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Letter from a Reader – Ms. Marie Quizon’s Personal Finance Journey

Three days ago, I received an email from a blog reader who inquired about her financial situation in 2013. Sharing with you our email exchanges and thanking all blog readers who have been following the blog for years.

On 2013-06-18 06:10, marie quizon wrote:
Hi Krissy! I’ve been your newbie mainstay guest in moneylifeblood.net. Let me congratulate you for coming up the best blog I’ve ever encountered in Personal Finance. Kudos once again!

Way back many years ago, I’ve always wanted to search and read all about how to handle finances, because I’ve been a breadwinner ever since. It started when Salve of PDI has its personal finance section, which I’ve been looking forward for a new article. However, it was stopped and my journey to personal finance has ended too. Just recently, I was able to bump about readytoberich.com of Fitz Villafuerte and I found myself attending a free seminar in IMG. But my quench to personal finance management never ended and upon searching the whole wide web, I was able to find moneylifeblood.net!

Here’s my story:
I’m 39 years old, a working mom, with an only child who’s now in 2nd grade. He’s been studying for free in one of the best private  schools in our province as an added benefit in my work. My husband owned a second hand van for hire which he drove, which we acquired from our savings. But before we bought the van, we got a secondhand tryke which my older brother is using that gives us a daily boundary. However due to influx of franchised trykes in our place, competition becomes stiff, that my brother preferred to work in construction business thereby leaving us the unit. Had we known for his plan, we won’t buy the van and renovate our house instead. As an added benefit from my work, I was able to enroll my dependents into health insurance, too!

And now, we are saving once again for the renovation of our house which I opened a mutual fund in FAMI-SALEF and planning to withdraw it 5 years from now. Though my son is sure of free education until he reaches college, I still opened a UITF in BDO Easy Investment  Program with 2k monthly as a back-up plan. I also had emergency fund 8 months worth of expenses which I saved in BPI’s Maxi-Saver and our Cooperative at work. Since, it was just recent that I became serious in handling my finances, I was able to get a VUL from Philam before and I am paying it for two years already. (btw, i got it in exchange of my MLM business). The plan will be paid in ten years and that is saved for my retirement. Most of personal finance gurus suggested not getting VUL but instead get a separate life insurance and invest the difference into mutual funds. But as I’ve said, VUL came from an ex-deal.

11297-handsandmoney

I know I still have a lot of things to learn, especially investing  in stocks. I admire you for being a risk-taker and adventurous in your quest for financial freedom. I have yet to learn the ins and outs of stocks investments since I got influenced by your blog as having stocks as the number 1 source of passive income. I am also in the know or contemplating if I will invest in real estate which I plan to have it rented out later on. Real estate developers are proliferating in our place, and I am taking this an opportunity to have a slice of it.

My husband wants a farmland instead so he can have piggery business in the future! So, the plan has changed. I presume that investing on farm is a good way to start but we need a lot of cash to own it. What could be our priority then?

The bottom line here is the cash flow. I am able to save 100% of my monthly salary (Php14k net) with a breakdown of the following;


BDO EIP – Php2,000.00
Paluwagan (VUL-Philam) – Php 4,800.00
Monthly Allocation for EF (4 months to go) – Php2,000.00
Mutual Fund Allocation (monthly) – Php5,000.00
Monthly SSS (Husband) – Php416.00
____________
Php14,216.00

My husband’s income goes to our daily expenses, monthly bills, groceries and some unexpected maintenance expenses at home. Other sources of income that I have are the following which I used for buying new clothes, shoes, bags, (case-to-case basis), school-related needs of my son, occasional gifts and donations (birthdays, anniversaries, christening, mass donations. etc.), and medicine expense of my father.

Constant Monthly income from USANA business (MLM/Direct selling) – Php 4,000.00
Direct selling from Sundance, Avon, Natasha – Php 400.00
Sales from Homemade Peanut Butter (reselling) – Php 200.00
Check Rediscounting -Php 900.00
____________
Php 5,500.00

From above, the bottom line falls into goals, plan and actions:
Allow me to share them with you:
1. College Educational Fund for my Son – 2k for 10 years – Php377,353.50 assuming 10% growth
2. House Renovation – 5k for 5 years –Php 366,306.00 assuming 10% growth
3. Retirement – VUL –Philam – 4,800 for 10 years –Php 1M assuming 10% growth
4. Two-door Apartment Construction (land acquired with title already)
– Equity of 200k ( fund will be coming from bonus and 13th month pay for 5 years)
Do you think, I’ll be able to attain financial freedom using this map?

Thanks for taking time to read my story. God bless and happy millions!
Marie

**********

On 2013-06-21 21:30, krissy@peraholic.com wrote:
Hi Ms. Marie,
As promised, here’s my humble opinion on your financial state:
1. First of all, I’d like to congratulate you for being a wonderful mom to your kid and a perfect example of a person who actually does what she learns in her financial journey. Count yourself lucky and blessed because not all people would really be in your situation – some know what to do but do not do these things. I myself cannot save 100% of my salary as I support my immediate family, so you are very blessed to be able to do so. In your case, you are on your way forward to financial freedom. Claim that you are actually in that state now!

2. BDO UITFs are one of the best in the market today – good choice. If you want, you can buy BDO equity fund such that you don’t have to start investing in stocks now, but you can atleast get the feel of it by investing in a UITF solely dedicated to stocks investments. I’ll tell you when you can start investing in stocks in a while.

3. VUL is actually ok product. In your case, you are investing in FAMI-SALEF which is another equity mutual fund hence you are actually doing the right thing.

4. Your emergency fund looks great too. But one thing I would say, in my opinion, is you and your family’s health fund. Do you have any history of illnesses? Are your family’s health perfectly fine? Do you feel that you need to set aside more money to address these health concerns in the future or today? It’s good to know that your work covers for you and your dependents’ health insurance – just be prepared for any event in case you would need cash.
5. Looking at your investment allocation, you are on the moderate to aggressive strategy. Most of your funds go to UITF and mutual funds, which is OK since market is bloody these days cost averaging is great strategy. Some would think you need to shift to safer investments,  but for me, I would agree with your allocation because as you said it was recent that you became serious handling your finances and for me, entering this market is never too late. It’s more of the attitude – some retirees or those in late 50’s won’t be able to take in too much paper losses or negative in their portfolio, while the individuals in their 20s to 40s are able to do so.
6. Good to note also that your son would be able to study for free until college. Inspire him to appreciate the value of every peso and to make the most out of his education. I am also a kid who graduated out of scholarships, hence I know the struggle of making money to support my daily allowances and school needs.
7. Thank God for the gift of your husband who is a good provider to your family! He should also thank the Lord for giving you to him as a great wife.
8. Your direct selling business augments to your day job and this is good. I’m amazed at how much you earn from USANA – is that really Php4k? Wow!
9. Since you have already acquired a land for an apartment, and the fund to build it will come from bonus and 13th month pay, you actually have nothing to worry about. It’s time to learn the ins and outs of apartment business before diving into it, such as the monthly rental fee your vicinity commands, tenant agreement, etc.
10. And lastly, the farm. Me myself would like to have a big farm. Though I already have a coconut farm and a mini farm at a mountaintop, I still dream of a big hacienda. Haha!

You can actually compute for this if you want a more mathematical  approach. I’m not sure how you want to buy a farmland. So let’s say the choice is between the apartment or the farm. At stake: Php200k. I’m not sure how much a piggery farm is. But yes it’s true maintenance is too high. (Our relatives have piggeries in the province).
Let’s put a price tag:
Farm: Php100k (I doubt)
Piglets: Php2,500 each (last time somebody is trying to sell me piglets) pls verify
Feeds, electricity, water, tenant: Php10k perhaps? pls verify
How much can you sell the pig? I forget actually.
From there, you can compute how much you can earn. That is I think two months after growing the piglets.
With risks of infestation, competition, etc.

There’s someone who offered me 50-50 type of scheme. I won’t have to pay rent, etc. But I need to buy the piglets. Then hati kami sa kita when he sells it. I didn’t give in since I’m not familiar with the business. And me myself don’t really like pork. Haha!
Now the apartment.
Say you are able to rent Php5k per unit. That’s Php10k per month.
With risks of no occupancy, terrible tenants, etc.
(I think I uploaded a file in the FB group on how to compute rental fee, check it out).
In two yours time, balik and Php200k mo.
And forever kikita ka.

Well I sound like biased towards the apartment. But practically speaking, it’s more convenient. One honest comment from my relatives handling the piggery business is the smell. That is why I choose to have a fruit and vegetable farm though piggery business is staple in our province.

But if it’s a dream of your husband, I’m not sure how he would handle it if choosing the apartment would break his heart.

How about, starting up first with the apartment. When your emergency fund is enough, and you have saved up for your dream piggery business, you can start it off.

Sorry for the long reply but I hope this really helps you.

Thank you so much for reading the blog and being a mainstay =) Idedicated my recent article to you and to all others who believe. =)

Happy millions!
God bless!
krissy

************

Hi Ms. Krissy!
How are you lately?  I was actually organizing my email and  I found this one.  I kept it in my personal files.  You were asking me to be featured in your VIP Series in your blog before which I declined, and I think I can be one now. (nahihiya kc ako before kc feeling ko di pa ako entitled dun, hehehe)
I am so happy to say that with your advice, here’s my financial state:
1.  Continued investing in my VUL (Philam) for 4 years now. -for retirement /protection
2.  Started investing in COL Stocks (March 2015) with an initial of 5k, and applying PCA, it’s now 47k—for retirement (Stocks are so bloody these days but I don’t care! hehehe)
3.  Was able to get a rent-to-own unit in an uptown area for rental purposes.  Equity of 200k was eventually paid-up.  Turn-over will be this June 2016. First-timer in rental.  (you mentioned about  how much is the rental in FB page, what’s the FB account?)-additional cash flow
4.  Was able to purchase a small (agricultural land) that may be utilized now as a farm (veggies/fruit crops) and when it will be fully developed, we might use it as my dream: 6-door unit apartment. – the land is to be fully paid this year (fingers crossed)
5.  Continued subscription with Yearly Health Insurance for my immediate family
6.  Three-years to go for a fully-paid, Memorial Plan.
7. Continued the automatic EIP in BDO (2k/mo) for my son’s trust fund- no plan of increasing it yet
8.  Enrolled in a Doctoral class – 3 years to go to finish it. (fingers crossed)
9.  Saving up for Emergency Fund as this was used as additional fund in acquiring the small farm land. (5 months to go)
10.  Discontinued my FAMI Mutual Fund as I withdrew the amount for my house has been renovated last year. -attained goal
That’s all for now.  Hope to meet you up in person.
“Patience is bitter but its fruit is sweet.”- jean-jacques rosseau
Thanks and Happy Millions!
Marie
***************
Thank you so much, Ms. Marie for sharing with me your personal finance journey!

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