Personal Finance, Family and Career

Posts from — October 2009

Weekly Roundup: New Contract, No Fear Edition

Last week, my contract with my current company was renewed. This means that I am now a regular employee and have a much stable job in the company I am in.

Here’s the list of my favorite blog posts from last week:


I really liked this talk. After watching the video, I actually started to teach myself the japanese language from various and will probably learn more when I think I’m ready for classes.

Amazing Video. This is truly the best time to become an entrepreneur.

I am planning to start a business later this year or probably early next year. Hopefully, with all the information I’ve been gathering, I will be pretty ready for the challenge of entrepreneurship.

October 28, 2009   No Comments

Simplify your Life

There has been a lot of buzz lately about living simple.

We have blogs about uncluttering and minimalism.

We have books about simplicity.

We have radio shows about the simple living

I think we can all agree that there is a good cause for it. Life is much much happier when we can focus on things we really love.

What’s that? You don’t agree? Don’t worry. That’s normal. Millions of people haven’t seen the light.

Consumerism is a growing problem in the world today – people buying houses they can’t afford, getting into debt by spending more than they earn, living a lifestyle they can’t afford.

Advertising

We are being bombarded everyday with tons of advertising materials on television, internet, radio, magazines and newspapers. Advertisers are using all necessary means to get our attention. In fact, Media Dynamics, a New York-based firm, estimates
that the time devoted to advertising has increased 25% since the 1970’s. We are now being exposed to 254 different commercials a day[1]. And you know what? It is working.

Simplification, on the other hand, solves consumerism. When simplifying, we don’t mean living a dull and boring life. When simplifying, we reduce everything to the point that we have enough. Enough, to live a wonderful and comfortable life.

Enough

Enough is the goal of simplification.

Enough for survival.
Enough for comforts.

Not enough for clutter.
Not enough for unnecessary wants.

People go through life not knowing what enough is. It is very common in today’s world and the whole idea of simplifying is unnerving. Here are a few things you can do right now to simplify your life.

  • Turn off the television. Let’s face it. There aren’t a lot of good television shows lately. Turn it off
  • Live in a smaller house.Besides, a big house is a lot more expensive and harder to maintain.
  • Cut your own hair. This is entirely up to you. I want my hair short and cut my hair with clippers.
  • Use a simple blade shaver. Dropping the mach5 for simple shaver reduced expenses by 1000%
  • Walk. When you’re going to somewhere near, forget the car. Walk. It’s free exercise.
  • Buy clothes you can mix and match. You don’t need a lot of clothes. Mix and match and you’ll have an endless wardrobe.
  • Have a simple budget. I recommend Tyagi’s Balanced Money Formula.
  • Use the ATM or online banking. If you can do everything without physically going to the bank, do it. I do all my payments except PAG-IBIG mortgage payments through the ATM. I set a date to pay all bills and pay everything on the same day every month.
  • Consume less media. You have a fighting chance against advertising if you watch less television, read fewer magazines and browse fewer websites.
  • Stay away from the mall. When you go to the mall, you will spend money. According to Carlyn Wesson, author of Women Who Shop Too Much, 53 percent of groceries are spur of the moment[2]
  • Create a shopping list. Some may argue that they need to go to the mall or grocery. In this case, create a grocery list and stick to it. Don’t get anything that’s not in the list.

Is living simply for you? Here a few resources that will help you on the road to simplicity.

1 The Tipping Point p. 98
2 Your Money or Your Life p. 171

photo credit

October 27, 2009   No Comments

What Is A Mutual Fund?

If you’re anything like me, you’ve already read the word, mutual funds, a thousand times already. It’s practically in every personal finance book. Almost all of them advice you to invest in mutual funds. Almost all of them advices you to buy into mutual funds. What exactly is a mutual fund?

A mutual fund is a collection of stocks, bonds and other investments. The collection itself comes from the amount invested by each member. The investment choices are then carefully picked by the fund manager. The revenue, minus the expenses are then reinvested into the mutual fund.

Understanding Mutual Funds
Most mutual funds member or investor receives shares, more commonly known as NAVPU in exchange of the money they invested. The NAV is the market value of one unit of a mutual fund on a given day which is computed based on the value of the mutual fund’s assets minus the expenses and liabilities divided by the number of members.

To redeem your money, you should sell back the shares to the mutual fund company. It should be noted that the money you invested might not be the same amount that you invested in the first place. It may have gone up in value or it may go down. It all depends on the NAV on the date you redeem.

Why invest in Mutual Funds?
Mutual Funds are not savings accounts.

Savings accounts saves your money from loss. This means that you should receive practically the same amount when you withdraw your money. In mutual funds, you may not receive the same amount.

Savings accounts are ensured by PDIC up to 500,000 PhP. Mutual Funds offer not guarantees that you would receive any amount on redemption.

While mutual funds are much riskier than savings accounts, they offer much more in return. Savings accounts interest rates are below 1% (.75%) per annum as I am writing this. So, when you save 1,000 PhP in a savings account for one year, you’d be getting 1,007.5 PhP. Seven pesos.

Mutual Funds returns are much much higher depending on the type of mutual fund you get. You could even get returns up to 50% and higher.

Another reason why someone should invest in mutual funds is that mutual funds are diversified. Meaning, the mutual fund buys many types of investments ranging from bonds to stocks. The diversification shelters you from various market hiccups.

Further Reading
While I have given you information on mutual funds, it’s still a great idea to read up on mutual fund investing through other resources like blogs, books and from a professional finance advisor.

I will probably be giving you more information about mutual fund investing in the next few weeks, so stay tuned.

October 26, 2009   No Comments

What Affects How We Feel At Work

Here are some thoughts from the great book, Escape from Cubicle Nation. It lists down what affects how we feel (alive, passionate, relaxed, happy) at work:

Physical work environment: type of building, color scheme, how desks are laid out, natural vs. artificial lights, etc.

Type of business: for-profit, nonprofit, established, start-up, your own business

Business culture: how people treat each other, values displayed by actions of all employees (not just words), policies and procedures or lack of thereof

Communication styles of managers, clients, and coworkers: direct or indirect, confrontational vs. relaxed and open

Size of business: number of employees

Type of work content: what the company is in the business fo selling, e.g. financial services, retail, consulting, consumer products, software, etc.

Skills and talents used in work: which skills you are using in your day-to-day work activities

Here’s my take on the following:

  • I had once worked in a start up company that started its operations at the condominium of the COO. Seeing the sofa and the television on only made us think of home and rest. I think you know how that worked (hint: sleepiness)
  • I’m almost never going to work for a non start-up company. I just hate it. It must be a good thing for others. It’s just not something for me. I’d tell you about it later.
  • I recently resigned from a company that vulgar words were spoken in almost every sentence when my co-workers spoke. I resigned two months later.
  • The last one is a no-brainer. If you aren’t doing something you generally like doing, you’ll be miserable.
  • I should probably add that salary also sometimes affect how we feel at work

photo credit

October 24, 2009   No Comments