New Years Resolution? New Goals!!!

I plan to increase my investment fund to earn more passive income. I was thinking of a new business that I can start in order to earn more money and in turn increase the size of my fund. I was thinking in the lines of real estate, internet cafe business or just hire more people for my current business. My current business, I'm satisfied of having just me and a few friends. And real estate seems to need a lot of time and money start, especially, I want to do business using rentals.

So my decision is, to start an internet cafe business. Let's see how this would work out. :)

Teaching Family and Youth the Value of Investing

OFW, family members and the youth that will enter college, will decide on their future based on how much money they can earn on their future jobs. OFWs will try to get out of the country in search of a greener pasture, family members will try to help their kids be an OFW and the youth will take courses that will make them an OFW, such as nurses and domestic helpers.

This in a way, is the wrong frame of mind with regards to being financially free. It is not how much money you can earn with a job. Its irrelevant. Its what you do with the money you have, no matter how big or small.

OFW

Give me one OFW that is financially free. That is, even he does not work, their families can still survive for a lot of years. No OFW can be financially free just by earning more than anyone else in the Philippines. Its a fact... Being financially free is not measured by your pay check on what country you are in. Its in the amount of time you spend on planning your investments.

Most ofws will spend their money once they return to the Philippines for a brief vacation. Then after a month or two, they burned their money and will try to get a loan to get back abroad. Its a cycle. Is this something you can see yourself doing when you are 70 years old? I guess not. I'm sure people will tell you, I'll save enough money by being an OFW and start a business in the Philippines. Ok. That is a great plan. In fact, most OFWs will have this kind of goal. But the sad thing is, how can you become a business owner with the money you can't afford to risk, without any knowledge in business? Are you sure you'll be able to keep your new business afloat? 90% of businesses fail in their first year of conception. Microsoft went bankrupt in its second year. What makes you think just starting a business will make you financially free or even succeed? Ideas are good and great. But action and execution is what makes a difference. A businessman is rich and financially free because he spent a lot of time studying how to run a business, how to make a good investment of money. Which, OFWs lack because they have spent their whole lives as consumers.

Family Members

Family members are the main reason why OFWs will never be able to be free financially. Most of them are parents who has no knowledge of investing and no self control. They have lived most of their lives in poverty and when money comes, they burn it by buying motor vehicles, houses or expensive clothing. They want to tell their neighbors that they are doing well. That they are better. While their son / daughter breaks their back working, the parents are living the life.

You know the typical ofw that will "sacrifice everything" for their family. Even the sad of emotion of being away from loved ones that breaks their heart are overcome, so just to give them a better future. The mass media has over exaggerated our ofws. For me, I think, money should never change your character or attitude. A bigger salary should not affect what you want to do in life. A bigger pay slip should not affect the feeling of being away from your loved ones. No matter what your sugar coated reason is for leaving. Let's face it. Its all about the money.

Money should never be the reason. Its just a tool to keep score of how you are doing. Your kids can only be young for a few years, once they became adults, they are not fun to play with anymore. And they may resent you for leaving them behind. It will be awkward to talk to them in the end and even though you want them to be grateful to you for "sacrificing" just to put them in a good school, they will never feel that emotion. All you did was lend them money so they can graduate. The feeling of having a mother or a father is not there. No matter how much you say or explain it to them. Its still "action speaks louder than words".

We are only in this world for a very short time. What's on the other side is still unknown. And I try to think that there's no other side. If there is. There's no point in making investments and living in the present. If all things are good on the other side, it defeats the purpose of improving yourself here. If there is the other side, there is no feeling of "time is running out" and we will only waste our time away.

The Youth

Last night I was watching TV. There was a contestant in a game show in primetime that wants to be an engineer. And the host asked why. The girl answered, because Civil Engineers get paid more than Architects. It surprised me. Because I'm an engineer. And in a 3rd world country. I know how much is an engineer's salary. This girl will be disappointed, because his goal is money. And will probably take Nursing once she realize that engineering is not that high paying. At least for the first few decades in the field. An engineer's salary in the Philippines is a measly P6,000.

These kind of youth we have right now, have no dreams. Earning a high salary is not a dream. Motivated by money, they will have nothing to offer to society. They will have no value to give to the community. Instead of taking a course in college which they love, they'll be spending their lives chasing after money. I feel sorry for them. Can't you just take a course in fine arts because you like to draw and its your passion? Many says there's no money in fine arts, but if that makes you really happy, that's enough reason to take it. You can always learn about making money later. And any skill can be learn. Especially making money and investing. Why waste 5 - 10 years taking a course that you didn't choose. Its just doesn't make any sense.

Stock Market Investing : Window Dressing

Window Dressing is a term used to describe the activity of mutual funds to sell bad performing stocks and buy good performing stocks before the reports are given to its investors. Giving the idea of strong portfolio.

This is the term I learned today as I increase our cash flow to P60,939 and yield at 5.4. Because of this, strong stocks, blue chips companies sky rocketed in price and the bad performers plummet even more.

We are not here to trade the stocks but to invest for the long term. My realization from all of this is that, if window dressing occurs every year and strong companies are being bought no matter what the price at the end of the year, we are very much in line with the principle of buying strong companies that pays out large dividends because at the end of the day, you'll be earning a bonus from its capital gains, because mutual fund managers will be buying them anyway at the end of the year.

So my suggestion will be is this, find 10 strong companies that you have made a very diligent effort to research until you are completely satisfied that the company is a keeper for a long time, then invest more money every month, buying its shares no matter if it raise its price or plummet. If window dressing will happen every year or quarter then this only validates our investing principle to buy strong companies and keep them, not trade them.

After all, strong companies will most likely have a dividend for us. And the capital gains from mutual fund managers and traders that plays by its volatility can only add to your assets.

Annual Cash Flow: P60,939.00

Dividend Investing Focusing on Yield

Added more funds to my account and this time, my focus is to buy stocks that have high dividend yield. As a result, the overall yield of our investment is 5.11 and the current annual cash flow is P48,149.43. In monthly terms, thats P4,012.45.

We are almost there. Its looking pretty good. :)

Annual Cash flow: P48,149.43

Added Positions - Yield Now 4.17 at P35,990 Cash Flow

Things are looking pretty good. We are now building up the cash flow to P35,990 per year. That's P2,999 per month. Not good and we won't be able to survive if we want to live using that income. I'll be adding more positions as the day goes by. Hopefully to boost the dividend yield even further. We're making progress though.

My first salary on my day job was P9,000. And I was able to survive thru my college days with that salary. Let's see if we can manage to reach that goal using passive income investing. Once we have done that, it should be easy to reach our next goal.

Annual Cash Flow: P35,990

Added Positions to PLDT & Meralco

I deposited more funds to my account to boost the average yield. As a result we are currently at P25,992 annual cash flow or P2,166 per month.


I bought 2 new stocks as well, AGI and GLO.

Why did I bought Globe where I already own PLDT stocks. Aren't they competitors? Sure. If an investor is in a horse racing event, which horse will he bet? The answer is, all the horses. Even though each horses are competitors, a wise investor will bet on all the horse so there is no risk. The returns are average (on capital gains) but we are going for the dividend and less risk, if in case 1 horse lowers their dividend. :)

I am enjoying the journey thus far. Its fun to pick stocks and looking forward. Its like planting a tree. You only have your first seed, so you won't be earning as much, but once your first tree flourished and produced more seeds, compound interest will take its course. I can't wait to see my tree bear fruit that I can replant.

Overall Annual Cash Flow: P25,992

How To Pick Income Producing Stocks

This is my first post on how I qualify as a good stock pick. I know people tend to have different strategies when it comes to stock picking or trading stocks. Most popular of them all are fundamental analysis and technical analysis. There seems to be quite a lot of people in the technical analysis field that are traders. But the goal of this blog is not to trade. But to invest. Hence, Stock Investing Philippines.

The goal of this blog is to pick stocks that are income producing. Looking for stocks that provide dividends and payout shareholders consistently over the course of many years. Since we are investing for the long haul, we want to make sure that our shares will outlast us.

#1 - It Must Be Boring

The book "One Up Wall Street" came up with the idea that boring businesses are great long term investments. Businesses that any idiots can run. The reason behind this is that, a long term company will experience many CEO and changing of its board, but anyone who runs a simple business will make it successful no matter what happens. Simple businesses are boring and thus a good investment.

Example of these are funeral parlors, cement, mining, bottle factories, paper, toilet materials and utilities ugh!

#2 - No Debt or Manageable Debt


Every successful businesses needs debt to expand, for research and for production. But an even better business is a business with no debt. Learn to spot those businesses.

#3 - People Consistently Need to Buy Its Products


This criteria is very important if you want to consistently make recurring income with dividends. Companies that produce products that people consistently buy for their daily lives. Examples are food, electricity, communication, vices like beers, gin, cigarettes, or daily toiletries like napkins, mouthwash, razor blades. These products may be boring but we can not live without it. So, investing in these companies only makes sense.


#4 - Consistent Dividend Payouts


The most important part in this investing strategy is the dividend. We earn money each quarter depending on the amount of shares we have in the company. This is the strategy that employs compound interest. We reinvest the money to buy more shares of that same company to increase its dividend the next quarter.

This is not a get rich scheme. Its fool proof, time tested strategy of the wealthy.

Long before, the way to measure wealth is not about one's net worth. It makes sense because net worth fluctuate depending on market sentiment. Especially if you hold different markets that are hot. To measure their wealth, they compare each other's passive cash flow. And this is what we are after, well at least on this blog.

Look for companies that never fail to give out dividends for over the course of many years. Especially during bear markets and recession.

#5 - Dividend Yield


Dividend yield is the percentage of how much dividend we are getting for the amount of money invested. The higher the dividend, the greater the rewards. Which is great. But also, be careful as some companies will try to make their yield higher so investors give them money only to find out that the company is collapsing.

In order to find out if the high dividend yield is justifiable, we need another criteria.

#6 - Dividend Payout Ratio


This is the ratio of how much money is paid out to investors with the amount of earnings the company made. To make it simple, if the company has 30 dividend payout ratio, it means that 30% of the company's earnings are paid out to the shareholders, and the remaining 70% are used to reinvest or expand the business. The lower the payout ratio, the better, because you know that the company is expanding and using its money to make more money. There's room for more growth with low payout ratio. If the company has high payout ratio, it means that they have saturated the market and may not have any more room to grow, that's why most of its earnings are paid to share holders.

More Boring Stocks to Add to Income

Bought a couple more of boring stocks to add to income. Added some more shares for PLDT.

And a couple more stocks.

MWC

TEL

MER

Overall Annual Cash Flow

: P21,388.43

as of today.

Still a long way to go.

Added More Funds to My Account P50,000

Still have a long way to go before we burn the P1,000,000. I'm doing this slowly so I can spread the money evenly to all the stocks that I want to buy. And also to even out the price. I deposited P50,000 and bought PLDT.

In picking stocks, I tend to pick the boring companies that do well but nobody wants them. For example, a business that makes cements. Not exciting, but its simple and any idiot can run it. That's why these types of companies last for more than a hundred years. That's the kind of long term aspect that you should look for in a stock.

Approximate Dividend Income Per Year as of today: P16,588

This is including the foreign stocks that I own.

My First Stock with P25,000

I bought Jollibee Food Corp (JFC).

Philippine Stock Broker Account is Now Live!

My last post about opening a foreign stock broker account is a success. I funded the account with $10,000 for starters and bought blue chip stocks to keep it safe. I plan to reinvest money from work to this account and also put money on my local stock broker account. Just to keep everything diversified on different markets, but the strategies are still the same. I'll be going for 90% dividend investing strategy and 10% growth.

My local stock broker account took quite a few days to be active. I just received an email indicating the instructions to fund my account. I plan to invest P1,000,000 in this venture. This money is just lying around in my bank. I don't have any use for it. I'm single and have a great job. Better save or invest it for later.

I plan to reinvest more money every month divided with these 2 accounts. Our goal is $1,000,000. Which is P200,000 per month in dividends. I plan to achieve this goal 5 years from now. Let's see what happens.

My First Stock US Broker Account

Today my application got approved and now I funded my account. I want to buy some of the stocks that I have been dreaming of for the past few days. But me being a noob at this, doesn't know how to open a trade nor do I know how to navigate the trading platform.

This might take a while and also, I'm reading Motley Fools in picking stocks. Let's hope for the best.

Stock Investing, My Journey Starts Here

Hello, I am just a normal person wanting to be wealthy. The idea of being rich does not motivate me, but the feeling that something can be achieve from the bottom challenges me. And hopefully, the journey of mine to my first million dollars can be documented here.

Today, I applied for a brokerage account in the US. I'm planning to invest in foreign markets. Simply because its easier for me to open an account. In the Philippines, I still have to go to the office of the broker firm. So I'm just waiting for my account to be activated.

My Goal and Why am I doing This?

As a child, we have never been wealthy. My grand parents were wealthy but we are not dependent on them. Thus me, spending my childhood life in a public school and growing up with the slum kids. Its not something I hate my grandparents for, just one thing to see how I view things.

College life comes, I still need to work while studying. I don't like the idea of working and then studying. Its too much work and me being stressed out. If I only have the money, I will not work. But things are not easy for the poor like me. I never hated that experience, it taught me to be creative and think of ways to earn without working.

Graduation comes, I managed to land a job. A good job. In a good company. Things are going pretty well. And any middle class family would be proud of what I have accomplished so far. But for me, its not about the money. Life is about life. We should enjoy like while we still can. Experiencing such hellish college life with work and school made me wonder if I all of these work are worth it, at the end of the day. And I realize that its not. Working in a good company, with a good salary is not something I would want to do for the rest of my life.

What I want

I want to travel the world. Meet gorgeous women. Experience different things. Things that a 9 hour day job would not give me aside from team building outings and party on a friday night. Its not a good thing to spend our only chance in this world. I want to travel the world.

So here is my journey to reaching my 1 million dollars. My 1 million dollars invested in income generating assets that could fund my travels. Without me working but still money coming in. I plan to invest in the stock market doing this. Picking only income generating stocks.

I'm here for the long term. So if you also want the same road that I want to take. Sit back and relax. We have a long journey ahead of us.