Building My Retirement Fund

Retirement is one of my worries as a single parent even though I know I have been funding it. Why does it worry me? I know how my father’s SSS pension is not enough for his monthly needs. He still works as a consultant to augment his and my mom’s daily needs.

After having attended the Associate Financial Planner’s Training early this year, I was able to compute how much I will need for my retirement. With that, I decided to find more ways to build my retirement fund.

Retirement is something I would really like to look forward to.  Having that said, here are the things that I have been doing in order to build my retirement fund.

1.  I have been investing in the stock market through Citisec Online since 2014.  I will continuously invest in the stock market.

2. I availed of Sun Life’s My Future Fund 2040 two years ago. I am paying for it on a quarterly basis. My annual premium is P48,000.  I lessened the insurance coverage on my My Future Fund 2040 so that the premiums will be placed on the investment.

3. Our company has a retirement plan and mutual savings. I became eligible after one year of continuous service in the company. In this plan, my employer will contribute 4% of my basic salary on a monthly basis. If I reach three years tenure, my employer will contribute 5% of my basic salary on a monthly basis.

On top of that, I enrolled in our company’s mutual savings. I am currently contributing 2% of my monthly basic salary. I plan to increase this once my daughter finishes college education, which is six years from now.

Vesting starts at 30% for at least three years of service, increasing 10% per additional year of service from years 4 to 10. Full vesting is attained at 10 years of service.

4. Since the stock market is volatile, I researched for other alternative investments and discovered Vidalia Lending Corporation (https://vidalia.com.ph).  With this company, you can invest in loans. It is like FundKo. The difference of Vidalia Lending Company is that it is a managed peer-to-peer lending. You don’t have to choose who to lend money to since it is the company who will do it for you. They also handle the collection of loans.

Vidalia Lending Corporation guarantees returns on your investment. You can earn as much as 18% in interest earnings for a 12 month term. For this year, I invested P72,000 for three months term with an interest rate of 3.5%.

Upon placement of my investment, I received an email with my investment confirmation. Instead of having the check delivered to my house, I opted to pick it up in Vidalia Lending Corporation’s office.

After this initial investment placement matures, I plan to re-invest it for another three months term. Why not re-invest for one year? I plan to add to this placement on January 2019 when my remaining leaves are encashed. That is the time when I will invest it on a twelve month term.

I know I can make additional investments anytime. I just want to be organized and have a single check for this purpose. I want to be able to track my retirement fund in an organized manner.

All these four items comprise my retirement fund. Some people may think I am uptight. Reality is I have only myself to rely on. It is better to have a plan for this very big goal.

Retirement is something I would really like to look forward to.  It would be the stage in my life that I would like to see myself be involved in charitable causes.

Real Emergencies and My Emergency Fund

I used to work from home previously for eight years and three months. Back then, I was working as an Independent Contractor for a company in Ireland. My contract was an open-ended contract and it offered me no benefits. It was a no work no pay contract. But I was paid on an hourly basis and charged if I was called during my on-call schedule.

I realized that I needed to learn to be wise with money. I saved for a lot of goals as I wanted to maximize my earnings that time. I saved for emergency fund, personal retirement fund, and college fund. I even zeroed out my consumer debt. By the time my house was fully paid, I adjusted my emergency fund to the reduced monthly expenses that I had.

In 2015, I decided to go back to the office. I needed benefits like leaves. It took one year for me to be hired. And I was really excited!!!

There were a lot of projects going on when I was hired. I also had to work overtime and some weekends. On my third month at work, I felt some chest pains. I went to the outpatient department in the hospital near my house for consultation. Since there was no doctor that time, I was told to go to the ER. And then, I was confined for four days. After that, the doctor instructed me to be on bed rest for a week.

I was not a regular employee yet that time. The time that I was confined and on bed rest, I knew that I will not be receiving any pay. Thankfully, for the first time in my life, I did not panic. Why? I have an emergency fund. And I was ready to use it to cover the expenses for two weeks.

I also had 65 hours of overtime and I don’t have overtime pay because of my position.

Can you guess what happened?

My boss allowed me to use my 65 hours of overtime and convert it to lieu day. This is actually a policy in our company, that we can convert our overtime hours into lieu days and it should be taken within three months.

I was very thankful for that.

I was also thankful to myself because  I did not have to worry should I touch my emergency fund to cover the two weeks expenses.

Emergencies are real. They can happen anytime. We should be prepared when emergencies happen. What about you? Have you had any emergency?

For single parents, the emergency fund is our best line of defense. I hope you learn something from my story.

Senior High School Voucher

Since the K12 program was implemented in the Philippines, a lot of parents complained about the additional expenses that they will incur in sending their children to school.

In line with this, the Department of Education introduced the voucher program for Senior High School students. This is intended to subsidize the tuition fee of students enrolled in private schools.

For this benefit, it should be the student who has to apply for the voucher. When I called the school, I asked if I can apply for it using my daughter’s email address. The person who I spoke to in the Guidance Department told me it was alright to do so.

I applied for the SHS voucher online on January 2018.  I actually had to call my daughter’s school since I had questions in submitting documents. The people in the Guidance Department were very approachable and they actually help me in submitting it.

After submitting it, you will receive a receipt of your application.

It takes a while for it to be processed. I am glad that my daughter is a qualified voucher applicant. The certificate looks like this:

My daughter is already enrolled for her first semester in Senior High School. Upon submission of my daughter’s remaining requirements, I also submitted the Qualified Voucher Applicant Certificate. The Admissions Officer I spoke to informed me that the funds are usually available on the second semester of the school year.

The validity of the SHS Voucher certificate is until Grade 12, school year 2019-2020.

Another Way to Eat Oreos

My daughter loves eating Oreos. I admit that I also do love Oreos. It cures my sweet tooth. =)

Last year, my daughter found a different way to eat Oreos. Let me share with you her new way of eating Oreos.

Ingredients:

Hotcake mix

Oreo cookies

Instructions:

1. Prepare the hotcake mix by simply following the instructions at the back of the box.

2. Dip an Oreo cookie in the hotcake mix. Make sure that the cookie is well covered in the hotcake mix.

3. Place the dipped Oreo cookies in a plate. Then, put it in the microwave oven.

4. Heat the dipped Oreo cookies at high heat for one minute.

5. Let it cool. Afterwards, enjoy eating it.

 

 

FundKo Investment Process and Review

Diversification is important when investing your hard-earned money.  This is to manage risks in investing. One can put his or her money in different financial products.  Thanks to the internet! I have discovered an alternative investment. And that is FundKo (https://fundko.com/).

FundKo is an online peer-to-peer platform that connects borrowers and lenders.  As with any other lending institution, FundKo verifies borrowers by reviewing the documents that they have submitted.

Since we’re talking about investments, I will give my review as an investor.  Obviously, you will have to register for an account.  Once you have registered, you will need to  add funds to your FundKo wallet. You have two options: Dragonpay and Direct Deposit.  Instructions are easy to follow once you have selected your option.

As for me, I funded my FundKo wallet using Dragonpay. With Dragonpay, I made a bills payment at any 7-11 branch nationwide. My bills payment was processed in less than two days.

After funding your FundKo wallet, you can start investing in the FundKo Marketplace.  The FundKo Marketplace can be found in the Lender Dashboard. You can filter the loans you want to invest in.  The loans that I have seen in the market place have terms up to 48 months. The maximum term that I invested is on a 24 month loan.

Before investing in any loan, you can check the purpose of the loan and the documents that the borrower has submitted by clicking on the Loan id. If you want to invest on that loan, click the Invest button and enter the amount you want to invest.

Note: FundKo recommends that you invest only a maximum threshold of 10% of your money in a single borrower to manage your risks.

Once the loan is fully funded, you will receive an email notification. The next step is to sign the loan agreement. The loan agreement can be found under the Check My Loanbook tab.

Once the proceeds are released,  you will get an email notification.

The next step is to monitor the payments of the borrowers. You will see the schedule of the borrowers’ payments on Investment Details tab.

I like how FundKo’s website is designed. It is very detailed and summarizes how much your cash flow is for the current month. The Loanbook shows you a summary of the loans you funded and the status of the payments of the borrowers. The dashboard shows you your effective yield.  As of this writing, my effective yield is 14.7%.

So far, the borrowers have been paying on time on a monthly basis.

You can actually re-invest the payments you receive on a monthly basis.

Overall, I like how my money is working for me. The returns that I am getting are returns that I won’t earn by just saving in the bank.

 

 

Debt Free Since 2017

Last year, I made a commitment to myself to stop borrowing for other people. It’s all because of several experiences that brought me to a rude awakening.

Let me do a flash back.

Admittedly, there were instances when I was asked to apply for a personal loan. And I was also asked to renew a personal loan. There were also times in the past when people related to me asked me to use my credit card for some of their purchases for daily living.

Yes, it was difficult for me to say no.  I have to admit there were times I was so stressed that I did not want to look at my credit card statement. I was promised that the person would pay what he purchased using my credit card. The due date came and the bank called me to remind me of my payment due for that month. Well, of course, the credit card was in my name and it was me that the bank had to remind, not the person who rode on my credit card.

Then, there were times, that I had to foot the monthly amortization for the personal loan when the person promised that he would pay the monthly dues. That happened more than twice. I recall the instance when it was two succeeding months that I paid for the monthly due for the personal loan. And then, my daughter had to be confined in the hospital. After my daughter’s confinement, I called the person who owed me money and politely requested for it. The reason was I took some money from the envelope that was supposed to cover my daughter’s tuition fee in order to pay the hospital bill. The person said, “Wala!!!” Ouch. That hurt. But later that day, a certain amount of money suddenly was reflected on my savings account.

It did not feel good living life like that.  Honestly, I felt so overburdened. I am trying to stand on my own two feet and survive. I do pay my bills on time, send my daughter to a good, private school and finance everything on my own. It is a burden too heavy to keep.

At some point last year, I reached my threshold. I finally decided to stop applying for personal loans for other people in my name. I also stopped letting people use my credit card for their needs.

Since May 2017, I have been debt free. I even told the person this year to stop borrowing money from financial institutions because of the high interest rates. I also advised him that it is not good to keep on borrowing money.

I feel so relieved. It feels good to be debt free at 40. Well, it is not just good. It is wise to be prudent in our finances.

I Fully Paid My Daughter’s Education Plan!

Nine years ago, I purchased a pre-need education policy from Sun Life. The policy that I purchased has to be paid for 10 years. I paid for it on a monthly basis. Well, I could only afford to pay it monthly even though I knew I would be able to save by paying annually.

The pre-need education policy is Sun Education Plus. I know it may not be enough to cover the whole expenses during my daughter’s college years. It’s better than not having an education plan at all. Since I only have one child, I can simply add funds during her college years by looking at the benefits I have. Since I am a regular employee, I have 13th month pay and leaves that are convertible to cash.

Now, the only thing that made the expenses bigger is the implementation of Deped’s K-12. It added two more years of high school education before entering college.

Because of the sudden change, I decided to fully pay the Sun Education Plus policy this year.  I paid it full on January 2018.  Where did I get the funds? I took it from my leaves that were convertible to cash. I changed the payment mode to annual to be able to save on the last premium payment. My proof can be seen below.

It’s a nice feeling to have fully paid this education plan. I am free of the premium payments now.   I know I made the right decision by purchasing this policy.  Aside from being able to fund my daughter’s college, I will get the contract price n years from the last availment in two payouts. It can be used to avail a health insurance plan for me. Now that’s money that has been properly managed.

The Three Big D’s of Personal Finance

The journey to personal finance is not easy. It requires three big D’s: drive, discipline, and determination.

Drive. This is what fuels your desire to effectively manage your finances. This is simply what motivates you in your journey to personal financial freedom. This is your WHY.

I believe we all need to have this big drive in order to push us to action. It is the fire that will keep burning inside you. Without this, our journey will be meaningless.

Ask yourself, “Why do I want myself to be financially free?”

Discipline. Discipline is necessary in order for you to be able to attain your personal financial goals. You need to be able to stick to a certain habit every month. If you want to be able to save for an emergency fund, you should be able to religiously allocate a certain amount for the fund every month. And you need to be able to continuously do it until you reach the desired goal.

It will not be easy at first especially when you are just starting your personal finance journey. The key here is to remember your big drive. Your drive will remind you to continue doing what you have started.

Determination. Ultimately, determination leads to success. When you continue doing a certain habit for a certain period of time, you will reach your goal. In personal finance, determination is very important. Why? You need time to be able to grow your savings and investments. Have you seen someone who has become financially free overnight? I bet the answer is a big NO.

For example, preparing for retirement will take a long time. This needs your determination to be able to set aside a certain amount every month.

Drive, disciple and determination are the three big D’s of personal finance. Without it, the journey to personal financial freedom will be meaningless.

Money Tips for Single Moms

It’s not easy to be the sole breadwinner and pay for all the bills every month. But if you have a stable and high income earning job, I have some practical tips for you single moms out there.

1. Do not include the child support in your monthly budget. Why? This forces you to live on your income and helps you make better financial decisions. Also, there will be times that it will be difficult to collect child support.

2. If the father continuously gives child support, save it in a passbook savings account or try to invest it in a good financial product.

3. If you have 13th month pay or other bonuses, try to set aside a certain amount for your child’s tuition fee.

4. Encourage your children to learn to make money for their wants. They can sell their old clothes, books or other things that they don’t use. They can take advantage of their social media accounts to sell their stuff.

5. Set a certain amount of fun money for your children every month, especially in their teenage years. They will be socializing more and hanging out with their friends. Once they reach the limit, remind them that they have used their fun money for that period.

It all takes discipline. Living on one income is a challenge but it can be done.

Financial Planner’s Training

This year, I fulfilled one of my goals.

I attended the Financial Planner’s Training of the Personal Finance Advisers (PFA). I have been planning to attend this training for some time. I just couldn’t find the time for it. This year, I took the time to attend it.

I learned a lot from this training aside from personal finance. The estate planning module was overwhelming. It opened my eyes to the different tools that we can use to plan for our estate. I wish I had taken this training when I became an independent Oracle Consultant 10 years ago. Why? That was the time that I really needed to know a lot of personal finance stuff since I started earning more.

But I am still glad that I attended the training early this year. I started the year right! Although I am 40 and feel really mortal, I feel more knowledgeable and equipped to approach how I should be saving and investing for my retirement.

Also, I passed the exam. I am now an Associate Financial Planner.