The Year End Report Passive Income

The amount of passive income I received this year amounted to:

- Stocks & Investments : 413,907
- Passive Business : 144,000
- Rental : 24,000
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Income for the year after tax: 581,907

Which gives me 48,492.25 per month of passive income.

I forgot to update the dividends received. I got busy with life. I am slowly getting back to my goal of 50k passive income. All is good and right on track. I hope to increase it to the next level of 100k per month.

Business # 1 is going strong. Nothing to be proud of. No growth in earnings. Its just earning the way it used to earn.

Business #2, I realized is a lousy business. I was losing 3,500 per month on that business. And I only managed to make it -1,000 monthly. That's the best I could do I suppose. The economics of the business is really bad. I did all I can. I think its time to give up on that.

More businesses created. The bump in income is because of some passive businesses I created. I think I am getting the hang of it and will pursue this kind of passive income.

The training in real estate investing also is bearing fruit. I bought my first rental property this year. Makes me happy. Already cashflow positive on its first month. I hope to buy my next property next year.

Dividends Received P1,103.95

Gross Amount (Php) : 1,226.61
Less Withholding Tax (Php) : 122.66
Net Amount (Php) : 1,103.95

Total Dividend Received (ytd): P229,661.38

Philippine Market is Falling And Its Tempting to Cash Out

The Philippine stock market has been falling lately. Experts say because of the interest rates, trade wars of China and USA. But nobody really knows why and up to what degree. I can only think for what a company is doing. The dividends I received which is documented on this site will be reinvested to companies that is the most deserving to receive it. Meaning, cheap, undervalued etc.

It is very tempting to just use that cash and enjoy life once in a while doesn't it? But this time is a rare time, where the stock prices are such a bargain. Maybe sometime in the future when we receive a dividend and stock prices are high, then we can enjoy a bit. But for now, we tighten that pants and reinvest the money so we keep that compounding machine running.

Dividend Received P96,392.88

Dividend Gross: P107,103.2
Tax: P10,710.32
Net: P96,392.88

Total Dividend Received Year to Date: P228,557.43

Dividend Received P54,945.00

Gross Amount (Php) : 61,050.00
Less Withholding Tax (Php) : 6,105.00
Net Amount (Php) : 54,945.00

Total Dividend Received Year to Date: P132,164.55

Dividend Received P59,047.2

Gross Dividend received: P65,608.
Tax: P6,560.8
Net Dividend Received: P59,047.2

Total net dividend received year to date: P77,219.55

How the Businesses are Doing?

I think you would remember a couple of years ago I started a business with my relatives. And it did not go as planned and an unplanned hiatus came after because of all the stress that that has brought me. But I am happy to say that the problem was solved (management / partner problem) and that business is still going strong.

Business 1

As you may know with businesses, it is a very unpredictable source of income. During the first few years of the business, I was going under -P4,000 a month on that business. I did not quit, because I really like the business and I like the location. And today, after 2 years, that business is now giving me +P12,000 a month of income (I will not add this amount to the passive income that we are tracking). Still a small sum. But I learned a lot. The total amount that was invested in this business was around P500,000. I did fund it using my own money and money that gets poured into the business slowly during the 2 years that it was starting. Mainly because only when the business is running, shall you realize that you need more things to buy for the business.

With P500,000 invested and 12,000 per month in net profit, that's 29% return on investment. I should be getting my money back in 3.5 years or so.

It is a so so business. Nothing to be proud about. But it did taught me a lot.

Business 2

With the success (and hardship) of starting that first business. I started another business a few days back. I am not in the front lines anymore as I have found someone to manage it. It is currently costing me -P3,500 a month right now. But it is still a small business with a small startup capital of just P100,000. Will I ever get to positive cashflow? I don't know. But I'm really curious to know.

A Step to the Dream

While that was going on, I have enrolled myself to yet another course. I am venturing into real estate investing. So I enrolled myself in a training about real estate. All is still under my dream of having a farm. I realised that it might be time to start learning about owning land and managing people who would manage the land. So I guess, this is my first step into that direction. It is indeed an exciting time.

I also figured that it might be time to search for people who thinks like me. It is sometimes lonely. You have no one to talk to about this kinds of stuff, for the people around you were not really into business and investing and instead most are employees. So the idea of risking in business is an automatic prejudice that I am an idiot for wasting money in risky endeavours. Most people just don't get it. But I don't blame them. I know there are people out there who are the same as me. And I intend to find them and network with them.

Dividend Received P18,172.35

Earnings report season once again and companies are handing out dividends to investors. Today I received a dividend amounting to P20,191.50 less withholding tax of P2,019.1. With net dividends received after tax of P18,172.35.

Total dividends received to date 2018: P18,172.35

I used some of the money (P1,200) to further my knowledge in investing. Like I said, I'm trying to get serious in this. I joined the membership of How To Invest for Beginners. The same person (Investing Philippines) teaching investing concepts in Tagalog. Very easy to understand especially that he uses Tagalog to teach. There's no friction when it comes to absorbing concepts. 

The only thing that bothers me sometimes is that he stutters. Possibly because its hard to explain and translate complicated concepts like investing into easy to digest one. But I still like it. We should support things like this.

You should see me again in the next dividend received in the coming weeks.

Tracking Fund Performance 2017

I was reading through Warren Buffett's annual letters. And it inspired me to do something similar. Investing is the way of compounding money. No matter how you compound it. He uses the index to compare his performance year after year as well as compare it to some popular investment funds.

I would like to do the same. Starting today. Every year. I will record the performance of my investing/business against the funds and benchmark.

So without further ado here is the first entry to that.

Fund Performance

Year	FMETF	Sunlife Pros Eq Fund	ALFM Growth Fund	MY FUND
2017	26.44%	22.3%	22.11%	26.33%

I will be using FMETF as the benchmark (index) as compared to the original PSEI index. This is because, if I did not beat this benchmark for a couple of years, I will throw in the towel and just buy FMETF.

So the goal is to beat this index. And using other popular funds to demonstrate that it would be very hard to beat the index long term.

Passive Income

Year	Passive Income
2017	32,927

I have been investing for so long and I just realized that I should be tracking my performance. Its better late than never I suppose.

Getting Serious About Investing and Business

Last year has been a difficult year for me. I lost most of my passive income because it was too risky. The income I get from them are good and big but with the cost and risk that any moment they could be gone. And that's what happened. Although not all.

From P50,000 per month in passive income, all hell broke lose last year, and it went down to P30,000 per month in passive income (net after tax). It hurts thinking that all your hard work was reversed back 4 years. P30k was my goal 4 years ago.

And I have come to realise that, Its better to have stable income than unstable high income.

And also with my 2 businesses failing. It just took a toll on me and I took a rest from it all.

What did I do with those months doing nothing?

Well, its not actually nothing... The thing is, what gives me joy is reading. So I read a lot of things during those times and I am perfectly happy and clear headed now. Spent time with loved ones and just taking things easy from then on.

I did start small businesses on the side that made income. From additional P1,000 per month all the way to P200,000 per month at one time And then poof! its gone. It was insane. But it taught me something that I realized for myself. And that is...

I love business and investing. Even with all the ups and downs. I really do like it.

And this time, for 2018. I think I have come to terms with that reality that business and investing can be fun and rewarding and challenging for people like me who enjoys learning. So this year, I'm going to be full time investing and going into business. But with the added caution to not repeat the same mistakes I made last year. Not to take it too seriously to the point of stressing myself out.

I will be starting my first business for 2018 soon and hope to increase my passive income this year doing that. And I will be documenting the journey here if some of you would like to learn from my experiences. Would that be a good idea?

So current passive income is P32,927 (net). I hope to increase it to P40,000.

Performance of Fund

On the bright side, even if I lost money from the businesses I put up to increase my passive income. I still made money overall because of my stock portfolio.

For 2017, my portfolio was up +26.33%. That +26.33% in terms of cash is already equal to 10 years worth of living expenses, so I am in a very good position to take risks in business, knowing that even if I don't work for 10 years, or fail in business 10 years in a row (I really hope not), I will be able to feed myself and my family.

I would not consider the performance of the fund as me being a great investor of stocks. I consider it luck because of the present administration (Pres. Duterte)'s "Build, Build, Build" program that the stock market experience such a gain.

Why go into business instead of stocks?

This blog has always been about stocks and investing in stocks for passive income and financial freedom. But recently, I have been having a hard time looking for good opportunities in the stock market to increase my passive income. In short, I see that the market is expensive and the money I could have invest might make more money if I just start a business. Stocks are businesses after all. They are the same.

...

I hope we have a good year.

Closing Down a Business

Today marks a new end and a new beginning for me. Today marks the 2nd business that I started and failed. The first one was acceptable. I closed it because I wanted to focus on this 2nd business. But this 2nd business has a lot of mistakes that I think I needed to write down to further reflect on.

This business was started by me and my sister. It was her idea to put up this kind of business (I will not disclose what kind of business it is). In collaborating with our skills. Me in tech and she on service. It was great from the start. We have a good manager, my youngest sister. Which seems to love her job as well.

The mistakes happen in chains. My younger sister got married. Had a child and quit the job. My business partner fill in for the job. But this is another mistake. She is not a good manager.

While I expand the business to other location. She, hides the fact that she don't open shop. Going on leave without a memo. Making the business suffer. Never tells me that some of the machines, critical part of the business, are failing to which I could repair because its my job. And she is rude to the customers.

I don't want to be pointing fingers why the business fail. I could have known better. But theres only a few things you can do to fix a broken business when all the little failings piled up.

I can only conclude that, do not go into business with family members. They tend to take advantage of the fact that you could never fire them.

I Stopped with the Dividends Received

I don't want to stop, because in a way, I keep track of the dividends I receive. But the broker suddenly stopped giving out notifications when I receive the dividends.

Also, I'm abandoning this experiment. I made complete overhaul of my portfolio and only maximizing the dividend yield and growth rather than trying to predict what company will be included next the index. I'm not playing that game anymore. I would like a more passive approach, like the original plan of this blog.

A year ago, I achieved my target goal of P50k a month passive. But due to some problems and some sources of income expiring, my passive is now back to P20k / month.

I realized that its more important to have a sustainable income that could last for a lifetime, rather than trying to chase high risk and high yielding investment. Because a more sustainable income is more predictable, reliable and helps to keep you sleep at night.

Dividend Received 14,000.00

Gross Amount (Php) : 14,000.00
Less Withholding Tax (Php) : 1,400.00
Net Amount (Php) : 12,600.00

How To Invest in COL FINANCIAL

Here are some of video tutorials about investing in COL Financial. If you decided to start investing, these videos might help. They are in Tagalog.

Dividend Received 5,873

Dividend Received 5,873 net after tax.

Result of Stock Picking Experiment

If you remember last year on the same month, I tried to put together a list of stocks that I think would perform well. As I have read in a book about investing, I tried to do the approach in the Philippine Stock Market. Well, for 1 year, here is the result now.

My Stock Holdings		Price	Shares	Ave	Gains	Equity	Yld
ANS : A. SORIANO CORPORATION		6	4,249	7.0600	-4,503.94	25,494.00	-15.01%
ATI : ASIAN TERMINALS, INC.		11.44	2,142	14.0000	-5,483.52	24,504.48	-18.29%
ATN : ATN HOLDINGS, INC. "A"	▲	0.37	96,246	0.3117	5,611.14	35,611.02	18.70%
COSCO : COSCO CAPITAL, INC.	▼	7.77	3,654	8.2100	-1,607.76	28,391.58	-5.36%
FDC : FILINVEST DEVELOPMENT CORPORATION	▼	6.2	6,741	4.4500	11,796.75	41,794.20	39.33%
FLI : FILINVEST LAND, INC.	▲	1.96	15,789	1.9000	947.34	30,946.44	3.16%
IMI : INTEGRATED MICRO-ELECTRONICS, INC.	▼	5.6	4,739	6.3300	-3,459.47	26,538.40	-11.53%
MEG : MEGAWORLD CORPORATION	▼	4.25	5,660	5.3000	-5,943.00	24,055.00	-19.81%
MPI : METRO PACIFIC INVESTMENTS CORPORATION	▼	6.12	6,622	4.5300	10,528.98	40,526.64	35.10%
MWIDE : MEGAWIDE CONSTRUCTION CORP.	▼	6.55	3,851	7.7900	-4,775.24	25,224.05	-15.92%
NIKL : NICKEL ASIA CORPORATION	▼	4.98	1,318	22.7500	-23,420.86	6,563.64	-78.11%
PF : SAN MIGUEL PURE FOODS COMPANY, INC.	▲	220	153	195.9000	3,687.30	33,660.00	12.30%
RCI : ROXAS AND COMPANY, INC.	▼	2.28	15,706	1.9100	5,811.22	35,809.68	19.37%
ROCK : ROCKWELL LAND CORPORATION		1.6	17,045	1.7600	-2,727.20	27,272.00	-9.09%
SHNG : SHANG PROPERTIES, INC.		3.13	9,230	3.2500	-1,107.60	28,889.90	-3.69%
VLL : VISTA LAND & LIFESCAPES, INC.	▼	5.1	4,000	7.5000	-9,600.00	20,400.00	-32.00%
VMC : VICTORIAS MILLING COMPANY, INC.		4.6	6,666	4.5000	666.60	30,663.60	2.22%
TOTAL:					-23,579.26	486,344.63	-4.62%

Some stocks performed well, some didn't. AS I realised from this experiment, I have much to learn in picking stocks. Or perhaps need another strategy? I will try to keep this portfolio for another year, because that is what is written in the book. Hold portfolio for 2 years and sell.

How are your stocking investing coming along?

Dividend Received P38,466 and P2,270.52!

Dividend Received: P42,740
Tax: P4,274
Net: P38,466

Dividend Received: P2,522
Tax: P251.48
Net: P2,270.52

How To REALLY Invest In The Stock Market

Since I started this blog in 2011, I have a different definition in my mind on how to invest in the stock market. As I grew older, that definition has changed over the years. I used to tell myself that the stock market is where we go and get rich. But that is far from the truth, I realized.

The Stock Market is the business of banks and participating in that business means to treat it as business too. Treating the stock market as a place in which you buy inventories for your fictional store like a sari sari store. And banks are considered the malls in the scale of things.

You buy a stock to put inventory to your store. And sell it to other store owners or banks to make profit. In other words, its just a market where people buy and sell shares of a company. You may or may not profit from the deal.

When people think that the stock market is where they go to get rich. They don't run the show like a business. In a small sari sari store, the inventory you sell, you want a little profit margin and will not sell those inventory to anyone if they don't have the money. But an inexperienced investor is willing to sell at a loss, just to cut losses. He did not research enough to know if the stock is in demand or not. If you run a sari sari store like that, you will go bankrupt in the future. Imagine a store owner not buying the most needed goods in a community and spends his money buying things that are needed by the community. Money will get stuck in those inventory and he might sell it at a loss to get the money back.

So investing in the stock market, first and foremost, is about knowing and predicting the future in which people would be most likely need a stock. Its forecasting if people would most likely want a particular stock in the near future and accumulating that stock as soon as you realize this.

Its like buying fireworks 4 months early in anticipation of new year to sell and make profit.

Dividend Received P111,452.4

I received P123,836 in dividends.
Tax: 12,383.6
Net: P111,452.4

Its growing!

My Thoughts on Business

Having been able to experiment with a brick and mortar type of business for a year. Here are a few things that I learned.

• Dont let family get involved.
• Dont borrow money from friends and family especially if they are not really wanting to help you out when starting. 
• Dont borrow money from anybody. Bootstrap anything as much as you can.
• Realize that people dont really care if you succeed or not, they just want their money back. Even if they call themselves your friends.
• Work with people who believes in your vision of the future.
• Dont compete in an industry.
• Create new products and services where there are no competition
• Your business should have proprietary tech, network effect, economies of scale and brand.
• There is no such thing as stable business. There will always be a problem. If it becomes stable, it means your business is dying.