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

Teaching Mandarin by Recalling How Much Chinoy School Students Complained, "Hay, Chinese!"

It's time for a bit of Chinese language Throwback Thursday. I remember how the Chinese school can be summarized as students  memorizing without understanding . The problem wasn't the Lǎoshīs (老師) but the system that ran them as persons . I decided to write this article to " bring up a trauma " associated with the Chinese education system. From Kiko Chinese, this picture shows the common complaints from children. Standard Chinese is so hard! The Chinese schools tend to lose students because they keep failing in Grade 2 or Grade 2 in Chinese. In fact, I remember someone failing Chinese four times back in the 1990s. Another one was three years in Grade 3 Chinese, where the Chinese teacher was even stricter than the Grade 2 Chinese teacher. The real issue was that there wasn't any real learning because the old traditional Chinese system wasn't doing anything right . People were treated as if Hokkien were their first language. However, we realize that people can...
Read more

Real Talk: No MNCs In Their Right Mind, Would Ever AGREE to That Ridiculous 60-40 Proposal

Here's another art I found on Facebook. Some time ago, I wrote about how the 60-40 policy may not prohibit, while still discouraging FDIs from entering . It's plain common sense, really, that nobody would want to rent a space if they had to part with 60% of their net profits to the lessor (read here ).  It annoys me to think that certain Netizens on Facebook are still blaming government corruption over the 60-40 policy. That can get annoying. I can link the 60-40 policy to government corruption . After all, corrupt officials want to perpetuate their stay in power through an ignorant and impoverished population. However, blaming corruption alone is really downright stupid. Some say investors are going to Communist Vietnam because the Communist Party of Vietnam-Vietnam People's Army is serious about cracking corruption. However, the reality is that, ironically, Communist Vietnam has more reasonable economic restrictions compared to the Philippines (read here ). Only a few sec...
Read more

Communist Vietnam's Great Leap Forward in Agricultural Production

I remember reading through Third World to First by the late Lee Kuan Yew. It's very easy to use the book to badmouth the Marcoses but not to learn from the rest of it. The book also talks about Vietnam and LKY's encounter with the late Nguyen Duy Cong aka Do Muoi. It's often said that Singapore only opened because of its lack of natural resources. On the contrary, Do Muoi decided to learn from Singapore how to turn the Communist Party of Vietnam into a powerhouse. Do Muoi, though a communist , was impressed by Singapore during his October 1993 state visit. Vietnam, unlike Singapore, is a country rich in natural resources. The third-world mentality said that MNCs are there to rape the resources .  A very huge misconception especially if you know Singapore's history Some Filipinos on social media even say that FDIs will destroy agriculture and nature. This is a meme by the Philippine Anti-Fascist League on Facebook. They say that FDIs equals environmental degradation. Yet...
Read more

Kabataan Partylist Seriously Needs to Learn ECONOMICS from the Ho Chi Minh Communist Youth Union

Vietnam National University, Hanoi Kabataan Partylist, is that you? No, it's actually the Ho Chi Minh Communist Youth Union (Đoàn Thanh niên Cộng sản Hồ Chí Minh), or alternatively, it can be called the Vietnam Youth Union . The color blue may remind some of Kabataan Partylist. Both Kabataan Partylist and the Vietnam Youth Union are involved with recruiting youths into the organization. However, there's a crucial difference between Kabataan Partylist and the Youth Union in how they view economics. The  Kabataan Partylist Laguna's blog  even writes this: It believes that the Philippines, as a semi-colonial and semi-feudal country, is plagued by a system which allows foreign and big business interests to dominate, while the majority of our countrymen are left poor and hungry . We are living in a society where foreign subservience, peasant landlessness, and rampant corruption are the top three ills. To that end, Kabataan Party-list strives to galvanize the Filipino youth in u...
Read more

Indonesia's Masarang Foundation Proves that FDI Can Greatly Help Local Philippine Agriculture

As I've sipped two glasses of Tealive's Aren Caramel (read here )--I was tempted to research more on palm sugar from the Arenga tree. Arenga bears the fruit that Filipinos call kaong and Indonesians call kolang kaling. As a Filipino, I prefer to call it the Kaong Tree or Punuan ng Kaong. This video is from Masarang, Indonesia. Masarang in Tagalog means strong. If the Indonesian word means strong as well--this is a very strong foundation. The research on palm sugar landed me in the organization called Yayasan Masarang or Masarang Foundation. The video I just shared shows the struggle of palm tappers and how FDI can help in learning environmentally-friendly practices.  The late Lee Kuan Yew even published in his book From Third World to First about greening Singapore. The pernicious myth that's spread around is that Singapore supposedly only opened to FDI due to lack of natural resources . However, other countries rich in natural resources like Malaysia, Indonesia, Japan, Chi...
Read more