Saturday, June 25, 2011

Financial IQ: Used Car Prices

2010 Toyota Prius photographed in Gaithersburg...Image via Wikipedia
Financial IQ Philippines Quick Hit(s):

Interesting...  Though in Philippines, cars immediately depreciate after it leaves the dealership and will continue depreciating due to usage/duration of ownership.


Cars are not supposed to be a good investment. But Spencer Hunter, an Oregon patent lawyer, recently turned a small profit selling his 13-month-old Toyota Prius.


“I drove a brand-new car for free for a year,” said Mr. Hunter, who now rides a motorcycle.


The rule of thumb says that a car loses at least 10 percent of its value the moment it leaves the dealership. But soaring used-car values are turning that formula on its head for many fuel-efficient vehicles, which are suddenly in high demand as Americans fret about escalating gas prices and do not want to pay for a new car.


Used cars over all are retaining a higher percentage of their original value than ever before, according to auto analysts who track prices. Compact cars that are one to five years old are worth, on average, about 30 percent more on the wholesale market now than just six months ago, the National Auto Auction Association reports.


“You’re not going to find a better return than that on anything,” said Jonathan Banks, executive auto analyst for the used-car guide published by the National Automobile Dealers Association.


The value, for example, of a 2008 Honda Civic LX (highway mileage: 34 miles per gallon) has increased by $2,098 since January, and the value of a 2010 Chevrolet Aveo LS (highway mileage: 35 m.p.g.) by $3,448. A three-year-old Ford Focus (highway mileage: 35 m.p.g.) is worth about two-thirds of its original sticker price, according to Kelley Blue Book, another widely used vehicle valuation source; in 2009, a three-year-old Focus retained just a third of its original value, a difference of more than $5,000. A year-old Prius actually can command about as much as the list price of a new Prius because the new ones are in such short supply that many dealers are selling them for several thousand dollars more than the sticker price.


An unusual confluence of factors creating low supplies and high demand is behind the unprecedented prices.


Many consumers seeking a higher-mileage vehicle consider a used car as more affordable than a new one. But the plunge in new-vehicle sales in 2008 and 2009 has meant that significantly fewer late-model cars are available for the used-car market. And because the tight credit markets during the recession led to a sharp cutback in leasing, the usually steady stream of leased vehicles has also slowed to a trickle.


On top of all that, there are shortages of Japanese models at many new-car dealerships because of the March earthquake and tsunami, prompting some shoppers to check used-car lots instead.



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Friday, June 24, 2011

Financial IQ: 11 Philippine billionaires on Forbes 2011 list

Scene from Family Theater in the Philippines w...Image via Wikipedia
Financial IQ Philippines Quick Hit(s):

2 thumbs up to our Tycoons!!  I believe in you and I bless you!!


The Filipino rich are richer than ever thanks to the “booming” stock market, and mall magnate Henry Sy remains on top for the fourth year in a row, according to the latest list by Forbes magazine.


It said the stock market boom expanded the Philippines’ billionaires’ list to a record 11, with the combined wealth of the 40 richest also hitting an all-time high.


The 86-year-old Sy has a net worth of $7.2 billion, up from $5 billion last year, according to Forbes’ list posted on the magazine’s website on June 22.


The Sy family owns shopping mall developer SM Prime, as well as SM Investments and Banco de Oro Unibank.


The Philippines’ richest are collectively worth $34 billion, up from last year’s $22.8 billion.


Richest 11

  • Following Sy on the list is tobacco magnate Lucio Tan, 77, with a net worth of $2.8 billion. Tan owns the national flag carrier Philippine Airlines and Hong Kong-based Eton Properties.
  • John Gokongwei, 83, founder of JG Summit, a conglomerate with interests in airlines, telecoms, power, banking and real estate, and owner of Robinson’s department stores, is third with $2.4 billion.
  • Andrew Tan, 58, of the Alliance Global Group, owner of the country’s McDonald’s franchise, is fourth with a net worth of $2 billion.
  • David Consunji, 90, who founded construction company DMCI Holdings in 1954, is in fifth place with $1.9 billion. He climbed up the list from 12th place last year.
  • Jaime Zobel de Ayala, 77, chairman emeritus of Ayala Corp., one of the country’s largest conglomerates, is sixth with a net worth of $1.7 billion, followed by Razon, at 7th.
  • Eduardo Cojuangco Jr., 76, who controls food and beverage conglomerate San Miguel Corp. (SMC), is in eighth place with $1.4 billion, followed in 9th place by Ongpin.
  • The Supreme Court recently affirmed with finality Cojuangco’s hold on 20 percent of the shares of stock in SMC, ruling that it wasn’t ill gotten, as alleged by the Presidential Commission on Good Government.
  • In 10th place is Metrobank founder George Ty, 78, with $1.1 billion.
  • The last billionaire on the list is Jollibee Foods’ Tony Tan Caktiong, 58, with a billion dollars.




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Thursday, June 23, 2011

Financial IQ: Will flyers help my business?

Action & ActionImage via Wikipedia

Financial IQ Philippines Quick Hit(s):

Distributing flyers is one way to reach out to our cold market.


How effective are flyers?


If executed properly, flyers can be effective guerrilla marketing tools for promoting your store. There are two parts to this: content and distribution. First the content: limit it to five key things: 1.) A compelling offer (“Get a free surprise gift for every purchase!”), 2.) The featured product (“this elegant necklace”), 3.) A sense of urgency (“Hurry, offer good only for this weekend”), 4.) Action point (“Just present this flyer to the store clerk to get your gift”) and 5.) Your store’s identity and location (include a map on how to get to your store, including store hours).


Second is the distribution: Do not limit your distribution to a specific location. Best to identify a number of touch points and see which of these generate the most number of responses. You could be distributing near the fashion stores in the mall, or dropping them off mailboxes, or inserting them in newspapers. Just be sure to include a code in those flyers so that you have a way of knowing which ones came from which touch point.




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Tuesday, June 21, 2011

Financial IQ: Mutual Funds

Investor ABImage via WikipediaArticle courtesy of the kindness of Jonjon Bonso.


Ano nga ba ang Mutual Funds?
Paano ang Steps para mag-invest dito?
May M.U. ba u?

These questions, and more financial-related inquiries, were answered on the recently concluded May M.U ba U? Mutual Fund Seminar of Accenture Young Entrepreneur’s Club(AYEC). The event was slated last May 21 at the 18th floor of Cybergate 2 building with our very own Senior Manager here in Accenture: Mr. Christopher “Chris” Lim.
                
Chris is not just a typical Project Manager Professional here in our company -- he is also  a Certified Financial Consultant (CFC); Certified Investment Solicitor (CIS), Licensed Real Estate Broker (LFREB); Registered Financial Planner (RFP) and an active member of Accenture’s Bowling Club! Now that’s BIG!

The event started at exactly 10 in the morning and the participants took the first agenda of the event called the “Investor’s Test”. Are you an aggressive investor? A conservative investor? Or somewhere in between? The participants got a better idea of where they stand as an investor by taking the Investor’s test we provided .
  
While munching the provided apple pie snacks, the participants had an interactive  talk with  Chris as he discussed the topic of Mutual Funds from its definition, advantages, disadvantages, types, common terms and more. The seminar turned into a big casual talk as  Chris delivers and communicates the message to the listeners in a very friendly, yet effective, way. Everyone was encouraged to openly ask questions even while the speaker talks infront – just as if you’re conversing to your personal Financial Planner!

Here are some key points of the seminar:

What is Mutual Fund?
Mutual Funds are professionally managed investment vehicles that pool money from investors to buy stocks, bonds, and money market instruments.

What are the Advantages of having one?
·                  Diversification
·                  Liquidity
·                  Professional investment management
·                  Ability to participate in investments available only to larger investors
·                  Service and convenience
·                  Government oversight
·                  Ease of comparison

How about disadvantages?
·   Fees
·   Less control over timing
·   Dilution
·   No opportunity to personalize
·   No guarantees

What are the Basic Types of it?
·      Bond Funds
·      Balanced Funds
·      Equity Funds
  
A sample Mutual Fund Fact sheets was also provided and  shown to all the attendees to give them the idea on how a real-fund sheet looks like.  Chris resumed his talk by discussing the difference of Balanced, Bond and Equity Mutual Funds by showing a sample sheet on the screen.

The event adjourned at past noon, but that doesn’t end the overflowing discussion as the remaining participants encircled  Chris for their follow up questions and other concerns.

Well, who can get enough of this seminar? Having a very respected, certified financial guru and extremely friendly  Speaker? And oh, did I already mentioned he is also an avid player of bowling too?

               The Early-bird of the event was also recognized as she arrived 30 mins early in the venue. She is Ms. Daisy Carranza of Alnova Capability.

The “M.U ba U - Mutual Fund” Seminar gave us inspiration and technical knowledge that we too can be Financial Free --without compromising our Careers and Lifestyle! Just as   Chris maintains all his investments, work and weekly bowling sessions with ease!
  
Join us in the next AYEC Financial Seminar this July! And to learn how high your Financial Intelligence Quotient(FIQ) is by visiting  Chris’ website at:  www.pinoyFIQ.com

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Friday, June 17, 2011

Financial IQ: Money 'rules' meant to be broken?

Sign of a mortgage centre in East LondonImage via Wikipedia
Financial IQ Philippines Quick Hit(s):

If your are paying your mortgage for several years already, it may not make sense to follow Rule 1.

Why?  Well, majority of the interest are paid during the initial years of the mortgage.  The latter years, majority of the mortgage goes to your "true" debt, not "interest".


There are many money "truisms" that can keep you in the poorhouse.


Check out these five rules you might want to start breaking:


Rule 1: Pay off your mortgage as soon as you can.


Rule 2: Don't charge if you can pay cash.


Rule 3: College kids need to build credit to get a job.


Rule 4: There's a set percentage you should spend on items, such as home, car, food, or entertainment.


Rule 5: To build credit, you have to carry a balance.

http://finance.yahoo.com/news/5-money-rules-meant-broken-creditcards-2778398742.html?x=0


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Thursday, June 16, 2011

Financial IQ: What is Term insurance?

The National Health Service Norfolk and Norwic...Image via Wikipedia

Financial IQ Philippines Quick Hit(s):

Term insurance is the way to go as it offers affordable life insurance coverage.


One of the most commonly question I get is... what is term insurance?  Term insurance is a "use-it-or-lose-it" type of insurance.  In motor vehicle insurance, you will not get anything if you were not involved in any accident (during the coverage period).  Similarly, Term Life insurance acts in the same manner, except it applies to life.  


So why Term the premium is lost if nothing happens?  Well, Term insurance is a lot cheaper than participating insurance.  Savings can reach as much as 40% to 50%.


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Wednesday, June 15, 2011

Financial IQ: Am I too young for life insurance?

$10,000 life insurance policy for President Ja...Image via Wikipedia
Financial IQ Philippines Quick Hit(s):

While you are still healthy and insurable, plan to get a life insurance policy.  The lower premium cost is a bonus.


Why do I need to get life insurance when I am still young?—Young Urban Professional


Here’s the typical script of a yuppie, whether from Gen X or Y, to an insurance agent when offered a life insurance policy. “I am young. I just started earning serious money. And here you are talking to me about death? With what I am earning now, it will take me just a few years to build up enough savings to match the coverage that your life insurance policy is promising. Plus, I have grand plans and your life insurance premium will just be an expense that will slow me down.”


For some reason, I can hear Richard Harris playing his favorite character of an old leader full of wisdom and experience, whether as Albus Dumbledore in the earlier Harry Potter movies or as Marcus Aurelius in Gladiator, and reacting to the above script with the line, “Ah, the folly of youth!”


I was once, and still prefer to think of myself as a yuppie. Alas, my age shows for even the use of the word yuppie is not in vogue anymore. Nevertheless, it is said that experience is the best teacher. So let me relate my experience as far as life insurance goes.

http://business.inquirer.net/4255/life-insurance-in-my-30s-too-early


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