16 March 2017

Introduction to Stock Marketing

Do you know anything about stocks? I'm sure some of you may already have heard about it onetime or another. You may have heard it from your friends, relatives or you saw some movies discussing about stocks. When we hear the word stock, what we usually think of is something very expensive and only rich people can afford. That may be true several decades ago but things change now. Stocks are already being offered to the public so anyone can purchase it at the right price. You don't need billions to own a stock, you just need a few thousands and then let it grow from there.  

What are stocks?

Stocks or shares are the unit of investment in a company. These are actually small portions of ownership within a company. Aside from profits, you may also have voting rights. Huge companies may need additional investment from time to time and they have two options; to secure a loan or to issue stocks. Some owners may want to secure their ownership so they resort to borrowing funds. On the other hand, selling stocks may dilute their ownership but they won't have to worry about any future liabilities or repayments since you will have a share in the losses as well. You may wonder why companies would need an additional investment. The most common reasons are : 
  • Expansion
  • Research and Development
  • Launching New Products
  • Paying off Debts

What will I get in buying stocks?

Profits. One of the most common reasons why people invest in stocks is for profit. Stock prices change depending on the demand and supply changes in the market. You can gain profit once your bought stocks increases it's stock price.  For example, you bought 10,000 shares of company ABC for 2.50 per share. Your total investment  is 25,000. ( there will be additional taxes and fees on top of the stock price.)  After 3 months, the stock price went up to 3.50 per share. Your current net worth is now  35,000 and the 10,000 difference is your profit, You may have the option to sell it or wait further if the stock price will go higher. 

Dividends. Another reason for investing in stocks is the existence of dividends. Dividends are portions of company's earnings that will be distributed to a class of its shareholders. The distribution of dividends are decided by the board of directors. This may come in a form of cash payments, as additional stocks or properties. Some companies issue dividends regularly. 

Voting Rights. Some people or companies buy stocks to gain ownership and control over the issuing company. Just around September 2016, Udenna Corporation, the parent and majority stock holder of  Phoenix Petroleum Philippines acquired 21% of 2GO Group Inc. The acquisition gave them an advantage in stocking and distribution of products throughout the country since 2GO is the country's largest end-to-end  logistics solutions provider.

Types of Stock

There are two two of stocks to choose from depending on your risk tolerance. They are :

  • Common Stock - Most of the stocks are being issued this way. Common shares represents your claims and voting rights. Investors often get 1 vote per share-owned to elect the board members who oversee the management of the company. Common stock usually have higher yields compared with preferred stocks. However, it also poses a higher risk that you could even lose everything if the company goes bankrupt. If that happens, the common shareholders will not receive anything unless all of the creditors, bondholders and preferred stock holders are paid first. 
  • Preferred Stock - Ownership of preferred stocks usually do not entitle you to any voting right however, you will be guaranteed with dividends from the company whatever happens unlike the common stocks which is subjective to the company's performance. The preferred stock maybe categorized as  "callable", meaning the company can purchase it anytime (usually for a premium price) for any reason. Preferred stockholders are also given priority over the common stockholders in the event of liquidation.

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13 March 2017

Help me! I cannot save!


Many of us wanted to save but for some reasons, we fail to do so. We all know what are the advantages of savings and maybe most of us have already tried saving before. Sadly, some who tried saving money faced a difficult situation and so the savings account was used. And after the storm passed, we we're left with nothing and the savings account was never revived. Maybe you did tried to restart the account but finds it hard to do so. I will be discussing to you my own personal experience in the art of saving money. 

Since I was a kid, I have been trying to save for various reasons. Most of the time, I failed to continue doing so because there are so many temptations lingering around. Once I have enough money, I found out that there's a new toy, or a new gadget or maybe you saw a nice shirt while visiting the mall with my parents so, it was not really successful. It came to a point where I did not even tried to save anything. That went on for years. 

Fast forward, I graduated, had a job and started working. I thought, maybe I can save this time. That thought just stayed there but it was never accomplished. Every time I receive my salary me and my team will travel to new places. That happened almost after every payday. I thought, I'm only young once so I should enjoy every moment. Fuck to savings that's for oldies only. So, I enjoyed my youth so much. And it broke me big time.

When Typhoon Yolanda (Haiyan) struck Leyte, I was not there. I was in Cebu that time. My entire family was in the center of the typhoon and I'm miles away to help them. Much worse, I have no money at all. Even if I will go home, I cannot help them financially and I will just end up as an additional bargain for them. My hands we're tied and I cannot do anything so I just sat there and cried rivers feeling so damn pathetic. I never wanted that to happen again.  

We survived that tragedy through the help of some relatives and friends and if you're one of them whose reading now, thank you so much. So after that, I decide to start saving again. However, I have been so caught up with my financial routine that I do not know where will I get the money for my savings. This is one of the most common reason why people cannot save. 

"I don't have enough salary and I do not have any extra income" 
"I don't have any spare money to save."
"There are just too many expenses. There's nothing left." 

Excuses. That's all they are. That's some answers I heard when I asked my friends why they don't have any savings. But in reality, a percentage of our money is actually being wasted. We tend to buy something unnecessary when we have the cash at hand. It may occur to you sometimes that, "If only I didn't used my money for this, I could have saved this amount. What a waste." That's what happened to me. 

Everyday, we will always have a spare coin in our pockets. It could be just one peso or five pesos or ten pesos or anywhere along those amount. One thing for sure, you always have a coin at the end of the day. That's where I started. 

I will collect all coins I have in my pocket and placed them in one of my cellphone boxes. I don't have money (maybe I just don't want to) to buy a piggy bank so I used the available resources at hand. I never even bothered to count how much money I drop in that box. If it's a coin, then it will go to the box. I continued doing that for several weeks until it became a habit. 

After a while, my sister ran short of funds and she asked if I can lend her some. I'm about to say that I don't have anything when I remembered the coins in the box. For the first time in a couple of weeks, I counted the money in that holy box and guess what, I have  P2000! That's all just coins but it's plenty enough to lend to my sister and some will still be left. I helped my sister literally with spare coins. Amazing isn't it?

Realizing the effect and advantages of saving I started to save some more. I raised the amount I'm placing in the box to a 100 pesos per payday plus of course, the coins. You won't even feel the amount you dropped there. It's too small. But all great things came from humble beginnings. 

Few months after that I generated enough cash to open up my official bank account. So I did. I started budgeting my expenses and further raised my savings allocation to 500 pesos per payday. Even in the existence of the bank account, I never stopped dropping the coins in the box. Every 2 months, I will collect all the coins in the box and add it to my saving account. Easy.  

I am still doing the same thing until now and I'm reaping the effects. By making savings a habit, I can optimize my funds to its full capacity. Financial freedom is something acquired through efforts. It doesn't matter how much you earn, what matters is how you utilize your money. I don't have to worry where to get money whenever I travel, or where will I get money for medicines or what if the phone suddenly stops. 

Currently, I have several accounts for different purposes like a travel fund, a health fund, and the miscellaneous ones (emergency purposes.) You may think it's impossible until you try it. So start saving now. I will be posting more about savings in the following weeks so stay tuned. The best time to start saving is today. Good luck! 

10 March 2017

Easy Money?

It have been three years since I discussed about money. So as a comeback, I will be discussing how to identify the right investment from a sham. We all want to be rich. But before we become rich, we have to earn money. We find investments that can cater our needs for financial security. We look for something with high returns but much better if the returns are faster. That's where the problem starts.

The fact that we are all striving to earn money fast is one of the reasons why a lot of scams are present. In the internet alone, you will find millions of investments that could give you money fast. Offers that are mind boggling that could send electricity all throughout your body, making you tingle with excitement.

 That sounds weird.

Anyway, some of these offers have no pint of any truth in it. Instead of you earning money fast, you instead lose money fast. And as excited as we are, once all is let out in the open, we find an ugly truth and we are left crying on the floor. You can do walling too if you like. But, the question now here is: How can we learn if a certain program is a scam or a genuine one. Here are some tips:

1. Check the Content. Check thoroughly how the program works. Most scams ask for low investments with very big returns. One example is you just have to invest 5k to 10k  but you will get a  return of 30k. All you have to do is invest and invite 2 people, easy! Sounds very tempting, right? They know and that's why they gave you this offer. But it won't stop there, They will open an option for you to increase your investment. And of course, the higher the investment the higher the return. Yes, they may give out pay-outs in the beginning but it won't be long. Just look at at the Aman Future's Group. Most people who entered the company used their own profits to reinvest. Their investments reached up to hundreds of thousands and then poof. It became coco crunch! The company disappeared.  The money? It's gone. And the investors never even got a thank you.

2. Go for Long-Term. All investments come with terms. Some last for 30 days and some reach up to a couple of years. The longer the investment, the more secure you are. The interest are also bigger when it's long term. Just take for example a loan. When a bank grants you a loan, there will be a term limit for you to pay the loan. The longer term you take, the higher the interest. That is an example of investment. The bank invested in you to get a return. Now, if the returns are both big and fast, then you have the right to start doubting. Most of the time, they're scam.

3. Read the Terms and Conditions. Before you make any investment, make sure that you fully understand what you're getting into. Read carefully about the terms and conditions. "What? Who reads a very lengthy Terms and Conditions? I will just sign it." Eeeengk!!! That's where trouble starts. Only the good points of the investment will be thoroughly discussed by the Sales team. The disclaimer may not be discussed or if ever they do, only just a read-through on it. So make sure to read it yourself. A few minutes of reading will save you from frustrations in the future. Smart people read the terms and conditions.

4. Ask Around. If you think that an investment sounds promising. Do some research about it. Look for feed backs. Read some comments. Go through their pages and hear what the people are saying about them. I would even recommend you ask an independent financial analyst about it. He may have some more info than you do. Financial analysts can also provide you other options. Who knows, some offers might be even better.

 5. Trust your Gut-Feeling. Think carefully before entering any investment. Check the pros and cons. Make sure that your investment is within your risk capacity. If they're too risky for you, then don't. If it's too good to be true, then don't. Be smart and trust yourself. 

These are only few tips on how you can prevent being taking advantage upon. A good investment needs to have the right price, right effort and right risks. If it's too easy, too promising or too good to be true, most  of the time it is.  If it's too easy to get, then it will also be too easy to lose. Remember that. Value your money.

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