I had a really wonderful weekend and one of the most memorable at that. :) prepared a surprise treat for my friend alan last friday night and the the boys had one hell of a party and then the next day my dad and i had dinner with mr colayco (author of “wealth within your reach”) and discussed things related mostly to business. :) we got mr colayco as our financial consultant for our business so the whole sunday my family and me were with him. To straighten out some things and to find solutions to some problems and on how to strengthen and protect the business and talk about things that are related to business. :) i really admire mr colayco because i always believe that the best solutions to solve problems are always the simple ones. :) he advised us on what course to take to solve some problems and the beauty is that he gave us simple answers to our problems. :) a very smart guy but he doesnt flaunt his intelligence or make you feel dumb when you talk to him. He is a very humble and helpful person. :) And what i like best about our talk was that somehow he made my dad believe that the stock market is not gambling after all! :) hehehe ive been trying to convince my dad and the rest of my family to invest in the stock market for almost four years already and i cant get through him but just one afternoon with mr colayco and now he is kinda open to the idea of investing in the stock market. :) and our talk with mr colayco further strengthened my resolve about value investing. And i will quote his words “dont mind the weather, know the climate” in other words think long-term. Dont mind the daily fluctuations in price and look at the prospects of the company of what it can achieve in five years or more. :) its just what i posted here around december i think. And im so happy that we both share the same sentiments. If you dont have any knowledge in stocks the next best thing to do is to invest in mutual funds. I believe he mentioned philequity (you guys should love me this is a free advertisement!). And we discussed the most lively part of our talk. How to invest your excess cash. :) and he suggested to put it in equities or in equity mutual funds and let the power of compounding work for you and leave it for as long as 30 or even up to 50 years. :) and i also did the math and our figures are not really far from each other. :) if you invest P240,000 in a mutual fund or stocks and add P12,000 every year for five consecutive years and just leave it and let the money compound here is what you will get.
At 12% compounded per annum. Your total cash outlay is P300,000
in 10 years you will have P850,042.65
in 20 years you will have P2,640,103.44
in 30 years you will have P8,199,760.54
in 40 years you will have P25,467,211.59
in 50 years you will have P79,097,293.59
at 20% compounded per annum. Your total cash outlay is P300,000
in 10 years you will have P1,708,221.73
in 20 years you will have P10,576,858.68
in 30 years you will have P65,489,121.14
in 40 years you will have P405,491,376.64
in 45 years you will have P1.008,992,302.32 welcome to the billionaires club
in 50 years you will have P2,510,695,725.72
at 21% compounded per annum. Your total cash outlay is P300,000
just to show you the difference what 1% could mean to your portfolio.
In 10 years you will have P1,850,814.71
in 20 years you will have P12,451,355.84
in 30 years you will have P83,766,495.80
in 40 years you will have P563,539,096.23
in 50 years you will have P3,791,209,241.23
can you see what a difference of 1% can do to your portfolio over time??? who would think that a difference of 1% in your portfolio would mean having over P1billion more in your portfolio after 50years. :) value investing works and compounding is a very good ally.
i wouldnt be surprised if mr colayco himself has a value investing portfolio with very good returns but he said that hes only into investing thru mutual funds. :) the key is patience and being able to detach yourself from the everyday happening of the market. I believe i wrote about an article about compounding around december of 2006 you could also read that if you like. :) and as mr colayco also said to profit from the stock market you should be able to take advantage of other people's mistakes. Buy when someone is selling cheap and sell if someone is buying expensive. :) in other words being a value investor also means being a contrarian. :)
a warrant of arrest was just issued to the two main suspects of the tan massacre in january last year here in iloilo. The two main suspects were the children of the father from his first marriage. This is really tragic and i hope that everything will be resolved soon and that truth will prevail. Let us be thankful for all the blessings we received. God bless everyone. good luck. :)