I have always been a saver. I had so many coin banks during my toddler years because my mother would always tell us to think of a goal (something to buy), that will inspire us to save.
Looking back, I do not have a vivid memory of what I bought out of my savings. I do not even know what happened to the coin banks or to the coins. But I took the disciple of saving with me… and I would like to impart it to our son. Whether he likes it or not, besides, Mom knows best. 😉
As soon as I got a NSO copy of his birth certificate, I opened him a junior savings account… and I put all his money there. I mean ALL, every single cash gift the he receives from his ninang (take note, there is no “s”), tatay, nanay, lolo and lola, plus one thousand pesos (Php1,000.00)every payday from us (his parents). After 6 months his money is more than fifty thousand pesos (Php 50,000.00) and earned 21.09 pesos interest less 4.22 pesos withholding tax. Giving him net earnings of Php16.87 pesos for that particular month… 😦 I’m not happy looking at this figures. I’m sure my son would ask himself sooner or later if this is the best that his mother knew. I need to do something about it. I need to show him the true meaning of the word best.
Think, think, think…
Before he reaches 2 years old… I read about Retail Treasury Bond (RTB) in the newspaper. It promises 5% interest per annum. I got excited and I called my bank at once and I asked a few questions. Is it safe? Is it guaranteed? Is it liquid? The answer is yes, yes and yes. So I decided to invest one hundred thousand pesos (Php 100,000.00) of my son’s money. After three months the interest was credited to his account. I was expecting a bit more than what we received only to find out that 20% tax is deducted from the earnings. 😦 Isn’t he too young to pay taxes? But at least my only consolation is that the interest is higher than what is his savings account is earning. His quarterly interest credit amounts to one thousand seventy five pesos (Php1,075.00) (net of tax) for the next 15 years. Ok, this one is better, but still not the best.
Think, think, think some more…
A few days later, I received a message from my very good friend (my son’s ninang). It is about investing in stock market. I got interested and asked her a few questions: Do I need a huge amount of money? Do I need to devote a lot of my time? Do I need a broker and financial adviser? The answer is no, no and no. She gave me the site of Citisec Online (now COL Financial, http://www.colfinancial.com), Truly Rich Club (by Bo Sanchez, http://trulyrichclub.com/) and the assurance that she will bet our friendship on this (her exact words were: Itataya ko ang pagkakaibigan natin dito). Those three things that she gave me are more than enough to make me invest my own money. I used COL Financial as my broker – I do all my transactions online with them and get all the readings I need for investing. I joined Truly Rich Club and it became my financial adviser. For a small fee, I get up-to-date financial guidance and investment strategies in layman’s term plus a whole lot more. Lastly, my investment is backed-up by the greatest assurance – our friendship.
After a year, I checked on the status of my son’s money. He got four thousand three hundred pesos (4,300.00) from his one hundred thousand pesos investments. Not bad. If it were kept in his savings account, it would have earned Php404.88 only. Better decision mom! But still, it’s not the best.
I compared it to my investments in the stock market, which started almost the same time as his RTB. My fifty thousand pesos (Php50,000.00), which I put in gradually over the year, earned twenty one thousand pesos (Php21,000.00). That is equivalent to 42% earnings! For sure with this kind of figure would spell the word BEST for my son clearly, isn’t it?
You knew already what I did… I immediately got my son a separate account as an investor in COL Financial. He’s officially an investor. 🙂
Of course, I checked his potential earnings (through Truly Rich Club’s Retirement Calculator, http://trulyrichclub.com/retirementcalculator/). If he will retire at 40 years old, he still have 37 years to invest. Setting everything to a minimum, initial and monthly investments, how much can his stock market investments give him when he’s about to start his life again at 40? Check it out.
At conservative 12% (as suggested in Truly Rich Club, http://trulyrichclub.com/retirementcalculator/):
What if his ninang’s forecast would happen? (check her site: http://smockexchange.wordpress.com/2013/03/27/use-this-retirement-calculator-and-partake-in-the-treasure/)
What if my beginner’s luck would persist for the next 37 years?
Isn’t it spectacular? My son could possibly be a billionaire (I wish Bruno Mars’ mom invested in stock market when he was three.). Come to think of it, he could earn a lot not because he had so much money to invest now, neither that he had so much money to top-up his investment monthly, nor he has the most financially educated mom (read this again from the top), but because he had so much time, and his investments can build up all the interest it may possibly earn, giving his money the full growth potential. Just like what the great Albert Einstein said: “The most powerful force in the universe is compound interest”. Keep on investing son and remember… Mom knows best. 😉