TV says?

To choose a new TV set, the line from the Family Feud game show "survey says" is not ideal. You don’t decide on an “investment” based on the decision of a majority. When buying a TV set, one has to research and research I did.

Two TVs
This would be our 3rd TV set in 14 years. Our first TV was a 14in Samsung which we bought for P5000 in 1994. It’s still working and currently being used when we’re in the province. Our second and current TV was purchased in 2004 just after MC was born. It’s a 21in Sony TV with a built in subwoofer. Considered “high tech” during its time with all the bells and whistles.

The Requirements
For our 3rd TV, the requirements set were the following:
(1) At least 32 in.
(2) USB input
(3) HDMI input
(4) LED
(5) Full HD (1080p)
(6) Slim and wall mount capable
(7) Preferably with sound bar
(8) Internet access is a plus
(9) The budget set was P30,000.

The Candidates:
(1) Samsung 32in Series 4000
(2) Samsung 32in Series 5000
(3) LG 32in LE5500
(4) LG 32in LE5300 http://32le5300.com/

And the winner is:
Last March 26, I read a newspaper ad about a promo tie up between SM Appliance and LG. They’re selling an LG32in LE5300 for P26,990 with a free wall mount bracket. So that pretty much sealed the deal. A new TV was purchased last March 29, 2011.

How to Green-ify a Condo

We're moving to our own place very soon. It's a 55 sq.m. condo space. Yes it is small but we can call it our own. A result of our blood, sweat and tears.Aside from the challenge of fitting 3 bedrooms, 2 toilets & bath, a living room, dining room and kitchen, another objective we have in mind is how to make our place earth friendly. Here's ze game plan:

(1) Earth friendly LED TV. It's been a while since we bought a TV set, 7 yrs to be precise. The plan is to get a 32 inch 1080p 120 Hz wide LED TV . Whatever that means, it sounds high tech so that’s acceptable. Kidding aside, one of the advantages of an LED TV is it comes with backlight control and screen off function. Definitely energy saving.
(2) Compact Fluorescent Lamp. CFL's reduce electricity usage and they put off less heat. They consume 75% less electricity compared to incandescent bulbs and last up to 12 times longer.
(3) Aircon with timer. We'll be installing 3 window type aircon in our place. While the HPs vary per room, one common denominator is the timer. Max use per a/c per day target is 6 hours. Just right to attain REM status before the a/c turns off automatically.
(4) Electric fan in every room. Ventilation is quite a challenge in our new place since the window size is just right hence the tendency is a/c galore. Airtime between a/c and e/fan will be split with the latter hopefully getting the lion's share.
(5) Low-Flow Showerhead. Low-Flow what?!?!? A few years ago, showerheads delivered about 5 to 8 gallons per minute (gpm) at 80 psi. The current standard for low-flow heads is 2.5 gpm at 80 psi. Some showerheads deliver only 1.6 gpm.
(6) Wash in cold water. This hold true for dishes and clothes. A study shows about 90 percent of laundry energy goes to heating water.
(7) Lose the tub. The fact is that the t&b in our new place is smaller therefore a regular sized 1.5 meter tub won't fit (lest we place it in the living room). We are doing away with the tub. We rarely use it anyways. At most, we use it once every quarter.
(8) Use a smaller and newer heater. We are now using an over 10 year old 12 gallon heater consuming 2000 watts and plan to downsize to a 6 gallon heater consuming 1500 watts only. The new gadget comes with it new technology ergo energy savings even if it’s just a water heater.
(9) Use an electric range instead of a gas-powered one. Aside from the fact that the condo management mandates electric range only because of the potential dangers of a gas powered range, we can save P 650/mo on an 11 kg LPG tank. Besides, where can we store the tank in our itsy bitsy condo.
(10) Recycle. So what if you’re transferring to a spanking new condo and you’ll be re-using furniture and appliances hence they will not match? Not only are you helping yourself meet your budget, you’re also helping the environment. Here are the some items that will be transferred to our new place: refrigerator, dryer, aircon, dvd player, desktop and all the pc peripherals.

Wealthy You Month!

The company declared that March is Wealthy You Month! They invited financial guru J-Randell Tiongson, RFP to share his thoughts and improve our financial literacy. While I’ve read ALL his articles published in Money Sense magazine over a period of 3 years and found them interesting and helpful, I was a bit disappointed when I attended the seminar because that night, he was apparently energized and was in a jovial mood. He was extremely funny but I did not attend the seminar to be regaled by stand up comedienne instead was looking to improve on my financial knowledge.

At any rate, here are some of the items that I picked up during the seminar:

Stages in Life
(1) Getting Started 22 to 35
(2) Growing Family 30 to 45
(3) Children in College 40 to 55
(4) Trapped in the Job 50 to 65
(5) No Income 65 up.

6 Steps to Smart Start
(1) Establish Financial goals and plan for getting there.
(2) Separate needs from wants.
(3) Create a monthly spending plan.
(4) Start saving and bank wisely.
(5) Stay on top of your loan obligation.
(6) Use credit wisely.

Despite my experience, I will still continue to read his articles but probably avoid attending his seminars. We will see.

The Donut Story

(September 19, 2008)

We just learned today that Go Nuts donuts set up a 4 sq.m space at the second floor of WalterMart Mall in Makati. They started early this week. The big question is - will they be able to recoup their investment?

Around July 2007, we explored the possibility of franchising a Mister Donut store and place it is WalterMart Mall in Makati. We submitted the necessary requirements and passed all the required interviews only to be advised that the location is NOT profitable. At best, we've be earning P10,000 a month for almost half a million investment. The mall gets P27,000 a month for the rent so they make more money. If it were the other way around, we'd probably be celebrating our first year anniversary. The 2% return on investment is actually good however the return on investment pegged at 5 years is bad reason why we abandoned the idea.

Going back to the question, will Go Nuts recoup their investment? If they are still in WM Mall 3 years from now then they probably made money.

Arriva Avida!

Avida Land is making headway with their Makati West project. Located between Yakal and Mayapis street and covering one block, tower one's foundation is complete and they've already started with the ground floor.
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When we purchased our units via pre-selling mid last year, we were told that the 300 something unit tower one is 70% sold out. It was initially offered to Ayala Corp employees. Lucky them! We got a 10th floor unit with a Manila Bay view. It was not an ideal floor for us (currently living on the 18th floor of a condo in Salcedo Village) but what we got is acceptable.
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Our loan in BPI should kick in this month. Seems like they're a bit delayed. Not sure if it's the sales agent's fault or the bank. How much does this delay cost? I was recently told that the annual interest increased from 10.99% to 11.75%. Somebody didn't do their job properly and we were charged additional 0.76%. Only in the Philippines. And the messenger of the bad news even had the gall to lecture me about inflation reason why the interest went up. Anyway, I knew that the situation was similar to a hostage taking (since Avida Land and BPI both belong to the Ayala Corp) and there was no recourse but to pay the ransom.
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The turnover is Y2010. That's 2 full years from now. We're excited to move to our own home. As for now, home sweet home will be at a rented condo in Salcedo Village.

Ayala Land @ Fifteen!

“You keep dreaming, Ayala Land keeps building. Fifteen years later, our vision remains clear: We want to build only good things for Filipinos. Thus, we keep innovating by building not just houses but communities and homes for every life stage. Not just malls but entire lifestyles. Not just offices but real estate solutions for corporations. As long as people continue dreaming, we’ll continue building.”

Six months after purchasing on installment a condo unit in Avida Makati West, three months after the Glorietta 2 'bomb blast' incident and one month after some passengers got stuck at The Columns Ayala Avenue (TCAA) elevator, the BIG QUESTION is if Ayala Land Incorporated (ALI) has learned from their recent experiences. In an earlier blog entry, I mentioned that ALI is in a lose - lose situation regardless of the G2 investigation result; if it’s a terrorist attack, then how come they were able pass through G2s “tough” security? If it’s a faulty sewage system, then that’s reflective of their property management (or mismanagement). And the most recent TCAA resident ordeal which I think is NOT an act of terrorism, have our fingers pointing to property (mis) management once again.

A financial magazine says that the property boom is in play and will continue until Y2010. Furthermore, it said that some of the players include Ayala Land Inc., Megaworld Properties and Robinson’s Land Inc. with ALI leading the pack. The Avida Makati West project’s expected turnover is fourth quarter of Y2010. There’s ample time to react and get your act together. Small time investors like us don’t want to deal with problems with security, elevators conking out and a stinky sewage system. That’s the prime reason why we choose to invest in Ayala Land Inc.

10 versus 100th : How to invest P100,000.00

If somebody gives you P 100,000.00, what will you do with your new found wealth? Sounds like a third world-ish genie granting a wish but I’m pretty sure we can easily come up with a list of 100,000 things to do. For men, a new set of wheel and tires, an LCD TV, a digital SLR camera, a notebook computer, your own set of tools. For women, a new handbag, a set of make up kit, a sofa set, a baking oven, beauty sessions. The list is endless. And then there’s this boring option called investment. This article will focus on how to invest P100,000.00 and eventually, you can use the interest earned for your caprices!

1. Type: TIME DEPOSIT
Where: All Types of banks – Universal, Commercial, Thrift, Rural banks.
Period: As short as 15 days, 30days to as long as 5 years. Withholding Tax is 20%. Tax becomes free if period is 5 years and 1 day.
Interest Rate: range is 2% to 4% per annum or per year
Minimum Investment: P5,000.00
Risk Involved: Low
Investor Participation: Low
References: www.psbank.com.ph

2. Type: COOPERATIVE
Where: There are over 10000 cooperatives in the Phils. You can check out the list in http://www.cda.gov.ph/.
Period: Usually, dividend is declared first quarter of the year.
Interest Rate: Depends on the performance of the coop. May be as low as 3% or as high as 23%. Sempco declared 23% in the 1Q of Y2007.
Minimum Investment: P10,000.00
Risk Involved: Low
Investor Participation: Low
References: http://www.cda.gov.ph/; www.kskcoop.com

3. Type: DOUBLE YOUR MONEY
Where: Cooperatives and Rural Banks
Period: Usually 5 to 6 years.
Interest Rate: 16.67% per annum
Minimum Investment: P250,000.00
Risk Involved: Moderate. The reality is, universal and commercial banks are “more stable” compared to rural banks however life would be pretty mundane if we don’t take calculated risks sometimes.
Investor Participation: Low
References: www.firstcountryfinancial.com

4. Type: STOCKS
Where: Stock Brokers or on line stocks broker sites
Period: Holding period can be as short as one day but ideally, hold period is one year.
Interest Rate: Depends on a lot of factors like the company invested and the period of investment
Minimum Investment: P10,000.00
Risk Involved: High
Investor Participation: Low if passive, high if active.
References: www.citiseconline.com

5. Type: MUTUAL FUND
Where: Financial Consultants
Period: minimum of 1 month
Interest Rate: 7 to 20%
Minimum Investment: P10,000.00
Risk Involved: Moderate to High
Investor Participation: Low if passive, high if active.
References: http://www.sunlifefunds.com//mutualfunds; www.philamfunds.com

6. Type: UNIT INVESTMENT TRUST FUND
Where: Banks
Period: minimum of 1 month
Interest Rate: 7 to 20%
Minimum Investment: P5,000.00
Risk Involved: Moderate to High
Investor Participation: Low if passive, high if active.
References: www.bdo.com.ph/investment

7. Type: GOVERNMENT SECURITIES (Treasury Bills and Treasury Bonds)
Where: Banks
Period: minimum of 1 month
Interest Rate: 3 to 14%
Minimum Investment: P5,000.00
Risk Involved: Moderate to High
Investor Participation: Low if passive, high if active.
References: www.bdo.com.ph/investment

8. Type: BUSINESS – FOOD FRANCHISE
Where: There are a dozen food franchises in the range of P30,000 to P60,000.
Period: ROI is dependent on a lot of factors like sales, location, etc.
Interest Rate: You can actually double your money in under 6 months. In the same manner, you can loose your money in half the time.
Minimum Investment: P30,000.00 to P60,000.00
Risk Involved: High
Investor Participation: Low if capitalist, high if industrialist.
References: www.entreprenuer.com.ph

9. Type: BUSINESS – DIRECT LENDING
Where: Ask your neighbor
Period: Usually 1 month to 6 months.
Interest Rate: As low as 2% per month to as high as 10% per month.
Minimum Investment: P10,000.00
Risk Involved: High
Investor Participation: Low if capitalist, high if industrialist.
References:

10. Type: BUSINESS - TRADING
Where: Depends on a person’s passion.
Period: Depends on the “harvest period”
Interest Rate: Depends on a lot of factors but can easily double your money in less than 6 months.
Minimum Investment: P5,000.00
Risk Involved: High
Investor Participation: Low if capitalist, high if industrialist.
References: www.entreprenuer.com.ph

BONUS: Type: BUSINESS – REAL ESTATE
Where: Depends on your preferred location
Period: Depends on your resources.
Interest Rate: From 10% to 20% depending on monthly rental rate
Minimum Investment: At least P60,000.00 (for the first year)
Risk Involved: High
Investor Participation: High
References: http://www.camella.com.ph/; www.theorientalplace.com

There’s no perfect investment for any individual. It all depends on your need, your want, your resources, time you can spare and how you’ll justify your choice of investment.

Alpha or Avida?

Alpha or Avida? The decision point is analogous to buying a BMW sedan. The question is do you go for a ten year old BMW 5 series or a brand new BMW 3 series. Each has it’s advantages and disadvantages and there is never a correct decision because factors vary depending on the buyer.

1997 BMW 525i / The Pro:
o Mid sized (therefore not too big and not too small)
o Luxury features (just like living in the lap of luxury)
o Safety is key (for its class, car safety is basic unlike in low end models)
o Stable resale value (by this time)

1997 BMW 525i / The Cons:
o Second Owner (hence not sure about how it was used)
o Gurgles gasoline (the bigger the engine, the more expensive it is to run)
o High maintenance (cost of service, parts, insurance, registration).
o Low resale value (10 more years down the road and you’d have a hard time selling it)

2007 BMW 320i / The Pro:
o Brand New (as in never been kissed and never been touched).
o Service galore (no headaches on service since warranty covers for it)
o You can choose the color and other options.
o The financing is budget friendly. You can go for a low down payment or low monthly.

2007 BMW 320i / The Cons:
o Size (might be too small for a family of 5 with a dozen grocery bags).
o Luxury is incomparable to a 5 series.
o Considered low end by 5 series and up owner
o High acquisition cost and probably low resale value (esp. if you’re desperate)

Sabi nga nila, nothing beats brand new. So we’re going for Avida.

Footnotes:
1. We didn’t buy a BMW. I’m just dreaming.
2. If you want to know what I’m talking about, check out www.avidaland.com

Jatropha, the wonder tree

Do you know what a Jatropha tree is? About two month ago, I didn't give a hoot what it was and what it does but I am now coming into terms with this plant that may-just-save-the-world. Too ideal you say? Think global warming, oil reserves and bio fuel law.

So what's the connection? It's a long story and this blog entry will be insufficient for me to detail it plus the fact that it will bore you to death. I just want to highlight these quick facts: 1- global warming is a big chunk caused by pollution, 2- oil reserves is concentrated in the Middle East countries and none in our beloved Pinas and 3- bio fuel law is already in effect.

Finally I met Mr. Jatropha last Saturday. It's a tree that grows about 8 feet and the fruit is processed to make the 2% mix in today's bio fuel. Today, the mix is currently at 2% but who knows the figure may increase in the next decade and maybe, just maybe, the tables may turn and it could be 98% bio fuel. That would probably happen but not in my lifetime.

Double you money in 5 years scheme

The double your money scheme usually given by rural banks is a dying breed. When I was younger, I recall accompanying my mother in Land Bank of the Philippines Tarlac branch to avail of this scheme. For a minimum of P100,000, you may entrust this amount to LBP, wait for 5 years and they’ll give you P200,000. No sweat. It actually is a good deal if you’re the type of person who is a risk taker yet conservative. Sounds contradicting? Allow me to expound a bit.

You are considered a RISK TAKER because investing your hard earned doe in a rural bank is not the wisest decision there is but if calculated properly, both quantitative and qualitative factors, there’s a very high probability you’d get your money back. Then again I may be wrong. That’s why it’s called a risk.

It is considered CONSERVATIVE because some brave soul would borrow P100,000 from a lending institution, pay an interest of 18% per annum and invest the money in a food franchise worth P60,000.00, cross his fingers and hope that he choose the right location and product. If his gamble proves to be right, then he’d have return of investment by 6 months, pay off his debt in a year and in a year or two more, he would have either more outlets or bought a second hand car.

Life is all about taking risks, that is calculated ones. Trusting your gut feel is applicable but should be exercised with extreme care in an investment.

T.O.P. Investment : The Oriental Place

I hope EIGHT is really a lucky number as we just made our first real investment today, May 18. The Chinese folks believe that 168 is a lucky number reason why Philippine motor vehicle plates with 168 numbers are quite pricey – in the range of P30,000.

We discovered the place while fuelling up in Shell gas station along Pasong Tamo avenue since it’s en route to our favorite mall Waltermart, my son’s school and our church Don Bosco Makati. The real estate project is called The Oriental Place condominium and it’s managed and developed by Federal Land Inc., a member of MetroBank Trust Company group. The selling price of a 1 bedroom 24 sq.m. condo is in the range of P1,8M but of course we don’t have that amount and instead we’ll mortgage it.

Here’s the deal: They call it 10-15-75 scheme. We paid P50,000 as reservation fee; after a month we have to pay the balance of the 10% down payment. From months 3 to the 33rd month, we have to pay P9,000 a month (interest free) only which accounts for the 15%. The remaining 75% will be paid P15,000 a month for 15 years.

We’ve done our math and it shows a potential ROI in 6 years if rent is aggressively priced or 10 years if rent is just right. Worse case scenario is we lose our deposit, down payment and first 30 months payment. If my computation is correct, the deal is better than placing your money in time deposit at 4 percent per annum.

I hope and pray that we made the right decision.