You have to break the law

A lot of people (including myself before) are thinking of high salary, working abroad, winning the lotto are some of the best solutions to their money problems.

Are these really true?

Sometime in 2005, I decided to pursue my career overseas. I got my 2 years contract with one of the biggest telecom company in Afghanistan.

The company is giving me a monthly paycheck which is around 6 times of my salary. I was very happy because in my mind, 1 year of staying overseas means I can earn money which is equal to 6 years of working locally.

This is true in figures but didn’t happen though because of my spending habits. As my income increase and so my expenses. This is one of the concepts of Parkinson’s law. Robert Kiyosaki refers this as the “rat race” that most people trapped into until their old age.

In one of his seminars, Brian Tracy says this is the reason of money problems such as debts and failure to accumulate money.

If you are seeking for financial independence like me, we all need to break this law. Knowing this law is not enough without taking actions.

So what are the practical actions we need to take to break this law?
Here are the two actions you could take immediately to start breaking this law:

Stop all unnecessary expenses especially those that are categorized as “wants”. Evaluate carefully and scrutinize each expense as if your budget is in big trouble. It is also good to make up a budget plan for the whole year to minimize and prioritize the expenses.

Save and invest at least 50% of any increase or bonus you may receive. I have done this for past 3 years and I was amazed of the result on my stock portfolio.

Always remember that “Financial independence comes from violating Parkinson’s Law.”

The need to invest

Before I started investing in stocks in the last quarter of 2010, I reviewed my financial life from the day I started working. At that time I realized, it’s already 10 years since I entered the corporate world and overseas as OFW but my savings are very small and nothing seems to happen.

My savings in the bank is not going anywhere because whenever it reaches a certain amount, I always find a way to spend it for something else such as new computer, mobile phone or gadgets.

Because of the frequent threats in job security (e.g. company downsizing, merging, re-org), I ask myself “Is there a way to escape this cycle?” After years of searching for answers I stumbled with the trulyrichclub team where I learn the concept of investing.

Here’s my top reasons why there is a need for everyone to invest:


This is one of the biggest issues today that motivates me to invest. Whether we like it or not, time will pass by and we’ll get older. The question is, do we want get old poor or rich? We have to decide now.

I have a neighbor who’s going to retire this year. He works as an OFW for more than 20 years. Unfortunately his relationship with his family did not turned out to be good. Now he’s alone and still needs to work just to put food on the table. He will be receiving 6,000 pesos monthly for his SSS pension but I doubt it’s enough because he is also sick and needs maintenance meds. I pity him so much.


Parking your money in the bank makes you a loser. Gone are the days that saving money in the bank is a smart thing to do because most banks nowadays give a 2.5% interest rate for time deposit account while 0.5% for savings. On the hand, the average inflation rate per year is around 4-5% so your money slowly “evaporates” over the years if you just let it sit and used by the bank.

Education and opportunity

When you invest your money for example, in the stock market, you will “ride” the giant companies and participate in the growth of their businesses. You will also learn their future plans and projects through their financial reports. These information is normally available for free from your broker.

With these “need to invest”, I hope I have given you great reasons to start your way in investing. If you are still struggling which stocks to buy, you can follow COL’s model portfolio in their monthly report called “COLing the shots”. Below table is the latest one.

Happy investing!

How to invest in UITF?

More than 3 years ago, I learned how to invest in the stock market. At first, I was hesitant to pour in my money into my broker’s account (COL Financial) to directly invest in stocks. I did it slowly because in my mind it could be a scam and besides I don’t even know somebody who invests in stock market. In short, I was really scared.

Since I’m comfortable with the banks, I decided to move some of my cash and buy UITF. So I told myself “It’s just a test”. Actually I really don’t know UITF back then because I asked the bank’s counter for mutual fund. They told me that banks don’t offer mutual funds but UITFs. By the way, the bank’s representative I asked is from BDO.

So what are UITFs?

UITFs are investment products where investor’s funds are pooled and invest in government bonds, stock market or a combination of both. The funds are being managed by professional managers so you don’t have to worry about them.

In UITF, you buy NAVPU (Net Asset Value Per Unit) based on current market price which is also a fluctuating value based on the market performance. This is similar to “shares” in stock market. So when stock market is down, this NAVPU is also lower.

Types of UITF

When I asked for UITFs, the banker offers me four types which are described below:

  • Balanced fund – investment is mixed with equities (stock market) and fixed-income securities (bonds)
  • Bond fund – an investment in fixed-income securities such as government bonds or a giant corporations such as Ayala
  • Equity Fund – an investment fund primarily in stock market. If you are going for a long-term investing, this is the best choice. For example, I choose this for my daughter’s college education.
  • Money Market Fund – investment fund in short-term which has a maturity of one year or less

Today, when I visited BDO website, there are a total of 9 different types of UITFs available. Some of them are in dollar denomination.  BPI is also offering UITFs.  Probably the main advantage of BPI UITFs is the removal of the holding period.

So how do you invest in UITFs?

Investing in UITFs is pretty much easy I would say. In my case, I just drop by to the branch where I opened my savings account and told them that I want to invest in UITF. I was assisted and my fund was moved from savings to the appropriate fund of my choice and that’s it. The minimum fund to invest in BDO UITF is 10,000.

Take note, BDO UITF has holding period. In case of Equity Fund, the holding period is 30 days. If you decide to pull your money out within the 30 days holding period, 1% of original amount will be deducted. If you are a long-term investor, you can ignore this policy.

How do you earn in UITF?

Below is my BDO Equity Fund certificate. I invested 20,000 pesos with a total of 84.5944 units and a NAVPU of 236.4221. It’s easy to do the calculation if you want to know how much you earn.  To compute for the current market value of this investment, multiply the total number of units (84.5944) by the current market value of NAVPU.  The value of NAVPU is updated daily and available in BDO’s website.


At the time of this writing, the NAVPU for BDO Equity Fund is equivalent to 414.6993. So the current market value of my investment is already 35,081.23. Wow! That’s a profit of 15,000 pesos after 3 years which is around 75%. That’s a huge amount of earnings compared to savings or time deposit.

So if you’re comfortable investing your money in the bank and you’re tired of being a saver, start investing in UITF now!

Any thought? Ideas?  Feel free to comment below.  If you find it useful, consider sharing it in facebook so others won’t be left behind.

How to spend your money wisely?

“More people should learn to tell their dollars where to go, instead of asking them where they went” Robert Babson

When I was still an OFW, I’m earning around 5 times of my salary as local employee.

But after a year of working overseas, I looked into my depleted dollar bank account and asked myself “Where did my money go?”

I believe this is one of the frequently asked questions among employees – myself included. Because a lot of people failed to plan how to spend their money, 1 week (or more) before the next payday comes, the budget is already gone.

If you notice, there’s a massive campaign attracting us when the calendar is approaching the 15th or the 30th of the month. This week alone, I received a call from a famous casino resort and home shopping network offering their products and services. I have no idea how these people get to know my mobile phone number.

I also got an SMS offering cash loan and to my surprise my credit card was upgraded to Gold without my consent with a highlight on my new credit limit and a 5-digit advance cash feature. Wow! Similar things such as these are encouraging voices telling us “Hey c’mon, spend your money on us and enjoy!”

Just to clarify myself, I am not against these promotions. Actually these promotions are good especially for credit card; you can use it to your advantage if you just know how. So how are you going to avoid these temptations?

Well based on my personal experience, one of the simple solution is to create a plan on how to spend your money. But before doing that, you have to know first how much is your total monthly expenses. You can do this first by tracking where your money goes.  As William Edwards Deming said “You can’t manage what you can’t measure”

So take a small notebook and list all your expenses everyday (meals, jeepney fare, etc). The monthly regular bills like house rent, electricity, water, grocery items, tuition fees and the like are easy to quantify. In so doing, you will identify your basic needs and if your budget permits, you will be able to allot some of your cash for your “wants” or entertainment but I suggest put your excess money in investments like mutual funds or stocks.

After 1 or 2 months of doing this, you can now create your plan on how to spend your money. Personally, I have a 12-month budget plan where all the expenses are laid out including the excess money which I am free to invest or spend on leisure or the “wants”. You can use Microsoft Excel to do this and the computation is easily done by this tool as well.

Upon completing this task, you’ll be astonished when you see all of your planned expenses for the year. This will allow you to adjust your budget easily in no time and create strategy to manage your cash. You will get to know which month of the year you have excess cash (month when bonus is paid) and the month you are short (enrollment month).

Given this scenario, chances are small that you will be tempted to spend those excess cash when the bonus month comes in.

How will you segregate the budget?

You can do this by opening an online account where you can move your cash from your payroll. I’m using BPI Express Online banking facility to do this so all transactions are done using the internet including the bills payment. I used to combine my expsenses for utilities (electricity, water, internet, and cable) so during payday i just transfer the total amount to the other account. For other expenses, i use envelops to store the budget where my wife can easily access them for our day to day needs.

That’s it! Now the next time you receive your salary, you will not be sad when it leaves because you spend it wisely. So gain control of your money and never allow your money to control you!

Plant in the spring or beg in the fall

Have you heard about the real story of Lola Penny and Lola Pilar?  If not, let me share with you this inspiring story of Bo Sanchez about two Lolas. I really love this story. It’s actually the story that keeps me motivated and one of the main contributors why I develop the habit of investing each month for my retirement.

The 1st half of 2014 is almost over so time flies really fast, so act now! As Jim Rohn said: Plant In The Spring Or Beg In The Fall.

The Story of Lola Penny

I have a friend who retired 7 years ago.
Let’s call her Lola Penny.
Actually, her real name was Lola Penang. She took a vacation in America, when she came back, she was now called Lola Penny.
Lola Penny is a widow with 4 children and 6 grandkids.
For 38 years, Penny worked as an accountant, crunching the numbers for her company. Because she was such a good accountant, she was promoted many times and became the manager of the entire department.
And she was earning very well.
But Penny told me that even if she was earning very well, she was living from paycheck to paycheck.
Which brings me to a very important principle:Income does not equal Wealth. It’s not how much you earn that makes you wealthy. It’s how much you investfrom what you earn that makes you wealthy.
Yes, she saved some money. But like most Filipinos, she saved only for the big expenses: She saved to buy a house. She saved to pay for the schooling of the kids. She even saved for the wedding of the kids. But she failed to save for the biggest expense of all: Retirement.
Like many, she totally depended on the retirement package from her company.
When she retired 7 years ago, Penny got P3 million.
For the first year, it was heaven on earth.
Every Sunday, she brought her grandchildren to the mall to buy them toys.
And when her children needed money, they’d run to her.
“Mommy, can we borrow money to repair our car?”
“Mommy, we lack P20,000 for Junior’s tuition fee. Can you help?”
“Mommy, your apo (grandson) will compete in a swimming competition in Singapore. Can you pay for his plane fare?”
But very quickly, her money ran out.
After 7 years in retirement, Lola Penny was penniless.
This Isn’t Just A Story;
This Is Harsh Reality
Today, Lola Penny totally depends on her 4 children to give her money. But she knows that they have financial problems of their own.
One time, she overheard her daughter arguing with her Kuya (older brother) on the phone. What she heard tore her heart.
With anger in her voice, her daughter said, “Kuya, it’s your turn to give money to Mommy! I’m the one who takes care of her at home! I’m the one spending for her food everyday! And I’m the one buying her medicines. Last week, I spent P3000 for her meds! My husband is already complaining why we always don’t have money!”
When Lola Penny heard her daughter complaining, she began to cry.
The painful words she heard that day were like many knives stabbing her chest.
Lola Penny felt she was just a burden to her children.
And she wanted to die right there.
Here’s the irony: All her life, as an accountant, Penny was very good at managing the money of her company—but she never managed her own money.
This is not just a story.
This is harsh reality: According to surveys, 98% of people aged 65 and above are just like Lola Penny.
They depend on their kids, or they depend on their tiny pension, or they depend on charitable institutions, or they have to keep working—or they have nothing to eat.
Only 2% of people aged 65 and above are financially free.
Like Lola Pilar.

The Story Of Lola Pilar

You can retire in two ways.
You can retire like Lola Penny or you can retire like Lola Pilar.
Penny is a pseudonym. That’s not her real name.
But Lola Pilar is no pseudonym.
Pilar is my mother.
She is 85-years old.
Today, I give my mother a nice monthly allowance.
I do it not because she needs it, but because I need it. I need to show my love to her.
But in reality, my mother doesn’t need my money.
Let me tell you why.
Many moons ago, my mother worked in a small music store as a Cashier. Her salary was P120 a month. After working for 19 long years, she received a separation pay: A whopping P2000!
She invested that P2000 in the Stock Market.
The year was 1966.
And whenever she had extra money, she’d invest in very well known companies. My parents bought the stocks of giant companies of their time: San Miguel. Ayala. Etcetera.
My father retired at the age of 65. He passed away at 88. For those 23 years, my parents sold a portion of their stocks–little by little—for their big expenses.
After Dad passed away, Mom announced, “I’m selling all my stocks.” I was surprised that she still had P1 Million from that last sale—even if they were already withdrawing their cash from there little by little.
I asked her, “Did you sell everything?”
Mom said, “Yes, I did. Well, I left the crumbs…”
“What crumbs?” I asked.
She explained, “Oh, I left the very little investments scattered in various companies. They’re very tiny. Nothing much.”
That conversation took place three years ago.
Just two months ago, I told her, “Mom, you’re 85. You better sell whatever you have left in the Stock Market. Yes, I know they’re crumbs. But just collect them anyway.”
She agreed. She called up her stockbroker and said, “Can you sell all the tiny stocks I have left?”
She was expecting P10,000. At most, P20,000.
But she got the shock of her life. The stockbroker told her, “Mrs. Sanchez, your stocks are worth P1.2 Million.”
Mom turned to me and said, “Bo, I’m rich!”
I told her, “Mom, you’ve always been rich. You just think you’re poor.”
Forty-five years ago, my mother planted P2000 in the Stock Market. And through the years, she planted little seeds of P50, P100, and P200 in giant companies.
Because she planted in the spring, today, she isn’t begging in the fall.
In her whole life, my mother never received a huge amount of money. She never inherited money. She never won the Lotto. She only built her wealth slowly.
Remember this truth I heard from David Bach:Wealth is not built in days; Wealth is built in decades.
There are two ways of retiring in life: Are you going to be a Lola Penny or a Lola Pilar?
God places the two roads before you.
Penny Poverty or Pilar Prosperity?
You choose.

Old is cool: Reasons why I love my old car

After typhoon Ondoy struck Metro Manila four years ago, we decided to move and rent an apartment in another subdivision because our previous place was heavily flooded. Since our access to the main road is a bit far, my wife and I realized that we need car so we bought a 12-year old car online. Owning a manual transmission car is a very big challenge to me. Why? It’s because I don’t know how to drive! So the car needs to be parked in the street for several months before I can use it. At the time, the idea of investing in stocks has not come to me. In summary, here are the top reasons why I love my old car based on my experience:

It can take me and my family from point A to point B. Like most brand new cars do, my old car takes me and my family safe and sound from one place to the other. Now I don’t have to rush early in the morning to the bus station for the first trip whenever we decide to go to Laguna for a weekend break or a vacation.

Easy to diagnose when there’s a problem. I save a lot of money here. My trusted car technician will visit me or I’ll call him describing the problem then the next day, he already had the parts needed to fix it. That saves me from expensive cost of parts and taxes because most cheap parts are available from local shops in Banawe.

Cheaper maintenance cost. Although it encountered a lot of repairs from the beginning, when I sum up all my expenses and compare it against getting a bank loan for a brand new car with monthly amortization of 15,000 pesos a month, I realized it just cost me less than half of the amount.

Fuel efficiency. Compared to its brand new and a more recent model, my car is much more fuel efficient because it has a smaller engine. I was shocked when I ask one of my colleagues who owns a recent model; his car’s full tank gas capacity is just good for 1 week while mine can last up to 3 so that’s a huge difference. But of course there’s a lot more factors to consider here like the driving habits, road and traffic conditions, etc.

Personal education. Aside from learning basic maintenance and repairs I experienced in my car, it also turns out to be an “automobile university”. During rush hours, instead of listening to the radio or music and complaining over the traffic jam, I view it as an opportunity to learn from my favorite motivational speakers and best-selling authors like Brian Tracy, Robert Kiyosaki, Bo Sanchez, etc. I listen and learn from their audiobooks and seminars. I also believe that when I’m stuck in a traffic jam, God gives me time to reflect and pause for a while.

It allows me to invest. This is probably one of the best benefits when I decided to buy a used car. I imagined that I bought a new car and I need to pay a monthly amortization of 10,000 pesos a month. I set aside this amount every month and put it in the stock market following Truly Rich Club’s recommendation. Also whenever I get bonuses and extra money, I also added it in my investments. After investing each month for almost 3 years, I was amazed how my money grows. Early this year I realized I can now buy a new car! But of course I’m not gonna do that because my old car still rocks! Besides, a new car losses its value of around 25% the moment you drive it off the lot while on the other hand my investments continue to grow and gives me passive income in the form of dividends.   To cut the long story short, I choose to keep my old car.

Do You Want to Earn Thru Dividends or Capital Gains

Just want to share you this sample stocks update from Bo Sanchez’ Truly Rich Club. I’m so excited in the power of compounding in the years to come. I remember the day I told one of my relatives about the dividends I received the first time. He was very excited to know and asked me “how much?” and I answered “well “it’s 200 pesos”. He laugh at me and said “are you excited with that amount”.  But that was 4 years ago. Now it multiplied many times because of my habit of investing month after month after month…  Thanks to the Truly Rich Club team for the motivation and encouragement.  You are doing a great job!


Do You Want to Earn Thru Dividends or Capital Gains?

The obvious answer is “Both!” Let me backtrack. There are two ways of earning in the stock market. The most popular way is through Capital Gains. That’s what gets bragged in the office cafeteria. “I bought this unknown company at P1.23 last month. Today, it’s gone up to P2.58! Whoot!” And a lot of congratulatory high-fives follow. But that same guy didn’t mention how he bought another unknown company at P0.45 last month and it’s doing P0.08 today. No one talks about losers, only winners. Because talking about the winners is exciting. And it makes you look very sexy. Hey, I like Capital Gains too. Who doesn’t? It’s like winning the lotto. In the history of the TrulyRichClub, we’ve had wonderful stories of Capital Gains. Not from unknown companies, mind you, but from our humongous giants. (For example, when we sold JGS last year, we enjoyed a 40 percent capital appreciation.) But as exciting as these are, I believe the bulk of your long-term profit will come from dividends. Wharton finance professor Jeremy Siegel studied the stock market returns from 1871 through 2003—a span of 132 years! Do you know what he found out? In that loooooong period, 97 percent of the total returns from stocks came from dividends, and only three percent came from capital appreciation.

What does that mean? In the long-term, a huge part of your earnings will come from DIVIDENDS. That’s when the gigantic company you buy gives you annual or semi-annual share of their profits. Sometimes, it’s two percent or three percent or four percent or five percent a year… It really depends on the company. These tiny dividends aren’t very exciting. But over time, they compound. And they will make you very rich. In 20 years, this is what will make you a multimillionaire. (Obviously, this works if you reinvest the dividends as we always tell you to, and not withdraw it from the stock market to buy a wide-screen TV or take a trip to Hong Kong.)
Here are a sample of the SAM Stocks that give you dividends:

  • BDO – 2.2%
  • EEI – 2.2%
  • LRI – 5.5%
  • TEL – 6.7%

I know, they don’t look very exciting. But believe me, in the decades to come, they will…
Have a fantastic year ahead of you!

Happy investing!
May your dreams come true,
Bo Sanchez

Afraid investing in stocks?

A lot of people know and heard about the stock market, its benefits over the long term and specially if compared to banks’ offered savings and time deposit accounts. Surprisingly, few people get started investing. I’m also guilty about this. The most common question is: “How and where do I start?”

Knowing where to start investing in the stock market is very important. Most people are stuck to this because they don’t know where and how. I remember 3 years ago when I heard about investing in stocks. Somebody sent me the e-book of Bo Sanchez where he explains the stock smart. Although the book is easy to read, I have run through it many times until convinced myself that I should start it out. But along the way, while having our regular date in the mall, I saw the opportunity to “invest” and own a townhouse somewhere in Rizal so I decided to grab it instead. Luckily, (because I call it as a blessing anyway), after several months of paying the down payment for our townhouse unit, the developer got involved in a scam so all the amount of money I put in was wasted. Then again I remember the stock market. I used my reserved cash for the down payment as my initial investment. I did it afraid thinking that I’m entering again into another scam because I don’t have any friends or relatives to ask for advice. I convinced myself that if I can invest into a scam for a bigger amount, these 5,000 pesos is just small. So I did what was instructed in the book. Author Bo Sanchez recommends Citiseconline (now COL Financial) as a broker in buying and selling stocks of giant companies. So I filed a 1 day vacation leave and went to their office in Ortigas. I was surprised to know that in less than 1 hour, I already have my COL EIP account. It’s very easy!

Fast forward after 3 years of religiously funding my account and following the Strategic Averaging Method of the Bo Sanchez’ TrulyRichClub, my money earned 10 times the amount of money I lost in my wrong investment in townhouse. Investing really pays off!

If you’re still struggling in starting out or opening an account here’s two simple steps that you can do:

1. Go to COL Financial’s office in Ortigas and bring a valid ID (driver’s license or SSS ID)
2. Fill-up the form and pay the initial amount of 5,000 pesos

That’s it! You will have your account already. Just wait for COL’s email for the login credentials so you can buy your first stock during the trading day which is from Monday to Friday, 9:30am to 3:30pm.

So stop making excuses now. Start investing today! As Ernie Baron said, “Knowledge is power”. What if you have the knowledge but lacks of action? Obviously, the power is wasted. We can then add action and improve this statement: “knowledge + action is power”.

How to smell a scam away

“Make your money work for you” is a very popular slogan used in scams to attract investors.  Now if you are not aware, chances are you will fall to this trap especially if they promised to give enormous returns over a short period of time that will make you rich quick.  There is a very informative and a real life video from pesos and sense about this where a professor of Adamson University was a victim.  Watch it below:

In the Trulyrichclub, our mentor Bro. Bo Sanchez is giving several tips on how to smell a scam away and how to identify its many faces.  It’s a long article but I think worth your time reading.  Here it is:

Here’s the first rule of money: If you earn it, don’t lose it.
I’m telling you this because there have been many financial scams in the Philippines. You need to learn how to protect yourself from a scam. It’s useless to earn good money and then lose it all to a financial fraud.
Here are the six signs of a scam…

1. Insane Interest Rates

Multitel (Multinational Telecom Investors Corp.), started by Rosario “Rose” Baladjay, was probably the biggest scam in Philippine history.
Some news reports say that two million people invested in this company—which probably reached P100 billion. Reason: This company accepted small investors—even as small as P10,000. This company was so believable, they got many military and police officers to invest.
Why? Multitel promised four percent to five percent interest a month. They also had another offer where you could double your money in 18 months.
Did you notice? That’s 60 percent growth a year.
That’s what I call an insane interest rate.
Insanely high interest rates means a pyramid scam is going on: The company gets money from new clients to pay off the interest of old clients. (This is what you call a Ponzi scheme, named after one of the most celebrated scammers in the history of America, Charles Ponzi.) This charade continues until there isn’t enough new money to pay off the interest rates of older clients. Soon, everything implodes.
For example, Rose Baladjay started by promising 1.1 percent a month interest to her investors.
But by its very structure, you’ll need more and more money to pay older clients, so Multitel had to keep raising the interest rates to attract more customers. Soon, it promised five percent returns a month.
But after Multitel was shut down by the government, people didn’t learn. Cyrus Yap Hao, who worked with Baladjay in Multitel, set up his own pyramid scheme. He founded Royal Manchester Five (RMF). His company promised insane high returns as well—and many more were duped and lost their money. Through Powerhomes, they dangled the promise of P3 million in earnings plus a house and lot. Around P2 billion of clients’ money was lost in RMF.
In 2008, FrancsSwiss did the same thing. It promised four percent a day for 60 days straight or 270 percent returns. But despite the insanity of those interest rates, many executives and celebrities were lured into its bottomless pit. (I know of one Vice President who sent them P10 million and lost it all.)
Remember, if the promised interest rates are too high, stop. There’s something fishy going on.

2.Guaranteed High Interest Rates Every Year

Aside from the ones I mentioned above, there have been many other scams in the country and all of them have been “successful”. Unfortunately. Companies such as Performance Investments Products Corp (PIPC), MMG Holding, Tibayan Group of Companies, Legacy Group, Maria Theresa Santos Trading, etc…
Biggest Reason: Filipinos are financially ignorant.
We think everything works like a bank. We reason, “If a bank can give me a guaranteed interest rate, these investment companies can also do so…”
No, they can’t.
A bank can give you a guaranteed interest rate because they give a measly one: Less than one percent a year for your savings account and around three percent to five percent a year for your time deposit.
But for example, at its height of popularity, the Rural Bank of Paranaque (run by Legacy group) was promising 20 percent a year to its depositors, every year. That should have been a red flag. But people didn’t see it.
Three of my friends invested in Legacy Group. They reasoned, “It’s a bank. As long as my money is below P250,000, my money is insured. I’m covered by PDIC.”
Sounds terrific. But when the collapse came, one of my friends had to wait for more than a year to get her money back.

3. You Can’t Understand How They Earn Money

Not one of the companies above could explain how they could earn such high returns. Some will try to explain their investment strategies in esoteric language specifically for the purpose of confusing you.
For example, Royal Manchester Five said that they grew their clients’ money by trading in European currencies. But that’s impossible. Anyone who has done foreign currency trading knows that it’s highly volatile.
(My mentor says that 97 percent of people who trade in foreign currencies lose their money.)
Most of these pyramid companies hire salespeople to invite people to invest their money. These sales people are usually investors themselves. And they earn one percent to 20 percent commissions from the money being invested. Most of these sales people are very sincere. They really believe in the company. They don’t know it’s a scam. So they believe they’re doing their friends a favor by asking them to invest in these companies.
So when you ask these sales people (usually called counselors), “How can the company earn such big amounts?” they’ll never be able to answer your question. Because they themselves don’t know. They’ll usually say, “I don’t really know how they do it. It’s too complicated. Something about European currency trading. But it must be fantastic. All I can tell you is that it works. I’ve been investing with them for three years now and I’ve been getting my interest checks every month like clockwork…”
And then tragedy strikes.

4. It’s Just Too Good to be True

There are other kinds of scams.
One day, a man came up to me and said, “Brother Bo, I received an email telling me that I was chosen to be the recipient of a huge inheritance money from a British lady who had no heirs. It’s worth 1.2 million pounds.
When I receive it, I’ll donate half to your ministry.”
Groan. Gently, I told him that it was a scam.
He said, “But what if it isn’t a scam? I’ll lose the 1.2 million!”
I told him to go ahead and find out for himself. I warned him, “If they ask for money, it’s a scam.”
The following week, he told me with a sad face, “You were right. It was a scam. I called up the number of the attorney. The guy asked me to send him $400 to expedite the transfer of the inheritance money to my account.
And to think that I almost fell for it…”
In another scam directed to OFWs, a text message was sent to them, saying, “Congratulations! You’ve just won $40,000 in the lotto…” The lotto was reportedly sponsored by then President Gloria Macapagal Arroyo for OFWs. But to claim their prize, they needed to send some dollars to Western Union—so they could remit the prize money from the organizer, which was supposed to be the GMA Charity Foundation. None of these were true. But some Filipinos fell for it.
If it’s too good to be true, stop!

5. They Seem to be Good and Credible People

The people talking to you about the scam could in fact be very nice, honest, and kind people who wouldn’t hurt a kitten.
But they could just be as ignorant as you are.
In the Royal Manchester Five scam, the top sales managers were Born-Again Christians. They believed in
their company so much, they asked their religious friends and even churches to invest.
Some, however, may just be very good pretenders.
Example of someone who seemed to be very credible? Bernie Madoff. In the biggest and longest-running
scam in America, Madoff wasn’t only seen as a good guy, he had all the credentials. He was former chairman of
NASDAQ stock exchange.
He was so believable, his Ponzi scheme lasted for possibly 30 years. Because of his reputation, Madoff was
particularly attractive to very wealthy investors. When his entire operations fell, reports say that his clients lost
$65 billion.

6. Your Financial Advisor and Financial Manager Are the Same Person

I love what I do in TrulyRichClub. Because I’m your financial mentor, coach, advisor, teacher, sensei… But
I don’t hold your money.
Instead, I ask you to put your money in the stock market—specifically in gigantic companies like JGS and MBT and BPI… (Even Citiseconline doesn’t hold your money. They’re just a middleman receiving your money and sending it over to the giant companies you buy.)
Do you see the difference?
If it’s a scam, your financial advisor is also your financial manager. He holds your money. He invests it. He
has full control over it. Theoretically, he can run away with it.
Example of a very dangerous situation: I manage the money of my older aunts and uncles (age 80+). I do
it because at their age, they have no choice. I love them. But what they’re doing is dangerous. If I was evil, I’d
spend their money—and they won’t be able to do anything about it. Thank God their nephew’s a good person.
Handsome too, but let’s not go there.

Smaller Bottomless Pits

But have some relatives or friends asked you to invest in their businesses? And has your money vanished into thin air?
They weren’t scammers. They just didn’t know what they were doing. Don’t blame them.
Who’s to blame?  You. (Sorry. I love you.)  You turned over your money without due diligence. You didn’t read their financial statements. You didn’t research about the industry. You didn’t ask mentors who are familiar with the
business.  You abdicated your responsibility over your money.  I speak with bluntness because I did these foolish blunders
myself. Many times! (I was hardheaded.) I’ve lost millions doing this silliness.  But today, I’ve learned my lesson. Finally! I don’t do it anymore. I’ve decided to keep my investing very simple now.
So today, I invest in two things only:
First, I invest in my personal businesses, where I’m in full control of the money. If I’m not in control of the money, I don’t put in my money.
Second, I invest in the stock market. I buy gigantic companies. Even if I’m not in control, it’s okay, because those who are in control are legends like Henry Sy, John Gokongwei, and Jaime Zobel, etc. When you invest in the best companies in the stock market, you partner with business titans. Because of these two simple decisions, my money has multiplied tenfold.
Keep away from scams.
Keep investing simple.
And your money will multiply as well.

May your dreams come true,
Bo Sanchez


How budgeting can alleviate your savings experience

There are many such people who may have been saving for quite a long time now, but to no avail. So, what would you be required to do, in order to can save up more? It is important to have enough savings, so that you can lead a secure retired future. Furthermore, savings is important for emergency situations too. Therefore, you need to take stock of the situation, so that you can save up more than before. The health of your finance depends on how you handle or manage your money.

Improving the budgeting techniques

One of the greatest crucial factors, with regards to effective budgeting is, keeping your expenses lower than that of your income. You will have to set up a goal and work on achieving that. If you have been following a budgeting plan, try to set up a new one. In order to get the things changed, with regards to budgeting, you will have to check the old receipts. These can be the receipts based on rent, mortgage, grocery, insurance and debts or even more. Find out what the past expenses have been, on an average and work on the changes as required.

In addition, you will have to:

  1. Follow separate budgeting techniques – You can start following separate budgeting techniques, for different requirements. Like, you can prepare a separate budget for a week and a separate one for the month. Then, you can use a separate budget for your everyday living, and a separate one for traveling and so on. This may help you in saving up more and from every other aspect of your life.
  2. Set up some savings goals – Set up a proper savings goal, so that you can work towards achieving the same. If you have already been saving, you will have to set an even higher goal standard. If you can achieve the new goal, set an even more stringent one.
  3. Gift yourself if you reach the goal – If you think that you had easily been able to reach the goal, you can gift yourself a small nothing. For example, if you had set up the goal for a month, but if you were able to achieve it within 25 days, you can get a gift for yourself.
  4. Try going frugal – You can try going frugal, if you had not been able to save up lots through simple budgeting techniques. You will have to save on electricity, on gas, on other bills and even on grocery through couping.

These are the ways in which you can obtain more savings and can go on to improve your finances too, in the long run. This may further, help you in avoiding debts and thus you may also see improvement, with regards to your finance and credit rating.