COL FINANCIAL UPGRADES CEB TO FV OF 150

COL Financial Raises CEB FV to P150.00. Today it is selling at P86 so there is so much room for potential earnings.

OPEC oil production accounts for 81% of the world oil produce. According to the US Department of Energy Data, oil importation of the US dropped to 40% due to its improved domestic oil production. OPEC refused to reduce oil production, thus sending oil prices plummeting down.

Cebu Pacific Air is benefiting from the price war between the OPEC and the US. Fuel comprises 50% of the overhead expenses of company. A significant decline in oil prices definitely benefits the carrier.

COL Financial upgrade the FV of CEB from P90 a share to P150 a share. CEB also out performs the PSE consistently in 2014 and this trend will continue because of the price war which is expected to last beyond 2015.

With CEB gaining solid share of passengers and reduction in the major cost component, we can expect company and profitability growth. This will definitely result to increase in share valuation. The market will be bullish with CEB.

Happy Investing!

Unit Investment Trust Fund (UITF)

For those who have no time to invest direct at the market. And those who have no time to learn on investment. Here is a good way to grow your money more than what Bank Savings can give.

The following is an update on the performance of Unit Investment Trust Fund (UITF) managed by Banks. This data is as of December 11, 2014.

Happy Investing!

NICKEL ASIA SHARES ON SALE RIGHT NOW! BUY SHARES!

As shown in my earlier posts, Nickel Asia (NIKL) is one of the top performing stock in the market for the year 2014 with 152% return as of September 2014. In fact this is where Security Bank places a huge percentage of their equity investment that comprises their UITF. The Security Bank UITF is also the top performer of the year, thanks to NIKL. 

According to Bloomberg, this trend will continue next year. Thanks to the pullback in the stock market this December, we can now buy more shares!

Here is the excerpt from Bloomberg:

Nickel, the best-performing base metal this year, may extend its rally into 2015 as China’s output of nickel pig iron will drop amid dwindling stockpiles of higher-quality raw material, according to CLSA Ltd.

China’s production of NPI, a lower-grade alternative to the refined metal, may fall to 300,000 metric tons in 2015 from 410,000 tons in 2014 and 485,000 tons in 2013, said Ian Roper, Singapore-based commodity strategist at CLSA. The country’s inventory of Indonesian laterite ore is now down about 61 percent from a peak in January, he estimates.

The refined metal, used in making stainless steel, surged to $21,625 a ton in May on the LondonMetal Exchange after Indonesia started an ore-export ban in January and then slipped into a bear market in September as the Philippines filled the supply gap. Prices are still up 18 percent this year, the most among the main six base metals on the LME. China is the largest producer and user of nickel.

“Nickel should be back up above $17,600 by the middle of next year because the Indonesian ore in China will all have been consumed by the second quarter,” Roper said in a Dec. 9 interview. “It’s justified for it to go back to $17,600 to incentivize nickel pig iron running purely with Filipino ore, because that involves a 30 percent higher processing cost.”

The Philippines replaced Indonesia as the biggest nickel-ore supplier to China. Imports of the raw material by China dropped 25 percent to 42.4 million tons in the first 10 months of the year from a year ago, with Philippine ore accounting for 74 percent of the total, customs data show.

Indonesian Ore

Chinese stockpiles of Indonesian laterite ore are around 7 million tons after peaking at 18 million tons in January, Roper said. Inventory is being consumed at a rate of about 1 million tons a month, he said. Indonesia’s Constitutional Court last week upheld the export ban on raw material ores.

Indonesia, the top nickel-ore miner, usually provides higher grades of ore with a nickel contentaveraging about 1.6 percent, compared with Philippine material, according to the International Nickel Study Group.

China’s NPI inventory fell to 200,000 tons from around 650,000 tons in April, Goldman Sachs Group Inc. said Nov. 19. About 20 percent of Chinese NPI producers lose money at $15,000 a ton for refined metal, the bank estimates.

Higher NPI prices are necessary to entice Chinese producers forced to use lower grade ore from the Philippines, CLSA’s Roper said. The spot price for Chinese NPI climbed 15 percent to 1,090 yuan($177) per nickel unit as of Dec. 9 from this year’s low of $950 on Oct. 28, Metal Bulletin data show. Taiyuan Iron & Steel Group Co., China’s largest stainless steel producer, said it would pay 26 percent more for the product in December.

Refined nickel in London climbed 11 percent from a seven-month low of $14,690 on Oct. 28 as NPI supply began to tighten in China. Factory closures from late October to early November to limit pollution before the Asia-Pacific Economic Cooperation in Beijing may cut as much as 4,000 tons of NPI production, Beijing Antaike Information Development Co. said in October.

The metal for delivery in three months on the LME rose 0.4 percent to $16,350 a ton at 1:17 p.m. inHong Kong.

SOURCE: http://www.bloomberg.com/news/2014-12-12/nickel-seen-extending-rally-into-2015-by-clsa-on-ore-stocks-fall.html

JUMP WITH JOY! THE STOCK MARKET IS DOWN!

Good news! The stock market is down. Everything is red. There is bloodbath everywhere...

This is good news for us because we know it is now time to buy more shares.

The price is down, thus we can buy more! It seems the stock market has its own holiday sale.

When others become bearish, we should be bullish!

Happy investing everyone!

http://business.inquirer.net/183322/psei-continues-to-slip

COL FINANCIAL STOCK PICKS DECEMBER 2014

COL FINANCIAL PHILIPPINES just came up with its recommended its stock picks this December 1, 2014. It updated the Fair Value of the Stocks and the Buy Below Price.

The "Buy Below Price" is the benchmark which signals us to buy the stocks when the price falls below this benchmark. The moment the stocks goes beyond the "Buy Below Price" we can hold the stocks until we reach the FV or more, at which point we can opt to sell.

If however we choose any stock as our main stock portfolio for the long term, then we can buy monthly for a fixed amount, say P5,000.00 regardless of the price. Historically, stock prices increase on the average, and since we invest regularly every month it does not matter if the price is high or low because you will always get the average price.

Happy Investing.

150% return on investment. Amazing Stock Investment.

I have been observing this stock for 2 years now. Its performance is SUPERB. If I acquired stocks worth P10,000 in November 2013 this will make my stocks worth P25,000 this November 2014. If you invested a P100,000 then that would have grown to P250,000. That means a return of 150%. This stock is simply amazing. I will be buying this stock when the price goes down say by at least 30%.

Some of those who invested here will eventually cash out on their gains. The growth that they gained from appreciation in the value of the stocks is a paper gain. It will become real gain when they sell the shares and get the actual value in cold cash. Data shows that only 5% of Filipinos invests in the stock market so the 95% are Corporations and Foreign Investors. These type of investors, are invested to grow their money. They are not interested in owning the company they invest their stocks in. They are there to buy and sell in order to gain. And this goes true to Managers of Mutual Funds who invests in the stock market. They will not hold the shares in perpetuity. Hopefully those who will cash out will be substantial that would bring the price lower.

This is DNL. 

Happy Investing!

HARVEST HUGE RETURNS IN BDO SHARES!

If you acquired BDO shares, now is the time to SELL!

It is time to sell because it has reached a very comfortable level of return. If you bought our shares September 2014 and sell now, you would have a return of 20.94%. Simply stated, if you invested P100,000 in BDO shares then you would have gained P20,900.00 in just two and one-half months.

 With BDO shares, Christmas came early!

Happy Investing!

WHOOPING 7.77% RETURN IN JUST TWO WEEKS. STOCK INVESTMENT

You read that right guys. In just two (2) weeks this stock investment gives 7.77% return. Not bad huh? Its simply AMAZING. Of course I have erased the name of the company and the PSE Code from the picture. 

This means that if you invested in this company (IN REAL LIFE) say P100,000.00 then you should have gained P7,770.00 in just two weeks. That is better than putting your money on your Savings Account or even in your Time Deposit Account.

The real challenge in the stock market is knowing WHAT and the WHEN. The WHAT is the company to invest in. The WHEN is the time to buy and the time to sell in order to maximize return. And the cycle goes on because the next question is WHAT stocks to buy again from the gains you have with your earlier sale. Well you may opt to cash out your gain but then you won't be able to grow your money much more. 

Learning the WHAT and WHEN is crucial. Knowledge is the new Wealth. 

Happy investing everyone. I will make updates soon and answer the WHAT and WHEN. 

START EARNING MONEY 101

startearningmoney101@blogspot.com

EARN AS A LAZADA AFFILIATE

One of the ways to earn passive income online is through affiliate marketing.

This works by allowing Lazada to post advertisements at your site. Any sales generated through your site entitles you to commission. If your family or friends shops at Lazada, ask them to shop through your site or blog and it is that simple to earn from their purchase. You can advertise your site at Facebook, Twitter, TSU or other social networks to drive sales of Lazada products and get commission by doing so.

If you want to be a Lazada Affiliate, contact me and I will gladly help you out.

TIPS IN PLAYING TRADEHERO

TRADEHERO is a trading app available for IOS and Android devices. This is a virtual stock trading simulation where players can buy and sell shares of stocks at Stock Markets around the world at real time prices. Players are given initial funds of $100,000.00 which they can use to buy stocks.

The goal here is growing your money by buying stocks at one point and sell them at some point when the price goes up. There is where the gain is.

In real life, the strategy is buy stocks from companies, with strong financial record, regularly - say P5,000 every month. This is the averaging method. This method helps capture the average prices of the stocks under the assumption that historically stock prices naturally goes up over time. So when the prices are low you continue to buy and also at times when the prices are high because in the end you will capture the average price and gain from appreciation in the price. This will secure the profitability of your investment in the long term. 

However, the volatility (fluctuation in the price)of those kind of companies is low. That means while you can gain from the long term increase in the price, the chances of seeing a sharp decrease in the price when you can buy more and the chances of seeing a sharp increase in the price when you can sell more, is very slim. The higher the volatility of the investment the higher the opportunity of earning huge amounts, the higher also the risk of loss. 

So given these, I will combine two strategies. My main portfolio will be invested in companies with strong financial record but I should set aside some money that I can afford to risk at a much riskier portfolio that could give huge profits as well. I will set aside a specific sum to invest at more volatile stocks and whatever income I get from them I will invest on my main portfolio. 

INVEST IN YOUR FUTURE NOW

I saw this video from pesoandsense.com and it really makes sense. You do not have to invest big for your future. Start investing small but invest consistently every month. By doing so you allow your money to grow without you even knowing it. 

There many types of investment. You can invest in Real Estate, Stocks, Mutual Funds, Insurance, Bonds, etc.

More important than investing money is investing in your learning on how to invest. You where to invest and how to maximize your investment. 

Other than Real Estate, I like investing in stocks. It pays off high and very liquid, you can get your money out easily if you need it. Often times though it is scary. You need guidance. That is why it is very important for those still starting in the field of investing to have a mentor. My mentor is Bo Sanchez from the Truly Rich Club. If you want to receive mentorship from Bo then join Truly Rich Club by clicking the link below.

TRULY RICH CLUB

JOIN NOW AND START YOU FINANCIAL FREEDOM

WHY INVEST IN THE STOCK MARKET

Investing in the stock market is one of those investment type that gives high return. The key is investing in companies with long history of strong financial performance. Good stock market performance will surely follow solid financial performance in the long run. Invest using simple averaging scheme, that is investing consistently over time, is important to capture and capitalize on the ups and downs of the market. When the price is high you gain because of the increase in the value of the stocks. When the price goes down you buy more because this is just buying a good company at a discount so that when the prices goes up again you gain out of the spread. 

EARNED MY 1ST $.01 FROM TSU

EARNED MY 1ST $.01 FROM TSU

It is really awesome. This is my second day and I already earned my 1st $.01 by simply posting at TSU.

START EARNING NOW BY CLICKING: TSU SOCIAL NETWORK

PAYBUX - INVESTMENT LIKE BONDS

Investment... Like bonds

I look at every QP as an investment worth P360. Everytime I spend an income is expected to return to me over a period of time.

Without paybux, the amount spent is gone - its just an expense. With paybux a whole new perspective of looking at spending opens. Every spending creates an expectation to get income. Of course the key is spend the usual way you spend (never over spend).

As mentioned, every QP is an investment like bonds with fixed value. If I have 100 QPs then my investment is worth P36,000. The difference with this type compared to bonds is that bonds are liquid. I can readily sell it at a discount if I need the cash right away.

This makes me wonder... Perhaps in the future QPs can also be sold like bonds. It would be amazing right?

INCREASE YOUR CASH FLOW BY DOING YOUR USUAL THING

It is the advocacy of this blog to help everyone attain financial freedom. Increasing your cash flow is one of the basics towards this end. We are doing it the simple and easiest way possible.

We enjoy posting pictures, comments and selfie on your blog, facebook or twitter account. You do this everyday (some every hour or even minutes). And you do this because you just enjoy doing it.

You do not get anything on your posts except the feeling of satisfaction of just simply doing your thing. But what if you earn while doing the things you usually do? You don't have to do something new but continue to post and share pictures, comments, feelings etc. but this time you get paid. This is EMPOWERMENT given to the users. Let me introduce to you TSU. Please click and watch the video.

NOW CLICK AND JOIN

POST + LINK = MONEY

Tsū’s algorithm automatically tracks, measures, and distributes revenue to the appropriate user and their Family Tree. At a high level, 90% of revenues are distributed to users. To maintain the platform, tsū receives 10%. To see how this breaks down, let’s take a look at 4 users, all with varying start dates on tsū:

User A invites user B, who invites user C, who invites user D

Part 1
- $100 of earned revenue is generated based on the content user D shared (photos, videos, status updates, etc.)

Part 2
- 90% of earned revenue go to the users. In this case, $90 of the $100 is shared with all the users.
- tsū takes 10% of the $100 for platform fees. In this case $10.

Part 3
- User D, the original content creator takes 50% of the $90. In this case, $45.
- User C gets 33.3% (1/3) of the original $90 generated. In this case, $29.70
- User B gets 11.1% (1/3 of 1/3 = 1/9) of the original $90 generated. In this case $9.99
- User A gets 3.70% (1/3 of 1/3 of 1/3 = 1/27) of the original $90 generated. In this case $3.33

- This is what we call the rule of infinite thirds
Shared economics ad revenue

JOIN NOW. CLICK HERE

‪#‎passiveincome‬
‪#‎money‬
‪#‎extraincome‬

HOW AN ICON JEEPNEY DRIVER, WITHOUT DOWNLINK, BECOMES MILLIONAIRE

Juan is a jeepney driver at age 30. His average fuel consumption is P12,000.00 per month. His Family spends P500.00 on cellphone load every month and he treats his family to Jollibee monthly for P400.00.

Someone told Juan about paybux that he can save on his usual expenses. He joined paybux and signed up at PAYBUX and became an Icon. He now uses paybux to load his petron card, happyplus card and the  cellphones of his family.

Because he has no downlinks his rebates returns to him over a span of two years, thus, every year a rebate of P19,440.00. He does not mind if it takes that long because, unlike before, a huge portion of his expense now returns to him gradually.

A friend told him to invest his rewards from paybux at the Stock Market. He invested all rebates he got every year which gave him a return of 12% each year. 

At age 60 Juan decided to retire. He has already 5.2 Million worth of Stock Investment he can use to a comfortable retirement. And all that from his usual fuel, load and Jollibee expenses since he is 30 years old, leveraging on the power of paybux and investing in the stock market. What if he has downlinks? What if he were able to use all the other ways an Icon earns? It would have been awesome! 

BEGIN TO EARN MILLIONS IN PASSIVE INCOME

Good news!

It is now very much achievable to earn MILLIONS in passive income. No selling. No nonsense.

How do you get the earnings without selling? The answer is quite simple. As others spend you earn. They spend not on the items you sell to them but on products they are already using and consuming. With or without you they consume these products. What you have to do is link them to you so that every time they spend you earn.

What do they spend on for you to earn? Well practically on everything such as when they gas up, buy medicines, groceries, eat at quick serve restaurants and from their other spending.

To build the system that will work for you in the long term and bring you MILLIONS in earnings, you have to work to establish your network for at least 3 to 5 years. The best part is that after 5 years the system will continue to run and bring you money even if you stop working. The people linked to you will continue to spend, even if you are not around, and so you will continue to receive income from their spending.

How many 5 years of your life have been productive on helping you build passive income stream? Don't waste time anymore. Join Now.

EARN NOW BY CLICKING THIS

WANTED TO INVEST IN STOCKS BUT DON'T KNOW HOW? BE GUIDED BY BO SANCHEZ

Many are interested in investing money at stock market but do not have the knowledge or skill to make it profitable.

A lot of money are made at the trading floor of the Stocks Exchange. A lot more are losing money in it too. This is the reason why many viewed that investing in stocks are scary and dangerous. However, the danger or risk is not really on the investment but on the investor that does not know what he is doing.

The problem is now solved! Invest in stock market in no time and EARN YOUR FIRST MILLION. Be guided by the country's Topnotch Financial Expert, Bro. Bo Sanchez. Get the guidance you need to start your way to financial freedom by joining his group of successful investors.

CLICK THIS LINK NOW! http://bosanchezmembers.com/amember/go.php?r=64494

MORE WAYS TO EARN FOR FREE

Great news! Now PAYBUX added a 5th way of earning to its BUILDER ACCOUNT (Free Subscription).

Leveraged Income is revenue you get out of Other Peoples Money (OPM), Other Peoples Time (OPT) or Other Peoples Asset (OPA). This is the best income there is. A passive source of cash stream that once built will give you a lifetime earnings even if you don't work anymore.

Every time anyone linked to you gets reward from partner merchant you get a percentage of their earnings. Supposing your friend earned P100 on his purchases at Jollibee, Greenwich, Red Ribbon, Chowking or Mang Inasal, you also earn P5.3. And if you have many friends who has friends who has friends, well you got the drift, you could get thousands of income without doing anything (Income from indirect links applies to Mentor and Icons only).

So what are you waiting for? Join now and click the link below:

CLICK ME

START BUSINESS. NO MONEY REQUIRED.

When someone tell us to start increasing our cash flow we, more often than not, respond that we don't have money to do that. Well we always find an excuse. I've attended some time ago a financial empowerment seminar that says you don't need to have money to get rich. WHAT? For me it was a statement so hard to believe. Nonsense. Rubbish. 

As time goes by it dawn to realization that there are two things you can invest, money and/or time. If  you can invest money then it's good so that you can make your money make more money for you. But if you do not have money then invest time. Another one way to invest even if you don't have money is leveraging but we will talk about this separately. 

Let's focus on investing your time. Do you know that you can earn when others gas up, eat their fastfood, buy medicines or groceries? Yes you can earn from their expenses without you selling them anything.

This is the power of PAYBUX.

BUILDER ACCOUNT is free. Yet this power account gives you 4 ways to earn without spending a dime.

WAYS TO EARN

1, Get P90.00 rebate from every qualifying purchase. If you spend P400 at Jollibee, Greenwich, Chowking, Red Ribbon or Mang Inasal you will get a rebate of P90.00. How cool is that?

2, The second hexcell generated by your downlink goes to you. That could hasten your ability to earn or add more earnings to you. 

3. Get instant reward (No waiting time) that is higher than the usual rewards given to you by your favorite merchant.

4. Get reward of as much P1,000 if your downlink makes and upgrade to premium account. 

And you get all that opportunities to increase your cash flow without you investing any money at all. What you invest here is your time. What you need to do is tell your friends to use PAYBUX in purchasing their meal, gas, medicine and food items. And it won't be hard to convince them because their is no added cost for them yet they will get the same rewards that you are getting. By joining they lose not a single cent but have the potential to earn from their own purchase and from the purchase of others who will be linked to them. This is a very HEXCITING opportunity for us Filipinos. 

Register now for FREE and start you way to a WEALTHY LIFE. 

GET YOUR DREAM CAR

HEXCITING OPPORTUNITY

You have a chance to get your DREAM CAR and MORE while doing business as usual. 

HOW TO LOAD AND USE HAPPYPLUS CARD

Please take note that transfer from your paybux account to your HPC takes 24 to 48 hours. You will receive notification once the transaction is complete. After receiving the notification go to the counter and request for HP TRANSFER.

If you go to the counter before receiving the notification then you cannot use your HPC because the transaction is still pending. Even if transaction is successful but you have not requested for HP TRANSFER then you also cannot use your HPC because the points have not yet been transferred.

If your HPC is new you must load it first with P100 at the counter to activate it. You can only transfer from paybux to HPC after activation.



WATCH THIS VIDEO FOR STEP BY STEP TUTORIAL

A POWERFUL PRAYER

This is a prayer that needs to be shared to everyone.

Indeed each one of us are God's co-creators and stewards of the abundance of the world He created for us. Our God is a God of prosperity, wealth and abundance. He wants us to share in His joy and the abundance of His creation. It is His plan to prosper us. 

It brings back to memory the following verses:

Matthew 25:14-30English Standard Version (ESV)14 “For it will be like a man going on a journey, who called his servants[a] and entrusted to them his property. 15 To one he gave five talents,[b] to another two, to another one, to each according to his ability. Then he went away. 16 He who had received the five talents went at once and traded with them, and he made five talents more. 17 So also he who had the two talents made two talents more. 18 But he who had received the one talent went and dug in the ground and hid his master's money. 19 Now after a long time the master of those servants came and settled accounts with them. 20 And he who had received the five talents came forward, bringing five talents more, saying, ‘Master, you delivered to me five talents; here I have made five talents more.’ 21 His master said to him, ‘Well done, good and faithful servant.[c] You have been faithful over a little; I will set you over much. Enter into the joy of your master.’ 22 And he also who had the two talents came forward, saying, ‘Master, you delivered to me two talents; here I have made two talents more.’23 His master said to him, ‘Well done, good and faithful servant. You have been faithful over a little; I will set you over much. Enter into the joy of your master.’ 24 He also who had received the one talent came forward, saying, ‘Master, I knew you to be a hard man, reaping where you did not sow, and gathering where you scattered no seed, 25 so I was afraid, and I went and hid your talent in the ground. Here you have what is yours.’ 26 But his master answered him, ‘You wicked and slothful servant! You knew that I reap where I have not sown and gather where I scattered no seed? 27 Then you ought to have invested my money with the bankers, and at my coming I should have received what was my own with interest. 28 So take the talent from him and give it to him who has the ten talents.29 For to everyone who has will more be given, and he will have an abundance. But from the one who has not, even what he has will be taken away. 30 And cast the worthless servant into the outer darkness. In that place there will be weeping and gnashing of teeth.’

Have a blessed Sunday everyone. 

AWESOME GAME TOWARDS WEALTH

Great wealth comes from excellent financial education. It is the ability to see opportunities, to use other people's money (OPM) to make more money and to know how and in what to invest in.

But attaining solid financial education comes with a cost - time. Time is valuable than money. Money lost can still be gained but wasted time cannot be recovered. One must invest time obtaining financial education.

However there is a fun way of learning. This is through playing. That's right, by playing you learn along the way. This cool game gives you an insight into the different ways you can invest, the risk attendant to each type of investment and the profitability these investment bring. I am talking about the CASHFLOW. This is a game developed by Robert Kiyosaki. One of the brilliant investor and financial educator who build his empire from ground up. He is a self-made millionaire who is willing to share his experience and knowledge on how to make people rich.

Download this game and see the amazing world of money making. 

FUND YOUR PAYBUX

You may fund your virtual wallet/paybux account by either of the following:

OPTION 1: Contract your ICON for direct transfer: leonardoonline101@gmail.com

OPTION 2: Fund it directly through bank deposit. 

                      After depositing go to paybuxsupport.com and fill-up the payment form shown below. Do not forget to attach your deposit slip.

Now your on your way to steady stream of passive income and great wealth. The key to financial freedom is passive income. Earning revenue even if your are just eating, watching movie, or sleeping on a lazy day. 

REGISTER NOW!!!

paybuxapp.com#linker/leonardoonline101

  

EARN WHILE YOU SPEND VIDEO

Watch this video to learn more.

PART 1 VIDEO CLICK HERE

PART 2 VIDEO CLICK HERE

REGISTER NOW!!!

EARN NOW

EARN WHILE YOU SPEND. GET BACK AS MUCH AS 100% OF WHAT YOU SPEND.

I came across this wonderful system by accident. I got curious and tried it. And it delivers more than I expected. Yes it is true. You earn while you spend and get back as much as 100% on certain purchases.

The idea of getting back a big chunk of what you spend sounds incredibly ridiculous to me then. But since I'm a curious cat I tried it. Anyway it cost nothing. ITS FREE.

It is basically an APP (Android App) that you can download for free. You use this app to reload your favorite merchant reward cards. Instead of using cash to buy the product, simply reload the rewards card and use that card to make the purchase.

By using this app to reload your rewards card you can get us much as 100% payback on what you spend.

Wait... There's more. You get earnings also from purchases made my others who are using the paybux platform. 

Interested? Register now. It is FREE after all. There is nothing to lose but much to gain. 

paybuxapp.com#linker/leonardoonline101

WHAT I LIKE ABOUT REAL ESTATE

There are few things I like about Real Estate (RE) Investment. First, it is a genuine passive income with competitive returns. Second, it works well with inflation compared to paper investment (bonds, stocks, CDs and the like).

One. RE is truly a passive income generator. It gives you rental income with minimum management effort required. This income generated provides higher returns especially if properly leveraged. What I mean by this is that if you finance the acquisition of the RE by borrowings the rate of return on your own money is high. 

Let me illustrate. Suppose you are buying a RE worth 1M. A bank is willing to finance 60% of the value of the RE at 12% p.a. (At present you can even borrow as low as 6% p.a.) That means your own equity in the purchase is 400k. Now this property is being leased for 15k a month. Lets do the math. Your total annual interest expense for the loan is 72k (600k x 12%). Your annual gross rental is 180k (15k x 12 months). This gives us a net cash flow of 108k a year. Therefore it gives you a return on your investment at 27% p.a. (108k/400k). 

Second. RE increase in value as inflation rise. As cost of materials, labor and overhead in construction increase, the value of RE increases. Now going back to the previous example. Assuming the loan has been paid in full after 20 years. Say annually property prices increase at 6% (Range in the Philippines is 5% to 10%) and the inflation rate is 4.9% (August 2014). On the 20th year the the property for which your equity is 400k is now valued at 3.2M. The present value is 1.2M (3.2M discounted at inflation rate for period of 20 yrs) . You therefore gain 800K (1.2M - 400k) on top of your net rental return of 27% p.a. 

What is good (for wise investors) today is that interest rates are low. Philippines as an emerging market is attracting investors, thus money is flowing in. The ability to leverage your return is significantly high today. There may be adjustments or corrections on interest in the future but what is important is that you position your self correctly to take advantage of the favorable economic realities. 

RULE OF 72

This is a useful tool for investors, businessmen and savers.

Rule of 72 estimates the number of years your money will double given a fixed interest rate. We compute by diving 72 by the interest rate or desired return.

Consider the following example. If you place your money in an investment or certificate of deposit (CD) having an interest rate/return of 4% p.a., that means your money doubles in 18 years. If the rate is 8% then it doubles in 9 years and 6 years when the interest is 12%.

So if you are an investor deciding where to put your money, you will be able to calculate roughly when your money will double. This can guide you estimating the growth of your money.

Typically, people place money in CDs because it appears to be safe. It is covered by deposit insurance and therefore secured. However, armed with knowledge on the Rule of 72 you will see how much your money can grow in a CD. If the inflation overtakes the return on your CD then saving money in your bank is a sure way to lose it. 

Let's say you put your 100,000 on a CD with 4% p.a. interest. On the 18th year it will be 200,000. But can your 200,000 buy the same things you can buy with 100,000 18 years ago? If the answer is NO then you never gained anything at all but lose some of your money. The value of your 200,000 is less than your 100,000 18 years ago. 

We will talk about inflation sometime soon.

Be a wise investor.

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Good thing is that Barugan Foundation Inc., in line with its advocacy to help small entrepreneurs, is giving away FREE INSURANCE. Entrepreneurs are also taught how to save for their family's future.

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