The preneed issue has been a big concern for thousands of Filipinos. Many are in anguish because they have lost their hard-earned money or they will be losing their investment. I have granted many TV interviews and have given dozens of advice on the issue in the past few weeks.

What is a preneed plan to begin with? The broad definition of preneed is that it is a “security” being sold by a preneed company. It looks and feels like it is an insurance product, but it is not. It looks like a trust product, too, but it is not, either.

In fact, you’ll find the preneed to just “exist” in the Philippines. Proponents of preneed have boasted it to be a genuinely “Pinoy” invention. The closest earlier preneed I know of are those you find in mortuaries in the US, where you can prepay your memorial expenses at a discount.

When you look at the design of a preneed product, it is very similar to an endowment policy being carried by life-insurance companies. With life-insurance companies also setting up preneed companies, the public gets more confused and the general public can’t distinguish the differences. Through the years, preneed products became mainstream investment instruments and have become part of the psyche of Filipinos. With very good branding and marketing endeavors by preneed companies, most Pinoys would dream of having a preneed educational plan for their children.

What happened? Why did preneed companies start to fold up? There are many theories to explain their current predicament. But the current financial crisis should not be used as an excuse by the preneed companies. We all know that many of them were already beleaguered for some years now.

Why are they in trouble?

One reason is that many of the plans that many preneed companies were selling were not “actuarially” sound. According to Wikepedia.com, “actuarial science is the discipline that applies mathematical and statistical methods to assess risk in the insurance and finance industries.” Simply put, we can surmise that some preneed plans were lacking in actuarial studies, a big reason they sold products that may be flawed by design.

Another probable reason is wrong investments by preneed companies. Yields will always be a function of risks. I noticed that many preneed companies are heavily invested in real estate and other riskier and nonliquid investments. We all know what happened to the real-estate industry. Imagine a company that you invested in putting a bulk of its investments in real estate. When maturities fall and you find your investments with minimal growth or, worse, illiquid, how will you meet your obligations?

How do preneed companies really invest their funds? We only hear about their trust funds, but what are in those trust funds? It is great if these companies are wholly transparent with what they do with their plan holders’ monies. By contrast, life-insurance companies are heavily invested in bonds, mostly treasuries.

Flawed design and poor investment decisions are a reflection of management competence. Not all preneed companies are in trouble, although there are just very few of them that are “strong and stable.” When you look at these “strong and stable” preneed companies, you will see that they employ prudent investment strategies, are actuarially sound and probably employ competent management teams. Sadly put, the majority of the players in this industry are in catatonic state, leaving their plan holders shaking their heads in disbelief and grief.

I would like to raise two questions. First, why is it that there are no preneed companies/products in other countries? Could it be that they know things that we don’t? Second, I would want to ask the regulators—why, why, why?

If you have invested in a preneed plan, what can you do now? Further, how should you invest for your pension and education now that preneed companies are in a flux?

Catch part two …

I wish to leave you with these words: Then he said, “Beware! Guard against every kind of greed. Life is not measured by how much you own.” (Luke 12:15 [NLT]).

In a few hours, I’ll be making my first overseas speaking engagement. The OWWA and the Ople Center have asked me to do financial literacy talks for the OFW’s today and Sunday at Hong Kong.

Financial literacy for the OFW’s have been in my heart for many years. Our “bagong bayani”, just like the rest of the Filipino population will really benefit from a better grasp on money education. Studies will show that the OFW’s are our new middle class — financial literacy is critical if they are to maintain their middle class status, otherwise all their sacrifices will be in vain.

I first started to get involved in with the OFW’s through my on-line friend, the late Tonette Binsol (a.k.a. Ka Tonyang). She asked me if I can help her organize a forum where we can teach OFW’s about personal finance. Today, I have forged a partnership with the Ople Center to make this advocacy alive.

I would like to thank our corporate sponsors for making this trip possible — Insular Life and V Cargo.

Hong Kong, here I come! Thank you Lord for all these!

p.s. – I’ll be speaking at the Bayanihan Center (Oct. 1) and the Philippine Consulate Office (Oct. 4).

Father, I pray that my event today will be successful. I pray that those who will attend will be enlightened about their finances and how to invest properly that will bring glory to you, Lord. Thank you Lord for all these. In Jesus’ name.

“Have I not commanded you? Be strong and courageous. Do not be terrified; do not be discouraged, for the LORD your God will be with you wherever you go.” (Joshua 1:9)

Readers of my blogs would realize that Dave Ramsey is my favorite personal finance guru. He is sound, he is good and his approach is no nonsense. I like this guy because he simplifies things… Personal finance is not rocket science, it shouldn’t be ‘nose-bleed’. To the other personal finance speakers & trainers, here is a good role model for us.

Watch the video.

Dave Ramsey on how to be financially successful

Integrity is consistency of actions, values, methods, measures, principles, expectations and outcome – Wikipedia

Like many Filipinos, I have become cynical, distrusting, disgusted and at times apathetic when it comes to our government, especially our politicians. Whatever ideals about government and politicians I had as a youth has not only been toned down by the years, it’s been practically obliterated.

I grew up in the martial law years and like majority of the Pinoys of my time, we had issues with Marcos and his cronies. I can still remember how I participated in the noise rally for Ninoy in the late 70’s honking the horn in my bicycle. By my college years, my political beliefs was awaken and held on to the belief that if we change the rulers of this nation, things will be better. I was so excited that I will be able to vote for the first time during the snap election and went all the way in campaigning for Cory Aquino (something I will always cherish). Months after, I found myself in EDSA for about 4 days full of hope to see the changing of the guards for the nation. I don’t regret my participation in all of these and I am proud I was part of pivotal events in Philippine History. But, it seems that the situation in the last 20 years has gone from bad, to worse – especially with the politicians. I sometimes wonder if we really help the country by changing tyrannical leaders not once but twice. I suppose only history can be the real judge. What is evident now is the deteriorating state of Philippine politics. It’s very hard to find real patriots amongst the people that govern us, nary a statesman in our elected officials, and we have multiple political parties without any real ideology. Ironically, the only political group that has a real ideology would be the Communist Party – wrong ideology but still an ideology nonetheless.

Time and events had made me cynical and I must admit that I am not really hopeful about our politics. Without good politicians, there will not be good politics. Without good politics, how can we run the affairs of the state properly? Sometimes I wonder… do we have the right to complain? Didn’t we elect those who govern us? By logic, the  state of our politics is a direct implication of the choices we make – a bitter pill to swallow, indeed.

Just when I thought that there is zero hope for Philippine politicians, I met a politician that disturbed by cynicism, challenging my lack of hope. Enter Congressman Ruffy Biazon…. (to be continued)

Catch part 2 of this blog.

“if it is encouraging, let him encourage; if it is contributing to the needs of others, let him give generously; if it is leadership, let him govern diligently; if it is showing mercy, let him do it cheerfully.” (Romans 12:8, NIV)

Early Bird Rate of P 1,000  is only up to September 11, 2009. To register, send an email to randellt@gmail.com or text to 09179023225.

To register, send email to randellt@gmail.com

Are you tired of attending money seminars that make a lot of prosperity promises and yet fail to deliver practical and sensible information?

Do you want to learn how to properly grow and invest your money in a practical and financially sound way?

It’s time for you to attend

“The No Nonsense Seminar on Finance”

Sept. 25, 2009 (Friday) from 1.30pm to 5.00 pm at the Victory Center, Upper Level, Promenade, Greenhills.

P 1,300.00 (with merienda)… but if you sign up and pay before Sept. 10, you can get the discounted rate of P 1,000.00 only. True value for money!

To register, send an email to randellt@gmail.com or call 09179023225.

What do people say about Randell Tiongson?

1) A lot of people are teaching on money. It’s good to learn from the teachers. But Randell will be talking about finances. It’s better to learn from an expert. I would.

Francis J. Kong (The country’s leading motivational expert & best selling author)

2) If you want to find a sound financial planner, Randel Tiongson is the name to go to. I highly recommend his training and seminars since I learned my investment skills from him.

Chinkee Tan (Lifestyle Trainer and author of the best selling book “Till Debt Do Us Part”)

3) A truly practical learning session for all of us, especially during these financially challenging times.

Jerome Ong (Chief Executive Officer, CDO Foodsphere Inc.)

4) Randell is a straight shooter who will strip the sugar coating off financial products and give you the unbiased picture of their true worth.

Efren Ll. Cruz (Investments Expert and author of the best-selling book Pwede Na! A Complete Pinoy Guide on Personal Finance)

This event is brought to you by the Registered Financial Planner Institute (Phils.) and V Cargo.

Philippine BOP surplus improves to $506 mn in July

The Philippines reported a balance of payments surplus of $506 million in July.
This is much larger than the $142 million recorded  in the same month last year.
This brought the January-July period  balance to a surplus of $2.72 billion.
Figure is an improvement from last year’s surplus of $2.08  billion.
The country’s balance of payments  will likely exceed target surplus of $700 million.
Strong overseas workers remittances and investments helped BPO surplus grow from %89 mn as of end 2008.

This is free. To register, visit http://schooltalk.ph/