Your Wealth Architect

Our clients get the additional help in maximizing the growth of their investments buy considering the Buy and Sell options given that the investment policies allow FREE fund switches per year. With proper timing of the market, they are not only enjoying 10% annual growth, but multiplied by how many times the range is traded.

What to review in a Life Insurance policy meant for protection:

1. The Sum Assured (Death benefit).
- how much is your annual contribution to the household including those meant for education and travels? On the regular expenses side, how many years do you want your household expense contribution to continue, factoring in inflation?

2. The living benefits.
- How big is the sum ready for critical illness coverage. Study shows costs are higher than 500k. I would say fund should initially be at least 1M. Cancer, stroke, heart attack are some of the critical illnesses.
- Fund to sustain your household contribution when you can no longer work due to total and permanent disability. This is very sad. You don’t contribute financially to the household but you have to be fed, cleaned, and clothed daily for the rest if your life.

As a note, if you have 1M Sum Assured with 250k critical illness fund, when you need to claim for CI, you are left with 750k as balance on the death benefit. how long will your family sustain from 750k? And by the way, with 250k CI fund, you’d probably have to source for funds elsewhere.

Having a Life Insurance policy is definitely a good first step. But your agent should be able to review with you on an annual basis if the benefits are still in line with the financial protection objective you have.

Have you experienced regrets in life that could have made your life and/or your family’s welfare better? Take for example a hot stock tip that you did not act and then the stock price rose 500%? Or that job opportunity your friend took becase you did not like the salary but which job made him and family work and live in the US for good? Certainly a regret about not getting proper critical illness coverage for you and a good financial legacy for the family at death would not cross your kind right? If you haven’t gotten one, do not make it the greatest regret of your life. :)

Today, you are either getting richer or getting poorer. Depending on how you want your financial life to be, the Global Financial System (GFS) is that tool that gives you the opportunity: either to continue creating wealth, or spend your wealth. The GFS cannot be in between, rather, it either helps you to be come richer or poorer by the day. If you wish to have wealth that transcends to multi-generation, you need to create, grow, and sustain the growth of that wealth. And the GFS gives you that powerful tool to create your wealth. We are here to help build that wealth for you. Send us a message so we can discuss how to effectively use the Global Financial System.

An inverted yield curve is that phenomenon when a 10-year bond yield is lower than a 2-year short-term bond. This reflects the sentiment of the market that wishes to lock in their investments into longer-maturity bonds for safekeeping lowering their effective rates due to high demand to the point that it crosses below the 2-year short-term bond yield (which likewise its yield increasing as there is lower demand for this bond type). When an inverted yield curve happens, it’s said to be a sign of a looming recession which could take months or a year or years to happen.

***Timing the Market***

Your Financial Advisor may tell you, “Hey, while it is not guaranteed, your VUL policy may generate a substantial investment growth for you. Here, take a look, at 10% annually compounded projected growth at 48k per year premium, starting at your current age (28), your Investment may become 7M at age 65!”. This is about letting the money work by just continually investing year after year.

Some policies however are flexible that you are allowed to switch to a particular fund for free up to some number of switches per year, so you can time the market. It has to be a strategic timing because you only have a few switch calls to make for free each year. This 2019, when the market peaked 8,100 and showed signs of resistance, you could have switched to Money Market and waited until it appeared to bottom out at 7,500 so you could switch back to Equity Fund. Then the market struggled at 8,400 this July which could have been an opportunity to switch back to Money Market and wait for this current market in August movement to correct some more before you nake your final switch for the year, if it’s necessary. If the market ends up at 8,400 again at the end of the year, by timing the market, you could have range-traded your investment to generate more than 20% instead of relying on a mere 11% growth. But this is not for everybody. If you want to just be able to sleep soundly at night, just let your investment grow thru the able hands of your equity fund manager. 😉

When we realize the enormous amount of money needed just to sustain that 30,000 share of monthly living expenses starting at the time of retirement and to enjoy it for the next 20 years given 5% Inflation and 2% return on investment (money market or time deposits), we will have a sense of urgency, otherwise we anticipate that period of time when retirement catches up with us and we haven't really made a big deal of that need to save for the future. Illustrations are between a 41-year old and a 31-year old. That's why financial planning and wealth planning are important-- they give us a peek of what lies ahead in the far future which empowers us to act now. We can plan for your retirement; let's see your available options. Message us!

Folks, we all start with the "man at work" phase. That's the longest travel, I believe. But when you can start the "man and money at work" phase, believe me, "money at work" will just be around the corner. Man and Money at work sometimes means saving 20K per month for 5 years. Just 5 years. Painful at the start but you'll get used to it, even your cashflow will seem to normalize after a few months or a year. But here's the main point: Save 20K per month for 5 years in an instrument that has the ability to transition into "money at work". Just let me know when you can start and we'll make "man and money at work" to "money at work" transition happen for you. ;)

Rather than think of what Life Insurance can do, think about how much your family, including your children’s education, needs to sustain a comfortable life, and for how long. Only then you will realize that a 2 million-peso life insurance coverage may not even be enough, nor will a 5M be. Think about it. It’s not only how much, but for how long.

Get a comprehensive and extensive and extensive life insurance coverage, at least until the last kid finishes college. Message for a one-on-one discussion.

Life Insurance. In accounting yes it is an expense because after all, it’s a cahsflow item right? cash out. But I think of 2 things when it it comes to Life Insurance:
1. Think of your premium as a means to pay off the guaranteed sum assured offered to you. It’s like prepaid wealth thay you pay out in your lifetime. I see some computation that reaches 88 years to pay off a Sum Assured of 4M. If unfortunately you leave this earth after 50 years, your loved ones have an extra 38 years worth of premium that could have been paid off if you leave for 88 more years. That prepaid 4M to guarantee for your family’s welfare is the greatest benefit of Life Insurance.

2. When your Life Insurance has an investment component, that investment part MAY be used as part of payment for insurance charges in the far future when you can no longer pay. Yet, you will be insured until age 99. And if the Fund performance is good enough that it can double, triple, or quadruple your total premiums paid within 50 years, then there is some amount of money you may still use during retirement.

So what determines the Insurance Coverage for the premium one pays? It’s Predictive Modelling based on Big Numbers or Big Data. Fully developed economies may have access to superior healthcare thus declining mortality or critical illness. Added to this fact is the average household income of their people, effectively creating a big pool of insured individuals. Thus the low mortality and health issues and the large population of life insurance subscribers effectively give lower financial risk to each Life Insurance company there. That in return causes a lower premium for a big coverage which would not be true for now in developing countries which are still having concerns related to mortality, healthcare, and household income. Hence, one way to address this is increasing the Net Worth and cashflow to attain the optimum Life Insurance coverage with relatively higher premiums then enjoyed by people of developed economies. Send us a message if you want to know how wealth building can be started.

In the context of wealth planning, it is said that the best time to borrow is when you have the money to pay. Example is the credit card. By having one, you can eat in a buffet at 40-50% discount. You go there anyways with a friend or your spouse to eat and celebrate a milestone. And you could have paid in cash because you can. But since your favorite bank’s Mastercard or Visa credit card gives you that benefit, wouldn’t you borrow to pay for the meals and pay when it is posted the following day?

Why Filipinos Shouldn’t Get Used to the Culture of “Pangungutang” Words by Meldrick Tin Admit it or not, I'm pretty sure that you've had an utang from somebody at least once in your life. You know, that time when you really had to borrow money from a friend to buy that snack from the canteen because you didn't have baon...