First of all, happy new year! I know most of the stuff that I post in my website are all about strategies about how to win in the market and frequent updates on what is going in our economy and the financial markets. However, as we open the year, I really want to address the 99% of the population that’s not yet invested. One of the reasons why I created my website more than 9 years ago was so that I could reach and influence as much Filipinos to change the course of their financial destinies by investing and starting businesses. (If you want to know more about stocks, here the link for you.)
Catch me in my live training events!
The heart of why I do this seminars is I want to build a generation of Filipinos with the right foundation in stock investing. I want to bring smart investing to every Filipino around the world! If you would like to know more on how you could time the market and win in stocks, checkout the trainings below.
1. If you don’t pay off your debts
This is one of the best ways to lose money. Most people fail to consider that interest payments alone will chop off a significant allocation from your budget each month and will hurt you over the long term. Specially if you are in credit card debt and you are just paying for the minimum amount each month. At the very least you will pay more than 40% each year if you just pay the minimum amount. If you are in debt, do not buy the gadget that you cannot afford yet, use whatever extra you have to pay off and finish off that debt.
Possible loss: above 40% a year
2. If you leave all your money in bank accounts
There’s nothing wrong putting your money in the bank. I always tell my private clients that cash is king and cash gives you the option to position well you in your stock trades later on. However if you do not have any investments and everything is in the bank you will lose so much as prices continue to rise and the value of your money stays flat. This alone, can make you lose 3-4% a year. Tuition fee hikes alone are already 10% a year! Why settle for banks when they are just giving you 0.1% a year.
Possible loss: at least 4% a year
3. If you do not invest
You cannot work in your job forever. If you are a professional and you maybe raking it now in your career, there will come a point in time where you would not be able to work as hard as you used to. You need to think about the end in mind, you need to realize that your ability work hard and strong will diminish. You need to see that at a certain point in time you need to have your money work hard for you. However, for your money to work hard for you, it needs to reach a point that it becomes a stockpile of cash that you would not need to work for a single day in your life. The only way it becomes a stockpile is if you start investing today. It does not even have to be stocks, it can be real estate, bonds, your friends’ business, anything that will bring you passive returns in the future.
Possible loss: 100% a year
4. If you invest in something you do not understand
This is the best way to lose money! Do not invest just because your friend is making so much money in his investment. Do not invest just because you received a hot tip. Do not invest just because everyone is talking about it! Invest because you have studied it well. Invest because it fits your timeline for risk and reward. Invest because you know the ins and outs of it, you don’t have to be an expert but you just need to know what you are getting in to. It pains me to see so many people lose money just because they followed an advise without them even validating what it is.
As bitcoin started to rise, I have received so much questions about bitcoin this year. Bitcoin in itself, if traded using technical analysis (not treated as an investment but as a way to go out when the chart tells you to could be sound), may give you could returns but coming in blindly just because you hope that it will go up is just plane wrong.
Possible loss: You can lose everything
5. If you do not invest in yourself
You have to remember that you are your greatest asset! You will only go as high as what you you have and know inside. Don’t focus on getting rich first, focus on building yourself and your skill set. Because the more you increase your skills in business and finance the greater and better financial decisions you will make. You have to remember, the greatest currency in investing is the ability to process information well and to use it to your advantage. Please build yourself up, read as much as you can, attend as much conferences as you can. Surround yourself with the right people who will steer you to the right direction. Do not spend time with people who will just drag you down and won’t add value to you.
Possible loss: Opportunity lost from making the wrong decisions
This are just five points but I really do believe there are more. For 2018, I will do my best to write as much as I can to help change the way you think and to steer you towards the right direction of money management and investing. As I really believe in you and I believe that, the more prosperous you are the bigger your ability to make a difference in the world around us.
God bless you and may 2018 be your best year yet!