How to Make the Most Out of Your 13th Month Bonus in 2016

By | November 3, 2016

We,the employees are already excited this time of the year, not just because of December holidays but because we are counting days of the release of our bonuses (yahoo!). 
Some of you may have already prepared what to buy; gadgets to shop and gifts to give for the inaanaks.
 
 There’s always an exciting feeling we anticipate while waiting for it. Hopefully, the long wait is over- a  time to rejoice and to enjoy our hard-earned money. 

I’ll surely buy iphone 6″, said by one commuter.I’ll buy flat screen, no way, I’ll treat myself at Vikings” said the other…

There’s nothing wrong with their statements, I’ve also been hearing it in our office while 2016 is coming to a close. It goes without saying, bonuses are freely-given by the company for us to utilize it wisely and we need to learn good stewardship or else it will be another ‘gone with the wind” story.

I’ve learned a life-long practice and I’m confident that this would work for you too. Up to this time, those bonuses are still on hand because I put it on asset classes that are appreciating over the years and I’m happy with the returns. 

Before going any further, lets define first these two things for us to identify the significant differences;

Liabilities- something that depreciates in value over time, ( not unless you have stuffs in your position which could be a collector’s item many years from now , however this has ”one in a million” chance)

I can still remember when I was in college and one of my classmates who have a gadget’s shop, sold his Nokia phone which was before a status symbol telling me that owning it is a very good investment. So I took his words for it and used my scholarship’s fund to have that phone without even knowing the real purpose.

At first, I got my friends admired my new gadget like owning a chihuahua and I was bathed with appreciation. After few years, that phone became obsolete and it ended up kept in the drawer. 

example: Smartphones, appliances, designer bags and other luxuries

Assets  something that appreciates in value overtime, mostly through compounding interest.This is my most favorite part that many people hate. There has been many misconceptions about investments and others even identify it as scam. While others are interested, they don’t like the idea that they need to wait for many years to take advantage of the benefits. 

Younger Millennials are not use to waiting and many of us want to have it in an instant. Walang ganun! The only way to maximize and keep your money is to park it in a good asset class.  If you want to have lasting assets, you need to work it out diligently.

example: investments, business, income streams.

Paying your debts

 

I made it first on the list because I know that this is very important in your financial life. I’m a strong advocate of a debt-free living and I’m teaching it consistently on my blogs, in the office, to my friends and family. Having said that, it is a great opportunity to clear what you owed once you already have your bonus.

One of my readers sent me a message that once she will receive the 13th month pay this year, she will commit it to pay for her credit card debt other than thinking of gadgets or luxuries. What a wise decision!

I’ve wrote multiple articles on dealing with debts that you can check out on my blog archives. In my previous blog Life After Debt: Should I Pay My Debts First Before Investing?, I highlighted there that to settle your debt is already a form of investment for yourself. You cant fix your financial life not unless everything is all set in order properly. 

Building your Emergency Fund

 

This is a perfect example of paying yourself first. What I can advise is to build your emergency fund this year. It is very convenient for me to set aside an amount from time to time but many people find it hard and boring especially if you are not use to it. Since you have already a big chunk of money, you can do it all at once. 

The concept of emergency fund is to save it for future use such as emergencies and unexpected occurrences. The fund should be good for 3-6 months and should remain liquid. That means you can use it anytime you need it. 

I would prefer to look for time deposit account or a savings account. If the fund is already intact, you can put half of it to less risky investment such as bonds. You can inquire in your banks or check it online, in BSP website, Bureau of Treasury, or in investment forums.

Adding income streams

 

 

Buying gadgets is not bad if you will use it to produce another income. You can buy good quality computer and start offering English tutorials in your free time. Online jobs are on trends nowadays,  so you can apply on rarejob.com and teach English language to Japanese learners while you are at home and in your convenient time. You might as well a “camera-fanatic”, then you can start taking photo for a living or an I.T. by profession to start an online part-time job. 

I just realized nowadays how important it is to have best gadgets when I’m already engaged into trading and blogging and doing vlogging project for next year. Having best equipment is always a very good advantage. Since everything is almost online nowadays, best specs should be considered and taken seriously. If you have good gadgets, you can maximize doing online jobs and do digital marketing.

 

Increasing your competitive skills

 

Seminars and webinars are very popular nowadays. Although there are advocates who are offering free seminars, I would advise you to attend paid seminars, not only that you can listen directly from best speakers but you can also learn something great in a shorter time (you will also enjoy good food and accommodation).

If you really want to learn new skills or bring your skill to the next level, I would advise to attend from these best speakers/organizers. I knew some of them who are conducting regular seminars that you can signed up. Just a disclaimer, I’m not affiliated to any of them.



TGFI (The Global Filipino Investors)

 

Spearheaded by Personal Finance Advocate Floi Wycoco, their excellent team is moving from places to spread financial literacy and business ideas. They are also conducting webinars for start up businesses, investments,  and often inviting speakers who are leaders in their different fields. 

Randell Tiongson’s Icon Conference

This is a yearly conference and I attended last year and it was a blast. You will get to meet and hear from best mentors and Registered Financial Planners in the country today such as Efren Reyes, Marvin Germo, Randell Tiongson himself, Francis Kong, a and many others. Things that you will bring home are bytes of learning in finance and investing. If you don’t have any idea in investing, after you attend this you will surely be on fire!

 

Marvin Germo’s Stock Smart

He is the sought after speaker for both investing and trading around the world. He has also written best-selling books. Do not miss his seminars around the country and learn investing the easy way.

 

Nikki Yu’s Bookaka Seminars

 

For those experienced investors and traders, you can also attend their seminars for free for premium subscribers. What I like about this group is that they are sharing their passion and knowledge about trading and often invite speakers that are successful traders.

 

 Caylum Trading Institute

 

You can maximize your profit in the Stock Market by trading but it takes a lot of effort and dedication or else you will be eaten alive by the market or you will be strayed by hypes. You can enroll in their course as you hone your skill in trading stocks.

On my bucketlist this year and on 2017, I’m setting aside funds to enroll seminars/conference on stocks trading, foreign exchange, foreign stocks investing, SEO, Digital/Online Marketing and book writing. You cant be wrong in learning new skills and you can get the benefits in the long run.

 

Building a start-up Business

 

 

I always believe that I’m entrepreneur by heart. Everytime I have funds, I usually use it to fund a business venture. It has also been a long practice that everytime I receive my bonus, I utilized it for projects. I like building small businesses (both online and home business), it always works for me since I have an office job and I can micromanage it with just few workforce.

For the past few years, I was able to start small businesses like my fruit business and overruns business. These are just small businesses but it really help a lot in terms of profit-making. From these businesses, I was able to saved some and invested it in the Stock Market. You can also read my blog How I Made My First Million in the Stock Market.
 
I encourage you to buy good books and reading materials. You can start with buying monthly edition of Entrepreneur Magazine or if you want to get ideas online for free you can also visit and read some business/money tips in Entrepinoy,Atbp.. I really like this website it’s because the businesses they introduced are Pinoy-friendly and small-medium business ideas that only require minimal capital.
 

Acquiring good Investments


Stocks

I’ve been in the Stock Market for a while now and all I can say are good things which are happening in my investments even the market is volatile. Stocks has always been my first love. When I started to invest in the Stock Market, that was also the same time that I began to realize the importance of financial education.

If you are going to start investing this time around, this is very timely for you since we are expecting factors that can cause the market to go down further. It would be a great opportunity for you to buy stocks in bargain more than what you’ve experienced in the shopping malls. You can start shopping good stocks like Ayala Land (ALI), Banco De Oro (BDO),First Gen Corp. (FGEN), and many more…You can also read my blog Investing in the Stock Market the Lazy Way to spot and pick best stocks to keep and hold for long-term.


Mutual Funds

 

I’m too busy at work! This is the common excuse that I’ve heard by friends and colleagues which I’ve shared investment opportunities. I tell you, I was able to manage it even if I’m too busy at work. For the purpose of making things easier, Mutual Fund is dedicated and tailor-fit for busy people. 

 

Usually, you just need to start 5,000 pesos and you can top-up in your convenience. You will also have a license fund manager (which is also an advantage), that will take care of your money and will invest it in stocks, real estate and bonds.

Philequity Fund, Inc. is a big player, top Mutual Fund in the country that has been performing well with 12.86% 10-year annual return. You can sleep while your money is working for you.

 

Just a quick sigway, I’m inviting you to join our men’s small group mentoring every Thursday at The Coffee Bean/Cafe Aquatica, Promenade, San Juan, Metro Manila. This is the best avenue to meet new people who are in the field of finance, CEO’s, and professionals. This is for free!  See you there. 
For those who are interested, please contact me: 09369280089 or shoot me an email: palengkekid@gmail.com…

 
 

VUL

 

While stocks and mutual funds has been popular investments that Filipinos are engaged in, this is another option that you can choose.

Variable life insurance (or VUL) is a product you can consider if you need both insurance and investment. VUL will give you insurance benefits but it will also have a fund that is being invested according to your objectives, risk profile and other preferences.

If there are already people depending on your income, you should get a life insurance policy. But if your sole objective is purely investing, then this may not be the right instrument for you at this time, because in the first couple of years of your policy, most of your money will actually go toward premium payments.Read more: Mutual Funds, VUL, UITF or Stocks?

 

UITF


The main difference between Mutual Fund and UITF is that it is offered by banks, while mutual funds are their own companies. By buying into a UITF, you own units of this fund. By buying into a mutual fund, you own shares and become a shareholder in the mutual fund company. All your earnings are net of tax and fees as represented by the NAVpu (net asset value per unit) for UITFs and NAVps (net asset value per share) for mutual funds. 
Read more: Mutual Funds, VUL, UITF, or Stocks?


Bonds

 

What are bonds? Bonds are considered IOUs (‘I owe you’). This is because bonds are debt instruments wherein an investor (you) lends money to a borrower (government or company). There are two general types of bonds – bonds issued by the government (treasury bonds) and those issued by corporations (corporate bonds). 
Read more: 5 Smart Reasons to invest in Bonds.
 
Basically, investing in bonds is putting your money with minimal risks. With a volatile market that we have today, this is an option that can work well for you. Other advantages that you can have is that the return is higher than the usual saving account and you will be paid regularly and your money could become liquid as possible.

Getting Insurance Policy

 

This is the most underrated but one of the most important investments especially if there are already people depending on you. It is very important to ensure proper protection. You need an income replacement for example something will happen to you ,we don’t know what is ahead of us and it is wise to be always prepared. All insurance is renewable in terms.

The type only differs on how you pay them, whole life, variable, universal, etc…So choose the most affordable that you gives more value to your money and you will not struggle paying for it. The most important is that you can pay it consistently.

I got a call from my friend who was very happy receiving almost a Million because he did not expect about it that the insurance he got years ago when he starts young has gone matured. It is always an advantage to start young because you will pay cheaper.

Although I prefer to talk to a Registered Financial Planner who doesn’t have bias in providing with insurance policies, it is wise to shop around and talk to insurance agents on any policies that you can compare with and will fit your needs.

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