Everyday Household Items that are Beating the Stock Market

I’m suffering from the Lost Decade Mood Disorder (LDMD) this week. LDMD occurs when index investors come to the realization that they gained almost a mere 3%, betting on the S&P 500 over the last ten years. That’s before inflation, mind you. The more commonly known symptom is retiring much, much later in life, but I’ve developed something new: finding weird investments that could have earned me a greater return than the market.

Weird Investments

Photo by MallyDally

Movie Ticket Vouchers

Last week, my wife and I located some free movie ticket vouchers that we’d received from an unpleasant movie theater experience 5 years ago. Let’s just say our box of popcorn and some used gum was involved. Standing in line I noticed the price of a ticket these days (we haven’t been to the theater in 3 years) and was astounded at the cost. It made me wonder what my return would have been if I bought movie ticket vouchers 10 years ago and sold them today. According to the National Association of Theatre Owners, the average price of tickets rose $2.50 from 2000 to 2010; a return of 46%.

Forever Stamps

Debuting in 2007, the forever stamp was a new creation from the USPS. Given the propensity of stamps to continually increase in price from year to year, the snail mail barons decided to give letter senders an option to buy stamps that would appreciate with regular registered mail prices. The first forever stamp sold for $.41. Flash forward to today and the USPS is bumping up the price to $.45. A change of four cents sounds small, but in return it amounts to 9.75%.

Nickels

Thanks to the appreciation of scrap metal, scrapping your five-cent piece was more profitable than spending it ever since 2006. Back in March of 2011, scrap nickel bought at about $.07 a nickel. That’s a return of 40%. Of course, there is that whole problem of it being illegal to deface currency and all. Realizing returns would require an act of congress and who thinks legislation will be passed anytime soon?

Jewelry

Your wedding ring is doing much better than your retirement funds. Jewelry is an obvious pick as a household item that appreciates. Right now, everything related to jewelry is providing good returns these days.

Gold is trading up over $1,800 an ounce. Diamonds increased in price by 7% just last year alone. The CPI for all jewelry is inflating into the double digits.

Of course, I don’t recommend investing in any of these items. However, it does make me wonder if I’d only put my money into movie ticket vouchers instead of a 401k, would I be looking at an early retirement?

25 Business Success Secrets to Learn From Rich Filipino Entrepreneurs

Success in business comes out with secret sauce.

I’ve just read 25 Success Secrets of the Country’s Richest featured in Entrepreneur magazine October 2011 issue written by Peter Imbong. I’m fascinated with the experts opinion from respected business guru Dan Antonio (president of the Asian Center for Entrepreneurship and Management Education), Wilson Lee Flores (my favorite business journalist of Philippine Star) and Edgardo Rodriguez (dean of the College of Business of Endurun Colleges) on what success factors these Rich Filipino entrepreneurs have that brought them to the helm of business success. Successful entrepreneurs mentioned are Edgar Sia, Tony Tan Caktiong, Henry Sy, Jaime Augusto Zobel de Ayala and Fernando Zobel de Ayala, John Gokongwei, Jr., Betty Ang, Lucio Tan, Enrique Aboitiz, Luis Virata, Eugenio Lopez III, Andrew Tan, David Consunji and Felipe Gozon

I’m sharing you the 25 Success Secrets of the Country’s Richest here. Please read it below…

1. Start with a great idea
Examples: Edgar Sia II and Tony Tan Caktiong
Edgar Sia II started Mang Inasal and Tony Tan Caktiong started Jollibee

2. Build a strong brand
Example: Edgar Sia II
Edgar Sia build Mang Inasal as a strong brand even if it’s very young at less than a decade.

3. Hire the best people and treat them well
Examples: Henry Sy Sr. and children
Henry Sy and children through its SM Group hire the best people and pay well to make sure the company continues to be run well.

4. Don’t be afraid to go your own way
Example: Henry Sy Sr.
Henry Sy developed his owned shopping centers (SM Malls) instead of becoming a tenant.

5. Take it to the next level
Examples: Jaime Augusto Zobel de Ayala and Fernando Zobel de Ayala
The Ayala clan’s main business is real estate but they are now heavily venturing into information technology especially in Globe Telecoms.

6. Diversify your business
Example: John Gokongwei, Jr.
John Gokongwei, Jr. Started in food processing (Universal Robina Corp.) then established supermarkets and department stores (Robinsons Supermarkets and Department Stores), build SUN Cellular and investing heavily in low-budget fare Cebu Pacific.

7. Don’t be afraid to become a second mover
Example: John Gokongwei, Jr.
John Gokongwei, Jr. Loves to offer an alternative from the number 1 company offering products and services like in telecommunications (Sun Cellular) and real estate (Robinsons Land)

8. Politics and business don’t mix
Example: John Gokongwei, Jr.
John Gokongwei doesn’t like being very close to government. Because according to him, wealth that’s based purely on politics cannot be sustained.

9. Create a product that could rule a market
Example: Betty Ang
Betty Ang established Monde Nissin the producer of Lucky Me. Lucky Me instant noodles with chicken and beef flavor dominates the entire noodle industry.

10. Be a good manager
The country’s richest entrepreneurs and business people capitalize on their strong points, then hire the talents to address their weak points.

11. Learn people skills
Examples: Lucio Tan and Henry Sy Sr.
People like Henry Sy and Lucion Tan don’t have graduate degrees but they become successful entrerepreneurs and pillars of Philippine business. They learned to have people skills, how to deal with people, manage business and acquire leadership skills.

12. Run your business like a business
Examples: Enrique Aboitiz, Luis Virata, and Eugenio Lopez III
Enrique Aboitiz, Luis Virata, and Eugenio Lopez III, who inherited wealth, debunk the particular theory that “while the first generation builds wealth and the second generation sustains it, the third generation spends it.” With their professionalism and management skills, they keep their inherited business, grow it and  nourish it.

13. Think outside the envelope
Examples: Henry Sy Sr., John Gokongwei Jr., and Andrew Tan
Henry Sy Sr., John Gokongwei Jr., and Andrew Tan think outside the envelope because they started their businesses from scratch. There’s no baggage and no tradition to follow.

14. Keep your friends close but enemies closer
Example: Tony Tan Caktiong
Fried chicken is Jollibee’s number one selling product. And because Mang Inasal’s chicken inasal grabbed a big portion of Jollibee’s fried chicken market, Tony Tan Caktiong bought majority shares of Mang Inasal to kill off the competition.

15. Target the bigger market
Example: Henry Sy Sr.
Henry Sy Sr. positioned his retail brand by targeting the lower socio-economic segments. He built his SM Mall brand targeting the general population where we can shop, dine and entertain.

16. Support other brands in a big way
Example: David M. Consunji
David M. Consunji’s DMCI Holdings is a big time developer contractor. It become the preferred contractor because it gives high-quality service and provides competitive prices.

17. Learn to ‘play dirty’
Dealing with dirt is a necessary element in the business world. The way you should look at dirt is the way those in the real estate industry look at dirt – it’s a component of whatever you construct. You either make it prominent, or you hide it. But you have to deal with it, one way or the other.

18. Look to other industries
San Miguel Corporation’s traditional business is in the food and beverage industry but it is now heavily investing in other industries like mining, power and banking.

19. Be hands-on
Example: Felipe Gozon
Felipe Gozon is a hands-on entrepreneur CEO. Everyday, all sales departments report to him and all TV programs report ratings to him. Also, every month, he eats with his employees and talks to them about the company. He is more aggressive, more entrepreneurial and have better management skills.

20. Give back
Examples: Zobel de Ayala family, John Gokongwei Jr., and Lucio Tan
What is success in business without sharing the profits? Nothing! But Zobel de Ayalas have always given emphasis to corporate social responsibility. John Gokongwei donates his money in a businessman-like way. He gives money to schools like Ateneo de Manila and De La Salle University, institutions that know how to use it. And Lucio Tan also donating to hundreds of public schools around the country. These rich entrepreneurs maybe get the cue from Bill Gates and Warren Buffet,  the two richest billionaires and well-known philanthropist in the world.

21. Be a whole-brainer
Successful business people are actually whole-brainers, who keep in mind the three O’s of business. Originating ideas is a creative activity, and therefore very right brain. Organizing straddles the middle. And Operation uses the left brain.

22. Love what you do more than what you earn
Examples: John Gokongwei Jr., and Henry Sy Sr.
Self-made entrepreneurs like John Gokongwei and Henry Sy love what they’re doing more than they love the money. John Gokongwei has retired from this official functions and title but still remains active in JG Summit. And Henry Sy still enjoys doing business and will probably never retire even at the age of 90.

23. Get the ‘immigrant drive’
Chinese immigrants or of Chinese descent have the immigrant drive. They have the drive to succeed and were risk-takers.

24. Think about an IPO
Initial Public Offering is one way to pressure you to perform even better . It gives access to more capital, and banks become more willing to lend even more money for business expansion.

25. Know when to let go
Example: Enrique Aboitiz
Enrique Aboitiz Sr. used to be in the shipping industry. Now, Aboitiz & Company has diversified into power, construction, banking, and real estate. Aboitiz knew shipping wasn’t going to be okay (so many Superferry debacle), so he sold it and kept the business that looked good and will grow.

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Merchant Cash Advance: Financing Small Businesses Without Hassle

Food business owners especially restaurant owners really need urgent financing so that they can respond to market changes, stay ahead of the game and continue invest in the growth of their food business. But even if new restaurant owners have a good idea and laid out profitable restaurant business plan, many banks are hesitant to grant business loans. Why? Unlike other non-food businesses or retail businesses, restaurant business has high failure rate. This is a big reason why many banks don’t like doing restaurant financing especially those who have low credit scores.

Getting funding from a bank can be difficult for restaurant owners because of the strict requirements they impose upon potential borrowers. Banks require that restaurant businesses pledge serious collateral or have a high credit score in order to be approved for a loan.

Best Alternative Financing Solution

Small business owners who are in dire need of financial help but can’t get business loans from the banks can apply for financing assistance from merchant cash advance companies. These companies are willing to extend merchant cash advance that can be used at your discretion. It can be used to quickly open a restaurant business, finance business cash flow, buy new kitchen equipment, dining utensils and appliances, expand restaurant area and others, as long as it will help in growing the business.

Applying for a restaurant advance from mechant cash advance company is a guaranteed way to see restaurant business grow and to provide cash needed to take the business to the next level.

Cash advances (also known as credit card factoring) can really help restaurant business. If food service business already has been open for at least 6 months and accepted credit cards, they are already qualified to apply to receive this type of funding for their business. They can still be approved even if they have bad credit. The cash can be given usually between  4 and 7 business days but sometimes even less.

Restaurant advance is easier to obtain compared to a restaurant loan because restaurant owners can substantiate their ability to pay back the advance by handing over their credit card sales history as essential collateral to their future transactions. They will need to have a decent credit score, but not nearly as perfect as it must be for a bank loan. Repayment will be tied directly to their restaurant’s future merchant account transactions as a percentage of credit card sales brought in each month.

Easier, quicker and more suitable for a new business, a merchant cash advance may be the ticket to help restaurant business down the road to success. Gone are the days of waiting weeks for the bank to tell you your applications was rejected. With merchant cash advance, you can get the capital you need easily, quickly and without the hassle.

With these, restaurant owners need to start using their merchant credit card account to start building credit card transactions so that the credit card machine will become a tool to easily get quick money for any financial need that may arise in growing the restaurant business.

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Personal Finance Education: Free YouTube Videos to Grow Your Money

HAPPY NEW YEAR to All! It’s great to start the promising year learning personal financial tips from the expert via free videos you can download or view online. These personal finance education free YouTube videos were brought to you by Mr. Francisco J. Colayco, entrepreneur, businessman, financial adviser and video-sharing website YouTube owned by Google. Mr Colayco shares his expertise in personal finance and investing with these 10 videos also called Ten Commandments on Personal Finance.

Commandment #1: Pay Yourself First.
Income – Savings = Expense
Savings should not be the other way around which is Savings = Income-Expense. Use the 80/20 Rule and pay yourself first. Set aside 20% of your monthly income for savings. This will go a long way. Use only the remaining 80% for expenses.

Commandment #2: Define your Financial Target at Each Phase.

People go through 4 stages in his financial journey:

1. Start up Phase – All your income comes from active income (personal effort/sweat).
2. Build up Phase – 20% of income comes from passive income
3. Fine Tuning Phase – Income comes from 50% of passive or investment income.
4. Retirement Phase – All income comes from passive or investment income already.

At each stage, define your financial goals! Make a balance sheet and define your assets and liabilities. Remind yourself of your worth everyday. Each year, aim for your assets to increase.

Commandment #3: Stop Spending on Things that Decline in Value.

Invest on Things that Earn for you! Every asset should be an earning asset!
Sometimes we tend to splurge our earnings on things like cars which depreciate in value over the years or buy land which is of no use to us at the moment. This should not be. Although land may increase in value over the years, idle land, is actually an expense for you because of the taxes that you will be paying every year. And If you really need a car, just go for something within your means.

Commandment #4: Protecting Your Greatest Asset: Yourself.

We must have financial fall backs during emergencies. First, insure yourself (Life Insurance and Health Insurance). Not for yourself but for the love ones who you will be leaving behind but are dependent on you. Next, get a Health insurance. This time this is for yourself. Third, develop your spiritual health. This will bring you peace of mind. Lastly, continue developing yourself. Knowledge is power.

Commandment #5: Grow with the Economy and Beat Inflation.

There are 2 ways to beat inflation. First is to earn more than the inflation rate. Second is not to buy products that increased in price greater than the increase in your income. Aim to earn 2-4% greater than your countries inflation rate.

Commandment #6: Trust the Power of Compound Interest.

When we save, do not be tempted to use your earnings for personal use right away. Instead leave the earnings, learn to roll it, let it earn through compounding.

Commandment #7: Assess risks and option: the higher the return the higher the risk.

Some financial institutions offer super high returns which are unattainable at times. Beware of these as they are more likely to be a scam. Remember: The higher the returns, the higher the risks!

Commandment #8: Make Money Work For You – The Power of Leverage

Sometimes borrowing money is not bad if you know where to use it. A debt is good if you are able to invest this and earn more than the interest rate of the debt. Just make sure to pay back on time so as not to increase your debt because like your savings, your debt can also compound in interest.

Commandment #9: Invest and Diversify

Start investing to earn passive income such as stocks, mutual funds, bonds, real estate or online real estate. Take note though that what may work for others may not work for you. Then learn to diversify. Don’t put all your eggs in one basket. Diversifying makes your portfolio more stable in such a way that if one segment drops, your other investments can pull you up.

Commandment no. 10: Use the Power of ONE: Strength in Numbers

Join cooperatives, organizations, or associations that have the same financial goals as yourself. These organizations can help you earn more especially if you only have a little amount to invest. Some organizations offer fund pooling so the group can invest in less riskier but with higher return investments. Find one in your neighborhood now!

Francisco J. Colayco, Ph.D., is an entrepreneur, a venture developer and a financial advisor. He is also the Chairman of the Colayco Foundation for Education, Inc. Other than performing advisory services to business and professional organization and individuals, he takes the lead in educating the general working class, OFWs and students on how to manage their personal finances. His advocacy is further exemplified in the books he has written: Wealth Within Your Reach. Pera Mo, Palaguin Mo! Consistent bestseller in 2005 and 2006 and won the 2004 National Book Awards in Business and Economics. Making Your Money Work. Pera Mo, Palaguin Mo! 2. A consistent bestseller in 2006 and nominated in the 2005 National Book Awards in the business and economics category. Pera Palaguin Workbook, written together with Dr. Helen Valderrama is also a consistent bestseller in 2006. He has recently written Money for Kids. Pera Mo, Palaguin Mo! A Parent/Teacher’s Guide to Financial Literacy for Kids together with Dr. Nina Yuson Lim.

Mr. Colayco’s over 40 years of working experience covers service contracting in the Middle East, manufacturing, trading, construction, shipbuilding, management consulting, banking and financial services. He was conferred a Doctorate in Humanities Honoris Causa by the National University. He holds degrees in AB Economics and Masters in Business Management from the Ateneo de Manila University.

Hope these personal finance education free YouTube videos will give you lessons on building wealth, investing and realizing your financial goal to financial freedom.

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