Managing Money at a Personal Level

Emigrating As A Pensioner In The Philippines – Tax Free In Paradise

For many, it is the big dream: to enjoy a well-earned pension abroad after work. It is not surprising that more and more people are dreaming of this dream. If you look at the serious conditions in USA, you immediately become aware of it. Old-age poverty, wherever you look. Many pensioners have to “earn a little extra”.

After all, every second pension is less than 800 USD, without including the direct and indirect taxes to be paid. A disaster and a condition for which one can only be ashamed. In this article I do not want to have a basic discussion with you, but I want to show you a real alternative.

A country in which it is still worth living as a pensioner. In which your money is still worth something, in a society that respects old people, in which it is continuously warm and in which you can spend your retirement legally tax-free.

Yes, I know, for you this may sound too nice at first to be true. But if you read this article carefully to the end, then all these things will clear up for you.

I myself live most of the year in the Philippines and have been able to make important local experiences, make valuable contacts and help people emigrate here. So let’s start now and see why the Philippines are so interesting for pensioners and independent entrepreneurs to emigrate. (More about business in the Philippines on Negosyong Pinoy.)

So if you think that …

Learn to Save: More Money at the End of the Month Thanks to a Simple Trick

When you were completely broke despite your regular income and didn’t even know how to satisfy your hunger tomorrow, you decided that this would never happen again.

Never again will I have to go through that again!

You have set yourself the goal of regularly putting aside part of your income for bad times instead of spending your entire salary on unnecessary clothes, overpriced drinks, magazines full of advertising and other junk.

Your wise decision wasn’t made that long ago, but now you’re on the brink of ruin again and seem to have learned nothing at all from your past mistakes.

Does this dilemma seem familiar to you?

How could that happen?

Welcome to a world where many people wake up every morning.

Why saving money is so difficult

People make their purchasing decisions on the basis of feelings. The option that promises the best bottom line feelings wins the contract.

And let’s be honest: I can afford 10 Dollars for this magazine now.

Only over a longer period of time the painful amounts come together, which can break us in the case of emergency the neck. With each individual purchase decision it concerns however always only an insignificant amount, which one can always justify somehow before itself.

Each small edition of only $5.50 for a latte macchiato here or the thirty-ninth pair of shoes for $29 (special offer!) there is not exactly earth-shattering in itself.

As already mentioned, every single purchase decision is made on the basis of feelings. …

Reviewing My Credit Score

A couple of weeks ago I did a credit report and much to my surprise my score went up. This isn’t a big achievement since the previous year my score took a big hit.  I decided I wanted to do a review of my credit history for the last 3 years and determine what caused my credit score to change and what can I do to repair it. First lets look at what affects your credit score.

Things That Affect Credit Scores:

  • Large Amounts Owed – If you have a large amount of outstanding  credit this will affect your score because it increases the risk that you will default on it.
  • New Credit – applying for or receiving new credit will lower your score because this may be a sign that something has changed and you are in desperate need of additional credit.
  • Payment History – Do you pay your bills on time? Constantly paying late may be a sign that you are falling behind on your commitments and will eventually default on your credit.  This will lower you score because you are a greater risk.
  • Type of credit – To many of the same type of credit may have an impact on your credit score. Having too many credit cards (also known as revolving credit) is a problem even if you don’t carry a balance. There is added risk that you will utilize all of this credit at the same time and then default on all of it.

Understanding Same Store Sales

Some of the hot stocks this past year have been McDonald’s and Wal-mart. Both seemed to buck the trend when everyone else was losing money. Generally speaking revenue is an important figure when performing an analysis on a company like Wal-mart or McDonald’s. However when dealing with retailers there is an equally important figure that gives the revenue figure some perspective, same store sales.

What are same store sales?

Same store sales is a look  at the sales of stores opened for a year or more.

Why is the same store sales figure important?

Revenue growth is an indication that a company is increasing its market share and growing. However looking at revenue alone can be misleading as an indication of growth. Companies can increase  revenue by expanding and opening more retail shops. This sort of expansion is good but unsustainable and also more expensive. Healthy companies should also be showing revenue growth in existing stores. This is where same store sales figures come in. It removes any new stores and looks to compare the revenue from the previous year with the same amount of stores in the current year.

An example

In 2009 Widgets Co. had 10 outlets and revenue of $100 million.  Now in 2010 they’ve expanded to 20 stores and increased revenue to $200 million. It’s great that revenue has doubled but so has the amount of stores. However if you don’t weed out the new stores from the revenue stream (which is what same store sales …

Understand What You Invest In No Matter What!

One of the reasons for me starting this blog was to hash out my investment strategy. By developing a system of rules and guidelines I can remove emotion from my trading. This is extremely important because with emotion comes stupidity. I started to rely on intuition instead of common sense which pretty much means I’m gambling on the market instead of investing.

Only invest in what you understand

Yes I know I must be an idiot for not following this advice already. This has always been the primary rule for great investors like Warren Buffett. The problem with such a simple rule is it lacks specifics so it’s easy to stop following.  This was my problem with USO. I never did the complete research myself. All I knew was that I wanted to invest in oil and resources around the web said USO was the best way. I took this information as me performing my due diligence which is just crazy.  I didn’t realize how complicated this ETF was and figured it was safe like index ETFs (that thought process is also incorrect as index ETFs can also be quite complicated).   In order for me to make wiser investment decisions in the future, I have re-written the rule and included some specifics:

Understand What You Invest In No Matter What! When making ANY  investment I must understand the investment based on the criteria below. Should I not meet these requirements I shall not proceed with the investment.


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How Much Should You Spend When You Travel?

Ah traveling is always a debatable topic amongst the frugal and personal finance enthusiasts. Travel abroad or stay local? Nice hotel or cheap hostel? Eat out or picnic? Pay for entertainment  or look for free alternatives? These are all questions that people try to find the answers to when they travel. Now the key to these answers lies in how well you understand yourself.

You need to understand your likes and dislikes as well as what you are looking to accomplish with your trip. Some people like to just sit back and relax on a beach. Others like to go clubbing and drink all night.   For me its all about new experiences. I need to see, do, and eat everything. If I wanted to relax I could just stay home for a lot less but it’s these new experiences that rejuvenates me. Coming back I try to incorporate those experiences into my day to day life and make myself a better person.

The Answer To The Question “How Much Should You Spend When You Travel?”

As much as you need to to enjoy the trip and get what you want out of it. If you are going to spend the money to travel then why skimp out on things when you get there. Now I’m not advocating that you shouldn’t save for the trip ahead of time, or that you shouldn’t try and find deals or use coupons, because that would be irresponsible. But what I am saying is don’t …

Understanding Currency Hedging

Currency hedging is one of those things people tend to bring up but never really explain. They’ll say vague statements why they are for or against hedging and if you don’t have an understanding of the process then you are left in the dark.

What is currency hedging?

Currency hedging is an attempt to try and minimize the risk associated with currency fluctuations on foreign investments. When you buy a stock in a company in a another country you are essentially doubling your risk. Not only are you at risk that the stock could go up and down but that the exchange rate between your currency and the foreign currency can work against you. Hedging is an attempt to manage that risk. An example of the currency risk:

Sally The Fund Manager goes and buys 1 share of CompanyX for 10$ USD. At the time the exchange rate is $2 CAD = $1 USD so it would have cost her $20 CAD. After some time Sally decides to sell her position in CompanyX. To her surprise the stock has doubled and Sally sells the share for $20 USD.  Unfortunately to her surprise the exchange rate has changed as well and the Canadian dollar is now on par with the American dollar ($1 CAD = $1 USD). In the end Sally still ends with $20 CAD even though her investment doubled.

Who can hedge?

Generally speaking anyone can perform currency hedging though it’s more difficult for the individual investor since most …

Establish a Budget

Draw up a budget: The idea is old – and at the same time more topical than ever. Planning assistance is needed, because the multitude of payment methods that households manage makes the overview dwindle.

Why you should draw up a budget

Never before has it been so difficult to keep track of your finances:

  • Most households use a current account, an overnight money or savings account, one or more credit cards and possibly pre-paid cards.
  • A large part of the payments is due monthly. Others, however, are quarterly, semi-annually or annually.
  • The fixed amounts are joined by the variable ones for the lifestyle and everything that is fun – from going to the cinema to coffee-to-go.

In view of the large and small, regular and irregular, fixed and variable payments, it is no wonder that the overview is lost.

A budget brings order to finances. It tells you where your money is, how much room for maneuver you have, where you can save and whether you can afford a loan if necessary.

Drawing up a budget – what matters

A budget comprises all the revenue and expenditure of a budget. Many payments are made in different periods – monthly, quarterly or semi-annually. Please determine in which periods you want to calculate. Our suggestion: Apply your quarterly and half-yearly costs to the month.

First write down your income

Wage or salary, pension, sickness benefit, maintenance, child benefit and all other revenue

Then list your expenses:

For the apartment: rent, ancillary …

Personal Finance: 6 Things That Everyone Should Know

Whether you are single or married, have just started working or are about to retire, you should know how to handle your money. Here are six financial tips you should always follow.

Always have something for emergencies

You never know when you might lose your job, get sick or get into a situation where you can no longer work. If you then have no savings, then you run the risk of incurring debts or getting big financial problems when the unexpected happens. This is also the reason why you should always have an emergency fund with the cost of living for 3 to 6 months. In addition, you should keep this money in a safe place like a savings account so that it is quickly available. If you don’t have an emergency fund, then setting up such a fund should have the highest priority over any other financial goal, including saving for retirement, or making a down payment for a house. You should also review your Emergency Fund regularly to make sure it matches your circumstances.

Try to live with your possibilities

If you spend every penny you earn, you have no room for extra costs and lose the opportunity to save. The latter can be a big problem, especially when it comes to your later retirement. Living among your possibilities can also take away some of the financial pressure you would normally feel. And once you’ve learned to be happy with less, you’ll also appreciate the flexibility of having …