Havin’ a blast with my new BB!

I’m having a blast with my new Blackberry Curve 8320. The best part is you can surf the web using wi-fi. Good thing we have one here in our office! Free surfing the web and stuff! The downside is that I get to see company emails before it reaches my desktop. Makes you a little bit of stressed sometimes, but you can’t have it all as they say.

Now I’m looking for some cool apps to pimp my berry. If you have some or if you can direct me to free websites that offers guaranteed cool applications, please leave a message.

I will post more about my new toy. Here’s my twentyfive cents for now.

BlackBerry Curve 8320

What a birthday present! I just received my service mobile phone – a BlackBerry Curve 8320. This is the first time that I will get my hands on a BB, so I’m pretty excited to explore its features and see if it can live up to my expectations. I’m currently using a Nokia N70, which has been my companion for the past couple of years. I will post more of my review later on.

Personal Finance – What I Learned

I have read so many websites, blogs, and books. The tendency is to be confused with contrasting teachings of these self-made financial guru’s. With the current financial crisis, many are now questioning what the best move for their hard earned finances. My twenty five cents? It depends on what applies to you. More confusing? Let me share my own personal experience and try to see if it fit yours.

 

1) Save first. This is the sure ball way to attain financial growth, albeit the slowest. Before dipping your hands to investment, build-up your emergency fund at least 6 months worth of living expenses. This will cover food, shelter, clothing, and other regular expenses for the month in case of emergency.

 

In my case, I already have 6 months worth of reserves tucked in a Time Deposit, but I’m planning to shop around as my TD rate is not earning enough. The idea is to have readily available cash in case of urgent need, so don’t place it on Mutual Fund and Stocks because you cannot withdraw your money immediately. Also, if the stock market crashes your reserves will definitely be depleted. Having this reserve stashed in a bank will also give you peace of mind if your investments turned sour.

 

As to the mode of savings, paying myself first (putting aside an amount before spending) works for me. It is very workable. I started when my salary was still Php10k. Once you have the habit you will get used to it. This system limits me to spend, and I have a rule to use my plastic on weekly grocery items only, which gives me an almost constant bill at the end of the month. It maybe hard, but you have to look the other way when you pass buy Starbucks, iPhone store, Macbook outlet, or Nokia center.

 

2) Invest the rest.

 

After building your 6 month reserves, it is now time to invest. There are lots to choose from, but my twenty five cents is to try it one at a time. By trying it, you will get the actual feel of doing it, and then you can decide if the investment vehicle is right for you or not.

 

I started with a government corporate bond. It is tax free and the rate that time was 8% per annum (now it is only 5%). Because my salary was very low I only managed to place P10k. P800 was not bad earning for starters, right?

 

Then I tried stocks through a friend (rider). I was able to earn 30% of my investment (around 10k also). I tried it again but bear market came. Now, I’m still waiting for the market to turn around, but my investment is also not that big.

 

Then I tried Mutual Fund. I tried Philam through GSIS kinabukasan fund, but their service is not great. However, the fund (a balanced fund) gave a fantastic return last year. Now, it is affected by financial crunch, and all I see on ICAP website is red. Again if you have the patience for their service (delayed statements, not responding agent), then try it.

 

What I enjoyed most is Sunlife. They have online notification via email, regular statement, and clear prospectus. I’m tempted to put all my money there, but diversification rule says do not put all your eggs in one basket. Maybe its time to shop around for other MF when the market bounces back.

 

3) Business. Or sideline/part-time job that can increase your income. What’s hot now is seasonal business. Christmas season is a great opportunity. It makes you earn for the season but not tie you up for the rest of the year. Join bazaars. Buy your stuffs from Divisoria or Quiapo. Your doing your costumers a favor by bringing their products closer to them.

 

Here’s my initial twenty five cents on personal finance. I will add more soon.

Fixed Exchange Rate as proposed by Prof. Diokno

While I was browsing the cable over the weekend, I happen to watch Prof. Diokno being interviewed by Joey Lina over the DZMM channel. Prof. Diokno enumerated some measures to take so that the Philippines can cope up with the current global financial crisis. One of the proposal is to set the exchange rate to around Php56:US$, and keep it there. This is targeted for OFWs who will be sending remittances so that their money can buy more. While this is a noteworthy proposition, BSP has already made a position regarding fixed exchange rate on their publication, dated June 2008.

Under a system of fixed exchange rate, the central bank commits to sell or buy any amount of foreign currency demanded in excess of what can be supplied by the market or offered for sale in excess of what is demanded, to keep the official exchange rate at a certain level.
For a small open economy such as the Philippines, large capital flows can occur at any time. In times of massive dollar inflows, the monetary authorities must buy the excess dollars to keep the foreign exchange at the desired level. In so doing, reserves are accumulated but pesos are released into the system from which inflationary pressures could result. Siphoning off excess pesos for example (through the sale of government securities in the BSP’s portfolio) could entail substantial cost to the BSP in terms of the difference between the cost of borrowing to pay for the dollar purchases and the return to the BSP on the foreign exchange purchases. Apart from the fiscal costs of sterilization, the sale of government securities is likely to push up interest rates and attract additional foreign capital inflows into the economy.
On the other hand, in times of massive dollar outflows, monetary authorities must sell dollars to accommodate any excess demand. In so doing, reserves are drawn down. If the massive outflow is sustained, reserves will diminish. Before this happens, the central bank is forced to reset the official exchange rate, often opening itself to exchange losses. Thus, fixing the exchange rate places a heavy
burden on monetary authorities in terms of reserve and liquidity management.
Moreover, occasional, large fluctuations—typical of a fixed exchange rate system—are more costly, destabilizing and disruptive to the economy than the more frequent but more gradual changes that may occur in a free float system.
On the other hand, a dual or multiple exchange rate system is discriminatory and distorts resource allocation. If the government sets a high rate for exporters and OFs, it will have to subsidize the difference between market rates and the fixed higher rate. However, this is not feasible since government revenues are not yet sufficient to cover our annual budget. On the other hand, private banks will not be willing to do this as it will incur losses in the process of paying higher than prevailing market exchange rates.

My twenty five cents: BSP should intervene only to manage fluctuations but not to set the exchange rate. The poor will be jeopardized more with the resulting increase in inflation due to abnormal level of money supply. BSP’s reserves will then be depleted, and our forex obligation will be greatly affected. Remember that we are on a automatic debt servicing which means for every budget cycle we automatically pay our debt to international lenders.

We can look at other strategies, such as job creation to accomodate displaced workers abroad, increase in social spending so that people can save their money on other expenses. Fixing exchange rate for me is too dangerous to do.

So there goes my twenty five cents. What about you? What’s your twenty five cents on this issue?

First Post

To-do list on my 26th birthday:

 

Create a blog: Check

 

Yep. This is my very first blog. I’ve been reading different kinds of blogs for quite some time now – from money and investment to cars to technology. On my 26th birthday, I thought of doing something new, and with some more encouragement, I can finally share what I know for the past 26 years.

 

This is my twenty five cents blog, because two cents are worth nothing here in the Philippines.