3 Groups of People that Can Teach Us Investing

I have been a huge fan of Philosophy. Ever since I first learned about it in college. I think that above all else, we differ from other animals because of our ability to think and philosophy is just that, being able to think better and more rational.

Thinking of all these things, investing, making money, amassing wealth, will surely lead you to read about the lives who amass wealth. Like Warren Buffett or George Soros. But learning about these people more, they are also a fan of Philosophy (George Soros is a philosopher himself). So there's a common ground here. Being rich and wealthy, is just a product of great thinking and a beautiful mind.

Of all the people who claimed to have answered all the mysteries in the world. Modern religion for one, though many believed, I think missed the mark by a long shot. They had it wrong. I think there are only 3 groups of people who had it right. Which makes sense. And for which I admire.

#1 - The Stoic Philosophers

You have power over your mind - not outside events. Realize this, and you will find strength.
Marcus Aurelius

The stoics are the most calm people on Earth and the most rational. A lot of Stoic philosophers have died attending to nothing but reason and proving that its better to die than to take ones free will. The Stoics are the master of "mastering emotions" not showing any anger, or hate, or excitement, they have been one of the cornerstones of modern religion and rational thought.

The stoics also told us to live simply. To obey the natural course of things. To be happy of the things we can control and have contempt to the things we can not. And to find God and beauty not in the heavens, but here with us -- Nature is god. Nature is us.

The stoics told us to not fear death or suffering. For everything is according to Nature. We were born and we will die. Whatever happens in between or when it happens, doesn't really matter much in accordance to how infinite the world will go on after we die. We are but a spec of dust in the vast universe. So your suffering today, your joy, your status, your pleasure or your wealth, doesn't really matter. In a few years after your death nobody would even know you existed.

What can the stoic philosophers teach us about investing?

Tranquility and Calmness

Remember that whatever happens to your wealth, be it be robbed, scammed, stock market crash, remember that its part of the course of nature. It is not in our control. We are just a steward of the wealth we are given and we should not treat it as our own. Such that, if it was taken away from us, be sure to feel nothing. Always have a peace of mind. Always be calm whenever you make or lose money in investing. Life goes on.

#2 - The Buddhist Monks

The purpose of our lives is to be happy. Dalai Lama

The Buddhist Monks are the happiest people on Earth. It has been proven by scientific study that, meditation makes the brain larger and makes the person happier. What kind of emotion does meditation invoke? And it turns out this emotion is also responsible for living a happy life. That emotion is "Gratitude". Buddhist live a simple life. They live on top of a mountain. Eating just simple meals. Giving away all of their possessions or any material things. Lifetime of celibacy. Yet they never come short of giving thanks to everything.

They give thanks to the monkeys, to the soil, to the worms and to all things on this Earth, living or not. Because in the end, we are all one.

The buddhist told us to not live in the past nor think of things in the future, but to live in the present. Thinking about the past makes you sad, thinking about the future makes you anxious. Remember the master turtle in the movie "Kung fu Panda"? "The yesterday is history, tomorrow is a mystery, but today is a gift. That's why its called present."

Living in the present gives a person the ability to be happy and to "seize the day". To do the things he wants to do today. Because that's all that matters. What happens tomorrow, may happen. What happens today, at this very moment, is our choice.

What buddhist monks can teach us about investing?

Being in the Present, Happiness and Gratitude

That is to think of today. Forget about if a stock would go up or down tomorrow or in a few years. Focus on today. Do you need to add more money to your fund? Do it so.. Regularly, without thinking about if the recession would be tomorrow. Think of today. Be happy of your choice and let it go.

#3 - The Native Americans

 I am poor and naked, but I am the chief of the nation. We do not want riches but we do want to train our children right. Riches would do us no good. We could not take them with us to the other world. We do not want riches. We want peace and love." Red Cloud

Of all the people on Earth, the Native Americans are the most free. They are the people who lived according to nature. They never desired riches or any material things. Therefore they are not tied or can be manipulated.

What the Native Americans lack in money, is the abundance of knowledge and harmony with nature and also love for one another. All of the things in their body are from nature. Even their knowledge of survival is above anyone else. You can place them in any environment and they would live comfortably. This is the kind of freedom that few of us will achieve in our lifetime.

We, modern people as we call ourselves, buy services for the skills we do not have. We buy services to fix our leaking faucet, we buy services to make us coffee even the littlest things as preparing our food, we also buy. Consumerism at its finest. We become good at only one thing... Our jobs.

We people boast if we have a new car. But think of how much oil it consumes, how much metal from the Earth that was extracted. While we make a footprint of the destruction we made in Nature, the Native Americans have no footprint at all. Living in harmony for more than 4000 years.

There was a story about an Indian chief talking to a government official that goes:

An old Indian chief sits in his hut on the reservation, smoking a ceremonial pipe and eyeing two US government officials there to interview him.

One government official asks, "Chief Two Eagles, you know the white man for 90 years - his wars and his technological advances, his progress, and the damage he does."

The Chief nods in agreement.

The official continues, "Considering all this, in your opinion, where does the white man go wrong?"

The Chief stares at the government officials for over a minute and then calmly replies "When white man finds land, Indians are running it. No taxes, no debt, plenty buffalo, plenty beaver, clean water, women do all the work, medicine man free, Indian man spend all day hunting and fishing, all night have sex ..."

The chief leans back and smiles. "Only white man dumb enough to think he can improve system like that."

What the Native Americans can teach us about investing?

Freedom and Simple Living

To become financially free is to live a simple live. To live frugally and not spend money on things you do not need. Focus on the bare essentials at life. Focus on things that really matter. For what does it matter if your friends say that you're poor or unfashionable? Being rich, financially free is tightly connected to being frugal and simple living.

Dividend Received P89,474!

I got a dividend payment today.

Gross Amount (Php) : 89,474.00

Less Withholding Tax (Php) : 8,947.40

Net Amount (Php) : 80,526.60

My new net monthly passive income is now P45,164. This is due to the reinvested dividend and extra money invested.

We are looking good so far and we might also reach financial freedom this year! P50,000 here I come!

Retire First, Then Get Rich

We Filipinos have a different notion for the word "retire". When we talk about retirement, its either living on pension, old and unable to work, or having a large sum of money and just waiting to die. But actually, the word "retire" means to withdraw from. In our case, work.

Our nation was built with the idea of the industrial age. Where getting a degree to get a job and to work in a company until you are not able to work. Trying to live how our grandfathers and fathers have lived their lives. To me, there's nothing wrong with it. But why ignore the benefits of our age, where all the opportunities are yours for the taking.

I think that all Filipinos want to be rich. And many will trade of their kidneys and precious growing years of their child to do so. But to be rich is not just merely striking a jackpot. Its a habit. And to become rich, there's just one hindrance to your goal -- your job.

It may be a contradicting thought that your job is the reason why you're not rich. If in fact, that is the only way you earn money. I think that your job is the one that's holding everyone of us back to be rich. How many of us really love their job that every morning we tap dance to work? "I'm happy being trap in traffic every morning, every waking day of my life". Said by no one ever. With all that stress, and still you're not rich. What's the problem?

The problem is, you're following the herd. You're living a life that you are taught to live. Pause for a second when you see a line of people piling up on MRT station. See all their faces. All stressed out and disturbed by other people who is just like them. You're going to fight your way again inside the MRT cab. You arrive at work. Do your job, then commute back then get stuck in traffic. Same old people you saw this morning. Only with different faces. You arrive home tired and then you're going to do it again tomorrow. Ask yourself, for how long are you going to do this shit?

Now ask yourself, how you could think differently. Is there any easier way to do the same thing with little effort. What if I could retire early so I don't have to do all of this every morning and just focus on amassing wealth? Retirement doesn't necessarily mean you would stop working. It only means, working is optional.

What if you focus all your efforts to build a passive income that could compete with your salary? Without bringing despair to others or doing bad things to others. Would you still need your job? NO! Why the hell would I bother being stressed out every morning where I can just sleep and wake up to any hour I want and still get paid every month?

"But I love my job!." Then that is great. You'll get promoted easily. Because you're not afraid to take risk. And you're not afraid to get fired. Which means, your boss will trust your judgement more, because you're not kissing his ass. All you do will be out of love and not because of money. That will completely change you.

Majority of people does it backwards. They work and work and work until they are old, and then they retire. If you see the flaw in this logic, you do not have the health to live life when you already broken your body to earn money. Most people fall into this category. And when most people do it, its usually wrong. That is my humble opinion. The reason there's a small number of rich people in every country, its because they do things differently from the majority.

Being with the majority means being average. Being average means, being just enough. And that is not the road to riches. To refuse the urge to follow the herd, means the self discipline to MAKE your own road to travel, your own decisions to make and your own life to live. When all people are trying to get rich and then retire. Try to retire first and then get rich. That is the difference!

The Cost of Not Following One's Dream

If we can self study all the skills we want, we could. Given enough time and patience, we can be a master of any skill that there is. Some skills are needed to achieve a goal. Some skills are used to express ones self. Some skills are used to help others and some skills just for fun.

But for any reason, probably the most important skill for us, is to learn how to quit our job that we don't like to pursue something that we are born to do. That is my decision in learning how to invest in the stock market and creating this blog as a journal. But skills take time to develop.

I recently attended a "free seminar" (I'm into free seminars) for the industry I'm in. And its for an advanced class in the field of programming. The venue, is a TESDA center in Manila. TESDA provides free or even cheap technical education to Filipinos and I think its good education that can be compared to universities. Why not? The instructors at TESDA are part time university professors and one of them is our resource speaker.

But that is not the reason for this post. Inside the TESDA campus are people who have no money for education and trying to learn a skill. But some of them are people who followed the wrong dreams that were though of other people for them and trying to play catch up to pursue the passion they dreamed of as a kid.

One of them was a nurse that I met. He was asking, after our class ended, if he could join since it was free. I said yes and there are no application form or test to do. Just come in and join the class. He said that he has always been passionate about programming but it never took of since he took nursing. He could not find a job as a nurse so he thought to learn the skill that he really wanted as a kid.

But the problem here is that, our class is for the advance people. He, on the other hand, have no clue what a program is. And he said that he was on his way to attend a Microsoft Word class. He doesn't know how to use MS Word?  He was I think in his 40's now.

I can't help but feel sad for this guy. Not only that he have wasted his time pursuing things that he did not like, he also don't have any realistic view of how much a skill gets mastered. Programming, like any other art, takes a long time to master. And I think there's a moral lesson here.

How many graduating nurses in our country really do love to be nurses? How many of them have the idea in their mind to go abroad as soon as possible?

If time is needed to gain and practice a skill. Doing the job you don't really like, does make it seem like wasting half of your life doing. Is it worth it? I don't think it is.

The Philippine Stock Market to Soar 3 More Years

The Philippine stock market's bull run to last 3 more years says the news. And the analysts may be right. But it doesn't mean its reasonable. The Philippines having upgraded its investment ratings and the masses just learning about investing in the stock market and foreign investors coming in to invest may drive the market up even further. But it doesn't necessarily mean its reasonable and that the Philippines is undervalued to make it a good buy.

The Philippine economy's tracker which is the index is composed of the 30 largest companies and conglomerates. And in my humble opinion, each one of these 30 (with the exception of a few) are so overbought and diluted that's its very expensive to invest today if we're basing its P/E ratio.

But ordinary people like us have no way to predict when its lowest point and its highest point. Nor would I like to try. So what to do?

I think the best way to handle the situation is to invest by cost averaging. Putting aside a fixed amount of money each month to invest in the Philippine index.

And then, focus on stocks with strong dividend payouts. Should recession come, you're safe with a steady flow of income from dividends. In which you can reinvest or add to your cost averaging.