COFFEE CHATS ON MONEYPERSONAL FINANCE. BASIC STOCK MARKET.

“For I know the plans I have for you, declares the LORD, plans to prosper you and NOT to harm you, plans to give you hope and a future.” Jeremiah 29:11 (NIV)

You will be the head and not the tail. You will lend to many nations, but you will not have to borrow from any. Excerpt from Deut. 28

In all your ways acknowledge Him and He will crown your efforts with success. Excerpt from Proverbs 3:6

What is God’s plan for us (money-wise)?

Reason #1: Emergency Fund

3 Good Reasons Why We Need To Save

Reason #2: Inflation

Reason #3: Personal Goals

Little Exercise:

Kindly list 3 SPECIFIC personal goals that can inspire you to save?

Which is Better: To Save or To Invest?

Saving means to KEEP your money.

Investing means to GROW your money.

Investing is about committing money with the expectation of getting something in return.

What does INVESTING mean?

It is making money work for you … NOT you working for the money.

Active income means you physically have to work for the money (salary). Passive income is a state where your money is working hard for you (stock market).

Little Exercise:

a) Do you work for your money?b) Do you let your money work for you?c) Both a and b.

Most books recommend these 3 simple guidelines:

** 10% Tithes** 20% Investment Fund** 70% Personal Expenses

Personal Finance How do you handle your finances after receiving your pay (sweldo)?

Investing is NOT only for the rich people. This is a very common misconception. (A Little Extra: Bo Sanchez taught his maids to invest in stock market).

Wake up call about INVESTING

Saving in a bank does NOT beat inflation. Investing does.

You do NOT need to be a financial guru to understand the basics of investing.

Gains (tubo) does NOT happen overnight!

Time Deposits on the average has 2% - 2.5% rate of return (per year).

Types of Investing (Simplified)

Philippine Stock Market on the average has 12% - 20% rate of return (per year).

I invest Php 10,000 today.

I will leave that money for 15 years in the stock market.

I won’t add any amount and I won’t pull out any as well.

If I’ll get the lowest average rate of return (12%) how much should I earn?

WHAT IF?

Age Savings Rate Gain Total30 10,000.00 12% 1,200.00 11,200.00 31 11,200.00 12% 1,344.00 12,544.00 32 12,544.00 12% 1,505.28 14,049.28 33 14,049.28 12% 1,685.91 15,735.19 34 15,735.19 12% 1,888.22 17,623.42 35 17,623.42 12% 2,114.81 19,738.23 36 19,738.23 12% 2,368.59 22,106.81 37 22,106.81 12% 2,652.82 24,759.63 38 24,759.63 12% 2,971.16 27,730.79 39 27,730.79 12% 3,327.69 31,058.48 40 31,058.48 12% 3,727.02 34,785.50 41 34,785.50 12% 4,174.26 38,959.76 42 38,959.76 12% 4,675.17 43,634.93 43 43,634.93 12% 5,236.19 48,871.12 44 48,871.12 12% 5,864.53 54,735.66

Let’s put some figures!

I want to be a part-owner of Jollibee.

STOCK MARKET IN SIMPLEST TERMS

I can’t go to the owner and tell him I want to be one of his partners.

By investing in stock market, I can do that!

That’s how stock market works, we buy shares of stocks and when they make profit, we’ll have our share of money too (profit-sharing)!

Capital AppreciationPrice (per share) of Jollibee last 2010 was Php 47.50, today’s price is Php 125.00

How do I earn from Stock Market?There are 2 ways to earn from the stock market:

DividendsAyala Land, Inc. issues Php 0.50 dividend per share.

Between the two, capital appreciation is a major way to earn in stock market.

Capital Appreciation with Figures

Year Price Share Total2010 47.5 1000 47,500.00 2013 125 1000 125,000.00

Gain 77,500.00 % of Gain 163%

Assumption is you purchased Jollibee shares last 2010 and you leave it for 3 years. That’s it.

Little Exercise: What are your initial thoughts on stock market? Share

How To Invest in Philippine Stock Market?Option 1:Traditional – Visit Philippine Stock Exchange (PSE) personally, talk to a broker and tell him that you want shares of Jollibee.

How To Invest in Philippine Stock Market?Option 2:Online – Open and fund an account with COL Financial and buy shares of Jollibee.

Buying and Selling Stock is Easy!

Each time you buy / sell shares of stocks, an electronic confirmation will be sent to your e-mail

Trade > Portfolio : This is a list of all your stocks

Open a COL account.

You can either go at their office (Ortigas) or e-mail the requirements, or have your documents picked up by COL messengers.

Fund your COL balance.You can either deposit via online banking (my favorite!) or deposit via bank (they have BDO, BPI and Metrobank as their partner banks).

It’s time for you to ACT!

WHY do we need to invest?

WHAT are the 3 simple steps on how to budget your personal money?

SAVINGS vs. INVESTING

HOW does stock market work?

Basic action items about COL Financial

LET’S REVIEW:

What are blue-chip companies?

Simple ways on how to maximize our earnings in stock market.

What stocks should I be buying?

NEXT COFFEE CHAT…

Question & Answer Portion

GOD’s people are destined to be RICH.

PS: GOD helps those who help themselves