve the politicians we get.


Source: MSN Money Central

Edited for better reading.

#85 tortuga

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Posted 29 March 2006 - 12:36 PM

Here is an example of how people's savings and proper investments can make the country prosperous. Alas, Vietnam will overtake us.

Lessons from Vietnam
First posted 06:15am (Mla time) Mar 21, 2006
INQ7.net

I WOULD just like to share this with your readers. I hope it inspires them to learn how to be optimistic.

This is a part of my story: When I first arrived in Hanoi in the autumn of 1995, people rode bicycles to work -- there were very few motorbikes. City folk wore almost identical clothes, and walked or biked home for lunch. They made do with what is available. A cup of coffee, which then was about seven pesos a cup, was considered a luxury. People did their own repairs, or asked friends who knew to do it for them -- sometimes for free, but always for a future favor in exchange. The meals, like the clothes, and the accommodations and almost everything else, were modest and sometimes substandard, yet they seemed surprisingly sufficient.

People worked the days and sometimes complained under their breaths, but they kept working, fully knowing that this situation was temporary. Hope was in the air. And they knew that their country had great wealth and was ready to provide for them-- all they needed was the know-how and the means -- and the time. The leadership would see to that, they were assured.

Now there are plenty of fancy scooters, the cheapest of which cost about 1,500 US dollars, and more cars. Just a few weeks ago, I spotted a Jaguar. On the streets there are more and more SUVs (Lexus, Infiniti, etc.) Mercedes-Benzes -- the noveau riche are beginning to flaunt their newfound wealth.

Down the alley where I live, a family of four, who had lived in a box of a home measuring two by four meters, has just built a new four-story home on that same space. This they did from income earned by selling meals and noodle soup on the alley outside. And real estate prices are no joke. That property alone would easily have cost them 15,000 dollars or even more. And they have a new motorcycle, a locally assembled 125cc Honda Dream, which costs around 1,900 dollars.

It's hard for me to imagine how all of that could come from their livelihood of selling noodles, because a bowl of noodle costs about 3,000 Vietnamese dongs (or about 10 Philippine pesos).

People were never ashamed to say they are poor -- poor in the sense that they didn't have the luxury that the Singaporeans or the British or my Filipino compatriots enjoy, poor in the sense that they could not afford an Italian meal, poor in the sense that they did not have enough money to put in the bank (they did not trust them, anyway), poor in the sense that they had to wear four layers of clothing to stay warm in the winter, poor in the sense that they had to work very, very hard to survive, and poor in the sense that they had to endure taking a bath in an open-air bathroom in 10-degree weather.

But that didn't stop them. Yes, they did blame this and that, but they knew the limitations, so they worked around those limitations, as they always had. Soon poverty became a "marketing" strategy to draw in much needed funds.

And there is education. Parents would sacrifice everything to send their kids to school. And the kids work very hard, studying in crammed schools at night from Mondays through to Saturday and even Sunday. They'd skip the toys and the games and the things that kids should be doing. To what end? To pass the exams to get to high school or university, or even compete for a scholarship abroad.

These "schools" are usually in somebody's home, like the one across the street from mine. The owners of that old house have converted and rented out their living room into a classroom where grade school kids attend classes. In the cold winter days when temperatures could sometimes drop to six degrees, I can see the kids, through the open window, wrapped in their warm clothes huddling together in the dimly lit room while trying to solve a mathematical problem. The scene is repeated in the summer, and throughout much of the year. This they live through without central heating or air-conditioning.

Tomorrow night, and for four more nights in the next couple of weeks, I will be making trips to my art teacher's house to tutor their 13-year old daughter. She is applying for a scholarship to the Raffles School in Singapore, and the English language exam is at the end of this month. Her parents have asked me for a second time to help out. You see, I tutored their eldest daughter who had passed a similar exam. She is now in Singapore finishing her high school studies. She had just been offered two scholarships: one for the US and the other for the National University of Singapore.

Even with these, her parents, who taught me lacquer painting, need to save money because the school's allowances are not enough. They need to send at least 2,000 dollars a year. When their eldest daughter steps into university, they will need to send more, about 20,000 dollars a year. Their daughter intends to study architecture. This younger one that I will be tutoring intends to take up Linguistics. She studies at least 10 hours a day!

Tonight, my art teacher, in exchange for my tutorials, will introduce me to his friend, a teacher of Industrial Design at the Hanoi Industrial Arts College, who will explain his proposed program of study for me.

Now sitting here, looking at my students silently reading the texts that I had given them, I can't help but feel so grateful, for I have come to teach. But now, after having lived here for more than 10 years, I realize I am the one who has been taught!

It is a sublime lesson -- and a very humbling one. As I wrap up my work because I will be heading home, back to the Philippines, by the end of this year when my contract expires, I feel the lessons are all there for any visitor to see: The Cu Chi tunnels, the Ho Chi Minh trail, the monuments to victory over powerful conquerors -- these and more are all testaments to a culture that sacrificed everything to accomplish a common goal.

Patience, hard work, frugality, persistence, modesty, a desire for harmony, ambition, and above all, a fiery sense of national pride: values so clear and strong.

I ask myself: Will I find the same when I go home? It's something to think about and maybe pass on.
This weekend, please say a prayer and thank God for all our blessings. Above all, please ask God to help us to always see and appreciate those blessings. Then let's move on.

With my prayers for a blissful weekend and a grateful and joy-filled life.


RAMONCITO MANDIA, The Australian Development Scholarships Project/ MDI-AusAID, IPO Box 321, Hanoi, Vietnam (via e-mail)

Edited for easier reading. Nice post, tortoogs, thanks! Color bolded emphasis mine.
LV

#86 mikemuin

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Posted 26 May 2006 - 02:54 PM

From PCIJ Blog: What money-saving Pinoys will give up most easily

Excerpt:

Against a global average of 48 percent, close to two-thirds or 61 percent of Filipinos would delay upgrading their technology if the going got tough. Filipinos were also found to be most likely to cut down on energy sources, with 69 percent of respondents saying that would be on top of their list of cutbacks.

Globally, 57 percent of the respondents said they would cut back on home entertainment; 53 percent would forgo buying new clothes; and 48 percent would delay an upgrade of personal technology.

“When the cost of living is rising faster than salaries can keep pace with,” says AC Nielsen’s report, “the world’s consumers are fairly unanimous about what they’d cut back on to avoid blowing their budget.”

Thus, the survey found, consumers will opt for staying home to entertain themselves, or making do with their old clothes and old mobile phones, skipping annual family vacations, or turning out the lights for longer periods of time to save on electricity bills.


I may be in Medical Informatics, but I don't upgrade or buy technology as easily as some. I don't have a personal laptop. I had a T-68i phone and a Tungsten T before I left, none of them has been replaced yet. I assembled my own computer combining old parts with new ones.

If I needed to budget, first thing that goes for me are the 'small luxuries'--Starbucks or Figaro coffee, eating out, movies, etc. I would believe that's the same for many Filipinos. The report on technology and energy first seems a bit erroneous. Maybe the 'small luxuries' were not part of the survey, hence the results.

#87 lakaydelfin

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Posted 07 July 2007 - 12:47 AM

MEDICAL FILES
Docs deserve good retirement


By Rafael Castillo, MD
Inquirer
Last updated 05:28am (Mla time) 07/07/2007


MANILA, Philippines -- Practicing doctors put in more hours in their work than those who have an 8 to 5 job. And talk about irregular hours, it comes with the medical profession, with doctors having to wake up in the middle of the night to attend to an emergency, or interrupt one’s dinner with the family to answer an urgent call from the emergency room.

Many doctors I know especially those who have small hospitals in the provinces work 24/7 and hardly take any vacation. It’s not so much that they’re in a no-work, no-pay or no-work, no-business predicament, but more because of their dedication to their patients.

Totally unprepared

It may be generally true that doctors make good money in exchange for all the hard and stressful work they do. They have no problems with finances while they’re still strong and able, but frequently, we have doctors caught totally unprepared for an emergency, and sometimes face their retirement with uncertainty whether or not their modest savings can still sustain them and maintain inflation-adjusted living standards after their retirement.

What’s even more unfortunate is when doctors fall victims to investment scams because of their poor knowledge in managing their finances and investments. Instead of increasing their hard-earned savings, they see their total net worth gradually depleted as they age.

“This is something which we didn’t learn in medical school or during training,” says Dr. Nelson Abelardo, immediate past president of the Philippine Society of Hypertension. “Many doctors realize too late that they should have prepared for their retirement by making sure they had enough savings and investments to make them financially independent up to their twilight years.”

How to retire in style

The PSH, in collaboration with Therapharma Inc., is organizing another whole-day seminar workshop for doctors and other healthcare professionals titled Evidence-based “Secrets” to Financial Abundance (… and how to retire in style). This will be held at the Crowne Plaza on July 21.

Noted professors on financial management from the Asian Institute of Management have been invited to share with the participating doctors practical pointers on the following topics: Establishing Your Financial Goals, Growing your Net Worth, Identifying Financial Opportunities, The Power of Compound Interest, Preparing for Retirement: Computing the Nuts and Bolts, The Red Flags: Managing your Debt, Identifying Scams, etc, and The ADB-VEST Formula for Financial Abundance.

Among the distinguished AIM professors who will compose the faculty are Noel Leyco, Rafael Azanza, Alejandro Ferreria and Jay Bernardo.

Practical pointers

According to the organizers, this one-day course can help its doctor-participants proactively draft a strategic organizational plan designed to progressively grow their net worth way beyond what they thought was possible. It will offer tried-and-tested and practical pointers and draw on a frequently untapped source of success to achieve not only financial freedom but abundance that can pave the way to a wonderful retirement. Many of these principles can also be applied to achieve other essential goals in life including good health, happiness, wonderful relationships, peace of mind and real success.

This seminar-workshop is one of the joint service activities of the PSH and Therapharma. The PSH and Therapharma were encouraged by the good feedback from the participants of previous seminars. This is already the third workshop which equips doctors with the basics on finance, entrepreneurship and investment opportunities to guide the doctors on how to grow their assets on the side.

Since they’re not totally dependent on their income as physicians, they can spare more time offering their services for free to charity patients, and also take a break from work and relax in their favorite resort. Stress has taken a toll on the health of many busy doctors.

Doctors and other healthcare professionals who are interested to attend may call the PSH secretariat at 687-2841, 687-7073, 631-7970 or 0917-6255810.



PS For those interested kung meron na kayong retirement funds or money for investment. Hope yung author aware sa present plight ng mga doctors ngayon. Mukhang yung perception niya di pa naupdate 20 years ago e. Icorrect na lang ninyo ako. :rolleyes:

lakaydelfin

#88 journey

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Posted 17 January 2008 - 04:49 PM

http://www.malaya.co...jan18/busi3.htm
Filipinos fail to save for retirement

http://services.inqu...113062-xml.html
8 out of 10 Filipinos worry about bleak retirement -- survey

http://services.inqu...113088-xml.html
Filipinos have low financial IQ, says bank

#89 wolverine

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Posted 19 April 2008 - 10:55 AM

Ten Traits That Make You Filthy-Rich
by Jeffrey Strain
Friday, February 1, 2008provided by TheStreet.com

Saving money isn't all about whether or not you know how to score screaming bargains.

It has more to do with your attitude toward money.

Just think of those who don't fit the filthy-rich stereotype. People like Warren Buffett.


As explained in the book The Millionaire Next Door by Thomas J. Stanley and William D. Danko, personal finance has as much to do with people's traits as it does with money. Many millionaires, in fact, have frugal ways.

Understanding how personal traits can influence your finances is an essential ingredient for building wealth.

Here are 10 key traits:

1. Patience

Patience is one of the most important traits when it comes to saving money.

This means waiting until the first wave of product hype has passed, keeping a car for an extra few years before getting another one and waiting until something you want fits into your budget instead of putting it on credit.

Patience is often the difference between creating savings and being in debt. Having the patience to wait until you find a good deal is a cornerstone of good finances.

2. Satisfaction

When you're satisfied, there is no reason to spend money on nonessentials. The sole purpose of commercials is to make you believe that buying a product or service will make you happier, wealthier, better looking or improve whatever isn't bringing you satisfaction.

People spend because they want to capture the excitement shown in advertisements. When you are satisfied with what you have and your life (not trying to live like those on TV), your finances will be in a lot better shape.

3. Organization

Being organized can make you more productive and ensure that all the many issues pertaining to personal finances are addressed.

It means not paying late fees, not buying two of everything, knowing deadlines that can affect your finances and getting more done in less time. All these can greatly benefit your finances.

4. Discipline

You need the discipline to continue to save money for specific, long-term goals every month.

Personal finance isn't a way to get rich quick, but is a disciplined execution of your lifetime plans.

5. Reflectiveness

It's important to be able to look at your financial decisions and reflect on their results.

You're going to make financial mistakes. Everyone does.

The key is to learn from those mistakes so you don't make them again, or recognize if you keep repeating them.

6. Creativity

The economy and our earnings don't always match our expectations.

Unexpected developments wreak havoc to elaborate financial plans. When this happens, changes are needed to deal with the new circumstances. Creativity is essential to accomplish this.

Creativity allows you to make something last longer rather than purchasing it when you don't have the money. It means juggling money to stay out of debt rather than simply paying with a credit card. It means finding a cheaper alternative when money is tight.

In these ways, creativity plays a large role in keeping finances in order.

7. Curiosity

Having curiosity helps you learn, study and improve yourself.

The curiosity of wanting to know more, to take the time to study and then take what is learned and put into practice is an important process that is driven by curiosity.

8. Risk-Taking

To build wealth, one needs to be willing to take risks. This doesn't mean uncalculated risks. It means weighing all the options and taking calculated risks when appropriate.

The stock market has risks involved, but over the long term, history shows that it provides good returns on money that is invested wisely. Those who fear risk altogether end up saving money in accounts that likely lose money to inflation in the long run.

9. Goal-Oriented

The importance of setting and working toward goals is obvious. If you don't know where you are going, it's difficult to get there. It helps your personal finances immensely if you have money goals and are motivated to reach the goals that you have set for yourself.

Those who lack goals don't have a road map to take them to the financial destination they want.

10. Hard- and Smart-Working:

Creating wealth and staying out of debt rarely comes about without a lot of hard work.

Many people might hope that the lottery will solve all their financial problems. The true path to financial freedom, however, is to work hard to earn money while educating yourself to continue to have more value and increase your salary.

You may not possess all of the above traits. But knowing them can help you make changes so that you nourish the ones that you have and obtain the ones you're missing.

Ultimately they will help you with your personal finances and create a plan to accumulate the wealth you desire.



#90 PrimumNonNocere

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Posted 20 April 2008 - 03:25 PM

^

Nice article. Although I'm not in any way near retirement, it really helps to have periodic assessments of what we currently have and plan to do for our future (reality check). I have to admit that it's so hard to save money particularly if you have lots of hobbies and interests... :crazy:


http://services.inqu...113088-xml.html
Filipinos have low financial IQ, says bank


... add this and I'm sure we're gonna have a big dilemma. :blush:

#91 handsomeb

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Posted 27 May 2011 - 10:26 AM

Just bumping this thread.

For those interested in Life insurance or simply want to save for Retirement
feel free to contact me Louell L. Sala MD at (63) 917 8984154.
I am duly licensed by the Insurance Commission as well as PRC with regards to
Real Estate Investing and Life Insurance

Sample computation for a 37 year old physician:

For a monthly premium of 6,000 per month for 10 years only you can be assured of

1. 1 million guaranteed death benefit ( 1 million to your beneficiary ) very good for parents
2. 75,000 endowment benefit while still alive staring at 5 years then every 3 years thereafter
3. accumulated dividends
4. pay out of 500,000 at age 85.

Subject to assessment. There are also premiums which are only 3-4,000 per month and 5 years. Of course the younger you are, the lesser the premium (ung babayaran mo) . If you are a parent or even a single, life insurance is highly advisable for retirement and so that you will at least know your family will not be in trouble in case something horrible happens to you.

For details and inquiries on your insurability feel free to contact or email at louell_sala@yahoo.com

Edited by handsomeb, 27 May 2011 - 10:34 AM.


#92 drhenry4

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Posted 30 July 2011 - 07:07 AM

Points you need to consider in saving money:

1. There must be a goal: how much proportion of your income will go to savings. Budgeting of income

2. Savings must earn or grow: Savings kept in the bank will not grow, instead it will depreciate. This is the common misconception. Money that is steady (i.e. neither spent or earn interest) is NOT "steady". The value of money depreciates in time. The gauge here is the inflation rate. It means that at 5% inflation rate, that's how fast the value of money depreciates. In simple terms, the amount of goods that you can buy for a 500-peso bill would be lesser now compared to what it could buy last year.

3. Savings put on investments must be at least semi-liquid. This means that it can be easily convertible to cash because it is the medium of exchange. For instance, there's a degree of difficulty of paying your hospital bill if most of your money are in real estate. You cannot pay a bill using your Condo title. But if you're renting out that condo, that asset is convertible to cash.

4. Paying a mortgaged real estate is saving. But a mortgaged real estate (e.g. a condo that is 5-years to pay) is still not an asset but a LIABILITY because once you default in payment, the condo would be taken out by the bank. But this kind of liability can be made a "lesser" liability if an income is derived from it (i.e. rent).

5. The greatest sucker of savings are loans (credit cards) spent for consumable items.


#93 Kal-El

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Posted 15 June 2014 - 10:47 PM

Points you need to consider in saving money:1. There must be a goal: how much proportion of your income will go to savings. Budgeting of income2. Savings must earn or grow: Savings kept in the bank will not grow, instead it will depreciate. This is the common misconception. Money that is steady (i.e. neither spent or earn interest) is NOT "steady". The value of money depreciates in time. The gauge here is the inflation rate. It means that at 5% inflation rate, that's how fast the value of money depreciates. In simple terms, the amount of goods that you can buy for a 500-peso bill would be lesser now compared to what it could buy last year.3. Savings put on investments must be at least semi-liquid. This means that it can be easily convertible to cash because it is the medium of exchange. For instance, there's a degree of difficulty of paying your hospital bill if most of your money are in real estate. You cannot pay a bill using your Condo title. But if you're renting out that condo, that asset is convertible to cash.4. Paying a mortgaged real estate is saving. But a mortgaged real estate (e.g. a condo that is 5-years to pay) is still not an asset but a LIABILITY because once you default in payment, the condo would be taken out by the bank. But this kind of liability can be made a "lesser" liability if an income is derived from it (i.e. rent).5. The greatest sucker of savings are loans (credit cards) spent for consumable items.


Super korek! :)

#94 Kal-El

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Posted 16 June 2014 - 12:36 AM

10178_416048978530761_1027927300_n.png



#95 Kal-El

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Posted 16 June 2014 - 12:38 AM

1461515_416048608530798_956892139_n.png



#96 tobyferrer

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Posted 10 October 2017 - 01:09 AM

I started investing in personal insurance with mutual funds and I plan to use it as my retirement fund.



#97 jeshy03

jeshy03

    PMD Intern

  • PMD Bronze 2 Group
  • PipPip
  • 12 posts

Posted Today, 11:49 AM

Hi Doctor's,

 

I'm looking for an active Doctor of any specialty who can prescribe meds.

 

PM me for more details or Email me @ czareline@gmail.com or txt me @ 0926 627 6793

 

Thank you :)


Edited by jeshy03, Today, 11:49 AM.