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Life Updates Passive Income Personal Finance

Announcing the winner of the FREE Rich Dad Poor Dad book!

First of all, THANK YOU very much to all those who participated in the first-ever Rich Money Habits Readers’ Survey

Your inspiring life’s stories, financial goals and dreams and suggestions on how Rich Money Habits can be of help to you are very much appreciated.  Rest assured, we’ll definitely keep them in mind as we aim to constantly improve the Rich Money Habits blog to be more relevant to your financial needs.

Without further ado, I am very delighted to finally announce the winner of the FREE Rich Dad Poor Dad book as part of our first ever Rich Money Habits Readers’ Survey promo. 

And the winner is… Lunining Arabiran! 

Luningning_Arabiran_Rich_Money_Habits_Readers_Survey_Winner

I was so amazed at the personal finance tips and stories Lunining shared that I want the readers of this blog to learn from and be inspired by it as well. 

Here’s her answer to the question What are your money habits and how they have affected your life?”

I’m earning a little over minimum wage and I was "awakened" that after 3 years of working I had so much less than what I was hoping for. I cleaned up my act….

  1. I love Manga (Japanese animation) so much so that a large chunk of my money goes here. I curtailed the Manga-buying impulse. (I still do buy but occasionally).
  2. I don’t use my credit card except when buying groceries twice a month.
  3. I bring lunch to the office.
  4. I had my mom invest my money that has a 12% APY.
  5. I read about how to invest in the stock market.
  6. I built up and completed my 1 year emergency fund.
  7. I am building up my retirement plan. I’m also looking into consulting someone who works for the SSS. So I can compute the actual amount of pension I’ll be receiving when I’m 60.
  8. I am taking up my Master’s degree so I can go ahead and get side jobs. (This wasn’t really necessary to get the jobs but understanding more concepts and theoretical background would help) and I’m almost done, just the thesis left.
  9. Next time I get to be in another country, will be saving my per diem like crazy. Last time I was in the US, I spent my money on a lot of souvenirs.
  10. I created a budget.

All of those things are the stuff that I’m doing, have done and will be doing. There are a couple things more but I think this is getting too long.  Basically, knowing and being conscious of how money is spent has taught me that when you spend money now, you’re not only giving up that money in that instant but you are also forfeiting the right that, that money can earn in the future.

 

How about you?  What are your money habits and how have they affected your financial life?

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Investing Money Mindset Passive Income Personal Finance Stocks

Where to Invest in 2010 Part 3- Investment with Tax Incentives: PERA vs CTRP

This is part 3 of the “Where to Invest in 2010” series which tries to compare the two investment vehicles with tax incentives: PERA and CTRP.  Part 1 dealt with the Filipino investor profile while part 2 discussed the 5 stages of Life Cycle Investing.

In your journey to financial freedom, one inevitable expense that you would have to deal with is taxes.  It is not enough that you make a lot of money.  It also matters how much you keep. 

Who is richer? A person who makes $100,000 a year and pay $50,000 in taxes?  Or someone who earns only $70,000 and only pays $5,000 in taxes?  The answer is simple.  The one who keeps the more money (after taxes).

Investment w/ Tax Incentives: PERA vs CTRP

According to Efren Cruz, the author of the book “Pwede Na! The Complete Pinoy Guide to Personal Finance”, there are two investment vehicles that offer tax incentives.  There is PERA (Philippine Equity Retirement Account) and CTRP (Comprehensive Tax Reform Package). 

Here are the main differences between PERA and CTRP:

Criteria

PERA

CTRP

Contribution
  > Non-OFW
  > OFW
<= PhP 100,000
<= PhP 200,000
no limit
no limit
Max # of accounts 5 none
Tax Benefits on Financial Instruments    
  > Capital Gains
  > Interest Income
exempt
exempt
exempt if tenor > 5 years
exempt if tenor > 5 years
Tax Benefits on Stocks    
  > Capital Gains
  > Interest Income
exempt
exempt
taxable
10%
Tax Credit 5% of contribution none
Administration with none

 

As you can see there is a LOT of tax advantages for both types of accounts.  Having a tax exempt investment is like saving at least 20% of your income.  It’s money that you keep. 

Rich Money Habits Thoughts:

To be honest, I haven’t given much thought about retirement until I learned about the tax incentives from the seminar.  I understand that there’s a mandatory SSS or GSIS in the Philippines.  I also read about 401K and Roth IRA accounts in the US but I am not sure if there’s anything similar to it in the Philippines. 

There’s still a lot more to learn about retirement accounts in the Philippines, but the tax incentives definitely caught my attention. The tax benefits from PERA and CTRP are incredible. 

Unfortunately, for reasons I still don’t understand, PERA is still not available in the Philippines.  I guess I’ll have to wait until it becomes available.  As for CTRP, it was my first time to hear about it during the seminar, so I really don’t have any clue. 

My only hope is that I’d be able to learn and take advantage of both financial vehicles and share it to readers of this blog some day.

 

How about you?  How are you planning for your retirement?  Have you taken advantage of any tax incentives for your investment accounts?

Categories
Investing Money Mindset Passive Income Personal Finance Stocks

Where to Invest in 2010 Series: Part 2 – Life Cycle Investing

This is part 2 of a series of articles discussing the lessons and tips from Moneysense Live’s Where to Invest in 2010 Seminar.

Part 1 of the series introduced the Filipino investor profile and shared the overall financial outlook for 2010 along with some tips on how to invest in the coming year according to one of Citibank’s financial analysts.

This time we will be sharing the 5 Stages of Life Cycle investing which was discussed by a BPI representative during the seminar. 

5 Stages of Life Cycle Investing 

  1. Orientation
    • Eager Beginner (mid 20’s and younger)
    • Learn the different types of savings
    • Cultivate the habit of savings and investing
  2. Exploration
    • Investment Apprentice (mid 20’s to 30’s)
    • Gain knowledge and experience on the different investment options
    • Develop skills to choose the right type of investments and avoid scams
  3. Accumulation
    • Wealth Builder (30’s to 40’s)
    • Optimize returns
    • Accumulate wealth by owning a home, new car, higher education, etc
  4. Preservation
    • Asset Protector (50’s to 60’s)
    • Seek less risky investments to protect money accumulated
    • Live on interest
  5. Disposition
    • Legacy Bestower (60 and above)
    • Self-sufficient
    • Leave heirs with as much assets as possible

Rich Money Habits Thoughts

The above 5 stages of life-cycle investing allows you to assess your financial situation and where you’re supposed to be at specific points in your life.  It is a handy guide to achieving your dream of financial freedom. It is a financial roadmap.

If you’re still young in your 20’s, it would be to your advantage to start learning how to personally manage your money as soon as possible.  This is very hard to do especially when you’re young.  You would rather enjoy life and spend as much as you can than worry about saving and investing your own money. 

If you’re in your 40’s and still struggling to save, that’s an obvious sign that you urgently need to start catching up fast.  Decide now to learn about the various ways to save and invest your money while you still have some time. 

If you’re looking for ways to build your retirement fund, you’re in luck as part 3 of the series will discuss the available retirement accounts in the Philippines (PERA vs CTRP) as well as the tax incentives from choosing one over the other.  The article will also touch a little bit on REITs.  So watch out for that in the coming weeks.

If you’re already approaching retirement, I wish you well.  I hope your retirement income from your investments can support you to live out your dream of financial freedom!  Have fun and enjoy life!

 

P.S.  Watch out for the announcing of the winner of Rich Dad Poor Dad book by Robert Kiyosaki from our first ever Rich Money Habits Readers’ Survey!

P.P.S. We will also be launching the Rich Money Habits Newsletter this month which includes a special section showcasing the results from the first ever Rich Money Habits Reader’s Survey.

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Business Credit Card Investing Life Updates Money Mindset Mutual Fund Personal Finance Stocks

Rich Money Habits Carnival – Frugality and Success

Welcome to the second edition of the Rich Money Habits Carnival!

In this edition we will highlight the top 5 frugality and success articles out of the tons of money stories we’ve received during the month of February.  May these articles inspire you to live a wealthy and successful life.  Enjoy!

Rich Money Habits Top 5 Picks

 

  • Steve C presents Why Being Frugal Can Only Take You So Far On Your Path To Wealth posted at MyWifeQuitHerJob.com. RMH – A great read on the age-old dilemma of going too cheap.  Steve argues that raising your income by working on your business gives back way bigger returns than the measly saved income you gain from cutting back  expenses.
  • Faizal Nisar presents Secret of Success: YOU | Be Truly Happy posted at Be Truly Happy, saying, “Creating money begins in the mind. Once you learn that success is a mindset, you can become rich in any industry.” RMH – Inspiring article on taking responsibility for your own success.  The question at the end says it all, “will you take responsibility for your success, or blame others for your failure.”
  • KCLau presents Focus: Achieving Goals posted at KCLau’s Money Tips, saying, “A guest post by Sayeed, a senior manager in a large MNC in Penang on how he achieved his financial goals.” RMH – Interesting article on why we should keep on dreaming.  Sayeed offers 5 tips on how to focus on your dream and achieve it.  My personal favorite – “get 15 minutes a day to read a book, best before going to bed. Develop the habit from there…”
  • FIRE Getters presents A Simple Budget That Works? posted at FIRE Finance. RMH – Very helpful tips on how to make your budget “actually” work.  The article aptly describes the problem of budgeting as being “too complex and rigid” while real life demands “flexibility and simplicity.”
  • Wenchypoo presents Ending Bureaucracy posted at Wisdom From Wenchypoo’s Mental Wastebasket. RMH – Great article explaining what bureaucracy means.  While reading the article, I couldn’t help but compare it to how big companies “bureaucracies” disguised these things as “processes”…in reality, all these “processes” do is delay you from doing what you really need to do in the first place.

Other interesting articles in this edition

Money Stories

Business

Personal Finance

Investing

Other

That concludes this edition. Submit your blog article to the next edition of Rich Money Habits Carnival using our carnival submission form. Past posts and future hosts can be found on our blog carnival index page.

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