Frugal Honey

Investing & Retirement

My Son, the Investor

photo_0153340612shhcydFor his birthday this year, my son received some cash from his godparents. Instead of starting a savings account or spending it on toys, I opted to open a stocks brokerage account for him since I’ve always entertained the thought of buying stocks in my son’s name considering that the yield is far superior than a savings account and it’s a good way of introducing him to stocks and investing in general at an early age.

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My First SRO Experience

Whenever people find out that I dabble in stocks, the next question after what stocks to buy usually is “When will I know when to buy or sell?”. And the honest answer is it really depends on you. Buying or selling depends on whether or not you’re an investor or a trader. It depends on the gameplan you have set for yourself. It really doesn’t depend on the market, as some people might think, because the market is a fickle creature so you should be the constant thing in your stock investing/trading.

However, to get your gameplan into order, you have to dive headfirst into the world of stocks. Sure it’s nice to do some studying before purchasing your first lot, but there’s nothing quite like the threat of losing money that will force you to learn anything and everything you can about stocks.

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Saving Up for Retirement (Part 3 of 3 in the Retirement Series)

If you were thinking of relying on your SSS or GSIS benefits to fund your expenses when you retire, then think again. The painful fact is that those government benefits are hardly enough to support anyone, much more if you want to retire in comfort. Currently, the maximum SSS pension is at Php13,000++. That’s right, Php13,000. And that’s if you paid the top tier of contributions throughout your entire employment history. What exactly can Php13,000 get you these days? Groceries and/or utilities?

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Predicting Retirement Expenses (Part 2 of 3 in the Retirement Series)

The rule of thumb when it comes to retirement savings is to replace 80% of your pre-retirement income for your golden years. Popular personal finance author Rose Fres Fausto also simplifies calculating retirement expenses into “annual expenses x number of years before you go to heaven.” 

While it is true that your expenses will decrease to some extent in retirement, you will also find that you’ll be spending extra on other items as well, so the 80% rule might not be accurate in all cases. On the other hand, although Rose Fausto’s computation seems a bit cheeky, it pretty much encapsulates how retirement planning should be approached. If you spend x amount every year and intend to live 30 years after retiring from employment, then you should multiply your annual expenses by 30. Easy-peasy. Of course, this is very much simplified as it does not take inflation into account and seems to imply that that is all you will need. So again, approach with caution.

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Visualizing Retirement (Part 1 of 3 in the Retirement Series)

When I think about retirement, I can’t help but look towards my parents who have accomplished the “retire by the beach” scenario every person seems to aspire for. However, my parents are far from living the stereotypical sedentary, retired lifestyle because they’re overseeing a beach resort in Biliran and with it comes the usual headaches of managing a group of people, ensuring that operations run smoothly (or frankly that they just run, period), balancing the books etc. I’m not exaggerating when I say that they’re busier now than they were pre-retirement and that my mom probably misses the security of having a steady source of income. Anyway, the point is that they were able to successfully accomplish what they’ve been working for all of these years and for that, you have to give them credit.

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