Those who took positions and made investments last year are smiling today; they have since experienced a big boost in their portfolios. Those who experienced losses during the crash of 2008 but stayed in the market have begun sleeping comfortably again. Will the current condition usher in a bull run as many analysts predict? Only time will tell. Risk-management techniques such as diversification, cost averaging, modern portfolio, etc., are all prudent steps to make risk more bearable and, at the same time, take advantage of the surge in the markets today.  While there is always the risk of market correction which will temper, if not reduce or wipe, the gains will always be a real issue, I will not rain on our parade just yet. My view is, if you are investing for the long term, continue to do so regardless of market conditions. Reviewing your portfolio vis-à-vis your investment objectives and staying within your risk tolerance should always be your primary plan of action.

There are other investments one can always consider: fixed income, money market, real estate, business ventures, gold, precious metals, art, etc. Creating your investment portfolio is best if you always consider other instruments. However, there is one investment that I always recommend: investing in memories with your loved ones.

Sometime ago, I interviewed a good friend and one of our pastors in Victory Church, Paolo Punzalan. He told me something that struck a chord, and one that I will never forget. He said it is his goal to invest in memories with his family. While spending money for a family vacation can affect your cash flow and even your portfolio, the gains you will get from such an investment can’t be measured by any financial standard. While our investments can go south and we risk the chance of losing our hard-earned monies, we can never go wrong when we build on the memories we have with our loved ones by investing time and money on them. I fondly remember all the family vacations I went through growing up and my kids always talk about the trips we take. It’s not just vacations that we can invest in—it can be as simple as going to the mall, park, movies, and especially going to Church and praying together.  As we invest, we must always put God in the center, and we can be assured that our investments will grow: in money and in relationships, as well.

“Hear, O Israel: The Lord our God, the Lord is one. Love the Lord your God with all your heart and with all your soul and with all your strength.  These commandments that I give you today are to be upon your hearts. Impress them on your children. Talk about them when you sit at home and when you walk along the road, when you lie down and when you get up” (Deuteronomy 6:4-7, NIV).

Appears in Business Mirror, 09.14.2010

God bless.

Obviously, the 3^rd major mother who influenced me and continues to influence me is the mother of my children. My partner, my best-friend and my wife:  Maria Mia Mapa – Tiongson. I met my wife when we were both very young (college) but I was attracted to her character more than I was with her incredible beauty. I saw many things I liked about my mom in her and they were similar in many ways, a gentle frame housing an incredibly passionate spirit. She was also like my grandmother in the sense that she was very entrepreneurial and very steadfast in making our common goals a reality. She was like my mom and my grandmother and more. She always had great ideas about what to do and would not be afraid to thread difficult paths if she so believes in it.

I was pushed into being an entrepreneur at a very young age because of Mia. When boyfriends and girlfriends would talk about dates, outings gimmicks, Mia and I was talking about business opportunities. Marriage did not dampen the fiery spirit of my wife, she was even more passionate because she was now doing things for her family. Mia was always sensible in many things, especially in financial matters. While many will look at me as the financial coach I profess to be, the real expert is not me but my wife. My endeavors brought peaks and valleys to my family and in most cases, it is the efforts of my wife that smoothen the bumpy road I take them into. All the mistakes I made in my adult life were because I did not listen to my wife or I did not get her counsel. My wife can put an accountant to shame when it comes to tracking and recording money and like her mother and my grandmother, she also did not take up any business course in college (she is a licensed interior designer).

My wife successfully established two business ventures already and for over a decade, a multi-awarded insurance professional and financial adviser. She juggled successful careers while running the household and putting up with an idiot like me. Although she is also a Registered Financial Planner like me, Mia’s approach to finances is practical, sensible and devoid of ridiculous theories that only complicates matters. My wife is also great in transitioning from careers and her biggest transition is to stay more at home now, schooling our boys (home schooling), watching a close eye on my teenagers, balancing the little money I manage to get while putting up with an egghead like me. Although she is in transition, I can guarantee that Mia will come out with bigger ventures and like her past endeavors; she will stamp it with her seal of excellence — while I still continue to be an egghead and an idiot. My wife is a great in many things and I love her not only because she is extremely beautiful, not only because she is a terrific mother, not only because she is a great partner, not only because of her innate sensibility, not only because she makes me feel loved day in and day out (even on days I don’t deserve it)… I love her so much because she loves Jesus more than she loves me and her kids. She is more than the light of my home, she is the heart that pieces us together and I feel the love of God because I see her love for God.

My wife, mother and grandmother are incredible women of character and of love but more so, they are incredible women of faith and have dedicated their lives not only for their families but more so, to God. These women though they can stand on their own and gleam with pride because of what they can do chose to be in the shadows of her husband and never took the limelight away for themselves even if they so deserve. These incredible mothers not only influenced me and many others, they molded us in many ways – allowing us to be great at what we do at the expense of their self. No award, gift, reward or blog can give them the honor they deserve – it is the way we live our lives that will truly bring honor our mothers.

“A wife of noble character who can find? She is worth far more than rubies. Her husband has full confidence in her and lacks nothing of value. She brings him good, not harm, all the days of her life.” – Proverbs 31:10-12, NIV

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Greater Expectations by David Bonifacio

Last week, I began moving things into my apartment. At the moment all i have are basic furniture and books, lots of books, and more books waiting to be moved. I intend to keep it that way: simple, clean, with a lot of bookshelves, and some space for my interests in art and music.

Shopping for home stuff is a lot of fun. If you’re like me, and you like details, discovering the differences in mattresses, thread counts, materials, technologies, and products can be an amazing learning experience. But if again, you’re like me, inflexibly particular, it can be quite expensive, in my case, too expensive, so I’ve drawn up master plan which I have divided into spending phases focusing on the most basic and important to me and getting fancier later on.

It’s a lot of adjusting for me. Having no internet, or not using the AC as much, and not having a piano are just some of the things new to me. And while they’re not essentials, a lot of people don’t live with these conveniences, they’re things I’ve gotten used to, things I’ve come to expect as a norm of life. The truth is, if I hadn’t gotten used to a lot of the comforts I enjoyed I would be much more flexible than I am today.

I realized I have two choices: content myself with lower standards or increase my capacity, through discipline and faith, to earn more.

I thought about it: With every higher level we reach we create a higher expectation. When you’ve past grade 1 you’re expected to be able to handle grade 2 and so forth. When you’re used to a certain standard of living it’s not so easy to lower it. When you’ve tried McDonalds you expect all McDonalds to be the same, which they strive to do, to meet your expectation so that’s why you’re always satisfied. It’s like exchanging numbers with a girl, then giving her a call, then it’s lunch, then it’s dinner, then it’s breakfast, then before you know it, she expects you to give yourself away with a ring included. Expectations escalate.

Here’s the principle on expectations: Not meeting an expectation disappoints, meeting an expectation satisfies, beating an expectation impresses – but it also creates a greater expectation, a greater expectation we now need to at least satisfy. And when we consistently meet or surpass expectations we start acquiring that most precious of currencies: trust.

This is one great challenge the next generation will face: the expectations created by the previous generation. For some the standards have been so low that the expectations are also so low, and the danger here is settling at a low level and we see examples of this in highly impoverished areas – a lowering of standards with each new generation. Some are content with the good or have not been exposed or prepared to take things to the next level. They don’t realize that standards are dynamic what was good before may no longer make the cut, so while they may satisfy at the very least, lurking close by is the very real possibility that someday other things will be more satisfactory and cause people to stop trusting in us and erode our relevance. (See my post on The Survival of the Irrelevant)

And there are those who follow a great generation.

In a visit to a partner’s factory, I was talking to one of the managers about the new family member who joined the company. This company is a respected firm that has been around since before the war. It’s on its fourth generation I believe, with the crown prince about to take over. I remember telling the manager, “Must be nice to inherit such a great company. At least it isn’t so hard.” She looked at me and said, “I think it’s actually harder. Imagine being in your twenties, having little experience, but having responsibility over hundreds of employees right away?” She was right. While this guy had a lot going for him by being heir to success, his inheritance brought a burden with it – a burden of greater expectations.

This is why building a strong next generation is so critical. Because with each changing of the guard we are posed the question: will we raise the standard? Raising the standard will require more from us and it will increase expectations of us. We will then have to respond with an even higher standard. But if the generations are prepared well, prepared to be strong, to fight, not to settle, to persevere, to sacrifice, and most of all to have faith to rely more on God, then we need not fear expectations. Besides the alternative is a lower standard, and if we do this, we take the first step in a downward spiral of good to bad to ugly to kaput. Sure we won’t have the burden of expectations on us, but that’s only because we’ve lost their trust.

http://davidbonifacio.blogspot.com/
From http://davidbonifacio.com/

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]).

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).

“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)

Watch the video.

Dave Ramsey on how to be financially successful

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)