Hello dear readers. Thanks a lot for supporting my blog. You are my inspiration why I am dedicated in writing quality articles on this blog. Your emails and questions are helpful to me as I am motivated to help more people to be financially intelligent, to educate on how to manage finances, and to achieve financial freedom in the future.

In this post, I will post some reader emails that I got to educate other readers as well if they too have the same type of questions. The names are not complete so as to keep the privacy.

Reader Mail 1: Thank You Letter

Hello Tyrone. I’m Anne and one of your avid readers on your blog since the first one. It is a very nice blog and since I started reading it, I’ve been hooked on it. It’s really nice to know that someone with the same age as mine is already thinking on how to save money and become a millionaire. And that started me thinking the same way too. I have been curious about all these financial world, and started reading Rich Dad Poor Dad and all other books about investments. It’s kinda hard for me because I’m a nursing graduate and we’re not exposed to all these subjects, but because of your blog, I’m learning a lot and I’m thinking of going back to study. I’m here in Canada now and able to save money and start some investments. Thanks to you I now know how to handle my money here. Good luck on your seminar and hopefully I can meet you and thank you personally.

It was a pleasure Anne. Thank you very much for the appreciation. The seminar will be held tomorrow. I hope that I can meet you too.

Reader Mail 2: On Stocks

Hi Sir, I’ve been reading your blog since I started to become aware of my financial goals. During that time, the investment that I can afford was limited to time deposits. Thanks to your advice, I can say that I’m doing good.

However, I would like to borrow some of your time. I need your inputs about this matter.

I am now 23 years old. I am planning to buy a house and lot at the age of 28. I envisioned the house to have at least three rooms. I set a price of P3 million for my dream house and lot. In order to accomplish that goal, 10% of my income will be allotted to stocks. Every quarter, I shall buy the same stocks from my 10% savings and I am planning to hold it for 5 years. Based on my calculation, I’ll be needing 7% return annually for me to succeed.

First question: Is P3 million enough estimate cost for my dream house?

Second question: Can peso cost averaging in stocks provide me a return of 7%?

Thanks.

Thanks for your letter. Based on the data you provided, there are a lot of details that you did not provide.

First Question: Where is the particular location of the dream house you’re eyeing for? Different locations have different prices of course. You answered me that you preferred location is within Metro Manila. P3 million may be enough for some cities but it may not be enough for a 3-bedroom for some locations. With inflation rate increasing every year, definitely P3 million today is not the same P3 million 5 years from now when it comes to its purchasing power. Therefore, you must invest it in a type of investment that yields interest income higher than the yearly inflation rate. Furthermore, probably that time, the economic recession is already over and we can already see a rise in prices of real estate. So back to your question, is 3M enough already? I think it is for some locations.

Second Question: Peso cost averaging is a good way to leverage the rise and fall of stock prices. From what I’ve read, 7% yearly return on stocks is quite small. According to historical data, 10% is the annual average return of the stock market. So definitely, the answer to your question is a big YES. Just an advice: If you want to hold the stocks for five years, look for companies that gives constant dividends. These are called income stocks which I will discuss in my next article. Also, I would advice if you have enough time to monitor the stock prices, time the market by buying low and selling high. Sell the stock when the price appreciated at least 10% but if ever there was a declared dividend in the disclosure statements which can be found in the stock exchange or from your stock broker, hold it a little bit longer and get the dividend first before selling it.

Reader Mail 3: On Personal Finance

Hi Tyrone, I’m Faith. I’m actually one of your avid blog readers and I really find it very useful. Thanks so much for sharing all those financial stuff. Anyway, the reason why I emailed you is because I had a friend working in a publishing company asking me if I know someone adept at finance. Then I remembered you. So I was thinking if you could help her. I believe you’re too preoccupied with several commitments already, so if it’s alright from your end, I just copy paste her email message including her series of questions. Please see below:

Hi Faith! Thanks so much for helping me with my assignment. Just to give you an idea, what type of article I’ve been asked to write, I’ve made a short backgrounder.

Basically I’ve been asked to write for Moneywise section of the magazine, which gives advice to parents on how to handle their money wisely. I have to come up with a list of 25 “freeloaders” or tipid tips for parents, most especially moms. Suggested tips are availing of Mercury Drug’s suki card to get points per purchase, cutting out and collecting coupons which they can exchange for certain items, or joining Mommy clubs for discounts/freebies. But preferably the tips should be more creative; something new. I also need to illustrate just how important financial matters are nowadays and how it is crucial to seize opportunities when it comes to saving every last peso.

I need to interview two financial experts, to give credibility and added information on the situation of the country’s economy right now and consumers’ spending power and buying habits. In this light, I prepared the following interview questions for your perusal:

1. How would you describe the economic situation of the Philippines today?

2. How has this affected the purchasing power of consumers, particularly that of parents? What do you think have been the changes they’ve made, spending priority-wise?

3. What spending tips or advice do you have to give to moms out there? Are there particular promotions or services you recommend they can avail of that can help them get more value for their money? How effective are these? How will they help?

4. What do you think are the most important points to consider when pondering on a possible purchase?

Thanks so much, I really appreciate it.

Hi Faith. I will email you my answers if I got the time. Do I get paid here? Hehe… Anyway, it’s ok. I just hope at least that you will provide me a free copy of the magazine where I will be featured. Thanks for contacting me.

I just want to take this opportunity also to thank all the bloggers who voted for me in the Top 10 Emerging Influential Blogs for the project of the influential blogger, Ms. Janette Toral. I hope I can take a place in the top 10 despite stiff competition among a lot of bloggers. I also hope that you, my readers, could vote me for the 2009 Philippine Blog Awards.

Special thanks to Jay Castillo for the kind words he spoke about me. Thanks Jay! If you want to learn about real estate investing, Jay is the man!

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