A simple guide in managing your investments portfolio

A lot of new investors doesn’t have any clue about managing their investment portfolio. Often times, many of them are not really aware of the risks they are exposed into. They know the word ‘diversification’ but doesn’t really understand how diversification works and how it is applied. If you are an investor who wants to learn the basic of portfolio management then let me share to you this quick guide of mine.

There are many advantages of this strategy in investing but here are the two most important to me:

  • Doing this would mean balancing the risks against the performance of your investments in order for you to protect your capital while minimizing your losses.
  • Doing this would align your investments according to your risk tolerance and goals in investing as you age.

A little disclaimer : this is for the financial markets, I didn’t include real estate investments.

Okay so lets start , first is you have to…

Know your risk tolerance

Here are 10 questions to know your risk tolerance in investments. Click here to know.

Now that you know of what type of an investor you are, here are the guidelines in partitioning your portfolio.

If you fell into the conservative investor profileyour portfolio would be 90% liquidity and 10% growth.

If you fell into the cautious investor profileyour portfolio would be 80% liquidity and 20% growth.

If you fell into the prudent investor profileyour portfolio would be 40% liquidity and 60% growth.

If you fell into the assertive investor profileyour portfolio would be 20% liquidity and 80% growth.

If you fell into the aggressive investor profileyour portfolio would be 10% liquidity and 90% growth.

Let me define two terms Liquidity and Growth:

  • Liquidity – this means that the investments you would be participating in should be easy to withdrawearns you fixed interests, and preserve your capital.Examples are time deposits, treasury bills, bonds, notes, uitf/mutual funds that are invested in money market funds or bond funds, and the like.
  • Growth – this type of  investments earns you by capital appreciation, and multiply your capital in the long term. They may be more riskier and more volatile but the returns would be higher as well.Examples are stocks, uitf/mutual funds that are invested in equities, forex, or derivatives.

Again, these are just guidelines in partitioning your portfolio, these guidelines are based on your answers in the questionnaire that may best align to your perspectives/personality towards risks.

If you are not comfortable with your results and with the partitioning you can always adjust it depending on your conviction on what really suits you.

Allot accordingly

Lets have an example, let us say that you fell into the prudent investor profile.

Your budget for investments is 10,000 pesos a month. Since the partitioning will be 40% liquidity and 60% growth, you now divide your 10,000 into 4,000 and 6,000 respectively.

We will invest the 4,000 in a bonds fund and 6,000 in stocks.

After 2 years, the total amount of money we invested is 240,000 pesos (10,000 x 24 months)

Our total investments in the bonds fund would be 96,000 pesos (4,000 x 24 months) and 144,000 pesos (6000 x 24 months) in our stocks.

Within that 2 years, the market has moved.

And now, our investments in bonds fund values at 104,025 pesos (+8.36%) and our investments in stocks values at 120,250 pesos(-16.49%).

We paper gained in our bond fund and we paper lost in our stocks.

So how did our total portfolio performed?

Total current value after 2 years is 224,275(-6.55%) pesos over total invested money of 240,000 pesos.

Since we have diversified our portfolio, our losses in the stocks haven’t affected our capital that much because of the gains that we had in our bonds fund. We have spread the risks and minimized our losses.

good job


Diversification works this way and it is applied by investing in different asset classes. A bond fund is an interest type(fixed) of investment and stocks is a capital appreciation(variable) type of investment.

The essence of diversification is to invest in asset classes that don’t rise and fall together.

There will be instances that they will but not on most cases.

It doesn’t make sense when someone invests in let say BPI equity uitf, BDO equity uitf, PNB equity uitf. Technically, it is diversifying because these banks have different fund managers but practically speaking, this is not what diversification really means because once that a global crisis hit the investments, all of them will lose their value together and there is no asset class to negate the losses.

Continuing with our example..

Let us say that after 2 years we had a different scenario.

Our investments in the bonds fund still values at 104,025 pesos(+8.36%) but this time our stocks value at 182,120 pesos(+26.47%).

This time the market has favored our stocks to the upside.

We paper gained in our bond fund and we paper gained in our stocks as well.

So how did our total portfolio performed?

Total current value after 2 years is 286,145 pesos (+17.27%) pesos over total invested money of 240,000 pesos.

Since we have diversified our portfolio, our gains in stocks has been minimized as well because the gains in our bonds fund is lesser.


Diversification minimizes our losses and in the same effect minimizes our gains as well.

But here’s the thing,

If you would ask me, it is really a win-win because minimizing the losses is a great thing and even if the gains are also minimized, it is still a GAIN!

As long as it grows I’m good with it.

Now the next step is to…

Rebalance your portfolio on a regular basis

In our last example.

Our investments in the bonds fund valued at 104,025 pesos(+8.36%) and our stocks valued at 182,120 pesos(+26.47%).

If you would notice the 60/40 partitioning doesn’t apply here.

The total value of our portfolio is 286,145 pesos and 104,025 pesos isn’t 40% of the portfolio anymore same with the 182,120 pesos.

The 40% of 286,145 pesos is 114,458 pesos and the 60% is 171,687 pesos.

This means that our exposure to the risks of stocks is higher. There is a need to re-balance so that you will maintain only a 60% exposure to the risks of stocks. There is a need to lock-in the profit of our stocks and transfer it to our bonds fund.

We can withdraw(profit lock) 10,433 pesos from our stocks investment and transfer it to our bonds fund to maintain the 60% exposure to the risks of stocks(keep it safe).

By re-balancing our portfolio, we protect our gains and minimize our exposure to risks.

If the scenario would be that the stocks investment is negative and the bonds fund is positive, then re-balancing it would compensate the stocks which is the laggard in that scenario. Over the long run…

Even if the markets are volatile, doing re-balancing will protect our portfolio and make it perform better over time.

Re-balancing can be done once or twice a year.

Wrap up

The last step in this guide to portfolio management is going back to step one which is to know your risk tolerance. As we age in life our risk tolerances change.

In our 20’s, the aggressive type of investor may work for us because we don’t have much responsibilities yet and we have a lot of time to grow our money but as we age and reach our 30’s or 40’s, the responsibilities come and that affects our decision making.

The most common practice is; as we age, we should incline our investments to the more conservative type because..

You will retire depending on the markets if you haven’t put it in the safer investments. If the market is down by the time you retire, then pick another year of retiring(joke).

We should also be wise to protect the money we’ve grown when we were young so that we can fully enjoy it when we get old.

I hope that this guide will help you better your investments because at the end of the day we just wanted to pursue happiness(and use the money we’ve grown haha). Kidding aside, if you want more of these then go and subscribe to my blog The Frugal Worker by entering your email below this post. Don’t worry your details are safe and confidential, this is for the sake of updating you when I have a new post in my blog.

Let me know your thoughts in the comments section.

Also, please share it with your investment buddies on facebook.

To your success,

The Frugal Worker

Photo Credits : Seth Sawyers


Things to do in an emergency when you don’t have an emergency fund

Emergencies do happen, though it might not come too often, there will always be a chance that it will. Everyone of us is exposed with this kind of risk in our lives and that is why we should always have an emergency fund that will act as a buffer when things like these arise.

A buffer fund would be your best weapon in coping up with an emergency but it will depend on what kind of emergency you’ll be having. Find out how to know the price tag of your emergency fund here.

But what if the emergency happen and you don’t have yet an emergency fund for it? What will you do?

Here are  the things that I could advise to you whenever you get into that kind of situation.

1.Stay calm and assess the situation

When emergencies happen to someone, the tendency for a person is to panic. Especially if he doesn’t have a clue of where to get the funds to pay for the losses caused by the emergency. Panicking will just make the situation worse because when a person panics, he losses focus and his decisions are greatly affected(pressured) by the situation.

So when an emergency happens to you and you don’t have a buffer fund for it,  do some heavy breathing first, breathe in and out first for a few seconds and try to stay calm as possible. Doing this gives more oxygen to your brain so that you your head would be clear and ready to assess the situation with a sound mind.

In assessing the situation, identify the type of the emergency that happened:

  • Short Term – defective laptop, stolen phone, lost money.
  • Mid Term – loss of job, hospitalization, home repairs.
  • Long Term – natural calamities, fire, earthquake, theft, illnesses/disablement

If it is only a short term type of emergency and you know that it only needs a bit of sacrifice then do so.

Ex. Losing your iphone doesn’t mean you have to replace it with a new one, maybe buying a cheaper phone for the mean time would do and just save for a new iphone later.

If it is a mid term or long term type that needs substantial amount of money then..

2.Check your immediate resources

Whether it is your piggy bank , a gadget , a pair of Jordans, insurances or anything that has value, put them in a list. This will be the list of your immediate resources that you could tap into. Once you complete your list.

Claim the insurances that are applicable, it might be good enough already to cover everything but if not.

Choose stuffs that you can sell immediately. It may be hard to sell stuff especially if you have a financial sickness called ‘stuffititis’ but remember once you get rid of these stuffs, you can pay already the damages of the emergency and also get rid of stuffs that just clutter in your room(gives stress in maintaining).

In some cases, selling stuff might cope up only a portion and…

If selling your stuff wont suffice the damages caused by the emergency, (atleast a portion of it have been dealt with already) the next thing you might need to do is to…

3.Find ways on how to make money

There are a lot of opportunities out there and sometimes we just need to widen our eyes and open our minds for us to see them. If the emergency is severe, then a fund raising might be a good idea, you might be surprised because there might be a lot of people who wants to help you.

Since you have sold stuff already in the latter step why don’t you continue to sell stuff and do ‘buy and sell’ , you can have a decent income from it.

Make freelance jobs if you are good at something(music, art, dancing, programming etc.)

Another way to make more money is to spend less money.

Create a budget and put aside a smaller portion in your expenses, just for the mean time so you can adjust according to the emergency you are having. Lowering your lifestyle might be hard at first but you have to really decide. If you want to get pass through this then you have to make a bit of sacrifice.

The bottom line is, you have to make more money in this kind of situation because the emergency needs you to.

4.Borrow Money

This is your last resort, and by saying last resort, this means that after trying to do everything that you can do to solve it on your own, this should be the last thing on your mind.


Because solving a problem by using a potential problem in the future won’t make sense.

Your goal in ending this phase in your life should not carry you a baggage that may cause another problem later.

Try to borrow money first from the people who are closest to you, they will most likely not put an interest in the money you will borrow. Be honest and considerate as  much as possible when borrowing money from them because you don’t want to ruin your relationship because of this. Tell them first your situation and why you are borrowing money from them, also don’t give them false promises on when you will return their money back, just plainly tell them when you can really pay them so that there would be a good understanding between both parties.

Also never get angry or feel deprived if they didn’t lend you, remember that they aren’t obliged to do so.

5. Remember that this is only a phase in your life and this is only TEMPORARY

People grow and mature in life and they say that the best teacher is experience. The emergency that happened to you is only a phase in your life and it is only temporary, it will come to pass. It would be hard to endure the situation but once you get pass through it, you will become a better person if you handled it right.

When something bad happens, you have three choices.

  • You can let it define you,
  • Let it destroy you
  • or You can let it strengthen you.

Choose the last choice because,

Once this is finished you will be a better person because the situation has moved you out of your comfort zone and allowed you to grow and learn from it.

Wrap Up

Emergencies do really happen once in a while, our lives can never be risk-free from these emergencies but it can be risk-proof if we have prepared well and planned our finances. Having an emergency fund will protect you from certain emergencies and insurances can help you protect yourself and your family.

These tools actually help you to live more of your life and pursue your happiness when you have them.

I hope that this post made you aware of the importance of a buffer fund. Having an emergency without it would really force you to get out of your comfort zone and dry up your resources. Don’t wait for it to happen to you because it’s really hard.

Let me hear what you think of this post in the comments section!

Do subscribe as well to my blog The frugal worker by entering you email below this post for you to get updates from my blog. You can also find me on facebook @thefrugalworker



5 common financial sicknesses you shouldn’t have pt. 2

This is the continuation of the 5 common financial sicknesses you shouldn’t have. If you haven’t read it yet, you can read it here.

For a quick summary of the first part, I have shared in that post the first 3 of the 5 common financial sicknesses that if not realized or acted upon may get you in a financial crisis. Here are they:

  1. The keeping up syndrome – it’s the tendency to keep up with the lifestyle of your friends even if it doesn’t align with your financial health. Symptom is peer pressure, you don’t want to miss out the fun they’ll be having or you wanted to be “in” thru things they do/have.
  2. Stuffititis – it’s the tendency to think that you “need” things even if you really don’t. Symptoms are lavish spending, owning a lot of things, holding too much on material things, discontent.
  3. Upgradingitis – it’s the tendency to upgrade your things frequently. Symptom is always wanting the latest things, believes in a the phrase “if it’s not the latest, it’s not the best”.

Okay so let us continue.

4. Nownarism

This is a common financial sickness to us young professionals. I got the word from two words which is “now na” that means “right now”. We always wanted it “right now” or what’s “instant” and only a few would go for the extra mile. We are impulsive and we don’t usually delay gratification.

The best example I could think of is when we have a promotion or when our salaries are being raised. Most of us would think that having a higher salary would mean an instant increase in our lifestyle.

For example you are living in a dorm before, now that your salary have increased you now instantly want to go and rent for a room(more costly), simultaneously you also wanted  a better laptop or a phone. Before, you do your laundry, now you just pay for them. Before you only ride the jeep/bus home, now you’re a frequent uber rider.

And the likes.

Yes you can afford it and yes you can do it but what if an emergency happen? Let say you lost your job (knock on wood). How do you cope up with your new lifestlyle?  You’re lucky if you would get a new job with the same or a higher pay but what if you don’t? Can you deal getting back to your old lifestyle? It is hard right?

We always wanted to have a great life and that’s a great thing to pursue but we can’t control emergencies and sometimes they can be very damaging to our finances. If you have this “Nownarism” and your cashflow is just breakeven without an emergency fund or liquid resources, it will be hard to bounce back.

The secret for dealing this sickness? It’s simply the opposite of it which is delaying gratification. Like what the Bible says,

 “There is a time for everything, and a season for every activity under the heavens

Ecclesiastes 3

Get rid of your Nownarism if you have it because there is a time for everything. Once you complete your emergency fund, protected yourself and created that habit of saving for your future, it would be easier to upgrade your lifestyle and it will just happen naturally.

Nownarism exposes you more to risks while delaying gratification minimizes your risks of a financial disaster.


Ignorance is a lot different from innocence. Ignorant people knows the right thing to do and they know it full well but don’t do it. While innocent people don’t have any clue(they need to be informed). In personal finance, to be effective is being able to do what’s necessary and apply the things learned in managing one’s finances. Ignorance is a financial sickness common to people who think that they will turn out fine even if they ignore things they know that can help them be better in their finances.

For example is tax planning. Did you know that tax planning has a great impact on one’s finances? There are ways on how to legally lower our taxes and lawyers and law firms who know how to do these things earn a lot from it. Imagine if you could do it yourself because you know some strategies on how to lower your taxes instead of paying a lawyer for advice.

Would it save you a lot? The answer is yes and the right thing to do is research about it or attend a seminar about tax planning but somehow people still ignore it. Don’t be like them, it may cost you to learn but it can be a lot costly for you to just give your hard earned money to taxes(you can minimize)

Personally, the idea of tax planning is new to me and it is quite interesting. I can’t  share strategies yet because I’m not yet familiar with them but I’m sure that I’m not ignoring it.

Often times, the most difficult things to do are the right things to do.

Let me know what you think in the comments section.

Wrap up

I hope that this blog of mine is being of help to you. I hope you don’t ignore having the benefit of learning personal finance here on my site and btw it’s free! For you to get regular updates from me you can simply subscribe by entering your email below this post. Please do share this article as well in your facebook/twitter. You can always find me on fb @thefrugalworker

see you on the next post! 🙂

Photo credits : 401(K) 2012


5 common financial sicknesses you shouldn’t have pt. 1

Most health sicknesses have symptoms like coughs, colds, headaches, fever, vomiting and tummy-aches. When these symptoms show, we go to the doctor and consult with them for us to know what’s wrong so that we can prevent it from getting worse.

This is the typical scenario when we get sick. How about when being financially sick? Shouldn’t we consult someone as well when we see symptoms of financial sicknesses before it gets worse?

Well, the problem maybe is that we don’t know the symptoms and we think that we are doing okay, where in reality we are financially sick and there is a financial disaster just waiting to happen.

So before that disaster gets in the picture I want to share these 5 common financial sicknesses that you might be having already and I hope that this will help you identify them for you to get away from them and be financially fit.

1. The “keeping up”  syndrome

Do you remember a time when you have traveled with friends and enjoyed it? After a month, one of them invites you to another trip along with the crew but you have spent already your money from the last trip and you’re still saving for the next one.

Since you don’t want to miss out the fun they’ll be having and you don’t want them to think you are a killjoy, you ended up borrowing money just to join them.

If you did experience this, you are just one of the many young professionals that are suffering from this syndrome. This doesn’t only apply  to travelling but also with a lot of things and the main driver of this is peer pressure.

That’s how this syndrome works and the symptom of this is peer pressure. Most of the times, we don’t see it coming and only realize it when we can’t keep up with them anymore.

People get this sickness because most of them don’t feel secured

People buy things they don’t need with money they don’t have to impress people they don’t like

-Dave Ramsey

It is quite unfortunate because a lot of people still get caught with credit card debts because of this sickness just because they don’t feel secure/significant if they cannot keep up with their friends.

Remember, your real friends will accept you for who you are even if you don’t do what they do and even if you can’t keep up with their lifestyle. If they can’t? They aren’t your real friends.

We are unique in every way and there is no way that you will have the same exact financial circumstance as others. If we keep up with a lifestyle that doesn’t align with our financial status then we will come up with the disaster.

The next time you feel the peer pressure and it forces you to spend your hard earned money, remind yourself that you are secured even if you don’t spend on them. It would be better to miss out the fun rather than missing your bills. Besides, you can still have fun and do it later if you have saved enough right?


This is a condition where someone has a mentality to own material things even if he doesn’t need them. He “thinks” that he needs those things but in reality he doesn’t, he will only be using them for a while and then after that season, he’ll just put it in his house and buy other things.

This disease is the “love for stuffs”, people who are suffering from this tend to buy expensive cars, houses, jewelries, clothes, shoes, and unnecessary gadgets, throws out big parties, lavishly travels and everything that you can think of that the world can offer.

The saddest part about it? They mostly do it on credit! Never fall for this disease because this worsens as long as you feed it and it may come to a point that it would be hard to get out of it.


Contentment is not the fulfillment of what you want, but the realization of how much you already have.


People think that having a lot of stuffs makes them rich well in fact it doesn’t. Having a lot of stuff will only produce more stress and things to maintain that will cost time, money and effort.

We have to realize that God has provided everything for us and He provides for every need that we have if we want to overcome this disease.

Never put your satisfaction or contentment on the things that can be provided but put them on the provider, ‘your’ provider who is God.


Upgrading our things is not destructive, actually, it is constructive if our reason to do it is to be more productive. Upgrading makes our lives easier because of the benefits in the advancement of technology.

Before, our phones can only make calls and texts. Today, a smartphone can make calls and texts and also do a lot of things with the touch of your fingertips. It made our lives more productive in a significant way (yes that’s true). But it also made us think that upgrading or having the newest ‘thing’ would make our lives more easier and comfortable.

Every year, Apple releases a new iphone and if you would notice, the upgrade is not that really significant, but why do people buy year after year even if they have the latter model which is still functioning well? I would understand if they buy because their old units are getting defective or it’s their first time to buy but buying just for the sake of upgrading? It doesn’t sound practical and it costs a lot of money.

Some might be selling their old units to buy the latest ones so that it won’t cost them much but remember that things depreciate in value and they depreciate on a fast rate.

People who suffer from upgradingitis has a motto:

If it is not the latest, it is not the best.

A lot of young professionals somehow believes in this motto and it’s saddening because most of them get into debts because of this.

Don’t be like them. If you are having this sickness right now, review your costs on your frequent upgrades, if you think they are really worth your money (considering you’re using credit), I’d respect that but if not then you don’t need to do it again (especially if you’re putting it on credit).

My take on upgrading things?

Be practical, never upgrade unless it is a game changer and don’t believe the motto above, that’s not true.

Wrap up

These sicknesses I mentioned above are very costly. If you have money for it, good for you but believe that at some point it has to be stopped because it won’t make you truly happy. How can I say? because I’ve experienced them, I’m just blessed to realized them early but most of our friends might not realized it yet. Feel free to share it on your facebook/twitter, It might help someone before they end up in a financial disaster.

I’ve made this article a two-part post because it would be too lengthy for a single post. This only ends the part 1 of the 5 financial sicknesses you shouldn’t have

If you think that this is helpful to you, please do subscribe to my blog by entering your email below this post and so that you will be updated on the part 2 of this article. Don’t worry your details are safe and it will only be used for updating you when there is a new post.

, you can find me on FB @thefrugalworker

Happy Monday! 🙂

Photo Credits : NVinacco


Is investing a luxury or a necessity?

Many filipinos say that investing is only for the rich and the reason I think why is that, is because investments are not that accessible before as it is today. The capital needed in a business venture, real estate or in investment instruments like bonds and stocks is a huge amount for the average guy to afford.

I want to answer the question straight

Investing is a necessity

But back in the days, even if it is a necessity, it is also a LUXURY due to the fact I mentioned above.

I learned from our teacher in class who is an executive for an asset management company that the inflation in his time was really high(about 32%) and the mindset of people is that; why would I invest my money with the risk of losing more of its value if I already know that it will lose its value by next week or next month considering that the returns can hardly beat inflation?

Somehow, people just want to spend than to invest and only the rich who has extra can afford to risk their money and fight inflation.

Another reason I could think of is because many of us are taught to get a job when we finish our schooling, once you are working for a big company then you are already fine with a stable income and all of the benefits given. Investing is not a common topic to talk about and explore before.


But as years passed considering inflation, people start to feel the weight of it . Prices of goods and commodities have changed significantly but the income didn’t. More and more people started to find different ways to earn money even those who earn big salaries. Since there is a big demand for investing, the investment scams became rampant as well and a lot of people got burned, up to now there are still scams out there and the mindset of many people when they hear about investment opportunities; “Naku scam yan”

I guess that is why today, there is still only a little percentage of our population who invests even if investment instruments are more accessible and much affordable already.

Did you know that you can already start investing with as little as 5,000 pesos and add to it for as low as 1,000 pesos only? With our situation today, if you only save money in the bank, your money will only be eaten by inflation because the prices of everything rises.

That is why today it is not a luxury anymore and our perspective should be more inclined to it as a necessity.


Let me tell you a bit about inflation to strengthen the fact that investing is a necessity.

The Philippine Statistics Authority is the one responsible for computing the inflation rate of the Philippines by gathering data in the markets in different regions. I talked to the local office of PSA in our area and here’s what I found out.

The PSA gathers data from the markets on what products are available, salable and preferential to most households. After gathering data from different parts of the PH, they will come up of what they called the Consumer Price Index(CPI). This CPI varies from time to time and the PSA compares these CPI values and calculate for the Inflation rate(how much have the prices changed over time).

Now, the point here is the gathered data. Most of the people buy cheap products which are readily available and most likely they are preferred by many. Knowing that, the CPI is somehow computed with these data and also the inflation rate that you are seeing in the news papers. If you patronize these products then the inflation rate you are reading in the news might be relevant to you.

In example, If the rice you eat is NFA rice, then the inflation rate applies to you but if you eat rice that is more costly, then your inflation rate is higher than what is said in the news. If you buy normal clothes then the inflation rate applies to you but if you buy branded clothes then you have a higher inflation rate, simple as that.


Inflation rate is really based on a person’s lifestyle.

If you’re lifestyle is a bit high then the more reason for you to see investing as a necessity.

If the news says that the average inflation rate for the last 10 years was 7%  and your lifestyle is high then your inflation rate estimate could be around 9%.

The higher your lifestyle is, the higher your personal inflation rate will be, and the higher responsibility as well for you to invest your money in order for you to cope up with the coming years in your life where you will have more responsibilities(family, education, healthcare etc.).

In the example above if your inflation rate is 9% then you have to find an investment instrument that could cope up with that in order for you to preserve your capital or earn you good returns.

I hope that I explained that point clearly.

So now what’s the take home? You might be saying right now

Okay Abe, I now realized that investing is a necessity and I want to act on it, how do I start?

Wrap up

I’ve been blogging for just less than a year, and I haven’t wrote a lot yet about investing because I want to focus more on sharing about money behaviors and mindset, sharing practical ways on how to solve common problems we face regarding our personal finance, and also topics that can benefit our personal development.

But, I don’t want to leave you hanging. If you want to start then my advice for you is to seek knowledge first because investments goes with risks(as in risks of losing money) and if you are not knowledgeable enough then you might get burned as well. Know these risks and invest on instruments that has risks you’re comfortable with.

If you have questions feel free to contact me.

BTW here are some articles I wrote about investing. I look forward to write more about it or maybe review investment products to share with you so we could decide on where to invest better, or maybe talk about investing in the stock market, managing portfolio’s etc. There’s actually a lot to write about.

So if you want to know more about investing, I invite you to subscribe to my blog by entering you’re email below this post, don’t worry your details are secured and confidential, the purpose is just for you to get updates when I have a new article in my blog. Also please do share this on your facebook/twitter because there might be people in your circle of friends who needs it.

See you on the next post!

– The Frugal Worker

Sources: https://psa.gov.ph/ Photo Credits :  Alessandro BaffaSimon CunninghamChris Potter


A simple guide to avoid getting into a bad financial situation

Bad money behaviors are most likely the cause of getting a person into a bad financial situation but it can vary from person to person and from case to case. I believe everyone of us doesn’t want to get in that situation but still, many of us end up getting in there.

Let me share to you this guide for you to avoid it.

First of all, we must know that there are things that are beyond our control that can get us into a bad financial situation such as accidents, emergencies, sickness, theft, acts of nature and etc. But there are also things that are within our control such as our cashflows, money behaviors(especially in spending), and knowledge about money.

There are two kinds of people when it comes to personal finance, the active and the passive type.

Passive Type of people are the ones who are not aware of where they really are in their financial lives. That is the reason why they only act when the financial problem is already there(retroactive).

While Active Type of people are somewhat just the opposite, they know where they are in their financial lives, actively monitors it to make better decisions, project their financial goals to meet it and protects themselves in case of anything that could happen(proactive)

So right now ask yourself, which of the two types do you belong?

If you want to belong on the active type of people regarding their finances then here’s the meat of this article.

Let’s tackle first the things that are within our control

1.Be Aware of your Cashflows

A cashflow represents the money that comes in and out of our pockets on a monthly basis. I assure you that most of us are unaware of this. Often times, we are only aware of the incoming cash that will go in our bank accounts but not the outgoing cash from our wallets. We don’t usually keep a tab of our spending, and that is the reason why most of us gets confused of where did our money go that results of getting us in a bad financial situation. To be the active type we first need to be aware of this because this is our starting point.

Here is an example of a cashflow (zoom in to see a clearer view)

[embeddoc url=”http://abrahamrlee.com/wp-content/uploads/2016/02/Cashflow.xlsx” height=”300px” download=”all” viewer=”google”]

This is an actual cashflow of a manager, based on his cashflows, he is currently in a negative, meaning, he spends more than what he receives from his salary. People might say that he’s fine because he has a car, he has a house, he has a big salary and everything but in reality he’s in a bad situation. Sooner or later he’ll end up selling things if he continues to live like that.

I encourage you to make your own cashflows or download the excel file above(as a template) and see where you are currently in. Just remember you have to list everything you spend(as in everything).

Net Cashflow = Income – Expenses

If yours is a negative as well, don’t worry this is the reason of this step. Now that you are aware of your situation I believe that you must act on it before it gets to you. Try to get rid of the unnecessary stuffs or get rid of debts as soon as possible. The goal is for you to find a way on how to make that a positive net cashflow.

If yours turn out positive then congratulations because you are one step ahead of those who have a negative net cashflow.


2.Assess your money bahaviors and change when necessary

All of us have financial goals in life and the distance from where we are right now to those goals are greatly affected by our money behaviors. These money behaviors are behaviors we got from our family, friends, relatives and influences. Often times these are hard to change behaviors but we have to assess it and if necessary, we have to change it.

Saving and spending are both money bahaviors but which force is stronger in you? You may have a positive net cashflow but if you are a big spender, you have just missed the opportunity to save more for more important things.

Monitoring your spending on a daily basis vs on a monthly basis? These are behaviors as well. The first one is a drag but it has more benefits than monitoring monthly. With daily monitoring, you have more control on your spending than on a monthly basis. If you do it monthly, there is a high chance that you might have thought you’re still within you’re budget but actually overspent already.

There are lots money behaviors and we have to know them so that we can make better decisions.

Here are  some of what I wrote about

Pasalubong : An overlooked expense

The Frugal Worker : Travel or Invest?

3 must ask questions before buying anything on payday

young professional

3.Expand your knowledge in regards with managing your finances

An investment on knowledge pays the best interests

Benjamin Franklin                      

When it comes to money , the more informed you are the lesser you fear. Let say for investments, the more knowledgeable you are with investments, the more confident you are with investing. For different financial products, the more you know about these products the higher the chance you are to make a good decision in choosing. In business, the more know about your customers, the more you will likely make a profit.

Simply, the more you know about your finances, the lesser the chances you’ll get into a bad financial situation.

Be hungry for knowledge and try your best to apply it because it pays when you do.

Now let’s tackle on the things that aren’t within our control

Emergencies, Accidents, Sickness, Theft, Acts of Nature and etc.

You can’t control these events, you don’t know when they will happen, and you don’t know how much damage they could bring to you financially. They aren’t most likely to happen but if they do, the only thing you can do is to prepare.

These things might come once or twice in our lives or might not as well. But it’s always better to be prepared than not.

Start building your emergency fund, protect yourself with insurance(research and find the best one that will suit you) and stay healthy.

Lastly and most importantly, let God lead you. Even if things are still in your control, ask for wisdom and understanding, ask for protection.


We are hard-pressed on every side, yet not crushed; we are perplexed, but not in despair; persecuted, but not forsaken; struck down, but not destroyed.

2 Corinthians 4:8-9

When things get out of control, remember that God is bigger than the bad situation, you will bounce from it.

Wrap up

If this simple guide have helped you and have taught you something please do share it on your facebook, there might be someone out there who needs it. Let me know what you think about this guide as well in the comments section below. If you have questions or you want me to research anything about personal finance just drop by in my contact page and I’ll try to to write something about it and if you want to read more of these stuff, please do subscribe to my blog by entering your email address below.

See you on the next post! 🙂 @thefrugalworker

Photo Credits : marco antonio torresMarc Wathieu, mer chau

Calculate how much you need to save and invest for you to achieve your goals

Do you know how much you need to save and invest for your dream travel? What about for your dream car? A dream house? For your future child’s education? or even for your retirement. Let me share to you this simple calculator of mine and see the numbers.

Below is a simple calculator (in excel format) I made to show you how much can a 1000 peso monthly saving and investing grow in years. As you can see at the 20th year, by just saving and investing 1000 pesos monthly on an investment instrument that has an average annual rate of 12% your money have grown from 240,000 pesos (total money invested) to 968,385 pesos(ending balance).

(If you’re viewing this on your mobile, the embedded calculator might not show properly. You can view it better on a bigger screen.)

Now it’s your turn to use the calculator above. Let me just walk you through on how to use it (personally).

You can only change the values of the colored numbers, do not change the numbers that are not colored because it is the calculated data. (if you do, just reload the browser).

Starting Amount of savings = this is the amount you will save monthly

Startup Fund = if you have let say 10,000 pesos to start as an initial investment then put an amount in this cell

Annual return on investments = this is the rate you will use depending on where you will invest your savings. Just put your desired rate

  • Equity Fund (mutual fund/UITF) – In the last 10 years of the PSE index, the average returns is around 12-13%.
  • Bonds – If you want to invest in bonds, the average annual returns is around 5%
  • Time Deposits/Money market fund – this is around 1.25%

Example : For the first 10 years you want to put the money on equity then just assume a 12% rate and put it for year 1-5 and year 6-10. Then on the 11th year you transferred it to bonds, so now change the rate to 5% on the year 11-15 and so on

Annual Increase in Savings = this is the rate of increasing your savings. For example you wanted to save 1,000 pesos monthly if you put 50% in this. On the 2nd year, you will now save 1,500 pesos monthly then 2,250 pesos monthly on the 3rd and so on.

Now let’s apply it in your goals.

Let say you wanted to get married 5 years from now, and you wanted a nice wedding. Upon researching, you came up with and an estimated amount of 500,000 pesos for that wedding. By using the calculator you need to come up with a 500,000 pesos ending balance on the 5th year.

So how do you do that? Change the values on the colored numbers depending on your capability to follow it.


I’ll tell you how I can achieve that.(try to put the values in the calculator above)

  • Since this wedding would be in five years, it will be more risky to invest on equity funds, so I choose to invest in bonds and change the annual return on investments to 5%.
  • I happen to have 20,000 pesos extra so I used it as my starter fund in the investment.
  • I can save 6,000 pesos monthly for it, and increase it annually by 10%.
  • After changing the values, the 5th year ending balance is 530,879 pesos with an actual return of 71,312 pesos.
  • This means that if I do this, to save and invest for the next 5 years with these values, there is a very high chance that I would have 500,000 pesos for my wedding. Thus achieving a financial goal in my life.

Wrap Up

I hope that I have explained it clearly and precise on how to use this calculator of mine. The heart of this tool is to give a clear and realistic approach on what to do in achieving our financial goals.

When I used it in my financial plan, it helped me on how to divide my savings for my financial goals (short term and long term).

I hope that this will help you too. If you want the excel file itself, just go to my contact page and drop me a message.

If you have any questions, clarifications or suggestions, please do comment below this post. Please do subscribe as well to my blog by entering you email below this post. You can also find me on Facebook @thefrugalworker (don’t forget to like! thanks)

Alright see you on the next post 🙂

P.S. : There is a retirement fund calculator that you can play with as well in the excel file I embedded


Photo Credits : lincolnblues


Thank you for the recognition SunLife #SINAG Awards

Last year on December 10, 2015, Sunlife Financial held its SINAG 2015 Financial Literacy Journalism Awards which seeks to encourage Filipinos to become more financially prepared through well-written articles/stories. I was blessed because my entries won 2nd-runner up along with my co-winners mommy Lace Llanora and momblogger Noemi Lardizabal-Dado, you can find their blog at www.mommylace.com and aboutmyrecovery.com respectively.


Sunlife SINAG
I’m really thankful for the recognition that I got from Sunlife. It has given me the confidence in what I write and as I continue to write more stuff here in my blog I pray that it would inspire more people, activate them into action and give them hope in their financial lives.
Winners of #SINAG Financial Literacy Digital Journalism Awards

Here are the articles that made me won (2nd-runner up)

How to know the Price tag of your emergency fund

How to save effectively as a young 20s professional

7 things to master while in your 20s for a better financial life

My story

Marvin Germo
With Stock Smart’s Marvin Germo

I had a great time in the awarding ceremony not just because of the prizes that I won but because I felt the burning desire Sunlife has in advocating financial literacy in the country. They are really investing time and resources in financial literacy programs for a brighter future.

sunlife perks
tokens of appreciation from Sunlife

I was inspired by that because it is a great advocacy of reaching out to people shedding light on how to become financially independent. I can just imagine a better and brighter Philippines for the next generations to come as more and more people become good stewards.

If you want to know more about personal finance stuffs just enter your email address below this post so that you will always be updated by The Frugal Worker. You can also like my page on facebook @thefrugalworker.


Achieve more this year by asking 5 simple questions

Hi it’s Abe here, for those of you who follow my blog and continue to wait for new posts, I just want to say thank you, I know I’ve been away for months already and obviously I haven’t post anything new yet but hey, thank you for just being there. I was on a hiatus and man,  I feel like it was years ago when I wrote my last article.

Moving forward, I can’t say that 2015 was my best year but still it was a great year. It was a year of God’s faithfulness in our lives and, one goal that I’ve hit last year where I was really excited about, is to finally share myself through a blog.


So this year I want to continue what I started and share more about myself, personal finance, things worth sharing, and God’s faithfulness to serve the purpose of this blog, and that is to be a blessing to you.

Ok, so here’s what I think is the best thing that I can share to you as my first post for the year. It’s the 5 simple questions to ask yourself in order for you to achieve more in life.

Just a few things before asking yourself. I want you to be totally honest with yourself, as in totally transparent, accept every fact you’ll discover in the process and lastly pray to God first that He will give you the wisdom and guidance as you contemplate.

Okay, let me pray for you so we can get started,

Lord, thank you for this life that you’ve given us, thank you for what you’ve done on the cross for us. Give us the wisdom and the guidance that we need as we go through this and just speak to our heart Lord. In Jesus name, Amen

Alright! First off,

1. WHAT?

Have you experienced day dreaming? That point in your life where you are just talking to yourself thinking of things that you want in your life. I had mine when I was thinking of what would I do if I won the lottery ( I don’t buy tickets though),  believe me, I had a great time thinking a lot of things that I would buy, get and do when that happens.

So this is your time to have a great time too.

For most of us, we wanted to get rich, get our dream house(s), dream car(s), dream business(es), dream abs, get married, be famous, etc. and it’s NORMAL! So here’s what you do, answer the question “WHAT do you want?”, write everything you want on a piece of paper, as in anything, sky is the limit. Be specific though for everything that you’ll write, Don’t write “I want to be rich”, instead write “I want to be a millionaire”. Don’t write “I want a sports car”, instead write “I want a ferrari”.

Once you’ve listed them all lets go ahead with the next question.


Yes, for every single thing that you wrote, ask yourself why do you want that. Trust me, just be totally honest about it and you’ll discover more of yourself. Continue asking yourself why do you want those things until you have a deep reason of wanting that, the deeper the reason, the better. I’ll give you an example

I want to be a multi-millionaire. Why? because I want to buy things without looking at the price. Why is that? because when I eat out, I look at the price and not on the dish. So why is that? because according to my salary, I need to be mindful on how I spend. So why? because if I don’t become mindful about it, I’d be poor and I don’t want to live a mediocre life. And so on…

The deeper the reason on your WHY is, the better. And at this point, I hope that you’ve discovered more of yourself.

Again just write every reason on your WHYs for that certain want/goal.


The third question you have to ask yourself is WHERE? Where are you right now in your life? How far are you from the things that you wrote in your WHATs? Just be totally honest about it and don’t be in denial because if you do, then you will just be fooling yourself.

In our example, “I want to be a multi-millionaire”

Honestly, I’m so far from that point, I don’t have a business, I’m just an average employee. My salary is like this, I haven’t been promoted yet. I don’t have a capital yet to do business, I’m afraid  right nowthat if I venture business on the sides, I’ll end up losing money. I have good connections though. My uncle is a successful businessman, I have skills in marketing, manufacturing, and etc.

The purpose of this question is for you to have a starting point, for you to acknowledge your current situation, for you to identify all of your resources, for you to realize that you have to do something in order for you to achieve something, for you to be motivated, that you don’t want to be in your current circumstances and wanted to excel, and that you wanted to start achieving your goals.

Now, this is where it gets exciting..

4. HOW?

Okay, so now you are aware of your current status, you now know what you want in life, and you now know why you want them. Now is the time to ask the HOW? How would you get near your goals in life? What are the things that you should start doing in order for you to achieve your goals.

The deeper your WHY is the more you are eager to answer the HOW. So let’s get back to our example. “I want to be a multi millionaire.” How?

I’ll be closer to my goal by investing in knowledge, by reading more books this year, I’ll be richer if I prioritize saving over budgeting. I’ll be richer if i started investing. I’ll be closer to my goal by meeting my successful uncle frequently and learn from him. I’ll be closer to my goal by learning a new skill. I’ll be closer to my goal if i would stop procrastinating. And so on..

Again the deeper your WHY is, the more you will think of ways on how to be closer on your goals and achieve them.

Don’t forget to write them down.

5. WHEN?

Okay so here’s the last question, WHEN? When do you want to achieve them? Every dream of yours will start from you identifying them, and then you have to have a deep reason for you to become motivated in achieving them. Once you are motivated and all fired up, you have to acknowledge where you are starting from, identifying your resources. After that, you start thinking on how will you get closer in achieving your goals, how could you use all of your resources in order for you to achieve more.

Everything is all set and that last thing you want to do is to put a DEADLINE. A deadline for every goal that you wrote. There will be long term goals and short term goals. In our example “I want to become a multi millionaire”, It is a long term goal.

Now, I give it a deadline that before I hit the age of 30, I will become one. This long term goal is broken into sub-components or short term goals, like this year I would have read 10 books and apply what I think would be essential for me, this year as well I would save diligently 10k a month. This year I would learn to speak chinese And so on.

Once you achieve more short term goals the closer you would get in achieving you long term goals, that’s basically the key.

By putting deadlines, it gives you a sense of urgency towards achieving your goals and helps you determine if you are successful in achieving them. The purpose of this is for you to not to procrastinate because most people DO. They continuously postponed their deadlines and they are wondering why they are not achieving.

Lastly, be realistic with your deadlines but also put your trust in God because He will guide you on this, trust me. Pray for everything that will come your way and put your confidence in Him.

Keep what you wrote on that paper and read it atleast once a month and if ever you feel tired and it seems like your not moving from point A to point B, just read your WHYs and pray to God that He will suffice you, I’m sure you’ll get motivated again and achieve more, and If ever you won’t hit all of your goals? Just be secure and calm because honestly not all goes according to our plans, but the plans of Lord for you stands firm.

It is worth trying than doing nothing

Wrap Up

Okay so that’s it! I hope I have shared something helpful to you and that you start achieving more this year. If you like what you just have read and want more of these, subscribe to my blog by entering your email below this post. Share it as well on facebook and you can also like my page @thefrugalworer. Thanks!

Photo Credits: Arya Ziai



The Frugal Worker : Travel or Invest?

I saw a quote the other day about traveling and it says, “Travel while you are young and able. Don’t worry about the money, just make it work. Experience is far more valuable than money will ever be.” It’s quite popular for young professionals so I just thought of writing a post about it.

While I couldn’t agree more that experience is far more valuable than money will ever be, I really couldn’t agree about “just making it work”.

So today I will be writing about a dilemma between travelling and investing. While both are great things to do at a young age, it is sometimes hard to think about which one should be on top of the other.

So If I were to choose between the two, I would choose investing first before travelling. I’m not saying you should too because I have my own reasons why I’m choosing that path but let me explain myself and I hope that it could be of help to you.

Here’s why,

I’m not a travel blogger and I haven’t traveled much but I can say that there are two kinds of travelers.

The Backpackers

The backpackers are adventurers, they want to travel because they are thrilled on what the world can offer to them. They don’t travel for relaxation but for finding their inner-self, they want to know what’s really out there and experience the world through other people’s eyes.

They usually don’t plan much like the tourists and anything could be an activity for them. They prefer to speak with locals, live with them and learn from them than getting on a tour with tourist guides(I guess that’s the reason how couchsurfing was born).

The Tourists

The tourists are also adventurers but their main goal is to relax and be separated from their work. They travel so that they can spend time with their family and loved ones to gratify themselves. It is like patting their own back for a job well done in their work.

They usually plan everything, they have itineraries and activities planned out already and they get information from guides.

For me, being a tourist is good enough to experience places and be separated from work while spending with loved ones.

My Path

I choose in investing first before travelling because I am a tourist kind of traveler. It suits my personality and my goals in life, yes experience is far more valuable than money but priorities in life makes the difference. My priority as a young professional guy is to prepare for my future family over travelling and I don’t want to sabotage that future by doing the other more and just making it work. Don’t get me wrong, I do love to travel but everything should be planned and budgeted, that’s why I do have a travelling fund.

Another reason I chose investing is this,

travel or invest

They say that we should travel while young and able right? Well, they got a point but I want to give two scenarios.

Let say I invested and worked really hard in my 20s and managed to retire in my 50s. Now in my 50s, I can travel now because I have all the funds that I need but I can’t do some of the activities because there might be some health reasons. Too bad I can’t travel and experience that much but I have the privilege not to work anymore. That’s the first scenario

Here’s the second

Let say I traveled while young and able and just make it worked, I manage to experience a lot of things and now that I’m 50, I want to settle but because I haven’t invested for my retirement then I have to work to make it work!

I would choose the first scenario rather than the second , it will be more okay for me to not travel and experience much in my 50s and enjoy my golden years than traveled and experienced a lot while young but will  be working in my 50s because I can’t retire. Does that makes sense?

That is just my analogy and I hope it made a point.

For risk takers that really want to travel and can live by making both ends meet, then just make sure you make it work as well when the time comes that you don’t want to travel anymore and wanted to settle.

If your goal is to find yourself out there and not just for any relaxation then it will be a different story, you are a backpacker type. Here’s some inspiration, let me share to you the story of Tomislav Perko, he just travelled with almost no money. Watch his story below

Nice isn’t it? Well, if your up to challenge and find yourself then go and hit the road.

My Conclusion

I guess my take in this dilemma is this

“Travel while young and able but make sure you won’t regret the bill. Experience is far more valuable than money so make more money and spend it for experiences.”

I hope that this post have helped you in a way. Let me know your thoughts in the comments below!

Photo Credits : Moyan Brenn