How to retire rich.final copy

HOW TO
Retire Rich
Yourno-frills guide to financial planning
Ramon Unas

TABLE OF
CONTENTS
Introduction
About the Author
Chapter1: The Early Roots on Money Management
A Culture of Saving
The Rules of Thumb of Saving
The Pyramid of Financial Planning
Chapter2: Talking About Retirement
Sample Expenses
Alternative Retirement Plans
Entrepreneurship: Additional Source of Income
Chapter3: Investments
Stock Trading
Mutual Funds
Insurance
Healthcare

TABLE OF
CONTENTS
Chapter4: The Financial Ways to Live By
The Do not Live Beyond Your Means
Keep Learning
Look for Opportunities
Chapter5: Retirement Plan in Action
Sample Plan
How to stick to the Retirement Plan
Chapter6: Conclusion
God Helps Those Who Help Themselves

Introduction
Money is not something to be taken lightly. It is a difficult
discipline that stems from early literacy of financial matters,
experiences, inspiration and a lot of prayers.
Kudos to those who have managed to save at this age.
Impressive if you have a family that imbibes in the culture of money
smarts. Sadly, not many Filipinos have money smarts, not because
we do not have the brains to be so, but because we are hindered by
a lot of misconceptions in our culture. I am very happy to say that
these times are calling for money-savvy citizens.

As you make your financial roadmap, know that it is going to
take a lot of you. It will be difficult but I promise you, it will be very
rewarding.
Let me take you to the 4 elements that I believe will bring you to
a financially rewarding situation once you retire: these are the early
learning, experiences along the way, the people you learn from
hence your inspiration and God, who will be your divine guidance
and inspiration for the times that may seem bearish when you
need bulls in the economy or in your life for that matter.

Through the course of this eBook, you will find that you
can relate with these elements to fulfill your financial
goals. Let me give you a briefer.
1. Start learning now, the earlier, the better.
Young minds are able
to absorb more
information, making
learning easier. But what
if we do not belong to the
category of being young
anymore? Then you
should start NOW.
Ideally, the more time you
have to build your
financial portfolio, the
better. Acting now is way
better than not acting at
all.
2. Yourexperiences will define you.
Through your journey, you will experience a lot of things. There
may be downsides but there will also be positive ones. The same
goes for your financial goals. As you reach for these, you will stumble
along the way but will be lucky in some. Use these to fortify what you
want to achieve. Should you lose, use these experiences to create
better, well-informed decisions. If you win some, share your
experiences and pay the goodness forward. There is nothing more
rewarding, you’ll find out later on.

3. The people you surround yourself on financial matters will
become yourinspiration, yourmotivation.
4. God, above all else.
This should probably need no explanation but I wanted to share
my experience with having God lead me to a wonderful financial
complacency. The world is a volatile place, and because of this, the
more that you need a calming presence to lead you through
confusions and sidetracks.
Find a financial inspiration. If you cannot afford a financial consultant,
you can read up and educate yourself. It is better to do things when you
know and understand how it works. The world is full of information with
just a click on your computer. Use this advantage to find someone you
can emulate. Find your own Warren Buffet, Rick Warren, Richard
Branson, Bo Sanchez, Tony Robbins and so on. The point is, to learn
from a different perspective.

AUTHOR
His aim through this eBook, is to educate, share his knowledge with
others to achieve financial freedom upon retirement. He believes that
time is of the essence; the earlier one starts to prepare, the better.
However, through this eBook, everyone can benefit from financial
literacy towards their financial goals. To him, financial literacy is key to
retiring rich. Having been to places and meeting different kinds of
people, he realized that it is through empowering oneself with the
necessary tools that brings one to achieve financial success.
Join him as he ventures into the financial world – a world for
everybody.
Ramon Unas is an Overseas
Filipino Worker (OFW) since
December 2003 working as a
commercial airline pilot. Being an
OFW, he shares the sentiments of
countless fellow OFWs who endure
the difficulty of being away from their
family to provide financial support.

A family culture of
saving
As parents, we imbibe different values in our children. This is
probably the hardest task for a parent. We try so hard to ensure our
children’s future by sending them to good schools, providing the best of
things they need on a daily basis, all the things we think will help them
prepare for the life outside their comfort zones. But despite these, there
are lessons that teachers do not teach at school. It is up to us, as their
parents to fill in these gaps.
One of these gaps is the lesson on money. Before proceeding,
there are two things that we should keep in mind. First is that kids’
minds are malleable, they easily digest information; second, children
learn best when they emulate. With these two characteristics, use
these to start teaching.
More than our kids, it is also important that they take their financial
journey with us, their parents. This means, walking the talk, practice
what we preach. That way, our kids learn through the culture that we
create as a family.

The earlier the better. You will hear this many times over in this
eBook. Many families let their kids learn money matters on their own.
This may work for some kids, but not for others. In any case, here are
some pointers you might want to take to create that financially savvy
culture.
1.The value of “money”. Our children need to understand that money
has a value and not to be taken for granted.
2.The value of routine. From the time they were born, children thrive
on routine. They depend on routine to teach them about their
surroundings. They need routine in order to branch out on their own
to create their own routines. For adults, routines come in the form of
bills payment. These occur at certain times in a year. When you teach
them the value of creating a routine, they can start to understand
dependencies. For example, paying for their tuition fee, either on
installment or full, at certain times, will be weighed through its
benefits.

3. The value of rules. By the time they are old enough to handle
money, some parents give out allowances. Let them understand that
there are rules when handling allowances. Along with the rules are
responsibilities that they need to look out for like their own babies.
Teach them the “If-Then” mindset, “If you buy this, then this is what
happens”. Teach them the cause and effect, so they know the
consequences of their financial decisions.
4. The value of earning on their own. Having kids work to earn
their own money during summer breaks is one way to teach your kids
many things, one of which is about money. Let them feel the joys of
reward through hard work. You don’t need to work them to the
ground, mind you. You can either give them a job such as cleaning
garages, garage sales or have them look for work in the
neighborhood such as washing cars, delivering the paper, tutoring
and many more.
5. The value of priorities. Learning
prioritization is no easy feat. Even adults
get this messed up sometimes. This is
why teaching prioritizing at a young age
is an advantage because they will know
that there are more important things than
others. This is especially a difficult stage
because kids tend to “want” everything.
But teaching them that they can have
things they want by order of importance
will enable them to later on distinguish
wants from needs. This has become a
common scenario in an OFW household,
where parents substitute wants for
presents.

The Rules of Thumb
in Saving
When we were kids, we were given piggy banks so we can save
some of our “aguinaldos” (money gifts) from “ninangs and ninongs”
(godparents). These piggy banks were crude then, from coconut shell,
empty glass bottles, make shift bamboo to baskets, it did not matter as
long as a peso would fit, it will do. This might be something you might
want to do with your kids or pose as an anecdote to get them saving.
But today’s saver has the luxury of technology and banks have since
then made some adjustments in their savings portfolio so kids can also
save. Once you start earning your salary, some follow a certain rule of
thumb, so to speak, on how much to save after getting your monthly
salary. Some would say 10% is enough, others would insist you save as
much as 20% of your salary. But there is really no specific rule that you
need to follow. These are more of a guideline than a rule, to get you to
set aside money for future expenses.
I especially like this recent article on Forbes that says that
how much you save will be according to your circumstance. It did not
say that you need to save 10 or 20% of your income. It simply states
that you need to save on a consistent basis. Consistency is key.

However, should you need some nudge, here are different ways to
look at how much you need to save at whatever age and stage you
are in at the moment you are reading this eBook.
1. 50/20/30 rule – The 50/20/30 rule is divided into three
categories: fixed costs, financial goals and flexible spending. Fixed
costs are your expenses that do not vary on a scheduled basis. If
there are variations, it will be very minimal and negligible. These are
your monthly rent, utilities, transportation costs, subscription bills.
Fixed costs should not exceed 50% of your monthly income.
Financial goals are your foundation to financial freedom. These
goals go from short to long term. According to this rule, you should
commit to save 20% of your income.
Lastly, your flexible spending category is for your daily expenses.
These vary greatly. These are your food allowances, entertainment,
groceries, dining out. In short, these are your “wants”, that are not
necessarily a “need”. Thirty percent is the advisable portion for this
category and no more than that.

2. 10% rule – This is probably the most traditional rule but also
the most specific. The ten percent savings is aimed towards your
retirement. Ten seems too small but at least this rule gives you a
specific number to work on. However, this is not for those who want
to be aggressive about saving or even for those who want to retire
earlier than the retiring age of 65 years old.
3. It depends – This rule is entirely based on what you want to
achieve at a specific age. It does not necessarily have to be your
retirement age. But this rule is also in conjunction with what we have
read on Forbes. In this article, you will find a workable worksheet to
help you compute according to your circumstance.
It all boils down to your objectives. How much money do you want
to have at 65 years old? When deciding, begin with the end in mind,
then work backwards to come up with the steps to accomplish these
goals.

The Pyramid of
Financial Planning
While at a Facebook group page, somebody posted a pyramid of
financial priorities. Upon further research, there are different financial
planning pyramids by different providers.
PROTECTION
SAVINGS
GROWTH
RISK
Debt Reduction, Emergency Funds, Disability Insurance, Life
Insurance, Regular Savings
Retirement Savings Plan, Home, Mutual Funds
Stocks & Bonds, Mortgage
Tax, Real Estate
The Financial Pyramid courtesy of
The Financial Highway
If youlookat yourfinancialpriorities
this way, thenyouat least havea
goal inmindandunderstandthe
steps youneedto take. Let’s us take
thepyramidonebyone.
“
“

Level 1 – Bottom Level – Protection
The bottom level speaks of unforeseen events that we need to
prepare for. It is called Protection because it is simply for that
objective that we need to consider this. It is the widest stage in the
pyramid because we need to build up before moving on to the next
stage. In this stage, we need to think about the debts to pay off
such as mortgages, personal loans. This is also the stage where we
need to build our emergency funds for unforeseen circumstances
such as calamities, accidents or retrenchment. In conjunction with
the emergency fund, you also need to think about disability and life
insurance, which is also a result of unforeseen events and a means
to prepare for the future, respectively. Finally, regular savings also
fall under this stage.
Level 2 – Savings Level
This level is different from the regular savings you have in your
banks. This level is what you save up for for the near future such as
retirement.

Level 3 – Growth
You don’t become rich just by
saving. Nope. This is often a
misconception among us. “We save
what we can and hope for the best”
is the Filipino mindset not knowing
that we have every opportunity to
grow our current financial state.
Through investments, you have the
chance to double, triple, quadruple
the money that you save up. This
takes a lot of risks of course, but
what investment isn’t a risk? The
key is to educate yourself over
investment matters so you don’t go
out in the market blindly.
Level 4 – Final Level – Risk
Once you are in this level, you
start thinking about succession
plans. This means transferring
inheritance to your heirs. With
these responsibilities come the
taxes incurred.
Where are you in the pyramid
of financial planning?

CHAPTER
2
Let’s Talk
Retirement

And yet how can we enjoy the Philippines when we retire?
Again, this boils down to your financial goals. You will need to be
very honest about yourself on this. It always help to come up with
questions to answer so you can get an assessment of your lifestyle
either on your own or together with your family.
Here are some guideline questions.
1. At what age do you plan to retire?
2. What are your other future expenses? What are your payment terms
for these expenses?
3. How much money do you owe (to any banks, insurance, etc.)?
4. What is your net asset?
5. Less net asset, how much will you still need to comfortably retire?
These are just some of the questions to get you started but for sure,
you will encounter a lot more as you go through your financial journey.
Expect questions to change over time because circumstances will
change.
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Expense Sheet
After assessing your goals in life, it is time to list down your current and
future expenses. It is best to separate current and future expenses. After
listing, note that there is an inflation rate to consider.

.
Sample Expense Description Sample Monthly Cost
House rent Payment for house if renting PhP 15,000
Food 3 times a day meal, with 2 snacks PhP 10,000
Transportation 120/day, bus and jeepney at 22
days in a month
PhP 2,640
Internet Broadband PhP 1,300
House Mortgage Monthly mortgage PhP 5,000
Phone bills Monthly subscription PhP 1,000
Utilities, Water and Electricity Water and electricity PhP 3,000
Tithe 100 per Sunday mass/worship
every month
PhP 500
Health Insurance Slated at PhP 12,000 annually as
lowest rate
PhP 1,000
Life Insurance Slated at PhP 18,000 annually for
a PhP 500,000 insurance
PhP1,500
Dining out Dining out twice a month with
the kids at a posh restaurant
PhP 3,000
Hobbies Our little idiosyncrasies that are
sometimes good for our mental
health
PhP 1,000
Clothing Quarterly PhP 2,500
Kids Tuition fees 2 kids in elementary on a semi-
annual installment terms
PhP 7,000
TOTAL PhP 54,440
This is a frugal family type of sample. Your expenses might entirely
be different. This is just a crude presentation of what could be in your
expenses sheet.
Whatever template you wish to use, be it simple or an advanced
Excel spreadsheet, what you need to remember is to make some
leeway for future expenses and inflation. To make it easier for you, we
found some really neat stuff over the Internet for budget spreadsheets.
You don’t have to wrack your brain and end up putting budgeting off
because these are customizable spreadsheets. Use them to your
heart’s content

Alternative Retirement Plans
Pursuant to Republic Act (R.A.) Number 7641, otherwise known
as the New Retirement Law with amended Article 287 of the Labor
Code of the Philippines (PD No. 442), any employee may be retired
upon reaching the retiring age agreed on in the contract. However,
retiring age is almost the same across all industries. Retiring age is
65 years old for government employees. Private companies may
follow this as well.
For your basis, your retirement pay is computed as thus:
““equivalent to at least one-half (1/2) month salary fo
”- Source: http://zalamea-actuarial.com/more-about-the-
philippine-retirement-pay-law-ra-7641/

Note that
“half month” does not mean 50% but includes the following components
:
a. 15 days salary
b. Cash equivalent of 5 days of service of incentive leave
c. 1/12 of the 13th
month pay
In any case, you have your current employer, provided that you
reach at least 5 years of service with them, as one of your retirement
plan options. Yes, you heard right. Your current employment is just one
retirement plan. You therefore, have the prerogative to find other
retirement plans in addition.
SSS Voluntary Retirement Plan – Launched September of last
year, the SSS Personal Equity and Savings Option (SSS PESO) fund is
another option worth exploring. It is a tax-free investment option wherein
funds are invested in sovereign guaranteed investments. Sixty-five
percent of the fund is allocated for retirement while the remaining 35% is
for medical and general purposes. Members can start monthly
contribution as low as PhP 1,000 to a maximum of PhP 100,000 per
annum.
OtherRetirement Plans You Can Explore

Private Insurance Companies - If you have a life insurance,
you most certainly can avail of a retirement plan from the same
company you are insured with. A retirement plan is considered a
pre-need plan just like educational plans, you pay your premiums
now so you can enjoy them later.
Substitute Retirement Plan – Still pursuant to RA 7641 under
Substitute Retirement Plan, a qualified worker is entitled to a
retirement plan. However, should there be no present retirement
plan in place, the Pag-IBIG can be treated as a retirement benefit
for the employee concerned. So the first thing that you need to find
out is whether you have been automatically enrolled for a
retirement plan in your company. If not, your employer is
mandated by law to process Pag-IBIG as the substitute plan.

Entrepreneurship
God willing, by the time you retire you are still an able-bodied
worker, so retirement from your 8-hour job should not stop you from
earning. Many of us dream of becoming our own boss someday. The
retirement milestone is just one of our motivations to start our own
company. However, it is also an option to keep our day jobs while we
pursue our dreams of owning our very own business.
When it comes to starting a business, you practically can do
anything you want. However, like any decision, you should think about
this many times over with your family. Owning a business is another
responsibility and a commitment that will either put a dent on your
savings or a bulge on your purses. Moreover, it is imperative to know
where your funds will be coming from when you start your business.
This is an eBook about retiring rich, advocating on careful planning for
retirement so you can become comfortable when that big retirement age
number comes. In other words, do not jeopardize your chances of
saving for retirement just so you can start your business now. These
days, you can practically start a business with zero capital. The rule of
thumb on capitalization is no longer applicable, instead, use business
revenue to grow your business not your retirement funds.
Consequently, some juggle their day jobs while running a personal
business successfully. So, there is no reason to wait for the retirement
age. After all, time is of the essence and time waits for no one; make
the most of it.
Additional Source of Income

For this purpose, we give you a few ideas on what you can do
while keeping your day job or when you retire.
Consulting – The most expensive commodity is information. If you
have the knowledge and skills, use these to get you some extra
income. Bank on your knowledge. Consulting has become lucrative
and many companies choose to pay higher upfront fees because
they don’t need to pay for benefits and so on. So this is an area you
can take advantage of.

Retailing, online – Sure, the sari-sari store is the most thought of
on-the-side business. But again, this eBook will not mince words
when it comes to the steps needed to make it big in retirement, so
we’re going against the traditional sari-sari store business. However,
some sort of selling is still lucrative, especially with online
businesses being accepted in the Philippines as the new form of
purchasing. With a sari-sari store, you are limited by your
geography, with an eCommerce business, you sell to the world!
Think big. That’s the way to start the mindset to retiring rich.
Franchising – Running a franchise is a combination of being able
to be your own boss without the difficulties of starting from ground
up. It’s a perfect choice for those who want to keep their day jobs
because then it would not be as laborious. In franchising, you get a
template and wait for the business to bloom. In the Philippines, you
can start a franchise business for as low as PhP 1,500. For
franchising inspirations, Entrepreneur has a
dedicated page for franchising detailing stories of franchisees in
the Philippines.

Investing 101
There are two types of investing: active and passive.
Passive investing is an investment strategy that holds for longer
terms and minimal investing fees. Also called the couch potato or
buy-and-hold strategy, this requires extensive research to come up
with a well-diversified portfolio.
Active investing, on the other hand is an investment strategy that
entails ongoing investment buying and monitoring of these
investments to exploit market conditions. While passive investors
seek long term profits, active investors are the opposite, seeking
short term ones.
To find out which one suits you, it is prudent to learn about the
different types of investments.

Types of Investments
StockTrading
Trading in stocks is probably the hardest form of investment but
some say it is also the most rewarding. However, unlike the other
investment types, stock trading will need a lot of your time and effort,
two of which most of us cannot afford because of our day jobs. Still, it
is an investment worth looking into. Traders would argue that stock
trading is for the young where risks are low compared to those who
have more to lose like the senior citizens who have little or no other
means of income.
In stock trading, your world is focused on the stock market. The
stock market is where shares are held and publicly traded either
through exchanges or over-the-counter markets. These are shares of
publicly traded companies. It is also known as the equity market. In
the stock market, it provides companies with the capital they need in
exchange for a piece of the company.
How do investors earn money
from stocks? Through dividends
and capital gains. When companies
are profitable, they pay dividends to
their investors or investors can sell
appreciated stocks for a profit
which is then called capital gains. In
the US, there are two biggest stock
exchanges, The New York Stock
Exchange (NYSE) and NASDAQ. In
the Philippines, we have the
Philippine Stock Exchange (PSE).

Other investors trade on their own, but some go through
brokers. Stockbrokers are usually associated with a firm. These are
individuals with the training and licenses. Brokers charge fees for
buying and selling stocks. Some brokers also get paid on a
commission basis instead of fixed fees. In addition to buying and
selling, brokers also offer personalized advices.
Anybody can trade in stocks. It used to be a rich man’s playing
ground but with discounted brokering, just about anybody can play
in the market. Nonetheless, stock trading involves the highest risk
out of all the investments. Today’s performance is different
tomorrow, that is how volatile the market is and you need to “listen”
to it to at least predict a situation.

In the Philippines, there is an aggressive campaign to educate
Filipinos on investing. The lowest investment to secure a trading
account is PhP 5,000. There are currently 132 stock brokers listed
with the Philippine Stock Exchange.
Below are online stock brokers.
Broker Website Minimum Investment to
Start Trading
AB Capital Securities, Inc. www.abcapitalsecurities.com.ph P10,000
Abacus Securities Corporation www.abacusonline.com.ph P10,000
Accord Capital Equities
Corporation
www.philstocks.ph P5,000
Angping & Associates Securities,
Inc.
www.angpingonline.com P5,000
BPI Securities Corporation www.bpitrade.com none if you have BPI
account
COL Financial Group, Inc. www.colfinancial.com P5,000
F. Yap Securities, Inc. www.2tradeasia.com P25,000
First Metro Securities Brokerage
Corporation
www.firstmetrosec.com.ph P25,000 for new clients
RCBC Securities, Inc. www.rcbcsec.com n.a.
Wealth Securities, Inc. www.wealthsec.net P10,000

According to news, these are the crème of the crop of Philippine
stock brokering. You can check them out one by one.
Opening a trading account usually requires identification and a TIN
number. Overseas Filipino Workers can now open an account via the
online brokers. It is that easy to trade in stocks now.
Stock Broker Website Minimum Fund to
Open an Account
Mobile App
AB Capital Online abcapitalsecurities.com.ph P10,000 no app yet
Abacus Online abacusonline.com.ph P10,000 no app yet
Philstocks.ph philstocks.ph P5,000 XAVi for iOS and
Android
Angping Online angpingonline.com P5,000 (students)
P15,000 (professionals)
no app yet
BA Sec Online baseconline.psetradex.ph n/a no app yet
BPI Trade bpitrade.com no minimum provided
you have funds in BPI
direct Bank account
no app yet
Coherco Trade cohercotrade.ph P150,000 (with free
Lenovo tablet)
no app yet
COL Financial colfinancial.com P5,000 Starter, P25,000
Plus, 1Million Premium
COL Mobile for
iOS
iTrade by DA Market
Securities
itrade.psetradex.ph P50,000 TradeXplore
iOS, Android,
Windows
2Trade Asia by F. Yap
Securities
2tradeasia.com P25,000 no app yet
First Metro Sec firstmetrosec.ph P25,000 FirstMetroSec
for iOS, Android
Investors Online investorsonline.psetradex.ph n/a no app yet
MakeTrade by
Maybank ATR Kim Eng
Securities
maketrade.com.ph P25,000 no app yet
Optimum Online optimumonline.psetradex.ph n/a no app yet
RCBC EZ Trade rcbcsec.com P10,000 no app yet
Regina Capital reginacapital.psetradex.ph n/a no app yet
UTrade by UniCapital
Securities
utradeph.com P10,000 no app yet
Wealth Sec wealthsec.net P10,000 no app yet

Mutual Funds
For those who feel that stock trading is too risky for their appetite,
then a mutual fund might be more to your liking. According to Sun
Life, a Mutual Fund is pooled fund from different investors. A
professional fund manager then will invest this pooled fund in a
diversified portfolio which may include stocks, bonds, securities and
other mutual funds. Each investor owns shares to represent a
portion of the fund. In Mutual Funds, prices are reported as Net
Asset Value per Share or NAVPS.
Before venturing into Mutual Fund investing, it is important to
know where your shares will be invested in. There are four types of
mutual funds.
a. Money Market Funds - A short term investment, usually one
year or less in debt instruments
b. Bond Funds – Invest long term in debt instruments of
governments or corporations.
c. Balanced Funds – Invest in shares of stocks and debt
instruments.
Stock Funds / Equity Funds – Invests mainly in shares of
stocks. Riskiest out of the other mutual funds.

When investing in Mutual Funds, you will be asked to assess
three things about yourself. These are:
• Risk Tolerance – Is your investment outlook aggressive or
conservative? Early investors tend to choose the less risky mutual
funds such as Money Market and Bond Funds. For those willing to
take some sort of risk will go for the Balanced Fund, while the most
aggressive ones will invest in Equities.
• Financial Goals – Asking about you financial goals should not
come as a surprise as everything will start with this question.
Without this, you will not know whether you are gaining or losing
money. If it helps, goals should be SMART – Specific, Measurable,
Attainable, Realistic and Time-bound. The more precise you are in
your goals, the clearer the paths are for you to take.
• Time – At some point in your life you will need to stop doing
whatever you are doing to focus on a priority, that is, your financial
journey. You will need to invest some time to understand the goals
you need to reach.
How then can OFWs invest in Mutual Funds? Because most of
brokers and mutual fund provides have online presence, an OFW
can take advantage of this even while working abroad. For easy
reference, below is a list of Mutual Fund providers you can check
out.
•ATRKE Alpha Opportunity Fund
•ATRKE Equity Opportunity Fund
•First Metro Save and Learn Equity Fund
•Philam Strategic Growth Fund
•Sun Life Prosperity Philippine Equity Fund
With online presence, there is no reason for OFWs not to take
advantage of this opportunity.

Insurance
Are you prepared for any eventuality? Do you have an
emergency fund? What will you leave your family when death
comes knocking?
Insurance is associated with death or an event that occurs
unexpectedly. It is a morbid topic. This might be the reason why so
many Filipinos leave their families with nothing when they die or
something out of plan happened.
But face it, death comes to us at a certain age, that is inevitable.
But no one knows what will happen in the future. Precisely because
of this that you should prepare yourself and your family. Getting an
insurance is one of the wisest decisions you will ever make.
To help you through this journey, let us take a look at the basics.
An insurance has two kinds: the traditional and non-traditional.

Traditional LifeInsurance
a. Term Life Insurance – Term Life Insurance is an insurance
that insures you for a specific period of time. In case you die within
the term your family gets the death benefit. However, if you live
past the term or period, you will not get anything. You have the
option to extend the period. It is considered the cheapest life
insurance.
b. Whole Life Insurance – Whole Life Insurance provides
coverage for the rest of your life or until you turn 100 years old.
With this type of insurance, you get both a death benefit and a
living benefit, so to speak. Your beneficiaries get the death benefit
once you die or in case you die unexpectedly (we pray, this will not
be the case, of course.); the living benefit is in the form of
dividends and cash values, though these are not guaranteed. The
living benefits can be used to fund future expenses such as
education, but once this is spent, your insurance is no longer in
effect.
c. Endowment Life Insurance – An Endowment Life Insurance
is for a limited period, so its goal is to pay for something specific
you have in mind at a specific time period. An example is
retirement, kids’ education or any financial necessities at that time.
In short, it pays off at a given time or if you die before that
specified time.

Non-Traditional LifeInsurance
There is only one type for non-traditional life insurance, that of
the Variable Universal Life or Variable Life Insurance. This type of
insurance is a combination of the traditional insurance and
investments or mutual fund to be exact. You pay to be insured at a
specific face amount but once you have completed payment of your
premiums annually, you can now shell out for the investment
portion. Depending on your risk appetite, you can choose bonds,
equities, balanced or money market to invest in.
Remember that an insurance, just to set expectations correctly,
is an investment not just for yourself and most often not for yourself
directly, but for your loved ones.

Different Insurance providers in the Philippines
According to the Office of the Insurance Commission, these are
the top insurance providers in the Philippines. Although this table is
set last year, Sun Life of Canada retains its number 1 spot this
year, based on total premium income, followed by Philippine Axa
Life Insurance Corp.
2 0 1 4 Life Insura nce Co m panie s Rank acco rding to Pre m ium Inco m e
List co urte sy o f the O fficia lWe bsite o f the Insura nce Co m m issio n

HealthCare
The only health insurance most of us know is PhilHealth. This is
the PhP200 deductions from our salaries that go into PhilHealth as
our health insurance. But there are other private health care
insurance that we can add to PhilHealth. Below is a comparison
table that we pulled out from the iMoney Philippines website. All
representations below are based on the assumption that the
insurance will be taken by a 25 year old male or female.
Product & Insurer Maximum
Benefit Limit
Cash
Out
Pre-
Existing
Condition
Outpatient
Benefit
Accidental
Death
(in PhP)
Monthly
Premiums
(in PhP)
Medicard VIP Plan
Suite
700,000   20,000 5,578.58
Medicard VIP Plan
Large Private
450,000   20,000 3,811.08
Medicard VIP Plan
250,000
350,000   20,000 2,090.00
Medicard VIP Plan
200,000
250,000   20,000 1,762.42
Medicard Plan
18,000
120,000   20,000 1,521.42
Medicard Plan
15,000
100,000   20,000 1,309.00

MedicardPlan
10,000
60,000   20,000 836.75
MedicardPlan
8,000
50,000   20,000 745.75
Maxicare Silver 60,000  25,000 1,199.17
Maxicare Platinum
Plus
200,000  25,000 3,458.83
Maxicare Platinum 150,000  25,000 1,923.50
Maxicare Gold 100,000  25,000 1,453.83
Insular Life iCARE
C
150,000   - 2,028.33
Insular Life iCARE
B
120,000   1,386.67
Insular Life iCARE
A
100,000   1,155.00
Fortune Care Plan
1500
300,000
 1,454.67
Fortune Care Plan
1000
200,000  1,255.08
Fortune Care Plan
900
180,000  1,123.83
Fortune Care Plan
800
160,000  1,089.17

Fortune Care Plan
700
140,000  1,054.50
Fortune Care Plan
600
120,000  1,020.00
Fortune Care Plan
500
100,000  1,003.50
Eastwest Health
Option 2D
250,000   1,455.58
Eastwest Health
Option 2C
150,000   989.50
Eastwest Health
Option 2B
100,000   779.25
Eastwest Health
Option 2A
80,000 

670.08
Eastwest Health
Option 1D
250,000   1,687.33
Eastwest Health
Option 1C
150,000   1,139.00
Eastwest Health
Option 1B
100,000   891.67
Eastwest Health
Option 1A
80,000   763.25
Blue Cross Select
Standard
500,000   25,000 504.25
Blue Cross Select
Standard Plan
(Suite)
3,000,000  100,000
2,076.00
Blue Cross Select
Standard Plan
(Semi-private)
750,000  50,000 828.08
Blue Cross Select
Standard Plan
(Private)
1,500,000   75,000 1,415.17
Blue Cross Select
Plus Plan (Ward)
500,000  25,000 616.33
Blue Cross Select
Plus Plan (Suite)
3,000,000  100,000 2,780.33
Blue Cross Select
Plus Plan (Semi-
private)
750,000  50,000 1,034.00
Blue Cross Select
Plus Plan (Private)
1,500,000  75,000 1,683.17

CHAPTER
4
The Financial
Principles to
Live By

Live & breathe
financial smarts
Let us be realistic and not sugar coat anything—financial
matters are difficult. It helps if we have established good money
habits at an early age, but to those who have not, the journey will
be bumpy. At the very least, all good things with money start with
principles to guide you through your journey. We say principles
because this is basically a belief that becomes your culture—only
this time it’s about money. When followed religiously, it becomes a
principle or a value that you cannot break, thus forging good habits.

1. You begin to prioritize. When you
spend less, you start looking at things in
ranking order. It might seem like
everything is important, but there are
differences between urgent and
important, wants and needs. You later
find out that what you have been justifying
as a need turns out to be a want; urgent
as important, urgent but not important
(Covey’s Time Management Quadrant),
and so on.
2. You learn to save. It is almost a
given that when you spend less, it is
because you are saving up for something.
3. You lessen stress. Money is
probably what keeps most of you at night.
4. You begin to eliminate debts.
Instead of putting off paying your debts
because you spend like you’re rich, you
now have the opportunity to see debts as
a priority to lessen stress and save. This
becomes an interconnected effect.
Principle # 1: Spend less than you earn to maximize
earning potential
You will often hear people say that OFWs are one day
millionaires once they get the chance to come back to the mother
country. They come home, armed with “pasalubongs” and cash
they can spend on liquor at the Duty Free. Their families back home
pick them up at the airport with every relative they can fit in the van
and start giving out money, swiping their credit cards. The usual
scenario.

Now that the arguments for spending less are laid down, let us
get you started with saving.
1. First things first, the debts and routine responsibilities must
go. Once you’ve eliminated the debts, you can review your
subscriptions or those that you pay on a monthly/quarterly/yearly
basis. You can either discontinue these or retain.
2. Track your spending, religiously. We could have said
diligently but we wanted to instill a habit that can become a part of
you financial culture. So when we say, religiously, this is something
that must be done or else. People hate doing liquidations. It seems
such a bother. But tracking your expenses help you see a trend in
your spending that you can either cut or improve.
.

3. Re-assess your expenses. Do you really need to buy Starbucks coffee
everyday? Or do you really have to have too many mobile phones? Or do
you really need two mobile lines? Find an opportunity to trim your spending
so you need to be aware of what you are spending.
4. Choose a bank. Don’t just choose a bank just because it’s what most
people are using. Instead, choose a bank according to your objectives.
Banks usually offer the same annual rate, but because customers have
started to expect more from their banks, they have become busy with
creativity with their “open an account” offers. The difference will be in the
promotional offers, so get busy with your research.
5.Trim, trim, trim! You can only trim your expenses if you know what
you are spending. Look at every nook and cranny to find that opportunity to
cut back. These opportunities might be hiding or in plain sight. These can
be in your kitchen, utility bills, phone bills and many more.
.

Principle # 2: Stay informed through friends, social media and
articles on ways to retire rich
The only constant is change. Cliché but so true. When you stop to
learn, you miss out on growth. The world today is a place full of ideas,
information and mentors. Take that chance to learn new things to
improve yourself, how you view money, how to increase income and
the lot.
With the social networks, you get the chance to talk to other people
across the globe sharing best practices. Don’t miss out just because
you are getting on with age. If you really want to learn, you can become
unstoppable with your thirst for knowledge. It is the same with money
matters. Keep track of happenings, tips and trick, opportunities in the
market for greener pastures. There are still so many things to learn.

Principle # 3: Foreverbe on the lookout foropportunities
Money is so fleeting. One wrong move and everything is gone. A tilt
in the market and money can all disappear. A closed-minded thought
will deplete you of your resources in no time. It’s so easy to lose
money, your hard-earned money, like so many OFWs do.
This is why it is smart to get your investments moving all the time.
When you spend, be ready with a replacement. This is how your
investments should be, make it work for you, non-stop. Look for
opportunities to earn, to invest, to multiply your money. This way, you
and your family are made for life.
Your number one enemy is an old traditional thinking that to be
content with what you have. Settle even when there are opportunities
that are presented. Make sure you balance these belief with how you
want to see yourself tomorrow.

CHAPTER
5
The Retirement
Plan in Action

It’s now or never
There is no better time to think about your retirement plan than
now. As one financial planner said, TIME, MONEY and INTEREST
RATE can work for you no matter the income bracket you are in.
Of course, starting is always difficult. Many put off retirement
planning until it is too late. So to make things easy to understand, the
following are the steps that you need to take to pull through a
retirement plan. There will be a lot of computations and needed
information so this is also an assessment of yourself.
Through this, you get the idea on what you need to fill in when you
are finally ready to discuss your retirement plan with your chosen
financial adviser.
Making a Retirement Plan

Step 1: Know thy worth.
How much are you worth? Do not be insulted. This does not mean
to degrade you, but rather a review of what you have been doing with
your finances. The first step to coming up with a realistic retirement
plan is to be honest about yourself. For some, this will be a painful
recollection, truth hurts, but think of it as a journey that will hurt now but
will benefit you later on.
To know your worth is to know your net worth. These are your
assets sans liabilities. Your liabilities are your debts. These are your
credit cards, home loans, car loans, personal loans, health loan, IOUs
and so on. Visually:
.
ASSETS
TOTALMONETARYASSETS
Current accounts
Deposit Accounts
Foreign Currency
Cash value of life insurance
Value of retirement fund
+
Financial investments (if there are any)

+
TOTALFIXEDASSETS
House
Other houses/properties owned
Car
Jewelry
Business or share if partnership type

This exercise might exhaust you. Do not worry. Instead, look at it as being
transparent with yourself over financial matters. Most of our fellowmen fail at this
stage. Without any knowledge of what we have and what we owe, we do not see the
big picture of where we are, thus, others end up clinging to invisible numbers.
Be honest. Be specific. And as a famous brand always say, “Just do it” and know
your own worth.
LIABILITIES
SHORT-TERMLIABILITIES
Utilities (Water, Electricity)
Telephone
Gas
Loans (Credit card, house, personal, car)
Bank overdraft
Mortgage
Other loans
+
LONG-TERMLIABILITIES
Bank loan
Mortgage
Others
TOTAL NET WORTH= ASSETS - LIABILITIES

Step 2: Know yourExpenses.
What have you been spending on? How much are you putting aside
for monthly bills?
Another exhaustive process but a much needed exercise is the
expenses sheet or budget sheet, as you might be more familiar with.
When we started to talk about retirement in Chapter 2, the very first
topic was on expenses. In it is a sample budget spreadsheet that you
can use, so you don’t have to delay doing your budget.
Budget creation or expense reporting is a meticulous practice. It
should be a routine. But many of us rely on memory to serve as our
guide not knowing that this only hurts our chances of not only saving,
but preparing for our future. This routine tells us a lot about how we
perceive our finances. Obviously, when we don’t list down our
expenses, we tend to do more spontaneous spending and lack the
discipline to stick to a plan. When we don’t have a plan, we don’t get to
where we want to be, financially speaking.

Step 3: Know yourGoals.
You might be surprised that goal setting is not a first step. While
goal setting is usually a first step, in this eBook it is not. Simply
because steps 1 and 2 create an urgency, diligence that you will not
take had goal setting been the first step.
Look at the big picture. That is what steps 1 and 2 is for—to know
where you are without bias, delusions, disillusionment and denial. A
retirement plan should be an immediate activity. But most of us put it
off for days until it is too late (and we can’t stress enough!) because
we do not have any idea of where we are financially.
Should step 1 and 2 prove that you are in dire straits, all the more
to create a SMART (on to what SMART is shortly.) goal and act on it
immediately.
You would be surprised by
how many people do not know
how to make goals. At least
goals that are actionable. We
sometimes call these, “dreams”,
until they just remain as that,
“dreams” that do not see the
light of day.

First, we start by identifying what the acronym SMART means.
The “S” in SMART stands for Specific. This means our goals
should be specific as possible, the more specific the better because
you can picture your goals.
For example:
Iwant to re tire with PhP 20 Millio n in cash in 1 0 ye ars in m y
ho m e co untry.
The “M” in SMART stands for Measurable. This means our
goals should be measured by a specific standard that we ourselves
will set. Take our previous example. Through it you will immediately
think that the success, the completion of the goal is set by a
specific currency, specific number, specific year, specific place.
This tells us that the metric that should be used is whether the
currency, number, year, place have been achieved by the goal
setter.
Another reason why steps 1 and 2 are in place is that these will
bring us grounded to our capabilities by the time we come to our
goal setting. Hence, the “A” means Attainable. When we set our
goals, we gauge whether we will be able to meet these goals.
“R” means Realistic. Simply put, are these goals realistic
enough, given the resources we have and the steps we plan to
take?
“T” means Timeline or Time bound. This means setting a
deadline on when these goals should be met. This is probably the
aspect where most people fail. They set goals but fail to set a due
date, and end up chasing goals longer than expected. Without a
timeline, we cannot push ourselves to meet deadlines. We point
again to our previous example. Note that “in 10 years” is indicated.

Step 4 – Know yourSources of Income
This is the step where you see a little bit of action—your mind
budding with ideas on what to do. That is good. This is the step that
will do a lot of action. Before anything else, everything that you will do
will need your time, commitment and money. This is the money
portion of the process.
Most of us are probably salary earners, those that go into private
companies or public sectors. We get to be paid for our 9 to 6 jobs. But
is this it? Do we not have any more sources of income? In this step,
that is the question that you need to answer.
If you are satisfied with your income streams, then all there is left is
consistency, discipline, time and commitment to be “big” (at least in
your terms) in the future.
Aside from the source of income question, there is also the
question on whether you want to add other streams of income. If yes,
then you can review Chapter 3, until you decide which other income
streams you want to add to your current day job.

Step 5 – Know yourOtherOptions
The problem with Filipinos is that we have a culture of “pwede
na” or being content with what we currently have, not opening our
minds to more opportunities. This is the reason why we rush to
borrow money left and right, sometimes even with loan sharks that
prey on our urgent needs.
This eBook, first and foremost, is meant to revolutionize that
thinking, if not to demolish. That thinking is a culture that we need to
change, so OFW families do not squander the hard-earned money
of their kin abroad.

Step 6 – Do the Exercise
To help you even further with your retirement plans, below is a
sample calculator, that you can access here. Below is a preview.

“God helps those who
help themselves.
”We begin with thanks to God, so should we end everything with
thanks to Him as well.
There are some things that we cannot explain. For sure, the ways
and opportunities that we have accounts for some Higher Being’s
generosity to man. Would it not be arrogant if we say, this is all us,
where in fact, it is not.
Financial matters often stress us out. It is no wonder, it is full of
decisions that we need to make every step of the way. For every turn
we take, there is a consequence that might or might not be according
to what we want. In addition, life is full of surprises. Good if these
surprises are all positive, but there are negative events in our life that
will test our being. Are we ready?
The ideal answer is “Yes”, but it is doubtful that we answer
confidently. Then these steps, sources, questions are for you. These
are laid out to help you become better decision makers when it
comes to where we want our lives to be tomorrow.
Yes, the future is tomorrow. It is that near. So putting off
preparedness is not a wise move. We start now, when we are able.
Take that first step. Now.

INCLUDE A
SIGN UP
Financial literacy is not something to be taken for granted. As
such, it can be gained through financial education. Time is
moving fast, it will not wait for you or anybody else. You have to
take your own course of action to retire rich, you cannot depend
on somebody to do it for you. Join me in my blog. Share your
views, I would like to hear from you. You will be contacted
through the email you placed in the comments for new products
and articles relating to our aim of wealth expansion. From there
we could all move forward to the financial world - a world that is
for everybody.

Disclaimer
The Author has strived to be as accurate and complete as
possible in the making of this eBook, notwithstanding the fact
that he does not warrant or represent at any time that the
contents within are accurate due to the rapidly changing nature
of the Internet.
While all attempts have been made to verify information provided
in this eBook, the Author assumes no responsibility for errors,
omissions, or contrary interpretation of the subject matter herein.
Any perceived slights of specific persons, peoples, or
organizations are unintentional.
In practical advice eBooks, like anything else in life, there are no
guarantees of income made. Readers are cautioned to rely on
their own judgment about their individual circumstances to act
accordingly.
This eBook is not intended for use as a source of legal,
business, accounting or financial transactions. All readers are
advised to seek services of competent professionals in legal,
business, accounting and finance fields.
© November 2015 Ramon Unas
All rights reserved. No part of this book may be reproduced or transmitted in any form or by
any means, electronic, mechanical, including photocopying, recording or by any information
storage and retrieval system, without permission from the Author.

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