Skip to main content

How Investing in Equity Funds Curbed My Spendthrift Tendencies

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. 

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"

"What Is an Index Fund? An Easy Way to Enter the Stock Market" by Kevin Voigt (March 20, 2021)
Labels:

Popular posts from this blog

Venezuela as a Cautionary Tale on #SahodItaasPresyoIbaba, Nationalistic Pride, Welfare State Economics

The Sunday Guardian Years ago, I wrote about Venezuela's pride and protectionism , under a more "formal" style of writing compared to my latest posts. I decided to use an even "less formal" and "less academic" tone since I'm not writing a term paper. Instead, it's like how a professor and a student discuss the thesis using first person over third person, using contractions, etc., while the thesis doesn't use such tones. Back on track, I thought about the arrest of Venezuelan President Maduro can spark debate. Was it a violation of sovereignty? I'm no expert on international law. However, Venezuelans can be seen celebrating Maduro's arrest. Right now, I'm using Gemini AI and Google search to help me find some sources for this blog. It's because I don't want my blog to become another gossip central, but a place to discuss facts with my own personal opinions (making sure they don't  derail the facts).  I used Venezuela ...
Read more

Venezuela's Pride and Protectionism

The Telegraph Venezuela is an oil-rich country yet it's a very poor country. Somebody could go ahead and give every unthinkable reason such as "foreign investments caused it" (a blatant lie) and "It's because America had economic sanctions in Venezuela". Yet, the answer can be found in several causes such as corruption. Yet, China and Vietnam, which can be seen to still have a good amount of corruption, are far more successful. The answer also lies in one policy--economic protectionism . The very idea that a country that first world countries used "protectionism" to succeed is a lie as proven by Venezuela's ongoing crisis. A common-sense examination of one root cause of Venezuela's continuing crisis Forbes magazine mentions this in "What Do Investors Need To Understand About Venezuela's Economic Crisis?" by Nathaniel Parish Flannery on December 21, 2016: Venezuela is far and away the worst-managed economy in the Americas . Ad...
Read more

Davide vs. Mahathir: Which Lolo Should Filipinos Take Economic Advice From?

The real issue isn't that something is old or new. Instead, if something old or new still works, or doesn't work! Many modern laws are built on some ancient principles, while adjusting to the current times!  The Constitution of Japan is actually older than the 1987 Constitution of the Philippines. However, it's more effective for the reasons that (1) their constitution is silent when it comes to regulating economic activities (ex., protectionist measures), and (2) it's a parliamentary system. Honestly, it's a pretty straightforward constitution compared to ours! As Mahatir Mohamad turned 100 today, I would like to raise up Atty. Hilario G. Davide Jr. once again. The problem isn't Davide's age but his unwillingness to embrace change when needed (read here ). This time, it's time to bring up a contrast between wise old people and unwise old people. A young person can be right where the old person is wrong. A young person can be wiser because he or she lea...
Read more

Filipino Manufacturing's Golden Age ENDED Because of the Filipino First Policy

Here's a picture from the Dose of Disbelief Page on Facebook. Here's something that it wrote: Filipinos once trusted locally made products more than imports. Before World War II, the label "Made in the Philippines" carried prestige, not stigma, reflecting a strong sense of national confidence in domestic production. Local products such as shoes, cigars, textiles, furniture, and food were often preferred over imports. This preference was rooted in the belief that local goods were better adapted to local conditions, tastes, and were often of comparable, if not superior, quality. This period showcases a strong historical era of consumer nationalism and thriving local industries. We need to look into the context of Filipino history  If we look at the Philippine history timeline , we must account for 1935-1940, during which the Philippines was under the Commonwealth government. Independence was declared from Spain on June 12, 1898. However, there was a transition period w...
Read more

Confusing Foreign Direct Investment for Foreign Imperialism for the Bajillionth Time

I guess those fools of the Philippine Anti-Fascist League (and many of its deluded supporters) either refuse to get it or are blatantly lying. Almost every rally held by what many believe are CPP-NPA legal fronts also confuses foreign investors for foreign invasion or even foreign imperialism . Once again, do I need to say that 100% FDI ownership is all about the shares and not land ownership ? What makes it even more hypocritical is that they are actually recording these things on imported media . They're sharing their anti-FDI rants using imported devices, imported platforms, and imported social media (read here ). When I do ask them on Facebook, they say how can they take them seriously and that they're "simply forced to participate in capitalism". Did anybody (especially those they call "evil capitalists") force them to buy the expensive Apple equipment when they could've settled for Xiaomi or Huawei?  A simple research on the dictionary will tell us...
Read more