Hello and thank you for being part of the WealthyTayo kwentos and tips!
I'm Jho, and it's good to meet and connect with you who are also interested in improving our level of financial preparedness, by learning more about long-term stock market investing.
In the coming weeks, we'll be sharing with you stories and tips, to help all of us prepare better for the future of our family and loved ones.
We have prepared a list of Frequently Answered Questions here:
http://wealthytayo.com/faq/
Before we begin, I'm not a professional financial adviser.
I'm a regular person like you, on this journey of financial literacy, and I'm sharing with you information that I also share with my family, because I want all of us to succeed.
If you need financial advice, please consult your professional legal and financial adviser.
Okay, now on to the rest of the story...
The first step is to have discipline over our finances, and here is the recommended way of handling our monthly income:
1. Immediately set aside 10% - Give this to your source of spiritual health. It can be your church or an organization that you believe in.
2. Set aside 20% - This will be the part of your monthly income that you will place in a savings account, stocks, bonds, or real estate.
3. Adjust your lifestyle so that you can live within the remaining 70%
Yes, that can be quite challenging, especially if we aren't used to immediately setting aside 30% of monthly income for other people and for our investments.
Still, it's a good standard that we can use to check our progress.
Here's what to do with 20% of your monthly income...
Every month, put it in a separate savings account until you have saved 3 to 6 months' worth of your regular monthly income.
That's your Emergency Fund. You'll touch it only in times of real emergencies.
And whenever you use money from the Emergency Fund, place the entire 20% of monthly income into that separate bank savings account until you once again reach the balance equivalent to 3 to 6 months' of your monthly income.
After you have prepared your Emergency Fund, that's the time you can think of investing in the stock market.
The next step is to apply for a COL Financial account.
It involves having to fill up some forms, and sending those to the COL Financial office in Pasig City. After COL Financial approves your application, they will send you instructions regarding which BDO Bank Account number to deposit your funds.
You can open a COL Financial account with just P5,000.
Since the kasambahays of Bo Sanchez put in P2,500 each month into the stock market, that's also our personal minimum monthly target.
How much should you invest in the stock market?
In the Rule of 100, subtract your age from 100 and that will be the percentage of your 20% that you will invest in the stock market.
If you are 40 years old, for example, 100 - 40 = 60.
If you have a monthly income of P30,000 and we set aside 20% for savings and investments, 20% of P30,000 = P6,000
Of the P6,000 you can target 60% or P3,600 to place in the stock market each month.
The remaining 40% or P2,400 you can place in the bank savings account.
Whatever amount you place in your COL Financial BDO Account will enter your COL Financial Cash Balance. You can buy stocks online using the money found in your COL Financial Cash Balance.
Whenever you sell stocks online, the value of that transaction goes back into your COL Financial Cash Balance, so that you can use that to buy other stocks.
We'll be placing the Frequently Answered Questions here:
http://wealthytayo.com/faq/
If you have a question that's not answered in that page, please let us know and we'll help you find the solution. 🙂
Talk to you soon,
Jho
P.S. We choose which stocks to buy, based on the recommendations of the Truly Rich Club (yes, I'm a TRC member). For more info, please see: http://wealthytayo.com/join-the-truly-rich-club
Thank you!