Eight Hairs

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The other day, the Philippine branch of an international news agency interviewed me on the advice I could give to not so rich parents who have suddenly realized that they do not have enough budget for the college studies of their children.

My reply was that many times, parents find themselves in the foregoing situation due to lack of planning. In fact, financial planning for newly-wed couples is one of the best family planning methods around.  But since it is no use “crying over spilled milk”, I said that there are two options that parents in the situation above can take.

One option is to force the issue by keeping their target cost of education for their children and barrelling their way through with the use of loans.  This is a risky option since loan repayment will be an issue in the near future and might even give rise to more problems.

The better option is to face reality and accept lower cost of education for their children.  This could mean a standard course over one that is highly technical in nature (e.g. business management vs. biology, which has a lot of laboratory fees). This can even mean enrolling the children in a public university vs. a private one.  I had successful officemates who were graduates of public universities (and I am not talking of just the University of the Philippines).

This strategy can also mean taking vocational courses first under the ladderized education program.  Under Republic Act 10647, ladderized education:

 “refers to the harmonization of all education and training mechanisms that allow students and workers to progress between technical-vocational and higher education programs, or vice-versa. It opens opportunities for career and educational advancement to students and workers. It creates a seamless and borderless education and training system that will allow transfers in terms of flexible entry and exit between technical-vocational and higher education programs in the post-secondary school educational system;”
Whatever the strategy, we should make do with what we have and what fate has dealt us with. A dear cousin of mine sent me this awesome SMS, which I eventually posted on Facebook:

“Old man has 8 hairs on his head. He went to the Barber shop. Barber in anger asked: Shall I cut or count? Old man smiled and said: “Colour it!”
LIFE is to enjoy whatever you have with you. In fact we don’t need to count what we have & what we don’t have. WE JUST NEED TO COLOR WHATEVER IS GIVEN US.”
Life is full of color. Let’s keep it..

(Originally written by Efren Ll. Cruz, RFP at http://www.savingstips.com.ph)


Can Investing be Too Late?


These were just some of the questions posed at my latest appearance on ANC’s On the Money:
  • What would you recommend for retirees who have not saved up enough money?
  • Can retirees still make their funds grow in retirement?
  • Should retirees start a business after retirement?
  • Should retirees rely on their children to afford a comfortable retirement?
Alas, there are some questions that personal finance cannot answer in a positive or even sugar-coated way.  The long and short of it is that people will have a difficult time in retirement if they had not prepared for it years before retirement age.

The 20/20 rule is but a rough rule of thumb on retirement.  It states that if you want to enjoy a 20-year retirement period, you should start preparing for retirement 20 years before your planned retirement age.  While it does not have to be strictly 20/20, the rule states that the length of retirement should roughly equal the length of preparation.

Whether a person ends up with enough money or not on retirement age, he should not immediately give inheritance to his children.  He will need every single centavo of his retirement money not only to fund his cost of living but also to cover any emergencies, particularly those relating to health.
If a retiree’s money is inadequate, despite not giving out inheritance, he can do either or both of two things: a) reduce his standard of living; and 2) increase income.

Increasing income in retirement through investing in financial securities means that a retiree’s funds are enough to generate the needed income (on a guaranteed basis) to fund the cost of living even if it means spending down retirement money and not leaving inheritance for children.  But let’s face it, if a retiree’s monthly cost of living is Php15,000, he will need Php180,000 of income a year.  Assuming the prevailing net interest rate of 2.75% p.a. on a 5-year time deposit, this retiree would need investment funds of Php6.55 million (i.e. Php180,000 ÷ 0.0275), funds that cannot be spent down.
Setting up a business only in retirement is a dangerous thing.  Retirement money is last money.  Contrary to the gambler’s belief, last money can die.  A person can only rely on a business in retirement if that business was already existing and stable before retirement.

People should ideally not rely on their children for a comfortable retirement package as well because it will only lead to strife in the family. Children of retirees will probably be in that expensive life stage when they are setting up their own family while their parents reach retirement age.

The best solution is to continue working.  That means a person who is ill-prepared for retirement cannot effectively retire.

To avoid having to face this unfortunate solution, the alternative for those who are still to retire is to start retirement planning early.  How early?  I always say as early as a person starts to make money.  This way, time will be on his side.

(Article originally written by Efren Ll. Cruz, RFP at http://www.savingstips.com.ph)



10 Money Tips For Paris Travelers

Just recently, me and my fellow top financial advisors from Insular Life went to Paris for a vacation (to reward ourselves of the hard work we did last year). It was just an 8 day vacation, just enough for us to explore and enjoy Paris. We also had a chance to go to Belgium for one whole day to taste the world's famous beer, belgian chocolates and belgian waffles!

Here are some of my tips for first timers:

1. Maximize the use of trains and subways
In Paris, the train system is quite efficient. In fact, you can go to several of the famous tourist spots in Paris through the trains.

Further if you are travelling light you can use the train from the airport to your hotel!

2. There is power in numbers
As the old saying goes, there is power in numbers which is true even when travelling. Most of the tickets when bought for groups of ten or more give you significant discounts. I can remember when we went to the Palace of Versailles we had to ride a train to go around the large garden of King Louis XIV and if we buy the train tickets for groups of ten it was only 5 euros versus 7 euros! So what we did we befriended some of the tourists to get groups of 10!

Also in Paris the food servings are large. Use this to your advantage. Applying the power of numbers we normally do food sharing which reduces our food bill. There are restaurants that are not too expensive in areas outside popular streets so you may want to take a one quick stroll around the place you are staying.

3. Use maps and technology to your advantage
Maps are free in Paris you can get them at any metro train station. Be sure to carry a map with you always and ask for the large map with the key tourist destinations.

In Paris there are normally free wifis in Malls and Restaurants. If I need to walk around I usually use google maps and find a wifi connection to search the location. Once I have found the location I can now walk outside with just my GPS even if there is no wifi. This way I get to walk around and save on travel expenses!

Another technology you may want to consider is AirBnB. We personally saved on lodging costs because we used AirBnB. AirBnB is an application (find it in iOS app store or android google play) that allows you to rent an appartment at a cheaper cost than most hotels. The apartment we got had a kitchen and had several extra linens!

4. Pinoy Power
When you go around Paris you seldom see Filipinos. But, that doesn't mean that the Filipino community is not present. In fact, our driver is a Filipino referred to us by another Filipino tourist friend.

Sometimes it could be more beneficial if you will hire a van from Paris airport to your place of stay especially if you are travelling as a group and if you are carrying large luggages to and on your way back to the Philippines. This way you can share the cost of the ride and have no problems carrying your luggage.

Aside from touring us around Paris we also hired the van to give as a lift to Belgium and back to Paris. Belgium for me is a beautiful place especially when you love authentic belgian chocolates, belgian waffles and belgian beer. Should you need a van and a driver, I especially recommend Ronald. You may ask for a quote of his price by emailing him at megaviptransport@gmail.com or viber him at (+33) 0643707208.

5. Prepare For Your Meals
Food is quite expensive in Paris so you may want to cook food if your place of stay permits you. For us, we cooked our breakfast since the apartment we got through AirBnb had a complete set of kitchen items. All we need to do is buy grocery at night and store it in the fridge for use the next day!

Also, you may want to find a conveniece store which sells cheap bottled water. Drinks in Paris including water if bought in a restaurant would cost around 3 Euros convenience stores sell it at 1 Euros.

6. Tax Refunds
If you are a shoppaholic just like my friends, you may want to consider tax refunds on your purchases. To avail of a tax refund the total goods purchased in one store should at least total 175 Euros and must be purchased on the same day. Simply go to the tax refund section of the store and ask for a tax refund form by showing your receipts. These tax refund forms will be collected at the airport after you have checked in and will be exchanged for cash.

It is important that you make sure that you ask for the tax refund form on the day of purchase. When I was shopping at Zara I didn't know that you should avail of the tax refund on the day of purchase. We went back to Zara two days after for the tax refund and we were denied. Don't let this happen to you.

7. Use Time To Your Advantage
Most of the tourist spots in Paris must be scheduled in advance through an online booking. My suggestion is that you book in advance to insure you have a reservation and to avoid long lines through Skip The Line. We had a bad experience because we did not do an online booking. We were supposed to have dinner at the Eiffel Tower but unfortunately you need to have a booking 2 days in advance. So we just decided to line up in the Eiffel tower and just avail of the tour to the top without dinner. What a sad story.

Having an advanced online booking will also allow you to avail of discounts. If you wish to travel to countries outside France, there is a train that you can take for a discount if you book in advance. Think of it as booking a plane, the earlier you book the cheaper.

8. Souvenirs
Souvenirs are normally expensive when you buy it in areas near tourist spots. My suggestion is that you go around the area near La Fayette Mall. There are cheap souvenirs that you can avail there.

9. Fake Money and Scams
Be extra careful when dealing with street vendors. A friend of mine bought a souvenir at some street vendor (at that time we didnt know where to buy cheap souvenirs) and was given fake money as change. We only knew about it when we were already at the airport. So make sure you buy at stores not at street peddlers so just in case you are given fake money you can go back to them.

You should also remember that there are many pickpockets and scammers along the streets. The first incident was when a friend travelling with us went roaming around the city. She was approached by a girl carrying a pen and paper asking for a signature for donations. The girl was asking for money and my friend glady gave 10 Euros. However the scammer refused the 10 Euros saying that the minimum donation was 20 Euros. She refused but a host of guys circled around her and asking for 20 Euros she had no choice but to give the 20 Euros.

The second instance was when my friends were lining up in the subway when a group of girls tried to pickpocket one of my friend.

So my suggestion is that when you go around shopping and when you are buying branded goods, make sure that you carry another big bag to place the branded goods that you bought. These scammers have an eye for people who are carrying branded goods.

10. Bonus: Practical Tips
A. Sun normally sets at 9pm and shops normally close around 7pm.
B. Branded items can be bought at La Fayette and Champs Elysses
C. Food service charge is not billed automatically and tips are not customary in Paris but if your server is doing great you may want to leave some tip
D. Bring change especially when you will be using the subway. Subway station tickets are bought through machines and some machines do not accept bills.
E. When travelling in Paris you will most likely do a lot of walking so wear comfortable walking shoes.
F. Paris is a very beautiful place. Make sure you bring a powerbank because your phone will most likeky be drained by the beautiful sceneries.
G. A universal adapter will come in handly since their sockets are not the same as ours
H. Convenience stores cannot be easily found and shops normally open at around 9am so you may want to think about how you will get your breakfast the next day.
I. Doctors are expensive and most medications that we can buy over the counter in the Philippines must have a medication in Paris. My friend needed amoxicilin but she was told she needed a prescription from the doctor.
J. Vouchers normally need to be printed. I had an online booking for the Paris River Cruise and I was not able to print the voucher. They asked me for the print out but I pleaded that if it be possible I just email the voucher to them and they print it. I had to go look for wifi and email it to them. All the hassle had I just printed it.

Bonus: Mark's Favourite Tourist Places in Paris:

This is just my opinion but for me here are the best places in Paris:
1. Palace of Versailles
2. Eiffel Tower
3. Louvre Museum
4. Luxemburg Garden
5. Sacred Heart Church (Montmarte)
6. Notre Dame Cathedral
7. Bridge Just at the Back of Notre Dame Cathedral where lovers write their names on the lock and put the lock in the bridge and throw away the keys
8. Arc de Triumph
9. Palais de Chaillot
10. Champs Elysees

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