A Good Man Leaves an Inheritance to His Children's Children

As good parents we ought to try our very best to leave inheritance not just to our children but to our children's children. But, for that to materialised in the future, the first step I guess is to educate ourselves to become financially savvy as early as possible. One thing I learned so far is that time is really valuable if not the key for it to become reality. The early we are financially educated and is acting upon it the longer the time frame our savings will work for itself. Perhaps, you don't have an idea or confused of what I'm saying right now but, once you understand how compounding money works you'll appreciate more what is TIME in relation to savings. Have you known someone who just spend 1 year worth of their salary for one grand extravagant feast? Yet, not bothered about the expenses incurred because as he or she say, that 1 year worth of salary can still be earned next year. Well, I guess it's okay if:

(1) We have accumulated enough savings already, and that 1 year is just a pinch of our savings 

(2) We are young and our parents are rich and money is not really an issue 

(3) Our time in this world is counted, I mean what for is the used of savings if by few years we are gone anyway unless of course we're saving for someone else 

(4) Though not rich, but still young and still have few years to waste for foolishness. 

But, if we are just trying to make an impression and is not one of the mentioned above, who are we fooling? I guess ourselves. Being financially educated, we're supposed to realised that at least small portion of that 1 year worth of extravagant feast could have started growing or already have grown by now. 

What's my point? If we have learned to become financially savvy after throwing the feast at a very late stage of our life, we'll have no enough time frame for our savings to grow, this time around, time is against us no matter how we try. So, we end up depending on our luck (lotto and other alike) or we depends on our children's and perhaps their children's too. 

How does this relate to the subject? If we intend as parents to leave inheritance to our children's children, we better be financially educated and ACT upon it while time is still in favour of us. Otherwise, no matter how we try later on, like what I said, we'll either depend on luck (lotto) or perhaps the government (pension) or on our children itself or ALL. 

Read How to Manage Cashflow: Click here
Read The Importance of Emergency Fund: Click here

My Own Stock Strategy Plan, Do you have one?

1. Buy only company with good fundamental value.

2. Before buying and or selling, check the technical Indicators. As much as possible buy only when MACD is at lowest point or when just about to cross the line upward. And, sell when at highest point or when just about to cross the line downward.

3. Don't speculate that the stocks will further go up when MACD is at highest point, exit already, if it does go up further, don't ever feel regret. Be thankful. 

4. Likewise, don't speculate that the stocks will further go down when MACD is at lowest , buy it already, if it does go down further. Cheer up. Don't ever feel regret. Be happy still.

5. Remember, you cannot predict the future. If you buy and or sell at a wrong timing. So be it. Sometimes you lose sometimes you win, it happens. Be thankful always.

6. Remember 'The Sunk Cost Fallacy'

• Misconception: You make rational decisions based on the future value of objects, investments and experiences.
• Truth: Your decisions are tainted by the emotional investments you accumulate, and the more you invest in something the harder it becomes to abandon it.

For this reason be FIX, if your lose already at 10% and has no good news. Exit already.

7. If within months the strategy is not working. Think twice and come up with new strategy. Never feel regret that it did'nt work. Treat it as a learning experience.

-End-

What We Need to Ask Ourselves when Assessing our Cashflow Considering the Increase in Price of Goods in Philippines

Cumulative Inflation Rate In Philippines From DEC 2006

From this illustration, at least 5 question we have to ask ourselves when assessing our cash flow.

• If our cash inflow is based alone on salary and in reference to the day we start working, did our salary increases more than the rate of which the price of goods also increases? 
• From the day we decide to put our money in the bank, did it grow sufficient enough to compensate the cumulative increase also in price of basic goods? 
• In reference to the day we start investing, is it already earning more than the cumulative increase in price of goods from the day we start investing? 
• Did the net income of our other source of income such as business increases more than at least the rate of increase in price of basic goods? 
• What are the available investment vehicle today that can possibly outweigh inflation and compensate all other investment fees? 

Perhaps, by asking these questions when assessing our cash flow planning, we can project somehow the needed earning or cash inflow in order to compensate one of the unavoidable economic factor "The Inflation". Of course, it's not enough to just realized this fact, I guess the hardest part when we realize something is actually whether we act upon that realization. Otherwise, it is as good as just a stored knowledge.

Psychology in Stock Market

If I tell you what and why I bought the shares I have and, in return you also bought the same shares at your own accord and you tell your friends. Then your friends also did the same at their own accord and so on.

We and your friends are actually helping to raise that demands of that particular share (law of demand and supply), in return the market price of that share will likely increase. When the price do increase to certain point where its already profitable, likely someone who holds huge volume of shares will sell out, as a result that huge sell out will likely scare other traders/investors and they will do the same resulting to decrease in market price. When the market price of that share decrease and then with perhaps some good news or reports related to the stocks. Someone again will probably buy in huge volume attracting other traders/investor alike to buy, possibly pushing the market price higher again.

The cycle goes on and on. Perhaps this is one or the reason why the market price fluctuate. Those who can buy in huge volume will likely affect and possibly control the market price of that particular share.