Net Worth Update (March 2013)

Current Net Worth
Assets	Feb-13	Mar-13	Change	% change
Savings Account 1	$4,958.78	$3,539.13	($1,419.65)	-28.63
Savings Account 2	$1,570.66	$1,525.66	($45.00)	-2.87
Savings Account 3	$14,630.00	$17,055.99	$2,425.99	16.58
Investment Linked Fund	$8,111.76	$8,550.42	$438.66	5.41
Schroders Commodity Fund	$10,074.46	$9,992.27	($82.19)	-0.82
Stock Holdings	$9,910.00	$10,140.00	$230.00	2.32
Phillip Money Market Fund	$15,008.43	$15,013.63	$5.20	0.03
Physical cash	$1,000.00	$1,000.00	$0.00	0.00
Market Value Of BTO Flat (to be built in 2016/2017)	$750,000.00	$750,000.00	$0.00
Total Assets	$815,264.09	$816,817.10	$1,553.01	0.19
Liabilities
Home Loan	$617,500	$617,500	$0.00	0.00
Net Worth (including flat to be built in 2016/2017)	$197,764.09	$199,317.10	$1,553.01	0.79
Investible Net Worth	$65,264.09	$66,817.10	$1,553.01	2.38

Are Personal Bankers Qualified Enough?

Personal Bankers / Personal Financial Consultants / Personal Wealth Managers are the sales people in a bank branch who promote all kinds of banking products which include unit trusts, insurance, loans, structured deposits, etc. Walk into any bank branch and you will see young and driven personal bankers dressed in corporate wear soliciting walk-in customers or sitting in their cubicles servicing the mass market customers.

Since personal bankers are on the front line of a bank recommending financial products to potentially ignorant consumers, we naturally assume they have adequate financial knowledge or at least a degree in finance or other related majors. However, a simple search on JobStreet will reveal that the minimum qualification for personal bankers is a degree or diploma in any discipline. In addition, candidates are required to have a minimum 1 year of sales experience.

Personal bankers are required to pass the CMFAS exams (all MCQs) and go through some form of sales training for about a month before they are eligible to start selling banking products. I personally have taken the CMFAS HI, M5, M8 & M9 exams and I can say that the exams alone are insufficient to equip a person with sufficient financial knowledge. The bulk of the CFMAS syllabus is on rules and regulations rather than finance topics.

From what my personal banker friend told me, there are a number of personal bankers who have non-finance related degrees such as geography, engineering, etc. With insufficient financial knowledge, personal bankers might not be able to fully comprehend and explain the inherent risks of certain products to customers. In a desperate attempt to hit sales target, some personal bankers start using past performance to paint a bright outlook on a fund's future performance or comparing interest rates on savings deposits with potential returns of a bond/equity fund without emphasizing on the risks involved.

The Lehman Brothers saga in 2008 exemplified this problem. Investigation findings on the sale and marketing on structured  notes linked to Lehman Brothers released by MAS stated that there were insufficient steps taken by some financial institutions to ensure that all their financial advisory representatives were properly trained before marketing and selling the product.  Also, from the many descriptions given by investors with regards to the information the received from sales representatives, it is clear that there were misrepresentation of this product.

Banks should have more stringent requirements on hiring personal bankers and have a more detailed and extensive training program. The sales target of personal bankers puts them under such high pressure that closing the deal overrides everything else. It is well known that retail banks have a high turnover rate for front line staff as many of them are unable to hit ridiculous sales target. For example, bankers of local bank XXX are given monthly sales targets which are denominated by 'revenue points'. Each dollar of sales charge or revenue earned equates to 1 revenue point. Monthly sales target could be to achieve 30,000 revenue points or more. This means that a personal banker will have to sell at least $20,000 worth of unit trusts everyday!

So are personal bankers considered finance professionals? Or are they just typical sales people? Many of my friends in university have applied to retail banking programs such as UOB Personal Banking Associate Programme or Standard Chartered Consumer Banking Fast Track Programme. What they might not understand is that it might not be as prestigious as it sounds and the chances of moving from retail banking to private banking are slim.

ARE YOU LEGAL?

ARE YOU LEGAL? 

Every year since I retired from the corporate world, I set up a business for myself or help set up businesses for others especially my student entreps and mentees. Currently, I’m teaching at the Makati Medical College. Who? Senior nursing students who I believe will have a challenge finding nursing jobs by the time they graduate this April 2013. 

Registered Business Name

Whether in undergraduate programs, Master’s degree at the Asian Institute of Management (AIM), or weekend entrep courses with Bro. Bo (under Beacon Light Events), the standards to teach entrepreneurship are the same: it is not just theory but rather execution! 

As part of my ‘Venture into Entrep’ subject, the requirements for a GOOD EXECUTION (not passing grade only) are two things: 

a. Business plan with napkin economics (10 page summary of the venture); 

b. Business registration (actual certificate of DTI registration). 

Why Do I Need to Be Legal? 

The best way of looking at this requirement is to consider that your business is your newborn child. Any parent would be proud of his/her child and would definitely want togive the child a name, a birth certificate from the City Hall, and a baptismal certificate (for Catholics) from the local parish. No parent would want his or her child to be illegitimate or be taken by someone else other than the real parent. Right?

In a business set-up, we don’t want our business to be illegitimate – Bawal ang kabit! (As a cable company advertisement would say) or be taken over by someone else (private or government) in the future. 

If Any of These Situations Happen, Then You Need to Be Legally Registered: 

• Will you rent a space other than your own house? 

• Will you have a signboard or tarp outside your business place (home or rented space)? 

• Will you allow customers to enter your business place? 

• Will you want to grow your business and bid for government or corporate accounts? 

• Will you in the future, need a business loan from a bank or financial institution? 

• Will you in the near future need partners other than your immediate relatives to fund any business expansion? 

Caution to Online Entrepreneurs: The BIR will start to do tax mapping for Internet businesses this 2013.

To be Legal Is Easy! 

You can either do the manual and traditional way (BTRCP Form 16A 2011 edition), or the virtual way via the website of DTI (http://www.bnrs.dti.gov.ph/web/guest/registration). 

Let me highlight what’s in the BNRS (Business Name Registration System) online system: Applicants who want to reserve a business name are advised to have several alternatives. It is fairly common that first choice cannot be registered because (a) it is already reserved, or (b) it is similar or confusingly similar to an existing business name. 

Your name should be descriptive as well as distinctive. We will help you ensure your name is distinctive by looking for similar names that are already registered. Click on the Check Availability button after you finish entering your proposed business name. If the Business Name Registration System finds your proposed business name available, you can proceed to register the name. We reserve your business name for five (5) days only. 

Business Name (BN) is subject to the Terms and Conditions set forth under the Revised Implementing Rules and Regulations of Act 3883, known as “Business Name Law.” Your proposed Business Name (Taken from BNRS website) MUST: 

• Not be used for business that is illegal, offensive, scandalous, or contrary to propriety (Example: Popoy’s Jueteng Betting Place, Boobs Massage and Spa); 

• Not be the same or nearly the same as an existing registered business, company, partnership, corporation (Securities and Exchange Commission), cooperative name (Cooperative Development Authority); nor it infringes on any trademark, service mark and trade name (Intellectual Property Office) (Example: Anne Dok’s Lechon, Jolibee, Starbax Cafe); 

• Not be composed purely of generic or geographic words (Example: The Laundry Shop, Bacolod); 

• Not be a name which by law or regulation cannot be appropriated (Example: OTOP, Intelligence, State College, CALABARZON); 

• Not be used to designate or distinguish, or not suggestive of quality of any class of goods, articles, merchandise, or service (Example: Best Taho Factory, A-1 Auto Repair Shop); 

• Not be a name or abbreviation of a name used by the government in its governmental functions (Example: NBI Private Investigation Services, DTI Trading); 

• Not be a name or abbreviation of a name of any nation, inter-governmental or international organization (Example: Philippine Manpower Pooling Agency, UNESCO Marketing, WHO Health Services); and, 

• Not be deceptive, misleading or which misrepresents the nature of business (Example: ABC Construction Services where nature of business is recruitment, a business name carrying another person’s name). 

Are you Legal?

Based on experience, talking to a DTI officer via the traditional paper application is easier (except for the time that you need to queue at the DTI office) than interacting with a computer system that has many restrictions. 

Don’t get me wrong, the BNRS online system is a good system to deter unscrupulous people that would want to deceive consumers.  

Final Advice 

Once you have an approved business name1, my suggestion is to pay either the city (P500) or regional (P1000) territorial scope versus barangay (P200)2. Why? You are registering it not only for the business NOW but also in the near future. 

Remember: Business is not a 100-meter dash but rather a marathon race—it is for the long run.

Source: Wrote by Dean Pax, TrulyRichClub Wealthatrategy

Are You Afraid Of Growing Old Without Money?

Truly Rich Club SoulFood News Letter.

Are You Afraid Of Growing Old Without Money? 

TrulyRichClub

Greg is a 63-years old Vice President of a company. The salt and pepper hair fits him nicely. Makes him look elegant. Greg also wears cool clothes that make him look like a rich gentleman. But his eyes can’t hide the bone-chilling TERROR inside. 

Because he knows he will retire at 65. That’s just two years away. And he’s scared. Because on that day, he won’t have a monthly paycheck anymore. “I’m sure you have savings, right?” I asked Greg. He looked down, shaking his head. “Not more than P200,000 in the bank. I’ve never been very good with savings. I just spend my money. And there were many emergencies along the way. I know I should have saved more. But I didn’t.” 

I asked, “But you’ll get a nice retirement package from your company?” “To pay my debts,” he sighed. “I just borrowed to buy a car last year. And did some house repairs this year. We also travelled as a family last summer, paid for by another loan. So whatever I’ll get from my retirement will erase my debt. But nothing will be left. Absolutely nothing.” 

I couldn’t help but groan. Greg was staring at the PERFECT STORM. A financial calamity that was coming in two years. “Can you help me, Bo?” Greg asked. I pitied him so much. If only he was twenty years younger—it would have been easy! 

My Maids Have MORE Investments Than This Vice President 

All my maids are invested in the Stock Market. My first maid—the first one who started her investment program under my guidance—now has P518,844 in her stock market portfolio. She’s only 30 years old. If she keeps investing, she’ll have P15 Million by the time she hits 50. Note: A maid! (Last year, I promoted her to bookkeeper, but that’s another fascinating story to tell at another time.)

Almost all my employees (over a hundred of them) are investing in the Stock Market too. Messengers, janitors, clerks... I’ve got happy employees because they will all be multimillionaires when they retire. Even my sons Benedict and Francis, ages 13 and 7, are investors. For years, Benedict would invest money from his odd jobs. And Francis would invest Christmas cash gifts from Ninangs and Ninongs. They will be millionaires by age 18 and multimillionaires by age 21. Let me repeat: Their money is in the Stock Market. Not in the Bank. 

Did you know that the interest you earn in a bank is LESS then 1% a year? But in the Stock Market, if you follow my simple investment system (NOT trading!), you’ll grow your money from 12% to 20% a year over time and become a multimillionaire in 20 years.

You Don’t Have To Make The Mistakes Of Greg 

Some people think that as you grow older, you’ll have to grow poorer. Not true. You don’t have to make the mistakes Greg made. Thousands of people have already joined my TrulyRichClub. And following my guidance, they have started investing in the Stock Market. And they’re very happy.

Those who joined me 2 years ago—and who invested in the Stock Market with my guidance—can’t thank me enough for the TOTAL CHANGE that has happened in their financial life. 

I repeat: Don’t be like Greg. You don’t have to be afraid growing old and poor. Stop postponing! You’re missing out on these earnings. Most importantly, you’re missing out on gaining financial freedom. 

To join, click the link below:  

Yes Bo, I’d like to change my finances in 2013;  

Tell me more about the TrulyRichClub. 

May your dreams come true, 

Bo Sanchez 

PS. Start this new year right! To gain financial freedom for your future and join the TrulyRichClub, click the link below:  

Yes Bo, I’d like to change my finances in 2013;  

Tell me more about the TrulyRichClub.

Don’t Interrupt the Compounding!

Truly Rich Club Updates!!

Don’t Interrupt the Compounding! 

Truly Rich Club

If You Withdraw P50,000 Today, You’re Withdrawing P1 Million Tomorrow Oh, I know it’s tempting. When the stock market is growing sweetly (like now), it’s sooooo tempting to withdraw “just a little bit” for that new ladies’ watch. Or a Hong Kong vacation. Or a birthday party in Boracay. 

As much as possible, DON’T. If you withdraw, you’re interrupting your compounding—the greatest mathematical force in the universe. 

Let me give you an example… 

Johnny saw that in a span of 18 months, his stock market fund has already grown from P100,000 to P150,000. He’s ecstatic. He’s thanking God. He’s inviting friends to join him at the TrulyRich Club. (Very good!) He’s dancing the gangnam dance. 

But then one day, while walking in a mall, Johnny sees this really nice “spaceship-looking” gizmo that functions as a cellphone/coffeemaker/vacuum cleaner all rolled into one. It can make phone calls. It can make coffee. It can clean your house. It’s astounding. (Okay, I’m exaggerating. But I’m simply saying that there’ll be temptations out there that are very real.) 

The price? P50,000. Definitely not in Johnny’s budget. Unless… He thinks of his stock market investments. He’s got the money. He decides to go for it! He withdraws P50,000 from his stocks and buys the gizmo. He can now talk to his girlfriend and make coffee and suck dust from the living room’s carpet. 

Question: Did he really withdraw P50,000 only? 

Nope. 

In 20 years, if his stock market investments grew by 16 percent a year, his total money would be LESSER by P1 Million. Why? Because he interrupted the compounding. I’m not kidding. Compute it yourself. I urge you: Avoid withdrawing from your stock market investments. If you feel tempted, just remind yourself: “When I withdraw P50,000 today, I’m actually withdrawing P1 Million tomorrow.”

May your dreams come true, 

Bo Sanchez

PS1. Take Charge Of Your Financial Future. Don’t leave your 2013 to chance. Do something today that will give you financial freedom in your advanced years. I believe investing little amounts each month in the Stock Market will give you financial freedom in the later years of your life. To take charge of your financial future, click here now.

PS2. By the way, the TrulyRichClub isn’t just all about the Stock Market. It’s also about having an abundance mindset. Why? Believe me, all the technical stuff I’ll teach about The Stock Market WON’T WORK if you don’t have an abundance mindset. So in the Club, you’ll also receive a lot of Audio Talks and eReports from me about having an abundance mindset. To take charge of your financial future, click here now.

How Does Different Tenures of SIBOR and SOR Affect Borrowers?

The following is a guest post by Property Buyer

As Singapore has been largely dependent on importation in maintaining a small and open economy, it has literally adopted a policy for the exchange rate that significantly affects import-based inflation. MAS or Monetary Authority of Singapore is responsible for regulating and managing the Singapore dollar valuation against its main trading partners and their related currencies. Based on this perspective, we can say that the world money market actually determines the rise and fall of the interest rate in Singapore. The interest rate fluctuates as a result of this undisclosed band between the MAS and its trading partners. This is relevant to how the US Dollar became a main component in the basket of currency between trading countries. To explain the strength of the Singapore Dollar, we can refer to the way the US Dollar works within the basket of currency. This simply explains how currencies between trading partners work. 

Explaining the framework of SIBOR or Singapore Inter-bank Offered Rate

When banks or financial institutions lend to each other, they usually refer to an interest rate to base their inter-borrowings. They use SIBOR as their inter-bank rate or inter-borrowing rate. The rate is actually set by the Association of Banks in Singapore. It is being announced daily at the start of the trading day to the public and mainstream media. For your information, SIBOR works similarly to LIBOR or London Interbank Offered Rate. Most home loan rates in Singapore use the SIBOR rate.

In Singapore, SIBOR are available in 1 month, 3 months, 6 months, and 12 months tenure. Usually the longer the tenure of SIBOR , the higher would be its rate.

Understanding the SOR or Singapore Swap Offer Rate

The expected forward exchange rate of the USand Singaporedollars is the SOR. The SOR is also used as the lending cost, where upon maturity, the SOR is being used as the rate of the Forex conversion with no bid and spread from the US to Singaporedollar. The banks love to use the SOR because they save more by using this rate. However, it demonstrates more volatility than SIBOR. The Association of Banks in Singaporeset the SOR as the currency swap for the US dollar even though its currency movement directly influence the volume of the contracts and trading. SOR is offered in terms of 1 month, 3 months, 6 months, and 12 months.

SIBOR and SOR pegged home loans

This refers to variable or market pegged floating loan packages offered by most banks using the SIBOR or SOR rates. The interest rate for these loans  is the spread + SIBOR or SOR.

How do you define bank spread?

The profit margin that banks or other financing institutions use to gain income on top of the SIBOR or the SOR rate is called the spread. For example the SIBOR rate is 1%, then the bank would like to gain 2%. The 2% is the bank spread. This means that the client would get the SIBOR + spread = 1% + 2% = 3% rate. A few years after the start of the loan, the bank usually changes the spread. The revision usually reflects an increasing bank spread as shown below 

Period	Interest Rate (p.a.)
First Year	0.75% + 1-Month SIBOR
Second Year	0.75% + 1-Month SIBOR
Third Year	0.75% + 1-Month SIBOR
Fourth Year	1.00% + 1-Month SIBOR
Thereafter	1.25% + 1-Month SIBOR

What are the benefits of using either a SIBOR or a SOR rate?

We would like to correct the misconception of most people. You must understand that although the two correlate with each other, the SOR tends to fluctuate more and can be above or below the SIBOR rate. Please take a look at Figure 1, 2, and 3 below for clearer explanation

Figure 1: 1-Month SIBOR/SOR for Jan 2012-Dec 2012

 Source: www.iCompareLoan.com

Figure 2: 3-Month SIBOR/SOR for Jan 2012-Dec 2012

Source: www.iCompareLoan.com

Figure 3: 3-Month SIBOR/SOR for Dec 2006-Aug 2012

Source: www.iCompareLoan.com

 Here is a piece of advice for those who are planning to apply for a housing loan: Always ask for the bank spread and evaluate the interest rate throughout the duration of the loan. Is the spread reasonable enough for you to take?

Differentiating the features of SIBOR and SOR

For both SIBOR and SOR,  their tenures are usually inversely related to their rates. For example, a 1-month SOR will be lower than a 12-month SOR.  This is because long term opportunities are more risky and normally incur higher opportunity cost.

A shorter tenure SIBOR is more volatile than a longer tenure SIBOR.

SOR fluctuates more than the SIBOR.

SIBOR tends to be preferred by risk-averse borrowers.

Recently banks started rolling out 1-month SIBOR packages which impact their administrative cost.

From Figure 4, we can see that the 1-month SIBOR is  lower than the 3-month SIBOR. Take a look at the historical trend for the last 20 years in Figure 4.

Figure 4: 1-Month and 3-Month SIBOR for Jan 1989-Dec 2012

Source: www.iCompareLoan.com

When is the right time to choose a 1 month or a 12 month SIBOR?

You must understand that choosing a shorter tenure SIBOR also means greater instability. The rates are being changed or modified in shorter intervals. This means that if you take the 1-month SIBOR rate, depending on the financing institution, you can get a change of rate in every 1 or 3 months. However, if you choose the 12-month SIBOR rate, you have the confidence that you will pay the same SIBOR rate for the next 12 months. You may find it beneficial to seek the advice of an expert before you decide which housing loan package to take. Free advice and loan package consultation may be obtained from http://www.iCompareLoan.com/or simply fill up an enquiry form at http://www.iCompareLoan.com/contact

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For more related articles, please visit the following websites:
www.PropertyBuyer.com.sg/articles
www.SingaporeHomeLoan.net
www.iCompareLoan.com

About Property Buyer
http://www.PropertyBuyer.com.sg/mortgage
We are a research-focused Singapore mortgage consultancy which helps you compare Singapore home loans either for new loans or refinancing. We use loan reports from Singapore's best loan analysis system (exclusive to us) at http://www.icompareloan.com/consultant/to serve our customers.
Our services are completely FREE to you as the banks pay us a referral fee upon loan disbursement.
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Personal Finance (11): Financial Self-Defense - A Critical Personal Skill to Live in This Modern World Economy

Let's go through some financial facts:

* On Governments' Investment:
 

Few weeks ago, I was wondering what is going on with the "World Islands" that build by Dubai as there is no news about it...  And found that these islands are sinking back to the sea!

 

Then, I wanted to figure out what was the development cost...  And found from the Wikipedia that: "The World's overall development costs were estimated at US$14billion in 2005".

 

Oh!  That's lot of money gone into the sea.

 

Then, I figure out that Government of Singapore Investment Corp. had lost USD41.6billion, or Three "World Islands", in US Market alone, during the 2008 financial crisis according to WSJ: http://online.wsj.com/article/SB125418236117447877.html

* On Personal Insurance and Investment Scheme:

Now let's look in to the price chart one of the global insurance company: AIG
(Yahoo Chart)

I AM curious how AIG is going to pay back all their clients long term life insurance and investment scheme, in long run, as the baby boomers are starting to collect their matured contracts now...


        

Others Ponzi Schemes: Such as Geneva Gold, The Gold Guarantee (TGG), etc...
 

Hundred of Investors at Hong Lim Park on The Gold Guarantee Scam (06 Mar 2013)

* On Taxes

Government can change rule for all kind of tax:  Example:  
(Here is the link )

 

*
*On Inflation:

The value of money(cash) is contine to be depreciated over time due to inflation.

 

 Source: - http://www.tradingeconomics.com/singapore/inflation-cpi
A very good source to check on many financial data from Money Supply, GDP, Debt, etc of various country worldwide.

Here is an Extreme case of Inflation...

This is what you can get for 100 billion zimbabwe dollars.

As many countries are increase their money supply today, and some call it as the age of "Currency War".  If thre is a war, there will be losers, and lot of time, there is no meaningful winner in the war as all public suffer.

 

 

*On Currency War:


A short interview with James Rickards - The author of the Book:
Currency Wars - The Making of the Next Global Crisis

 

 

 

 

 

*The Point of Finanical Self Defense is: DIY

The era of working hard in one job, save enough income to entrust a good fund manager to grow the money for retirement was over since the year 2000 tech bubble.  And, if someone has not started to educate him/herself to learn about managing his own investment account, please think again. 

 

Of course, Rome was not built in one day.  The road to learn/practise about investment involve risk of money and time committment. 

 

As Mark Twain said "Focus on the future, because that's where you going to spend the rest of your life."  So, if it is something very important and must be learned, start to read relevant books, start to attend seminars, including start to loose certain amount of money and gain experience...  While one still have the luxurious of time and money to do so.    See... A plane that take off from the same run way, just need to turn its direction a few degrees will alter its course by hundreds of miles...

 

 

 

"But trading and investing is like any other pursuit

—the longer you stay at it the more technique

you acquire, and anybody who thinks he

knows of a shortcut that will not

involve “sweat of the brow”

is sadly mistaken."

- Richard D. Wyckoff

 

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