Colayco's main intention why he wrote the book Making Your Money Work - Pera Mo Palaguin Mo 2 was mainly to share his expertise to the million OFWs around the world. The book will teach them - how to save? How to invest? What to invest? Why invest? And where to invest?
Colayco accentuated that one of the main reasons why most of the Filipinos do not save is they do not know where to put their savings. There are few who actually save but end up putting their money in get-rich-quick schemes, which turn out to be pyramid scams and swindling operations.
Philippines has a very low savings rate compared to other Asian countries like Thailand, Malaysia, Indonesia and Singapore. Francisco J. Colayco - a Filipino Chinese businessman and author of the book Making Your Money Work emphasized that there has no savings culture in Philippines only culture of consumption. He further said that savings are very important to the country's development since these are the primary source of investments that can generate more production and employment.
Colayco also marked the plights of the Overseas Filipino Workers (OFWs), who are sending billions of dollars to their families in the Philippines but most of these remittances went into goods and services. Only a small amount went into savings, which could have been invested in manufacturing or other types of producing industries.
On this book, he highlighted the basic guideline in investing which is the inflation rate. He said, "All savings that are put away to grow wealth must produce rates that are higher than inflation. Otherwise, you will lose a great deal of money. The money you save will not be enough to buy the same goods you are able to buy today."
Types of investments that Colayco advised
Colayco further advised to be careful if someone offers you a guaranteed investment that yields higher than 2 percent per month or 24 percent per year because this may be good for one or two months only. It is very difficult to sustain this high rate for a long period.
Below are types of investments which Colayco has classified them into asset classes and the types of options into three categories with his admirable analysis and recommendation namely:
Lending Investments are about bonds: government bonds and corporate bonds bank deposits: savings and time deposits and pension plans.
In lending investments - the money you invest is given to borrowers as loans. You earn from the interest charged to the borrowers for the use of your money. This is recommended for those who need regular and definite income and those who are 50 years old or older who can take less risk. About the return, he said that it is relatively low for the short-term but exceeds inflation rate in the long term. And the money you make here is called interest. However, your investments will not automatically increase, so you must make sure that you reinvest your earnings.
Ownership Investments are about stocks, mutual funds, unit investments trust funds (UITF), real estate and own business.
In ownership investments - this make you a part owner of the business or company which receives your money. You need to sell before you realize your gains or losses. This type of investment is recommended for younger investors in their 30s to late 40s. The risk is high. You make money if the business or company goes up in value and vice versa. You gain or lose money only when you sell. About the returns, he said if given enough time you will receive the highest return and it is in the form of dividends or capital gains.
Speculative Investments are about investment in assets, properties or businesses that may be illegal or at best and it is questionable, when you engage in gambling activities like lottery and other gambling types.
This type of investment usually has vague and incomplete information on how it can generate profit. You hope and take the chance that it will eventually increase in value and give you bigger returns when you sell it. You place a bet or buy a lotto ticket hoping you will win. The risk is very high. About the returns, you earn only if you are able to sell your investment or win more money. Speculation is for the short term only. You expect to cash in - in a very short period like a few months or maybe at most one year.
Francisco J. Colayco said, "Each investment has to be studied in terms of three important criteria namely: Risk, Return and Liquidity. And you will choose investments with returns of 2 to 4 percent above the annual inflation rate. Do not be too attracted by unreasonable high returns. And anything more than 2 percent per month is highly questionable."
Where to buy the book? If you were in Philippines - try to visit National Bookstores outlets in the country.
More Info About The Author - Francisco J. Colayco
FRANCISCO J. COLAYCO is an entrepreneur, venture developer and renowned financial adviser. He has over 45 years experience that covers service contracting in the Middle East, manufacturing, trading, construction, ship building, management consulting, banking and financial services. He holds degrees in AB Economics and Masters in Business Management from the Ateneo de Manila University. He was conferred a Doctorate in Humanities (Honoris Causa) by the National University.
Mr. Colayco is the Chairman of the COLAYCO FOUNDATION FOR EDUCATION (CFE) (www.colaycofoundation.com), a non-profit organization that he founded in 2001 that pioneered that promotion of financial literacy in the country. Today, CFE is the prime mover of the financial literacy movement as it continues to open the minds of millions of Filipinos on the need to obtain secure financial futures for themselves and their families. CFE teaches Filipinos how to manage their hard-earned income through wise spending, proper planning, saving and investing.
For more details: Visit Colayco Facebook Page
Mr. Colayco is also the author of four bestseller books on personal finance “Wealth Within Your Reach: Pera Mo, Palaguin Mo!”, “Making Your Money Work: Pera Mo, Palaguin Mo! 2”, “Pera Palaguin Workbook (co-authored with Prof. Helen Valderrama, CPA, former Chair of the Department of Accounting and Finance at the U.P. College of Business Administration and former financial consultant for the Securities and Exchange Commission, the Asian Development Bank and the Energy Regulatory Commission) and Money for Kids (co-authored with Dr. Nina Lim-Yuson, early childhood educator and President-CEO of Museo Pambata). He was presented the 2004 National Book Award by the Manila Critics Circle, in cooperation with the National Commission for Culture and the Arts and the National Book Development Board, for his first book “Wealth Within Your Reach: Pera Mo, Palaguin Mo!”. In 2005, “Making Your Money Work: Pera Mo Palaguin Mo! 2” earned him a nomination once again.
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