Two Stamford Executive Residences - Update

It's more than a year since I got the Unit 6K - Two Stamford Executive Residences at Mckinley Hills and now the development works according to megaworld's plan. December 11, 2008 I received an email update regarding the construction status. Below is the email of the Marketing Assistant:

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Dear Sir/Madam,

We are pleased to inform you that as of 30 November 2008, the overall project accomplishment is 49%. Excavation and foundation works are complete for all towers. Concreting of Tower 1 is currently at 7/F. Current works include installation of formworks at 8/F, electrical roughing-ins and pipe sleeving at lower levels. Other engineering works are in pace with architectural and civil workds.

Megaworld Corporation

3/F Forbestown Center Showroom

26th St. Cor. Rizal Drive, Crescent Park West District,

Bonifacio Global City, Taguig

Simple idea on handling your Money

I just want to share this very simple and common sense idea explained by Francisco Colayco during his interview with Boy Abunda on Private Conversation. We as an employee who are striving to work everyday to be able for us to compensate our daily needs and other expenses should learn how to pay ourself first. Why think of buying expensive stuffs that will not give us a value? Most of us think of spending our hard-earned money to something that we think will give us an unnecessary pleasure. We often think of buying things even before we receive our salary. It's not bad to spoil ourself with expensive things but being conscious on where we put our money is the most important mindset that we should develop. Cited by Bill FitzPatrick the founder of the American Success Institute, "Separate your wants from your needs. You want to work for all you need, not necessarily for all you want. You do not have to sentence yourself to a lifetime of hard labor for the false trappings of status. Living on less can eventually yield much more. The simpler you make your life, the easier it will be to maintain. Think in terms of moderation. It is easier to buy things than to sell them. You can make a comfortable life for yourself by finding contentment in the things you already have and holding reasonable expectations."

I agree with that statement of Bill FitzPatrick. Now, let's get more into reality check, some of us are still young and capable to work hard to earn more money; some are now thinking of their retirement and health insurance plans. These two simple scenarios will not just happen to one person but to everyone. That scenario will repeat over and over again and will pass through our next generations. Basically, in life, young people turns to old. Avoiding ourselves to prepare for the future because we believe that we are still young is not a good mindset. That is why many people end up broke and realize their mistakes when they get old. They start blaming the circumstances of their misfortune. Why? you already know the answer. Absolutely, because they have already failed in their past and nothing to do now but to blame. That's the only thing they can do at their age. Handling our hard-earned money is quiet simple as long as we have a clear view of our goals.

4.6+% x 2, ROI in AsianLand Lot properties

My first ROI in AsianLand lot properties was formally announced on July 2, 2008. I received a confirmation email from the VP of AsianLand strategies, that the lot properties in Grand Royale Bulacan has been increased to 4.8% equivalent to Php 200 per square meter. Since I acquired 2 lot properties last year, my ROI can be considered as 4.8% x 2 in just 1 year. The figure below shows how the ROI calculated for each lot property:

ROI Computation:

AsianLand Grand Royale

1) Lot 1 - 96sqm

Purchase Price = Php 401,760

Current Value = Php 420,960

FY 2008 Increase = Php 19,200 (4.8% of the Purchase Price)

2) Lot 2 - 96sqm

Purchase Price = Php 419,520

Current Value = Php 438,720

FY 2008 Increse = Php 19,200 (4.6% of the Purchase Price)

Considering that this is just a lot property, an average of 4.8% and 4.6% annual ROI indicates that the location is in a well-developed area. Furthermore, Bulacan government is continuously doing reform to advance their economy as compared to other provinces. Some of their development plans are: 1) Sustainable economic development, 2) Efficient delivery of health and social services, 3) Youth Cultural and Historical development and 4) Peace and Order. Achieveing these objectives will lead to the fast economic growth of Bulacan.

14.8% ROI in Megaworld

As per the Philippine Star Newspaper issue on June 1, 2008, Andrew Tan, chairman of Megaworld said that the company remains bullish on the prospects of the real estate sector despite of the economic slowdown. "Real estate remains a preferred asset class to hedge against inflation," he added. To cope with rising construction costs, the company will raise prices by 10-20 percent effective August 1, Tan Said. Megaworld senior vice-president Kingson Sian said the company normally increases its prices every year albeit at a minimal rate. On August 1, 2008, the 30 sqm Condo unit at Two Stamford - Mckinley Hills that I acquired last year has been Increased.

Now, I'm happy to say that my ROI (Return On Investment) this year was 14.8% equivalent to Php 318,800.

ROI Computation:

Purchase Price = Php 2,145,200

Current Value = Php 2,464,000

FY 2008 Increase = Php 318,800 (14.8% of the Purchase Price)

Curiosity meet Mutual Fund

As my passion in investing started to explode, my curiosity about mutual fund investment turned to a maximum level of excitement. I made different research on what mutual fund is all about, what are the different types of mutual fund to consider and how will I get benefit from it. I've read the book "Investor's Business Daily" written by Bill O'neal, he is one of the best-selling authors featured in Wall Street Journal and New York Times. I was able to understand the basic terminologies like "Buying" means investing a certain amount for a number of shares, "Selling" means when you withdraw the amount you invested.

Mutual Fund is simply a financial intermediary that follows a group of investors to pool their money together with a predetermined investment objective. The mutual fund will have a fund manager who is responsible for investing the pooled money into specific securities (usually stocks or bonds). When you invest in a mutual fund, you are buying shares (or portions) of the mutual fund and become a shareholder of the fund. Mutual funds are one of the best investments ever created because they are very cost efficient and very easy to invest in (you don't have to figure out which stocks or bonds to buy).

Last year, I decided to buy a share from Philam Asset Management Corporation amounting to Php 10,000 for a NAVPS (Net Asset Value Per Share) of 9.20. I got 1,034 shares. Aside from that, I applied for 5 months Php 1,000 mutual fund to accumulate my number of shares. I chose the "Balanced Fund Type" of mutual fund because it combines a stock component, a bond component and, sometimes, a money market component, in a single portfolio. Generally, these hybrid funds stick to a relatively fixed mix of stocks and bonds that reflects either a moderate (higher equity component) or conservative (higher fixed-income component) orientation. This type of mutual fund is geared toward investors who are looking for a mixture of safety, income and modest capital appreciation. The amounts that such a mutual fund invests into each asset class usually must remain within a set minimum and maximum. I really like the mutual fund game and it is a good long-term investment.

Acquiring my third Investment

In December 2007, I noticed the continuous growth and development programs in Bulacan government. At that time, I negotiated with Asian Land Strategies Corporation to have my second lot property in Grand Royale Subdivision. I was able to acquire another 96 sqm lot property. The contract price was Php 419,520. Same payment mode with the first lot property that I acquired last July 2007, I paid the amount of Php 10,000 for the reservation fee and 20% downpayment which is payable in 30 months at Php 2,463. I also applied the 80% remaining balance to in-house financing. Because it was my second time to have the property in Asian Land Strategies Corporation, I was asked to become a part-time Agent. Moreover, I was nominated and won as International Real-estate Partner. One of the benefits I received was a percentage amount discounted to my first lot property.

Acquiring my second Investment

Bulacan is among the most progressive provinces in the Philippines. Its people are highly educated, enterprising and industrious. It is well-known for the following industries: Marble and Marbleized Limestone, Jewelry, Pyrotechnics, Leather, Aquaculture, Meat and Meat Products, Garments, Furniture, High Value Crops, Sweets, Native Delicacies, and a wide variety of high-quality native products. Bulacan has fast become an ideal tourist destination, owing to its vital role in Philippine history, and its rich heritage in culture and the arts.

In July 2007, I visited the Office of Asian Land Strategies Corporation to inquire about the on-going projects and check the site location. (Asian Land Strategies Corporation was established in April 1994 by a small group of entrepreneurs from Bulacan to cater to the low-to-medium-cost housing that was slowly growing in the Northern part of Luzon, Philippines). This time, I was able to acquire my second investment property. A 96 sqm lot area in Grand Royale Subdivision. The contract price was Php 401,760. I paid the amount of Php 10,000 for the reservation fee and 20% downpayment which is payable in 30 months at Php 2,345. The 80% remaining balance is subject to in-house financing. Again, I considered this lot property as my long-term investment.

Acquiring my first Investment

I started to make some research about real-estate invesment last 2005. I've read different books that teaches on how real-estate invesment work, how to find a highly profitable property location and what are the fundamental approach on acquiring properties.

In April 2007, I decided to implement what I've learned and that's the time I acquired my first investment. I personally visited the Office of Megaworld Corporation at Forbes Town Center, Fort Bonifacio Global City to inquire what are the available projects, overview of the project plan, projected annual inflation rate, contract price and mode of payment.(Megaworld is one of the leading real-estate companies in the Philippines and has been recognized for transforming Manila's urban landscape through its various property developments).

After studying the projects that was presented to me, I chose to get a pre-selling condo unit at McKinley Hill - Two Stamford. Mckinley Hill Village is located in strategic location at Fort. It has an accessible road going to C-5, Makati, Ortigas and 15 minutes going to Airport. Composed of 50 hectare development which concept is a sustainable community. Mckinley Hill will rise the EnDeRun (Swiss Culinary School), German International School, Chinese International School that is operational already, British Embassy and a mall called Venetian in which concept is like in Europe.

The contract price was Php 2,145,200. I paid the amount of Php 25,000 for the reservation fee, no downpayment, starting at Php 10,000 monthly payment and annual lump sum of Php 100,000 for 4 consecutive years. Then, the remaining balance is subject to Bank financing. The turn-over of the unit will be on 2011.

Since I am always looking for a long-term goal of investments, I found this as one of the affordable and highly profitable properties in the Philippines.

Forecast your Expenses

The above figure shows my forecasted expenses for the year 2008. I can easily track my expenses against my savings by having a clear report of how much do I need to spend for the succeeding months.

Save for the Charity

In this figure, I simply illustrated my savings goal for the Charity program. As a member of Kerygmafamily headed by Bo Sanchez, I personally decided to allocate part of my monthly income to share some of my blessings to the abandoned people in the Philippines.

Simply manage your Personal Savings

As shown from the figure above, that is my personal savings goal for the year 2008. I usually project an estimated amount of how much should I deposit to my savings account every single month. I have an inventory to check if I hit the estimated amount and regularly update my excel report. By simply doing this, I can easily track my annual personal savings goal.