20. Swabeng Strategy: What UITF works best for me?

We know that not all UITFs are created equal. Some are made according to your risk appetite and some are made for how long will you hold the fund.

Regardless of which will you be choosing based on the criteria, what matters is that you understand the risk and reward for each before putting in your hard-earned money to have it work for you.

I will cite some of the most common types of UITF according to your Risk Appetite and Time Horizon.


1. Money Market Fund. 

This is a type of UITF that is invested on a short-term basis of usually one year or less. Your funds will be invested in a fixed-income securities . Usually, the return for this type of investment is relatively higher than time deposits and savings account.

This type is recommended if you prefer to preserve your capital and you. don't want to take much risk (for conservative investors) but at the same time you have your money grow within the shortest time possible. Opening a Money Market Fund account can be as low as a thousand pesos depending on the bank you'll be visiting. You could go here to this link for the list banks that offer Money Market Fund (please take note that the data on the link may vary from time to time).


2. Bond Fund

This is a type of UITF that is invested on a short to medium term. This time, your funds will be placed in Bond that you can withdraw after a period of as short as 30 days to as long as a year.

This type is recommended to people who wants to preserve their capital and at the same time doesn't mind the risk (say very low to low risk). You can open a Bond Fund account for as low as five thousand pesos depending on the bank you'll be going to.


3. Balanced Fund

Now this is where the excitement starts. This type is usually invested on a medium term to maximize the growth of your fund. They are usually invested in a combination of fixed-income securities like treasury bills and high yield savings account, bonds and even equities (Stock Market).

This type is recommended to those who won't be using their money for the next 3-5 years so that you would be able to utilize the power of compounding (I'll try to make a post regarding Compounding in the coming weeks).


4. Equity Fund

This would be the type of UITF that is heavily invested (almost 100%) in equities or stocks. Since the fund will be invested heavily on equities, risks for this type of fund are higher than the previous funds (hence this type is considered high-risk). With high-risks, as long as you've planned well, the rewards will be high also. This type of fund is suitable for aggressive, long-term investors who can sit and wait.

If you won't be using your money for the next 5-10 years, this would be the best type of fund for you especially if your goal for this fund is for your retirement or your kid's college education.


Regardless of what type of fund you choose, bottomline is, you have a chance to let your money work for you. You may check this website and you would be able to see the list of Banks that offer a specific type of fund that suits your personality.


Till the next post.

16. Swabeng Dilemma: Beyond your Savings Accounts

Let's say that you were able to pay your debts, completed your emergency fund and learned some basics on Savings Accounts. What's next for you?


Would you just spend the incoming money thinking that your already settled and financially secured for the years to come?


Or would you thirst for more and try to learn as much financial knowledge as possible?


I'm sure you have did your part more than I do as of this time and I know somehow your Financial IQ has increased from zero to something that you could pass on to future generations.

As for me, I'm still thinking what to write next. Care to comment so you could give me an idea on what to share?

13. Swabeng Dilemma: What Insurace Suits you Best?

In my last post, I shared to you my perception of having an insurance back then when I was young.

On this post, while I'm sure you had a better understanding on the importance of having an Insurance, you might get overwhelmed with the options available today. Even when I was about to pick what type of insurance I'll be getting, seeing new types got me more and more confused.

Anyway, here are the most common types of Insurance that are available in the Philippine Market.

Just remember that I won't be specifying any provider here and I will not go technical here so as not to overload you with information (those stuff would be reserved for later as I need to do a lot of readings too)


1. Traditional Life Insurance

Also known as ordinary life or straight life, this is a type of insurance that provides coverage for your entire life. This kind of policy is sometimes described as plain vanilla insurance.

These includes Term Life Insurance, Whole Life Insurance, Endowment Life Insurance among the most common in the Philippines.


2. Non-Traditional Life Insurance

This is usually linked with investments. For instance, unit linked insurance plans allows the insured to choose between equity, debt and mixed market investment vehicles.

Depending on the risks involved, the insurance plans will differ for every customer. The premiums for these plans also differ. You should be aware of this information before investing in these plans.


I told you, I'll just share the most common types of Insurance here in the Philippines. While there are a lot more to choose from, that would be all for now.

See you soon. And please do comment if you wish to add something or share something.

11. Swabeng Strategy: Building up the Foundation of your Emergency Fund

When all of debts have been settled, the next phase is to build-up your emergency fund to ensure that you don't need to be in debt again in case an emergency happens.

By definition, An emergency fund is an account used to set aside funds needed in the event of a personal financial dilemma, such as the loss of a job, a debilitating illness or a major expense. 

So this only means that it should be a MUST for every working citizen (breadwinner or supporter). Anyway, here are some basic steps on building your emergency fund. 

1. Determine your monthly budget at its most basic. 

You need to calculate the total amount of your basic expenses. This includes utility bills (the most basic would be electricity and water), food for the table (excluding eat-outs at the malls and/or restaurants),  your kids' basic expenses (schooling). Sale at the Malls are NOT included in your emergency fund. 


2. Determine the amount you need to build your emergency fund. 

Once you determine your basic monthly cost (sale is not included), you need to know how much would you need (for how long). Most local (and foreign) blogs would advise to have at least 3 months of your basic expenses. Some would say at least 6 months worth of your basic expenses. But for me, I'd go the distance and recommend 9 to 12 months worth of your basic expenses. Sounds insane right? But for me, I'd rather be safe than sorry, 


3. Determine if you need a buffer for your emergency fund. 

While you were able to determine your basic budget for each month, You also need to consider the possibilities of encountering any unnecessary incidents. These incidents may affect your budget once it happens. A few examples would be expenses if your car broke down or if someone in your family got sick and hospitalized. If you decide to save 9 to 12 months worth of your basic expenses, a 10-20% buffer will do. If your saving for 6 months, a 20-30% buffer will do. And if your saving for only 3 months, a 50% buffer should do. The bigger your emergency fund, the smaller the buffer. Let me know in the comment section if you have other ideas on building your emergency fund buffer. 


4. Determine the amount of time that you need to build your emergency fund. 

Building an emergency fund takes time. It may take a year to a couple of years depending on your strategy. Patience is the key factor here because the bigger your targeted emergency fund, the longer it may take for you to accomplish it. The good thing is you don't need to be in a hurry saving up for it especially if you are still able and working. As I posted this, I'm still working on my emergency fund. =)


5. Determine the possible source of your emergency fund. 

Now that you know your basic monthly budget and how much would you need for a certain period of time, you need to know where would you fund your emergency fund until it hits your target goal. The first thing that may come to your mind is to fund it from your paycheck. You may allot 5-20% depending on your objectives and targets. If you want to speed-up your funding, try to freelance your work or do sell something that people need. That way you'd be able to reach your target at the soonest time possible.



I hope I was able to give you some basic guidelines on building your emergency fund. But were not yet on the technical aspect of it (this will be on another post). If you have other ideas on building-up your emergency fund, please feel free to comment below. =) 

10. Swabeng Dilemma: Do I Really Need Emergency Funds?

Let's say you were able to clear out all your debt within the time frame that you've set. Congratulations!

Then what's next? Would you borrow again to get new debt and pay them again?

At this point, do you really want you financial status to be that way? Get Debt, Pay Debt over and over until your done?

I hope you'd realize that if you never get out of that Debt Cycle, your future generation will be the ones to suffer in the long run. Which means that in case something happens to you while you're still on Debt, Who will take your place to settle them? It would have been easier that your entire debt will be wiped out once you're done but that's not the case here.

Do I Really Need Emergency Funds? First timers would answer NO for the following reasons


1. I have all the time in the world.

Being young (say you just finished college and just started your first job) would be the first excuse of not saving up for emergencies. I'm sure most (me included years ago) of you are still dependent on our parents as we still live with them and they still cover rent (or mortgage), food and all the basic utilities (water, electricity, cable, etc). In the event that something unfortunate *knocks on wood* happens to either one of them (or both) do you know what happens next?


2. I don't earn that much yet for me to save some.

Personally, this was my excuse when I was starting. I kept on saying I'll start building my emergency fund when I'm earning a heftier salary. I realized that If I can't save money early in my career, I would have a hard time during the same right now.


3. I'll just worry about money when there is an emergency. 

While you have your parents, relatives, friends, and even your credit card, never assume that they're always be there to take care of you in case of emergencies. You should realize that they have their own financial obligations to take care of. Also do not consider your credit cards as your emergency funds, remember that if you pay the minimum and/or on a delayed basis, its interest will pile-up until your debt doubles. Would you want that?

On my next post, I'll show you how to build your emergency fund so you'll have a peaceful sleep every night.

7. Swabeng Strategy: How you kill your Debt?

If you're in Debt, I'm sure you'll find time to read this post.

But if you're in deep-deep (pun intended) Debt, I'm sure you'll read this right now.

No matter how deep in debt you're into, there are several ways on eliminating it the right way.

I haven't been in trouble with my current debt (via SSS Salary Loan) and I don't want to go through a knee-deep debt like probably most of us here.

Anyway, here are some of the tips that I can share with you on how you can eliminate your debt. Just take note that were not on the technical side yet. This is just more on the mental conditioning for you on how to get rid of it. Once you are mentally prepared and able, the technical side of dealing with it would be much easier for you. =)


1. Acknowledge that you are in debt and be ready to eliminate it ASAP.

There are times that you are still in denial with the fact that you have debt and you need to face them. Whether you have debt to your friend or relative, you should acknowledge. Be it Credit Card Debt or Cash Debt, you need to do something about this and you should always consider debt as a serious matter no matter what.


2. Know the root cause why you are stuck in debt and why it took you some time to take care of it.

I'll guess one factor why one is stuck in debt is because of living the luxurious lifestyle beyond one's means. When one cannot say no to friends, he will find a way to get money to be with friends. Personally, I've never encountered this as I know my limits early on. You may also want to list down your debt in order (from the most to the least) so you would be able to come up with a strategy.


3. Look for ways to reduce debt until you eliminate them.

There are a lot of free sources (online) on finding ways how to reduce debt. All you need is a reliable internet connection and the motivation to get rid of debt once and for all. You may also seek advice from someone you know who has been there and was able to eliminate it so you would be able to have an idea on how he/she dealt with it.


These would be my tips for now. I'm sure you'll be waiting for the specifics. Just stay tuned.

5. Swabeng Strategy: How do you really set your budget seriously?

This should be your first step towards your financial freedom. This step has no time frame and should be done religiously for the rest of your life and make sure your next generation will learn from it too.

I have been reading some books as well as some blogs on how to set your budget. To be honest, there is NO universal distribution on how you should budget your paycheck on a monthly basis. It would still be up to you on how you distribute your budget.

Let's say you are the sole breadwinner for your family, it is crucial for you to be able to set a budget and make sure to follow them as religiously as you can. Given that your spouse works too, you may have a slight advantage with your budgeting unless your spouse has other plans. 

0. Determine your purpose of Budgeting

What is your main reason on why you have decided to budget? Is for a short-term goal? medium-term goal? or long-term goal? Whatever your goal is, what matters is that you have one (or more) that's why you decided to have a budget. Deciding to do Budgeting without any purpose is like planting a tree not knowing what fruit it will bear.


1. Determine all your sources of Net Income

This will be your base on how you will budget for a specific time frame (say 2 to 4 weeks). Your net income should be the entire pie or 100%. If your spouse would help you with the budgeting, so much the better. If you have more than one source of inclome, the better. The more sources of income you have, the bigger pie you'll be having.


2. Determine your Needs (Living Expenses) and Wants (Lifestyle Expenses)

Other books would say Wants and Needs. It should be the other way around. You have to determine what you need and what you want for a day, a week, or a month so that you would be able to determine how you would allocate your budget. Just remember that your need may be someone else's want and vice versa so be very particular in determining your needs and wants.


3. Allocate your budget according to your Needs and Wants

Your needs should have a bigger budget allocation than wants (Definitely!). The lower the percentage for your wants, the better (at least for now) until you have saved some for Emergency Funds (to be discussed soon). You may also set some room just in case you go over budget (atleast 5-10%) as your buffer.


4. Make sure to stick to your budget and review them periodically.

As I've set previously, budgeting is a lifelong skill that you need to sharpen as often as possible. There may be unexpected expenses along the way, but as long as you know your budgeting priorities, you're good to go.


I would soon show some examples on how you can allot your monthly budget according to your Needs and Wants.

For now, please take some time to plan and set your budget using the guidelines given. You may add some suggestions via the comment section if you wish to.

See you then.

3. Swabeng Strategy: Your Steps to Achieve Financial Freedom

In the last article, we discussed what really prevents you from achieving financial freedom and before you know it, you realize I'm right correct?

Anyway, let us not dwell further on what prevents us from achieving our goal and now we learn the steps on how to achieve financial freedom. The steps I'll show you here is more of a goal setting (for the rest, I'll try to discuss them chronologically). 

It took me a few weeks of reading to determine what should be the steps on how we should achieve financial freedom. Believe me or not, I've read close to a hundred articles (locally and abroad) just for this topic and believe me, everyone of them have a different take on it. But here's mine:

1. Acknowledge the Need for Financial Literacy

If you were born to parents whose advocacy is to educate people on financial literacy, then consider yourself very fortunate. But in reality, not all of us are born having them as parents. Your objective now is to get yourself to learn and you should take action NOW! You have to admit that you need this for you (and your family) to have a better future ahead. You should also know why the need and how to make sure to accomplish them. Don't worry, I'll do my best to guide you in every step.


2. Get your family involved

You should also inform your family members about your decision to achieve financial freedom by having yourself literate first. Some may accept your decision while other may be hesitant. You just let them know that you're not just preparing for your future, but also for their future as well. Whether they would help you achieve it or not, the fact that you have already told them of your plans would mean that you are serious in securing your family's future.


3. Set your Goals

Once you were able to do the first two steps, this would be the right time to set your goals. Generally, there are three types of goals in Financial Literacy: the Short-Term, the Medium Term and the Long-Term. Depending on the time horizon, it is important for you to set your goals depending on the need. I may discuss this in further details sometime soon.

4. Start reading books/e-books. Watch video clips 

For you to learn the basics (to advanced) of financial literacy, you need to start somewhere. You have already acknowledge the need for financial literacy. Now you have to start. How? Most beginners read books, e-books on financial literacy. You can buy (or borrow) them and give yourself a few minutes to an hour (or two) to browse though pages of them. You can also read blogs of well known financial advocates here and abroad and I'm sure you'll learn a thing or two from them. There are also several video clips (from youtube and vimeo) that you can search and watch. 

5. Attend seminars and look for a mentor and like-minded individuals

Given that you have read several books and attended a few seminars (free or with a fee), you should be able to determine who would be your mentor in your quest for financial freedom. You may also join forums found on social media that has the same goals as you are. That way, you get inspired/motivated by other people who could also get some motivation from you. 

6. Track your progress

This would be your diary in determining whether you are still on track to your financial freedom or you need to do some fine-tuning. Don't worry if you get side-tracked while on your way. What matters is you keep record of your progress and learn from it.


I think were probably done with goal-setting at this point. Now its time to execute the plan that we made and let's aim for financial freedom for our family. 

1. Starting your Journey to Financial Freedom

So, you have decided to become financially independent just like me?

If you say yes to the question above, then very good. Just to let you know that I am with you in your journey towards financial freedom. We will go together each step and learn all of them together.

How old are you by the way? I hope you're still in your twenties (or even younger). That means you still have lots of time to learn and earn. Time is on your side which means you still have lots to work on to choose your path to financial freedom.

If you're in your thirties (just like me and I'm only a few years before forty) and beyond, don't worry. As long as you still have that burning desire to learn and earn (just like me), you're still fine though we don't have the time like those in their twenties (or younger).

Right now, there are a lot if ways to achieve financial freedom. If you ask me, there are at least two.

First, the wrong way. When I say the wrong way, it is by doing illegal means (like Scams and I'll discuss this someday) and stealing other people's money for your own gain.

And Second would be the right way. I think you know by now that there are a lot of right ways to achieve financial freedom this way.

If you chose the right way, I am with you all the way until you achieve it.

See you soon and I'll start to share some more Swabeng Ways to achieve Financial Freedom. =)

If there is anything you want to learn about financial literacy or any financial topics that you want me to share, just hit me a comment and I'll do my best to share with you what I know. =)