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| The Dollar Stretcher |
I admit I used to overspend as a teenager. Eventually, I started helping out in our family business, made some bad decisions typical of young people, and I admit I've got the tendency to overspend. I started to invest in time deposits and invested in treasury bond (which is loans for government and retail companies), and I was initially discouraged from stocks because of the volatility. My first bond was sold and I decided to reinvest the money. Right now, I wonder what I'd do with the money when it matures plus I still have a long-term negotiable certificate of deposit (LTNCD) due two years from now. I thought about the bear market and realized Warren Buffett would advise buying the dip with an index fund. Before that, I decided to get into AXA's Chinese Tycoon Fund which invests in blue-chip companies by Filipino-Chinese businessmen (read here). I wanted to increase my coverage but found out my short attention span can be a real killer.
Before the pandemic, I got the AXA Chinese Tycoon Fund. Having to lay aside PHP 3,000.02 per month made me think to focus on my needs than my wants. It would be a good idea to focus on getting my needs over my wants. I do want a lot of stuff but I've got to be careful with my impulsive spending. Laying all that aside made me think about long-term investing. Sure, I've got a 2.5% per annum fee (due to active management is also involved). However, it's for the long-term and the stock market may go from bull to bear and bear to bull within a given timeframe. 2023 would mark the fifth year of my AXA Chinese Tycoon Fund. I decided not to pull it out because the PHP 3,000.02 allocated per month during a bear market means there are more units bought than during a bull market. Still, the principle is cost averaging with AXA to minimize losses. Though, I want to also do value cost averaging--that is buy a bit more during a bear market and buy less during a bull market.
Before the pandemic, I got the AXA Chinese Tycoon Fund. Having to lay aside PHP 3,000.02 per month made me think to focus on my needs than my wants. It would be a good idea to focus on getting my needs over my wants. I do want a lot of stuff but I've got to be careful with my impulsive spending. Laying all that aside made me think about long-term investing. Sure, I've got a 2.5% per annum fee (due to active management is also involved). However, it's for the long-term and the stock market may go from bull to bear and bear to bull within a given timeframe. 2023 would mark the fifth year of my AXA Chinese Tycoon Fund. I decided not to pull it out because the PHP 3,000.02 allocated per month during a bear market means there are more units bought than during a bull market. Still, the principle is cost averaging with AXA to minimize losses. Though, I want to also do value cost averaging--that is buy a bit more during a bear market and buy less during a bull market.
I wanted to do value averaging and I felt helpless. Fortunately, I decided to get GCash so I could order some food. It's kinda stupid really but GCash has the GInvest feature. Sure, I want to open Seedbox but I think GInvest will do for now. GInvest allows certain products such as stock index funds, feeder funds, and bonds. I decided to invest small amounts to rebuild my investment muscle. However, I realized that it might be better to lay aside PHP 1,000.00 to PHP 2,000.00 per month (or quarter) to the stock index funds and the feeder funds. The Philippine Stock Index Fund is more on passive management while the Philippine Smart Equity Index Fund combines the best of active and passive. The ATRAM Global Consumer Feeder Fund and the ATRAM Global Technology Feeder Fund will allow me to invest in global stocks without having to open an account abroad.
The principle of investing is to invest what you don't need now. I still find the idea of investing only what you can afford to lose to be very self-defeating (read here). I prefer to think about investing in what I don't need now. In short, I'll keep some emergency cash on hand, maybe invest only every quarter, or not invest at all (for a short period especially during a bull market) if the minimum has been met. I would think the best way to do it is that some of the money I set aside for wants gets invested. Money set aside for needs should stay. What happens is it becomes amusing to see myself trying to make every penny last. Fortunately, I don't desire luxury goods which is why my spendthrift tendencies aren't that bad. Still, I want to curb them as much as possible.
The objective here so to be thrifty, not stingy. That's why I wrote an article where I explain why being stingy isn't a good thing (read here). The aim isn't penny-pinching either. I want to achieve a thrifty lifestyle. Buying those equity funds when I can (and holding on to my AXA equity fund) has been helpful in making me reject a luxurious lifestyle. It's been one of the ways that one could stop spending on what doesn't matter to focus on what truly matters in finance.
References
"Buying the dip: Is this a good strategy when markets are falling?" by James Royal (May 26, 2022)
"Philippines Feeder Fund What It Is And How To Invest"
"The difference between a stockholder and a shareholder" (May 18, 2022)
"What Is an Index Fund? An Easy Way to Enter the Stock Market" by Kevin Voigt (March 20, 2021)
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