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FIRE: Getting to Financial Independence, Retiring Early

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FIRE: Getting to Financial Independence, Retiring Early

( Companion thread for a Viber chat)

Financial literacy, modest spending & good savings and investing habits will build you wealth.

THIS THREAD captures some Highlights from a Viber chat, set up to help spread Financial Literacy.

Here was a statement I made when the chat began, back in April 2020:


Initial thoughts, which helped to inspire creation of the Chat:
Over the last few months, I have been mentoring some younger friends in investing.
The main idea is FIRE: ie, Financial Independence, & Retiring Early.
I am already retired, using skills and knowledge to support my lifestyle through investing.

So far, my friends have done well, for instance one young friend just sold over half the stocks they owned, capturing a 7.5% return, which is over 30% per annum. This is in line with the returns I have been making in recent years,  and so was a sort of confirmation, or proof of concept.


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The FIRE viber chat was launched with a Mission statement:

FIRE LIFE HABITS - Mission Statement

FIRE is for: Financial Independence, Retiring Early - that is the goal.
We will seek wealth for the Freedom it brings, not to impress others. We also aim to develop good habits with less consumer spending, while recognising that it is much easier when surrounded by a community with similar values and goals.
1. The recent pandemic crisis has shown the importance of having good investments. Living paycheck to paycheck just won't cut it. Our younger members or less experienced members can learn much from our pool of generous, seasoned  and well established mentors.
 2. We will first seek to be savers, getting out of debt. Then, we will seek investments with expected returns above inflation, in order to build real wealth.
3. We know we can sometimes earn above-average cash returns, while being aware that abnormal returns tend to be cyclical or brief.  Mentors will contribute to investment discussions, and we will ALL seek ways to keep our lives on a positive & pro-life path.

(I have been a regular poster there, but not as a Moderator - more as a Mentor, along with some other good mentors):


(Comments on mentoring, received from a "mentor" with my comments back):
A: I'll post on this FIRE group later. However I do not feel qualified to be a mentor. But I would be happy to exchange tips & experiences. These young filipinos (at least younger than me) seems really matured and have a nice profile. This is exactly the kind of people this country needs.
B: The Mentoring thing just means some informal advice and suggestions from time to time - And that the younger ones are "running the show" not me, or other mentors. The mentoring suggestions are purely voluntary, and no promises or guarantees on their effectiveness are made or claimed.
A: Perfect
B: "These young filipinos (at least younger than me) seems really matured and have a nice profile" I agree, and want to see them thrive and do well.  Not be fodder for sharp salespeople. haha

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I POST a lot about Stocks, and the trading portfolio of a mentee that I am helping / advising on her trading...

I felt it necessary to post the following warning:

HISTORICAL SPECIAL WARNING for FIRE / on stock trades mentioned here. 

I have been "crushing it" on the markets recently,  And I think if you saw my series of trades, especially the winners, you might be tempted to copy everything I do. That could be dangerous.  I am not always on a hot streak, and I will not feel obligated to tell you when I sell.  It might hurt my own trading, and I might forget to tell you.  So please take with a big grain of salt the stock charts, and ideas here.  The only way you are going to learn is if you are not relying on Tips, and are making your own decisions about what to buy and when to sell it.  But I can tell you this: in a strong market, stock trading is way more profitable than property.  More liquid, and with much lower transactions costs.

(about having the Right attitude)

PROPER HUMILITY - required to trade successfully is something like this:
+ Look at chart to see what trends are in place; identify support & resistance
+ Examine fundamentals on stocks I own or might want to Buy
Using these. Consider what may be the likely next moves, short & long term.

Monitor markets to see if my expectations continue to be met.
If so, Buy on Support levels, when they hold. Or Buy on a Momentum basis.
If not, accept that my market expectations may be wrong.
THEN, still accept that at any time: “ANYTHING CAN HAPPEN”
With this kind of attitude of trading humility, it is amazing how “lucky” I am,
In my trading activities, when I do good technical & fundamental analysis. 

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TIPS on Stock Picking

I will keep it brief...

1. I look for a sector I want to own. 

2. I scan many charts, and select a few with the best looking charts: short & long term,

3. I dive into the fundamentals, looking for evidence of undervaluation, including high dividend yield, low price ti book, or a rising earning trend,

4. Where I like a stock, I will monitor it, and look for a favorably entry point,

5. I don't buy all at once, usually I take 2-4 bites. 

6. Sometimes the first bite is taken quickly, a small position so I will stay interest. 

/ I tend to be a pretty savy seller, even my broker tells me that, often selling on or close to the top tick, but that is a whole different art, more reliant on charts

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Stock Investing Q & A:  I got some REALLY GOOD Questions from one of the chat participants

... and will copy comments here too, as I write & post them

Thanks for all the info and data. I have a lot of questions since I don’t know much about stock investing.

A few questions for now..
1. How much do you advise a newbie like me to invest for the purpose of learning the basics of how to trade?
2. What kind of stocks should we first practice on? Blue chips?
3. Which would be a better investment for guys in their 20’s, 30’s and 40’s? Investing in a retirement account like a 401k or investing in property?
4. What platform or software does your mentee use for her investments?

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1. HOW MUCH to start trading... 

How Much do you advise a newbie like me to invest for the purpose of learning the basics of how to trade?

That would depend on your age and circumstances. 

First, you must put yourself in a position were you are generating more income than you are spending, and are thereby growing your savings each month.  Then, prudence would dictate you have a cash cushion equal to 3-6 months of salary, to tide you over in the event of a loss of your job or some medical emergency.  However, if you start trading SMALL enough, then maybe this cash cushion will not be required.

There are two ways to start, one is by paper trading, and that means you are not using real money.  So you can do that any time.  In fact, I think virtually everyone here who is interested in stocks should be doing some paper trading to start - the Sooner the better.  That means picking stocks, writing down the price at which you have chosen to Buy.  MONITORING the stocks you have "bought", and then later "selling" them, at a price you get in the market.  You show keep a clear written record of your portfolio, writing down the trades and updtaung prices from time to time. (I can show you how to do that.) 

I recommend a minimum of 2-3 months of paper trading before you start real trading.  Then, you should start TRADING SMALL, with real money, where you can afford to lose the whole sum.  I would recommend that when you start real small- maybe the pot you use is Less than 1% of your annual NET income or less.  You need to show yourself, that you can make money consistently before you start pushing up the average size of your trades. Best to grow on success, re-investing profits alongside the funds you are adding.

PAPER TRADING BLUE CHIPS - you can use a format like this

My Mentee yesterday wanted to buy two "blue chip" stocks yesterday.
I suggested that she do them as paper trades.  So I will assemble a paper portfolio here - using this morning's prices.
Here are her two ideas, plus one of my own (AGI).

BLUE Portfolio
PortB. :  # shs : price : PValue:   Pct.
CASH : ——— : ——— : P1,060 :   1.1%
AGI    :   5,500 : P6.00: 33,000 : 33.0%
AC.    :        45 : 732.0 : 32,940 : 32.9%
SMC. :      330 : 100.0: 33,000 : 33.0%
Total: Starting, Last: P100,000: 7/15/20, about 11am

In fact, , which I am not yet ready to buy AGI just yet, since I think it can retest the March lows, or will at least break 6.00.

> more  here. including some valuation metrics: Mentee Stock trading

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MY MENTEE STARTED LARGER than this guideline, when we began an actual monitored trading a few months ago. 

However, she had my assistance at every step from the beginning.  In fact, there was some trial trading before the Official start. We started casually, late last summer.  We did not write down trades, we just talked about trades I was doing in my own account, and a few of them were trades were she was shadowing, and monitoring  results.   In fact, I had a windfall profit as a result of one of these trades.  I probably would not have even done the trade had we not been talking about it, so I gave her part of the windfall profit, as her starting capital - that was C$1300 used to start her CANADIAN PORTFOLIO. 

**You can learn more about this trade here> NEWBIE STOCK Trading - to gain Master

Here's a chart on the stock where I had the Windfall


WILD.t / Wildbrain Media .  See the jump to C$1.90 and beyond?  I sold some stock at $1.90 on the opening GAP UP that day, and made a nice windfall on the trade.  Later when the stock pulled back, I bought again, at under C$1.10. So I captured a profit, and then reloaded at a lower price.

Philippines Stocks: My Mentee also has a PHL portfolio. 

It has done well too, but not as spectacularly well as the CA portfolio.  Here's how that started.  She set up a PHL savings account at BPI, and started paying a regular amount, a little less than P5,000 a month into that account.   She also set up a BPI trading account.  After watching her make payments for 2-3 months, I agreed to lend her Php.100k to help kickstart her portfolio.  (in effect, the loan is secured by the payments she is making into the account, and also her CA-Portfolio, which I hold in my account.)  So she has had almost php.114k to work with in that portfolio. 

She has done a series of trades, and now has a portfolio worth Php. 136k, meaning a profit of P22k (+19%), and about 150% profit on her own contribution, of about p14k so far.

I am tracking the trades and updating both portfolios on a thread on my website, you can check that here : Mentee Favorites - stock charts & Portfolios

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2. BEST STOCKS? What kind of stocks should we first practice on? Blue chips?

Well, almost everyone will tell you: stick with blue chips.

My advice is a little different... Yes, buy some blue chips, but pay attention to valuations, and technicals (charts).

You probably should start with no more than 3-5 stocks.  I usually try and start with about three when I start a new portfolio.

Valuations: Aim to buy stocks with decent yields like, a minimum of 3-5%, or higher. So long as the dividends continue to be paid, this should give you some downside protection, since the lower the stock falls, the higher the dividend will be.  I also aim to buy stocks trading below book value, since that may provide further protection if the stock market is weak.  Low PE ratios are also helpful. But you need to have some familiarity with the business and the earnings prospects, so read the annual report and ponder the impact on the changing economy upon their earnings prospects.  Ideally, you should have some insight into the business you are buying into.  Perhaps as a customer for your target company, or one of its competitors. Then, you may be able to have your own view on whetehr future Earnings per share are rising or falling.

Here is a table with some fundamental metrics I look at:

Stock: Last - / BkVal. : %-BV : Yield : PER:
ALI    :  33.05 / 14.34 = 230.%: 1.60%, 16.1
SMPH: 31.55 / 10.41 = 303.%: 0.59%, 24.2
SHNG: P2.70 / P7.35 = 36.7%; 6.76%, 3.50
MEG. : P3.02 / P5.54 = 54.5%: 2.48%, 5.70
AGI    : P6.00 / 18.26 = 32.9%: 0.00%, 3.62
AC.    : 732.0 / 524.7 = 141.%: 1.04%, 14.3

Technicals: Seeking low valuations may push you towards stocks that are weak, and in downtrends.  Be very very careful with stocks that are making new lows for the year. There is an old saying: "Don't try to catch a falling knife," which means: don't buy stocks making new lows.  Personally, I do occasionally buy stocks breaking to new lows. but that will typically be for a bounce.  I might aim for e short term trade, like 1-3 weeks.  It is much better to buy a stock that has already "bounced of the Table top", ie that retested the lows on Lower volume, and may now be ready for a more sustained rally.

Comparison: Falling knife and After the retest


Above: WILD was Making new Lows, and it continued lower still


Above: WILD has tested Lows on very light volume in late March and April. The stock may be reversing its downtrend

Blue Chips: are well-known companies, with big Market caps, and usually believed to have stable earnings.

In theory, these are safer to buy.  But sometimes, yesterday's Blue Chip becomes today's train wreck. So there is no guarantee that a pattern of stable earnings will go on forever.  Generally speaking, in a rising bull market the blue chips get pushed up by momentum traders, seeking a low risk trader.  But we are now in a market where the bull market argument is debatable, and there are some very likely earnings and debt repayment shocks ahead.   I had identified the gold mining sector, which does not have blue chips in Phl, as a likely winning sector in mid-2020.  I bought shares in some smaller companies, and they have done well,  But I familarised myself with their valuation metrics, and their stories.  (There are some still smaller mining companies that are Zombie-like companies that I would not touch.). If you are young and starting off with small amounts, you may consider putting less than half of your portfolio into smaller companies, to get some experience beyond blue chips.  But be prepared for some losses, and consider trading with mental stops, where you will cut your position if the stock falls below a predetermined expected support level.  You don't want a portfolio loaded up with money-losing "dogs".  That will demotivate you and make you a less succesful trader. 

Before you buy into a smaller company, have. look at the volume.  There are some small companies in PHL that hardly trade.  Volume may be 100,000 shares on the average day or less.  If you buy into a stock like that, you may get stuck. and unable to exit without forcing the price down.  In general, you should make sure your position is a fraction of the average volume for average day.

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3. WHICH IS BETTER... Stocks or Property?

Which would be a better investment for guys in their 20’s, 30’s and 40’s? Investing in a retirement account like a 401k or investing in property?

Why not both? Do you really have to choose? Eventually. you can have your wealth diversified into both asset classes.

Obviously, starting out with stocks makes sense, since they can accommodate smaller amounts which you can own more easily for flexible periods. Better to wait until the right property becomes available at the right price.   Also, round trip transaction costs are FAR LOWER with stocks. Typically, on the Buy side you will have a transaction cost, commissions etc., of just 0.3%, and then typically another 0.9% when you sell.  Compare that with transaction costs on property, where it may easily cost more than 10% to Sell, with a CGT ("capital gains tax") of 6%, and a commission of probably 3-5%, plus some other costs, to release a mortgage and so forth.  On the buy side of property, you might pay 3-4%, with stamp taxes, and fees to banks.  Also, If you buy a new property from a developer you may think, it is zero cost.  but in reality there are costs embedded in purchase price you pay.  You don't see them, but they are there and are probably at least 10% of the price of the property.  What you will see when you buy a new property are various Miscellaneous buying cost, which might be 5-6% of the property's values.  These you will not get back when you sell, unless the value of the property rises.

Developers will tell you that you will save money and maybe even "make money" by purchasing on installments in the pre-selling window. A typical purchase price might be 5-10% down, and then something near 1% a month for years, and then maybe a large 50% balloon payment on completion before you get the key. (In an attempt to disguise the ultra-high prices of recent years, some developer cut the monthly payments, and now have larger balloon payments, such as 70-80%.) If prices rise during this long build period, you might find the property is worth more than you paid when you get the key.   But people must remember, they are getting NO CASHFLOW from all the payments they make, until after they get the key and rent it out.   So some increase in value is needed to recover the time-value of money you paid.

Some "sharp" salespeople form developers send out "Congratulations" emails when the developer raises the price for remaining units in a Condo you have bought.  But you must remember this: that price rise is for a brand new property, supported by a team of well-paid and highly-motivated sales people and backed by the installment plan and other financings structures the developer may offer.  YOU as a seller will not get the same support or the same price.  You might get 20-30% less, or even a bigger discount.  So to congratulate installment buyers, on the developer charging more for its similar product is somewhat non-seniscal.

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Timing Purchases


The Philippines Property Cycls


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I guys, I thought I share two actual buys we made this month in PH property. I think they are within the reach of most in this group and therefore maybe source of ideas:

1) Makati Executive Tower 2, 1br 32sqm, high floor. 2.5m . Seller has purchased “pasalo” from someone who bought in pre-selling. The title had not yet been transferred to the seller. As the original buyer was in good terms with the seller, we could have all documents signed by the original buyer so that we can transfer the title.

2. Citadel Inn Makati - executive studio 41sqm, fully furnished, high floor, 2.5m . Here seller was in the US, we worked both with SPA to get it done. Took more time to get it done because we did not get the copy of all documents right away. Also it was an old title, not all security items on the title matched (dates) with what we found online, two signatures on the title made with different pens.. quite some red flags. Never the less when we got the CCT from the LRA and had title examinated, it proved to be right (lesson don’t judge to quickly.. and triple check it all).

Rental yield .. MET2 was rented literally by the next day bar (but just for a couple of months) for 15k. We think with a bit of renovation/furnishing this can got to 18-20k.

Citadel Inn was rented for 25k until March.. maybe 20-22k now good. It’s very well furnished so may be ok. Poblacion seems to have a lot of change going on and with covid there will be less go go bar which give it a bad reputation.

Financing: decided to just take most of the money by personal loan in HK, costs me a bit more than 3% interest. PH would also have been feasible but interests are higher.


Prop.- : Price- : Type: Size : /Sqm : RENT: /Sqm: p.a. : Yield:
MET-2 : 2.50M: 1Br- : 32.0 : 78.1k: 20k.E:  P625: 240k: 9.60%
Citad. :  2.50M: Stu. : 41.0 : 61.0k: 22k.E:  P536: 264k: 10.6%
Upside: Rents may be increased thru renovation

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We all need to live somewhere.  And most people spend almost 1/3 of their income on housing related expenses, be that Rent or Mortgage expense.  One of the most important concepts of FIRE is to spend your housing related cash flow carefully, so you will recover most or all of that expenditure later.   Normally, that would be through the sale of a property.  By doing that, and maybe even making a capital gain beyond that, you transform your 1/3 cost into future wealth.  That wealth can help you to move towards Financial independence.  In my own life, I have been doing this in a very disciplined way.

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"if you buy well, your property may wind up costing you nothing during the period you live there - it can even give you a Negative Housing cost"

We all need to live somewhere.  Most people spend up to 30%, or even 1/3 of their income on housing related expenses, be that Rent or Mortgage expense.  One of the most important concepts of FIRE is to spend your housing related cash flow carefully, so you will recover most or all of that expenditure later.   Normally, that would be through the sale of a property you have been living in.  By doing that, and maybe even making a capital gain beyond your cost, you transform that 30% of your income you have spent on your home into future wealth.  That wealth can be enormously useful in helping you to move towards Financial independence.  In my own life, I have been doing this in a very disciplined way.  It works well.  In effect, I have been living for free, having a ZERO or NEGATIVE housing cost for decades.  When I sold my main home (several times), I more than recovered all my interest paid, as well as my other housing related costs during the period I lived there.  I had a nice capital gain, which allowed me to buy a larger next property, and/or to capture an extra sum that I could put into other properties or stock investments.

Keeping costs down, by thinking small, without sacrificing quality of Life

Assuming you are Budgeting some figure, like 30% of your income, towards Housing,  if you just squander that, paying Rent, you will never recover that lost cash flow.  It is better to find a way to lower rental costs, through sharing an abode.  That might be the first step: Save money by sharing, until you have enough capital to buy your first property.  Even better, if you can "paying Rent to yourself", because you own the property you live in.

Here are some more ways to think about the strategy of buying the right home, the one that suits your needs but will also help you to build your future wealth.

Let's look at three cases:

1. You have enough capital to buy a property for cash,  2. You have some capital, but not enough to pay cash to buy a property.  IE, you need finance.  3. You have almost no capital

1. You have enough capital to buy a property for cash, 

If you have enough capital to buy for cash, you really should do that, rather than renting* (The exception might be that very small number of people who know where to deploy capital so it earns a nice return FAR ABOVE what you make from owning a home.)  However, even if you are getting a good return outside property, you should still consider this matter carefully.  Because, if you own your own abode, without a mortgage, then that home is something that no one can take away from you.  Owning your own home may be the best & safest investment you will ever make, because you yourself are the main care keeper of that investment..  A key part of your future living expense has been covered, and settled already.   The main advice I give to people is: Buy your own home, as soon as you can afford it, because your living costs will go down, and be more predictable and stable at a low level.

You should consider this carefully, even if it means buying a smaller or older property than you think you can afford.  A sacrifice of some space in your early years, may repay you many times over, if it helps to boost your capital for future investment.


Here's an example from my own recent past - when I decided to begin my move to the Philippines from Hong Kong about 5 years ago.  I was buying a P 8 M property as my main home, but it was under construction, and would not be ready of 3-4 years.  In the meantime, I wanted to spend some serious time in PHL, to get to know the place better.  I had a mental budget of perhaps P15,000 - 20,000 a month, that I was willing to spend during the time I would be in PHL,  I was thinking that might be a maximum of "Half-time"  such as spending every second month in PHL. At first I thought I would just stay in an AirBNB pad, and spend perhaps P1200-1500 a night.  (if I did that 6 months out of the year, it would come to a maximum of: 1500 x30 x6 = 270k per annum or less.). That would be a lot of money to "waste" on rent.  And if it was in Makati, all I would be getting would be something like a comfortable hotel room.  Not even a 1 BR flat.  And anyway, I had a nice 1 BR flat that was under construction, that I would be moving into in about 2018-19, when it was expected to be completed.



Eventually, I decided to buy a second property, and cheap one, to live during me temporary stays in PHL.  A main requirement was that it be within walking distance of Greenbelt and Ayala Avenue, and not cost me more than P20,000 a month to own it.  Assumed an 8% cost of capital, I could work backwards: 20k a month is p240K a year, and at 8%, that would be interest on P 3 Million.  SO I was thinking if I bought a property for up to 3 Million, and it went sideways in value during the next 3-4 years, then it would cost me P 20k a month in lost income on the capital I deployed.  But I needed to adjust this figure, since the property would also cost me a monthly association fee (maybe 2k a month), and an annual property tax.  So my budget came down as follows:  (20k -2k, or 18k a month -10k for property tax, and so= 216k - 1k= 206k / 0.08)= P 2.75M maximum price to spend. So I wanted to find a property CHEAPER than that, which was likely to rise in value over the next 3-4 years.   The wife of my Alveo agent, was also a property agent, and I asked her to show me properties "below the 3.199 M VAT threshold."  She showed me one that met my requirements.  It was a reopened Studio unit of 22 sqm, and I was told if I paid cash, I would get a 10% discount, and be able to move in within about 3 months.   I bought it quickly, paying just under 2.1 Million all-in.   I had a nice budget left to pay for furniture. And by the time I moved in with all the new furniture, my all-in cost was about 2.3 Million.



Though the place was small. I was only living there halftime, I would fly over from HK, and stay for up to 30 days, and then fly back to HK.  It was bright and cheerful and had enough storage, so that if I needed to bring most of my personal things over from HK, I would be able to do that.   And it was set-up as a sort of home office, so I could not only sleep there peacefully, but I could also work in the unit, and even run a small business there if I wanted to.  My actual cost of living there was only about 2,000 a month for association fees, plus less than 8,000 a year in property taxes.  Plus an average monthly electricity spend of under p400 a month and maybe P100 a month for water.  3 years there cost me less than 2k x36 + 400 x 36 + 8k x 3 = 100k.  If I add in the 8% a year in foregone income on 2.3M, it comes to: 100K + 184k x3= 650k.  So if I sold the property when I moved out for P3 Million or more, I would have had a NEGATIVE COST OF HOUSING for those three years.  Instead, I found I could rent it out at P24,000 a month, which after association fees of 2k, gives me a nice 8.8% Yield on that P3 Million notional property valuation.  I plan to sell it someday for P 4 Million or more, since a similar NEW property of almost the same size, in a less favorable location, is now being sold by Avida at P 5.7 Million. And that is the "discounted" price. haha.

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  • 2 weeks later...

SPECIAL WARNING on Expensive debts, like 3.5% a month Credit Cards

In Philippines, once a person has been in a regular salaried job for a year or so, they may be eligible for a credit card.  These can be a handy way to buy items ranging from air travel tickets, to restaurants, to consumer items.  Getting in the habit of using cards can be dangerous, since it may be hard to pay them off and avoid sliding into a debt spiral.  In a debt spiral, debt from one card is used to payoff the debt on another, and pretty soon the regular card payments are only covering interest, or less, and the card balance will grow.  In Philippines this can be very expensive debt, at maybe 3.5% PER MONTH.  If you start compounding these debts they get very very expensive.  Just see what Php 10,000 can grow to in just 12 months, if you fail to make payments. (answer: P 15,111.)   This 3.5% a month compares with 1.5% a month maximum legal rate in countries like the USA.  (At 1.5% a month, $1,000 will become $1,196 in a year. That's a maximum of 19.6% compounded in 12 months in USA versus an astonishing 51% in Philippines.)

A wise rule for those aiming for FIRE is to always pay off the most expensive debts first.  And you should pay off ALL expensive debts before you start saving and investing.  (Although it may make sense to invest some small token amounts to gain valuable experience in investing.). The truth is, it very unlikely, and maybe not even possible for someone to make more than 3.5% per month, with any degree of consistency in the long term.  Personally, I think it takes a very good investor to generate returns beyond 10-15% per annum over stretches like 5-10 years or longer.  Certainly, a basic Rule is: you should not borrow expensive debt, to finance stock market speculation.   Learn how to get out of debt, and build actual savings before you start investing significant sums.

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POLL : PLEASE CLICK on the Heart next to all that apply,
Showing your areas of greatest interest

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POLL : PLEASE CLICK on the Heart next to all that apply,
Showing your areas of greatest interest

1. I am aiming to get out of debt
2. I want to get good rates on my savings, bank deposits etc
3. I’m Paper trading stocks to gain experience
4. P 5000 investments or less
5. P 25000-50,000 is a nice minimum investment
6. P 100k-500k is my average stock investment
7. P 1 million and larger investments interest me
8. Properties up to 2.5 million (Vat threshold) might interest me
9. Properties of 5 Million and above are within my range
10. Yields like 8-10% are my minimum expectation


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Two Great Videos: provide intro to FIRE thinking

KEEPING YOUR 27%, Making the most of your Housing spending

Tiny House Movement | Andrew Morrison | TED talk. >

Instead of paying it out, turn it into savings, by living Happily on a human scale, without big debts

/ 2 /

CATCH FIRE: "Maybe you'd retire right away, and start living your good life immediately." /

"I was working my butt off... Why do we work ourselves to death? ... Then I came across the 4 Hour Work Week"

SAVE MONEY: use it to buy Assets, which generate Passive Income... and Retire Early

- like Fred who saved 60% of his income, reached FIRE and retired at 30 y.o. >


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Not everyone is a Fan of FIRE:

Some "get it", while others do not understand the details, & think some FIRE movement people are reckless

Reasons To Dislike Financial Independence Retire Early -

The FIRE Movement  Financial Independence Retire Early gets some people excited, but it also gets other people upset or even mad. The FIRE movement is a little difficult for some to wrap their head around at first, but once you understand it you realize what it's all about.

In this video, I'll go through the reasons most people dislike Financial Independence Early Retirement and attempt to uncover how FIRE people would get around those possible problems.

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Suze Orman: Why I Hate the FIRE Movement | Afford Anything Podcast (Audio-Only)

Suze Orman is one of the most famous voices in the world of personal finance. From 2002 to 2015, she hosted The Suze Orman Show on CNBC. She's the author of 10 mega-bestselling books, she wrote a financial column for O, The Oprah Magazine, and she's made multiple appearances on The Oprah Winfrey Show. I turned to Twitter and Facebook and asked my community, "What would you like me to ask Suze?"

One question stood out far ahead of all others in popularity:

What does Suze Orman think about the FIRE movement?

I opened with that question. And Suze's response shocked me. "I hate it," she replied. "I hate it. I hate it. I hate it. And let me tell you why." That's a direct quote. (Really.) She spent the next 30 minutes explaining why she thinks pursuing FIRE could be the biggest mistake of a person's life.


Ms Orman thinks you need $10 Million (P500M) to Retire early. Wow!

Suze probably has too many paying advertisers who want to push expensive holidays & luxury Consumer products   ...

COMMENT: "As another commenter said, Suze may hate the FIRE movement because it steals her thunder. If more people adopt the FIRE movement, they really won't need Suze--they'll be way past the stuff she teaches." 

Indeed:  4% a year from Municipal bonds? haha.  Spending money like water on pricate islands and aircraft?  Honestly, who needs that??

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  • 2 weeks later...

What's better: a New Pre-sale property, or REIT shares?

(Comments from a viber chat)

The question now for OFWs is: why buy over-priced new properties on an installment basis, when you can buy flexible REIT shares without paying the 30% (or so) premium for new property?  They can PARK money in Reit shares until they find a bargain in the secondary market.

Q: A property is much better, isn't it, because it gives you full control (The ability to Have full control on the investment - whether to sell, lease or live in it)

A: FULL Control, you do not have, if you are buying on installments: 1. Property may be delayed, 2. Property may require finance, and the Loan/to Value may not be what you need, and rates may be higher than anticipated, 3. Yields may be below your expectation, if/&when it is completed and you find a tenant, 4. If actual secondary market prices fail to rise, you will wind up sitting with a 30% loss, 5. You cannot control when you find a buyer, and Transaction costs are sky high when you finally sell,         ==> In fact, you have very little control of your capital when you buy a new pre-sale property

Q: I would say that 80% of OFW do not know what a REIT is. Secondly, many want something to go home to when they return to the country.. a place to live or for the family. Don’t think they don’t want to go home to a few thousand shares in a REIT. Somehow in many other Asian cities, despite the appearance of REITs, people have not stopped to buy property even if yields were way lower

A: They cannot go home to it, until it is completed.  My condo was originally supposed to be complete at end of 2017. I got the keys in March 2019.  If I was an OFW now, I would make regular payments to buy REIT shares or other high yielding shares. And then look for bargains in the secondary market, expecting to pay 30% or more under the price of a new property.  When I have enough wealth saved, I can liquidate my Reit shares and but something cheap - with Cash, and with or without bank finance, depending on its availability and cost.  Getting a nice yield on the Reit shares, may be much better than getting stuch with an over-priced "new" property, than will not get the "new" pricing when I have to sell it.

Q: "...80% of OFW do not know what a REIT is..."

A: Here is an explanation, well designed for both locals and OFW's :

AREIT ₱24.10 GOOD DEAL OR GREAT DEAL? - Rex Mendoza >

REX is trying... And others I know are trying... to get the message across:

People I know are going the step-by-step pathway. Shares are the first step.  One friend I have been talking to now understands how expensive, and how toxic, is credit, and things bought on credit in PHL.  (Actually, for me: "expensive things bought on credit" at this stage of the market would include most new properties)

My friend really got it when we sat down and worked out how much her 3.5% rate on credit cards was on a Per annum basis. (= 51%), Then I asked her: if you are borrowing 2years worth of your net salary at that rate, what percentage of your monthly salary goes towards paying interest (= ALL of it!.) The Debt trap becomes unmanageable well before that stage is reached.



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A Magic Formula that works?

"Buying good companies at Cheap prices"

Magic Formula Investing by Joel Greenblatt (THE NO-BRAINER WAY TO MAKE MONEY IN STOCKS)

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Magic Formula Portfolio Update (1 YEAR RECAP): -30%


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  • 3 weeks later...

HIGH DIVIDENDS are a great way to generate passive income

This approach makes some sense, but might be a little too passive for me:

HOW TO GET 100,000 PESOS A MONTH FROM DIVIDENDS? > Spend P24M, or less than Half

Here are the 7 stocks used in the video.

Sym.  : Company—- : -Last : YrLow: PE R: E.ps: Yield: Div.:
SPC.  : SPC Power— : P9.08: P6.50: 7.60: 1.19: N/A?? : 0.00
GMA7: GMAnetwork: P5.05: P4.28: 10.7: 0.47: 5.94%: 0.30
MER.  : Manila Elect.: 259.6: 189.7 : 16.1: 16.1: 3.78%: 9.81
TEL.   : PLDT Inc. —  : 1,416: 805.0 : 13.5: 105.: 5.44%: 77.0
GLO.  : GlobeTelecm: 2,040: 1,590 :  12.9: 158.: 4.87%: 99.3
AREIT: AREIT (ayala) 25.25: 23.85 : N/A : N/A : 4.91%: 124.
AP.     : Aboitiz Pwr.  : 26.00: 20.15 : 15.4: 1.69 : 4.54%: 1.18
====: 6 co’s Average: ==== : ==== :  12.7 : === : 4.91%

Replace SPC with SCC

Sym.  : Company—- : -Last : YrLow: PE R: E.ps: Yield: Div.:
SCC.  : SemiraraM&P: P9.40: P8.30: 6.40: 1.47: 13.3%: 1.25
GMA7: GMAnetwork: P5.05: P4.28: 10.7: 0.47: 5.94%: 0.30
MER.  : Manila Elect.: 259.6: 189.7 : 16.1: 16.1 : 3.78%: 9.81
TEL.   : PLDT Inc. — : 1,416 : 805.0 : 13.5: 105.: 5.44%: 77.0
GLO.  : GlobeTelecm: 2,040: 1,590 :  12.9: 158.: 4.87%: 99.3
AREIT: AREIT (ayala) 25.25: 23.85 : N/A : N/A : 4.91%: 124.
AP.     : Aboitiz Pwr.  : 26.00: 20.15 : 15.4: 1.69 : 4.54%: 1.18
====: 6 co’s Average: ==== : ==== : 12.5 : ==== 6.11%

How much is required to generate P1.2M pa. (= P100k /mo.) ?:
+ 4.91% : P 24.4 Million
+ 6.11% : P 19.6 Million
+ 13.3% : P 9.02 Million

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  • 1 month later...

15 Best Investment Vehicles for Filipinos
    1. ETF
    2. Modified Pag-IBIG 2 (MP2) Savings
    3. Bonds
    4. Insurance (VUL)
    5. Micro-Lending & Peer-to-Peer Lending
    6. Stocks
    7. Mutual funds & UITF
    8. Small Business
    9. Real Estate (foreclosed properties)
    10. Cryptocurrency
    11. Buy a website (for passive income)
    12. Forex Trading
    13. Angel Investing (Venture Capital & Private Equity)
    14. PERA: Peronal Equity & Retirement Account
    15. Invest in New Skills                                                      

...  > https://grit.ph/best-investments/

What is Compound Interest?

Compound interest is the resulting interest based on your initial deposit/investment plus the accumulated interest gathered from the number of periods it was compounded (“compounding schedule” — e.g, daily, weekly, monthly, annually, etc.,).

And that’s why it’s also called “Interest on interest”, since it piles on top of both the principal and its earnings.

In comparison, simple interest is calculated only on the principal amount, which does not include everything the money gained so far.
Compound interest requires three things to work its magic: money, interest (earnings), and time.
To explain this better, let’s do a quick analogy.
Imagine a snowball rolling down a hill.
As it rolls down, it continuously picks up snow, making it grow bigger.
With each revolution, the more snow it absorbs.
And the longer it rolls down, the bigger it gets.

Now imagine that money is represented by the initial snowball before it rolled down the hill (principal)
The accumulated earnings is represented by the amount of snow it gathers as it rolls.


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Dec 27, 2019 — To put it simply, when you buy stock from a certain corporation, you ... There are two types of bonds you can invest in the Philippines, namely ..
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  • 1 month later...

WEALTH & the Crisis in Capitalism.  

Really excellent interview here with a guy who is probably the world's most successful Hedge Fund manager: 

Ray Dalio's introspective look at financial world order, inequality and capitalism: Full interview >


Dalio's article: The Changing World Order,

Folks, I don't think Biden is going to do anything to remedy the Crisis in Capitalism, if he is confirmed, so think deeply about the danger of holding cash

- My PHL portfolio has a lot of that, so I will be thinking some deep thoughts about what to do with it

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  • 1 year later...


+ Knowledge is power. Best to get an overview of your financial situation before formulating a plan.  Make a list of Assets, showing value at end of a Quarter, and also show expected annual income


+ Biggest first step in building wealth Is to own your own Home.  This way, you “pay rent to yourself”, can lock-in the cost and you don’t have to pay tax on the “rental income” that you pay yourself.

+ There is a fairly predictable Long cycle in Property. It is about 18 years long, on average. It is not 9 years up, and 9 years. It tends to be 14 years up and 4 years down.  So most of the time you are making money.  But if you Buy at the Top, it might take 7 years or more to recover.  I believe we may be now near the top, and a randomly chosen property could be a poor investment.  But there may be opportunities ahead.  Times like this are good times to pay attention and learn,  to “climb the learning curve”

+ In your situation, it may makes sense to be (another family member’s) “business partner” in an investment. Maybe even a very carefully-chosen property investment could work now.  Your lower tax rate could be an advantage, and so might be your ability to pay some rent.  Needs some planning, but if you take the income at a lower tax rate, and he gets a long term capital gain, it could work best.

+ Property Ideas to consider might be a two-dwelling home (ie large home with Granny flat behind.) Or a property you can live in as your home, while renting a room or rooms to a short term, or long term tenant.  This could be Air BNB. or just less formal house sharing.  Many people in the past used to “take in boarders”, sometimes students paying rents to share costs.

+ You might want to start investigating opportunities in 2-3 specific locations, like one in A, one in B, and one in C.  To learn how to use the internet to investigate properties in detail, before you actually see them.   I have owned homes that I hove never been inside.  (It is not without risk, as I discovered, but overall I made money.)

+ Look for activities inside the property market that catch your interest and hold it.  You can improve your investing by digging deep and understanding better.  You might even find a job or business opportunity.

+ Give yourself 6 -12 months, or more, as a student before thinking seriously about buying.  You may be surprised at how much you learn.  (Get on top of the math of Gross Yield, Net yields, and how the compare with interest rates.  Buried there somewhere is the secret of making money using “other people’s money”

++ Make a short list of things you want to learn, or areas you want to investigate

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