Financial IQ: Is Personal Loan worth it?

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Financial IQ Philippines Quick Hit(s):

Most of us have been offered loans by different institutions.  Unless you can recover the interest from the loan, I suggest you think twice before taking out this type of loan.  As can be seen from the one of the leading institution's offer, the loan's annual interest rate ranges from 21% to 27%.  Yes, this is very high.

Just think about it, in savings account, you typically get 1% interest per annum (for a deficit of appoximately 20% to 26%).  For time deposits, typical range is around 4% per annum (for a deficit of approximately 17% to 22%).


One of the flyers I got from the recent Franchising Expo 2011 in SMX is a Personal Loan from one of the leading financial institution.  This type of loan is typically non-collateral and can be used for home improvements, purchase of retail items, medical expenditures, trips, etc.  Reading the front portion of the flyer, seems like the rate is around 1%.  As it turned out, the various interest rates are:

Term	Interest Rate / Month	Effective Rate / Year
6	1.30%	26.27%
12	1.25%	26.63%
18	1.25%	26.76%
24	0.99%	21.37%
36	1.25%	25.98%

Related articles

• The Pros and Cons of Personal Loans (savings.com)

Financial IQ: 9 Strategies of Billionaires

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Financial IQ Philippines Quick Hit(s):

Warren Buffet, consistently among the Top 3 billionaires, preaches buying companies when they are cheap.  Shouldn't it be one of our strategies as well?


One of my favorite business books is Martin Fridson’s How to Be a Billionaire. Although I have no plans or ambitions to be a billionaire, this book shares a lot of interesting ideas that even small and medium entrepreneurs and professionals can learn from.  Fridson studied more than a dozen self-made billionaires like Sam Walton, Bill Gates, Wayne Huizenga, and Warren Buffett, and came up with these nine strategies. I will apply these strategies to our local tycoons:


1. Take monumental risks. Lucio Tan buying almost bankrupt firms like Tanduay, Genbank (now Allied Bank), Philippine Airlines, etc. Who is gutsier than he?


2. Do business in new ways. Henry Sy pioneered malls in a big way; Tony Tan Caktiong’s Jollibee was ahead of multinational McDo; John Gokongwei Jr. turned transport upside down with budget airline Cebu Pacific and also the free texts/calls from Sun Cellular.


3. Dominate your market. MVP’s PLDT is dominant in telecom and Meralco is a monopoly; Danding Cojuangco and Ramon Ang’s San Miguel is dominant in beer; David Consunji is a leader in construction; Fred Uytengsu is dominant with Alaska Milk, etc.


4. Consolidate an industry. Like the Aboitizes consolidating power firms and plants.


5. Buy low.


6. Thrive on deals. Like top dealmakers MVP, Roberto Ongpin, Ramon Ang, and Gokongwei.


7. Out-manage the competition.  Like George Ty, the Zobels, Henry Sy’s family in malls, Felipe Gozon of GMA 7, etc.


8. Invest in political influence. Not a few tycoons are like Manny Villar in politics, while Ricky Razon of ICTSI is close to all presidents of the Philippines.


9. Resist unions. The late immigrant Jose Yao Campos of Unilab was very benevolent, and I heard of no strikes or labor unions.

http://www.philstar.com/Article.aspx?articleId=721429&publicationSubCategoryId=82

Related articles

• Cebu Pacific Stays Simple and Scalable (online.wsj.com)

Financial IQ: Franchise Expo 2011

Financial IQ Philippines Quick Hit(s):

I visited the Franchising Expo and there are a couple of interesting concepts.  There is a P100.00 entrance fee and closes at 7 pm.  I will share the various franchise information I gathered in future articles.

FRANCHISE ASIA 2011 to Highlight PHL in Global Franchise Map

The Philippines will take centerstage in the global franchise community with the staging of Asia’s grandest franchise event dubbed “Franchise Asia 2011 (FA2011)” on September 19-25 at the SMX Convention Center.  This was announced by FA2011 Overall Chair Bing Sibal-Limjoco, who also sits as Vice Chairman of the Philippine Franchise Association (PFA), host and organizer of the event.

“The honor of staging this prestigious international event came after the Philippines, through PFA, won the bid to host the twin international meetings of the Asia Pacific Franchise Confederation (APFC) and the World Franchise Council (WFC).  FA2011 will gather in Manila, delegates from 43 members countries of the two world umbrella franchise organizations,” Limjoco said.

Bannered under the theme “Asia to the World ● The World to Asia,” FA2011 aims to provide the platform to showcase to the world the best Philippine franchise brands and concepts, as well as provide a gateway for international brands to enter the 650 million ASEAN market through the Philippines.

Limjoco, reiterating the importance of the biggest gathering of franchise leaders in the country, said, “Through this event, we aim to strengthen the Philippines’ position as the ‘franchise hub of Asia.’ Franchise Asia 2011 will definitely highlight – in a global scale –  the position of the Philippines as a premier trade, investment and tourism destination to further raise the country’s profile as a frontrunner in the international franchise arena and as an important investment destination in this side of the region.”

The 4-in-1 FA2011 showcase will feature: the twin meetings of APFC and the WFC (September 19-22); the International Franchise Conference with Concurrent Breakout Sessions, a high-level educational program which will provide the best opportunity to learn from world-class experts and noted franchise gurus who will share their expertise in franchising (September 22-23); the International Franchise Expo, a three-day one-stop shop for the best business opportunities ranging from established and successful brands to new and promising franchise concepts – in food, retail and service – both homegrown and international (September 23-25); and, Educational Sessions and Franchise Seminars which will provide the proper learning venue for would-be franchisors, would-be franchisees, and/or would-be international master franchisees or those on the look-out for prospective joint business ventures (September 23-25).

Highlighting the Conference are prominent names in both local and international franchising which includes Jollibee Chairman and CEO Tony Tan Caktiong as a keynote speaker.  The 2004 Earnst and Young’s “Entrepreneur of the Year” will provide the face of a Filipino brand’s success in the franchising sector both locally and internationally. In addition, Krispy Kreme Doughnut Corp. Senior Vice President & President-International Jeff Welch and 7-Eleven International Senior Vice President Chris Tanco have also confirmed their speaking engagement in the event.

Meanwhile, the Expo will continue to be the biggest showcase of unlimited opportunities as an almost 10,000 square meters of exhibit space will have added features to complement  the wide variety of investment options.  Among the exciting sections to visit are the International Franchise Brands and Concepts; the Country Pavilions (USA, Europe and Asian Countries); Emerging Concepts, Incubation and Winning Business Ideas from the Academe; and, Allied Suppliers and Business Opportunities.

Related educational activities will also highlight the Expo, such as International Franchise Seminars by international exhibitors who will present investment opportunities for prospective partners and investors; Franchise Seminars for “would-be franchisors” and “would-be franchisees”; and, Franchising 101: Benefits and Advantages of Franchising.

To know more about Franchise Asia 2011, visit www.franchiseasia2011.com.ph, or contact the PFA Secretariat at tel. nos. (02) 6870365 to 67, 09178320731, or e-mail pfa@pfa.org.ph This e-mail address is being protected from spambots. You need JavaScript enabled to view it .

Financial IQ: Premarital sex among Filipino

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Financial IQ Philippines Quick Hit(s):

You might be asking... how does this relate to Financial stability?

Check John Gokongwei's 12 longevity secrets.  In particular, his 3rd secret - marry a good wife.  As studies show, those who practice chastity has a 70% chance of good marriage.


OFWs working in North America or Europe are very much aware of rampant premarital sex among adolescents in their respective host countries. It is taken for granted that chastity is an old-fashioned virtue that young people can no longer practice because of the sexually permissive environment in which they live. Deep within, these OFWs—especially mothers who left their children behind—are still hoping and praying that their daughters and sons continue to value chastity and do not go the way of adolescents in many Western societies.


These concerned parents must do everything in their power to prevent the controversial RH Bill from being passed. The obsession with the promotion of artificial contraceptives among those pushing the so-called RH Bill is partly based on the assumption that we have to prevent unwanted pregnancies among adolescents who find it impossible to avoid premarital sex. This presupposition is based on the empirical observation that in many countries in the Western world, the majority of teenage girls have had sex before they get married. Those in favor of the RH Bill claim that they are just being “realists.” To them chastity is an impossible ideal. Well, I claim that they are defeatists. They are assuming that the youth in the Philippines cannot rise above their purely animal instincts. Before they even try, these lawmakers have given up on values and character education of the youth and the spiritual formation that can come from religious faith, whatever the creed.


“So, what’s his point? The point is not to put our loved ones in danger. We said that asking ‘how far can I go with a girl without sinning’ can be put more positively into ‘how far can I go with a girl in protecting her innocence.’ Think of it this way. He invited us to think of our future wife who may be dating another guy right now. How far do we want that guy to go with her? It is like Stephen Covey’s ‘thinking with the end in mind,’ the end here being marriage. Then he said, ‘Girls, do not allow a guy to lift the veil of your body before he lifts the veil on your head—in marriage.’


“To illustrate his point further he cited statistics in the US which show that those who married as virgins had a divorce rate of 70 percent less than those who were not. This was taken from a 700-page book compiling the results of a research that had the largest survey respondents. What made me think deeper was his analogy of our love for our future wife with the love of Christ for the Church. He quoted St. Paul’s letter to the Ephesians. I couldn’t help but think of Mel Gibson’s ‘The Passion of the Christ’ where he described how Jesus suffered for us, His Church, His Bride.  He said that that’s how much we have to be willing to suffer for our future wife. And part of that sacrifice is to live a chaste life now. We need to free ourselves so that we can love!”

http://business.inquirer.net/13775/premarital-sex-among-filipino-teenagers

Financial IQ: 12 Gokongwei Secrets For Long Life

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Financial IQ Philippines Quick Hit(s):

If you have not seen this article, I highly recommend to read John Gokongwei's 12 longevity secrets.

What do you think of his 3rd secret - marry a good spouse?


What are the 12 longevity secrets of John Gokongwei, Jr.? Here are some, which I’ve observed through the years that I’ve had the great privilege to have known this business genius:


1. Never retire. Gokongwei has retired from top posts in his many companies, but he is still chairman emeritus and de facto supreme leader like a Deng Xiaoping or Lee Kuan Yew.


2. Exercise every day. He does the treadmill daily like his younger brother James Go and he likes to swim too. He is also a golfer.


3. Marry a good wife. Gokongwei has advised me that one thing I still lacked to be a true success is to marry a good wife, like he did Elizabeth Yu Gokongwei, and he said I should hurry because he wants to be a godfather in my wedding. He told me that having a good wife is not only good support for life and career, it’s great to come home daily to good rest. He revealed that ever since he got married, he has stopped going out to parties and stayed at home every night with his wife.


4. Raise good and obedient children. One reason Gokongwei is very happy is the fact that he and his wife Elizabeth have raised six children — Robina, Lance, Lisa, Faith, Hope and Marcia —  who are all obedient, hardworking and humble. No blacksheep, prima donna or spoiled brat among their kids, so no big headaches or stress!


5. Have a good sense of humor. Learn to laugh. Humor is a Gokongwei family trait.


6. Do not smoke or drink too much liquor. Gokongwei many years ago quit drinking liquor and he quit smoking the day after the 1983 assassination of Senator Ninoy Aquino due to shock at that tragic event, then he realized that he could live without smoking.


7. Take a nap every afternoon right after lunch. Gokongwei revealed that ever since his days as a young, struggling trader in Manila’s Binondo district after World War II, he always took a nap after lunch. Before, he’d just put a newspaper to cover his eyes and nap in his office chair. Years later when he became more successful, he had a small bed hidden beside his office in his former Libis factory.


8. Travel at least once a year. One of his hobbies is to travel at least once a year, looking at new places, visiting museums, getting new business ideas.


9. Never stop learning. Gokongwei is forever studying something, he is an information junkie. He always asks me stories, facts. Just before his 85th birthday, he half-seriously told his former executive assistant that he wants to study to become an archaeologist!


10. Continue venturing into new projects and new ideas. At his “retirement,” Gokongwei is still involved in thinking up new businesses and expansions for his diverse companies in eight industries. JG Summit is now among the Philippines’ top five conglomerates, but still dynamic and entrepreneurial due to Gokongwei’s drive.


11. Eat whatever you want, but have a good wife guarding your diet! At his 85th birthday party, the menu served a rarity for Chinese lauriat or Western sit-down dinners — Gokongwei’s favorite dish lechon. His wife Elizabeth also revealed that his favorite is also humba and patatim pork dishes, humba is from the Chinese hongba. He still eats pork, steak, etc., but of course with his wife often admonishing him to lessen those kinds of foods. Once when he saw his bodyguard snacking on chicharon, he said he wanted to eat that too.


12. Read everyday. Gokongwei told me he reads the Philippine STAR every morning, plus other publications, books, most especially biographies, history and on business topics.

http://www.philstar.com/Article.aspx?articleId=716394&publicationSubCategoryId=86

Related articles

• Carlyle, Gokongweis Bid for San Miguel's Hotdog Unit (businessweek.com)
• Philippine budget carrier buys 37 new Airbus jets (seattlepi.com)

Financial IQ: Eat or Invest?

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Financial IQ Philippines Quick Hit(s):

"Investing" is making an informed decision.  Cost averaging (wherein fixed amount is invested on a regular time frame) works out quite well for typical investors.


Question: I have seen a lot of blogs, discussion groups, articles and even videos on investing. I am truly convinced that we need to invest. However, I am having trouble getting my spouse to buy in on the need to invest for our family’s future.  What is the best way to do so?


Answer: Investing is actually a boring activity with no immediate benefit to enjoy. Just try watching those investing channels and see how fast you either press the channel change button on your remote or fall asleep.  If you insist on watching, you better put on a lifesaver as you may also drown in the myriad of alien terminologies that they use.


Yet you can have your cake and invest too. Here are some suggestions on how to make investing easier.


1. Learn as a team
2. Gaze into the future 
3. Have fun
4. Start small but think big

http://business.inquirer.net/6775/i%E2%80%99d-rather-be-eating-cake-than-investing