[BUILD WEALTH THRU SIMPLE STOCK MARKET INVESTING] By Art Francis Añana

PREFACE

“Our prosperity as a nation depends upon the

personal financial prosperity of each of us as individuals.”

- The Richest Man in Babylon

For the longest time, the Philippine Stock Market has been ‘alien’ to most Filipinos. And
the reason is obvious; the stock market speaks an alien language.

But this is about to change.

This book offers a very simple introduction into how the Stock Market works. You can’t
know everything there is to know just by reading this. This is simply to awaken in you a desire
to consider this as one way to build your wealth through the years.

To address the language barrier of the Stock Market, I made this very easy to read that
even a Grade-5 student can understand.

I remember a scene from the 2016 movie “Doctor Strange.”

Dr. Stephen Strange was asking The Ancient One how he can learn to do the magic
spells. Here’s how their conversation goes.

Dr. Stephen Strange: “How do I get from here to there?”

The Ancient One: “How did you get to reattach severed nerves and put a human spine
back together bone by bone?”

Dr. Stephen Strange: “Study and practice. Years of it.”

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 [BUILD WEALTH THRU SIMPLE STOCK MARKET INVESTING] By Art Francis Añana

Do you have a dream you want to achieve? A specific number you desire when you
retire? It can be 1 Million pesos. Or 50 Million. Maybe even 1 Billion pesos.

The same principle applies:

“If you are to achieve what you desire, time and study would be required.”

Take time to learn the laws that govern the acquisition of wealth by educating yourself.
Read more books about finance. You can see my recommended books at the last page of this
book.

Share this dream with me:

That the Philippines become a nation so great, just like Ancient Babylon, because its
people appreciate the value of money. That the Filipino people practice sound financial
principles in acquiring money, keeping money, and making their money earn more money. Thus
providing for themselves what we all desire… incomes for the future.

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 [BUILD WEALTH THRU SIMPLE STOCK MARKET INVESTING] By Art Francis Añana

I. HOW MONEY WORKS

A 2015 Study conducted by LIMRA states that when 25 year-old today reaches 60:

Only 1% will be wealthy

Only 4% will be financially independent
5% will need to work
27% will be dead
63% will be broke

But why is this so? Its because there is a lack of understanding of:
The 3 Basic Laws of Money

1. Save – pay yourself first with 20% of your income. That means to automatically save
20% of your income each and every time.
When the Rich receive their income/profit, this is what they do:
Income – Savings = Expenses
(meaning there is already a set amount for savings before paying any bills)

But the Poor Man’s mentality is this:

Income – Expenses = Savings
(meaning whatever is left after paying all the bills is their savings. So there are
times when they have nothing left to save.)

2. Invest – know where to grow your money. It is not enough to save if you don’t make
your money grow. Inflation will just eat it up. (I’ll explain inflation later)

3. Reinvest – whatever dividends/income you money makes, reinvest it to maximize the

power of compounding. Compound interest simply means your interest money is
making more interest money for you.

So the plan should be: Invest 20% and live on 80% of your income

This is a trick question: would you believe that your P50 today can become P50 Million
someday?
Yes it can. But it will just take TIME.

So if you decide to put your P50 in a time deposit account in the bank, (depending on the rate
you will get):
your P50 will become P50M in 468 years at a 3% rate per year
your P50 will become P50M in 284 years at a 5% rate per year
your P50 will become P50M in 145 years at a 10% rate per year
your P50 will become P50M in 99 years at a 15% rate per year

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 [BUILD WEALTH THRU SIMPLE STOCK MARKET INVESTING] By Art Francis Añana

See? You’ll still be a millionaire if you are patient enough.

But let me ask you, can you save P50 per day?
At 10% a year, it will only take 56 years to become P50 Million
At 15% a year, it will take 40 years to become P50 Million

This is because of the Power of Compounding.

Example:
A friend asked me if he can just invest a certain huge amount and leave it there.

If he is 25 years old and he invests P100,000 in the Stock Market at growth rate of 12%, at age
60, he will have P5.5 Million.

But, I asked him if he can just invest P3,000 every month. So I computed it at growth rate of
12%. At age 60, he will have P22.6 Million.

Which do you like better? P5.5M or P22.6M?

A 12% average growth rate in the long term is very doable when you invest in the Stock Market.
I’m talking about decades long investing (not trading). Just continue the discipline of putting in
a certain amount every month without fail.

Here is a very basic & simple analogy I found on Youtube that talks about what the Stock
Market is. And it uses our favourite food: PIZZA.

 Go to: https://bit.ly/2UGXgZr

Lessons we can learn from it:

1. Philippine Stock Exchange (PSE) – the organization that allows companies to sell their
shares and the public to purchase those shares; while maintaining a fair, transparent
and efficient market.

2. There are a limited number of shares a company can sell to the public.

3. The Stock Market is where the buyers and sellers meet.

4. Prices are largely determined by the Law of Supply and Demand

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 [BUILD WEALTH THRU SIMPLE STOCK MARKET INVESTING] By Art Francis Añana

Investing Against INFLATION

What is inflation? Inflation is a quantitative measure of the rate at which the average
price level of a basket of selected goods and services in an economy increases over a period of
time.
Or the loss of your money’s purchasing power after a period of time.

I like to make it simple.

Imagine your mom stuffed a P500 bill in her old wallet in the year 2000 and then forgot
about it. Cost of gasoline during that year was around P19 per liter, which means she could
have then bought 26 liters of gasoline with that P500 bill.

Fourteen years later in the year 2014, the cost of gasoline was around P48 per liter. If
she finds the forgotten P500 bill in the year 2014 and then went on to purchase gasoline, she
would have got only 10.4 liters.

Although the P500 bill remained the same for its value, it lost its purchasing power by
around 60 percent over the 14 year period.

This simple example explains how money loses its value over time when prices rise. This
phenomenon is called inflation.

My friend J3Patino explains this very well in his book “Stock Market Jumpstarter”.

He said “Inflation continuously divides people into2 types: those who can invest above
inflation, and those who can’t. Those who can invest above inflation will be able to accumulate
wealth and become rich, while those who can’t will create poverty and become poor. It is
unfortunate that very few Filipinos know how to invest above inflation. This is one explanation
why so many Filipinos are poor.”

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[BUILD WEALTH THRU SIMPLE STOCK MARKET INVESTING] By Art Francis Añana

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 [BUILD WEALTH THRU SIMPLE STOCK MARKET INVESTING] By Art Francis Añana

II. HOW TO FIGHT INFLATION BY INVESTING IN THE STOCK MARKET

But first, what is the Stock Market?

It is the same concept with our Public Market. Our Public Market sells fish, vegetables,
meat, radio, beds, etc. The Stock Market sells shares of companies in the Philippines such as
Jollibee, SM Malls, BDO, PLDT, etc. (If you’re confused what ‘shares’ of a company are, watch
that Youtube video again I told you about.)

What is the difference between Stock Market Investing and Bank Deposit or other forms of
investment?
When you deposit money in the bank, you’re actually letting them borrow that money
from you. For doing that, you get a fixed amount of interest. (e.g. 3% interest on time deposit)

In the Stock Market, you’re investing in a business such as Jollibee. That business may
rise or go down. You go along with either their success or downfall. That’s why it is important to
invest only in giant companies that are managed very well.

It may sound scary at first but the Stock Market has beaten any form of investment out
there in terms of return. It’s what they call high risk-high reward investment. But if you invest
for the long term, the risk grows lesser and lesser.

Just look at where our Index was during the 80s.

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 [BUILD WEALTH THRU SIMPLE STOCK MARKET INVESTING] By Art Francis Añana

Long-term investing solves the problem of short-term volatility. Prices may swing up and
down due to issues on economic, political or natural events. But you can see above that the PSE
Index always goes up through the years.

Is it better to go into business or invest in Stocks?

Of course, it is better to go into business. From my background of growing up in a family
business, I would attest that doing business is better. You can gain 100% of your investment
back in less than a year, depending on the type of business you’re in. But also remember this,
business requires a huge capital and entrepreneurial skills.

Compared to investing in Stocks, you need only a small capital and then you rely on the
company’s entrepreneurial skills. You basically make them work for you.

But this is my advice if you have an existing business, invest a small portion of your
profit into other people’s successful businesses (e.g. Giant companies like SM, Jollibee, PLDT,
etc). And you basically earn from their success.

If I invest in the Stock Market, how do I lessen the risk?

Invest for the long term (in 10, 20 or 30 years) and diversify your investment (Stocks,
real estate, business, etc). As I said before, long-term investing solves the problem of short-
term volatility.

Do I need to watch over my investment everyday?

Investment means “Money making money for you.” So if you watch over it everyday,
your money is no longer working for you. You are now working for money.

So please don’t watch over your Stock Market portfolio every day, every hour, every
minute. Don’t watch every single movement in price. You’re just wasting your time instead of
doing productive work.

Think about this, for example, you invested in SM Malls.

Think: Will SM be losing money 5 or 10 years from now?
No, because every 15th and 30th of the month, people will come inside the mall. Some
may shop, eat, watch movies – or do all of them.

Is the Stock Market only for the rich?

This is a reaction I get.
“I can’t invest in the Stock Market, I don’t have millions!”

Let us break that misconception by first understanding the concept called “Board Lot”
 Board Lot – is the minimum number of shares that can be bought in the Stock Market.
Every company has different Board Lots. It would largely depend on the price of the
each share.

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For example, you want to buy shares of Jollibee

• Board Lot: 10 (meaning you can only buy shares of Jollibee in multiples of 10. Meaning
you can either buy 10, 20, 30, 40 or 50 shares. But not 11, 23, 35, 48 shares)
• Price: P190/share
• P190 x 10 = P1,900
(Meaning: You only need P1,900 to invest in the biggest fastfood chain business in the
Philippines. So the Stock Market is really NOT only for the rich)

Other examples:

SMPH PLDT
Board Lot: 100 Board Lot: 5
Price: P17/share Price: P3,000/share
P17 x 100 = P1,700 P3,000 x 5 = P15,000

If the company’s stock price is going down, is it the right time to buy?
First, we must differentiate 2 things: Price and Value.

If the company’s stock Price is going down and its true Value is also going down, DON’T
BUY! That means the company is losing money or it’s not being managed very well.

But if the company’s stock Price is going down but its true Value remains high, then it is
time to BUY!

Example:
In 2007, Jollibee’s stock price was P50/share. In 2008, the Global Financial Crisis hit the
US and Europe (Philippines was not hit). But in the same year, Jollibee’s stock price went down
to P35/share.

Question: In 2008, does that mean Jollibee was going down that year?

No, Jollibee was actually expanding that year. This is an example of the stock Price going
down but its true Value remained high.

During this year, you should have bought shares of Jollibee.

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What are the ways to make money in Stocks?

There are 2 ways:

1. Capital Appreciation – is an increase in the price of the company’s stock. For example
you bought 100 shares of Unionbank (UBP) at price P60/share on May 2016 (Total
investment: P6,000). But 2 years later, UBP is now priced at P91.40/share, if you sold
your shares, you will have P3,140 as profit. That is more than 50% return on your
investment.

2. Dividends - a sum of money paid regularly (typically quarterly) by a company to its

shareholders out of its profits. Here is a copy of the dividend I received from Metrobank.

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 [BUILD WEALTH THRU SIMPLE STOCK MARKET INVESTING] By Art Francis Añana

Where do I go to open a Stock Trading account?

Everything is now available online. You can go to your bank and ask if they have a Stock
Trading platform. If not, you can choose from these options:

If you already have an existing account with these banks, the process to open a Stock
Market account with them is fairly easy.
• BPI – Bpitrade.com
• Metrobank – Firstmetrosec.com
• BDO – Bdo.com.ph/bdonomura

But my personal favourite and the one I use is this:

• www.COLfinancial.com

Can I have a real person as my Stock Broker?

Yes. They are called Offline stock brokers. They have more expensive fees and
commissions compared to online brokers.

Is it scary to start?
Yes it could be. But Online Stock Brokers offer a 7-Day Trial. You’ll be given an account
and password. You can then access their site and get familiarized. The good thing is you’re not
spending any money. You’re just on trial.

When is the best time to invest?

“The best time to invest was 20 years ago. The 2nd best time is now.”

The above quote sounds a bit cliché. But it is really true. When Henry Sy bought cheap
lands in far-flung provinces, nobody took notice. But when SM was built in these areas, the
value of these lands multiplied many times over.

There is no forecasting involved. He did not say, “I wish I knew that land would increase
in value in the years to come.” Henry Sy actually took action and he created value by investing
when no one else would.

What do I recommend?
Option #1: Read books
Read many financial books. Grow your skills to become a better investor. The best
investment is an investment in yourself. I have a list of books I recommend at the end of this
book.

Option #2: Have a Mentor

I consider this the best option for passive investors like me and you. Yes, it’s nice to
know that the Stock Market can help you become rich. So are you just gonna go blindly into
Stock Market Investing and start buying stocks today? You might end up buying overpriced
stocks and lose money a few weeks from now. Please don’t start this way.
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 [BUILD WEALTH THRU SIMPLE STOCK MARKET INVESTING] By Art Francis Añana

Have someone as a mentor. A mentor will teach you what stocks to buy or sell and at
what price. It removes the need for analyzing charts and tables. He does it all for you.

Benefits of having a Mentor:

1. Saves your TIME.

You no longer have to study and learn everything about the Stock Market. Most
people study the market for years before starting. They don’t realize that in the
Stock Market, your best ally is TIME. The earlier you start the better.

2. Saves your ENERGY.

You have a job, a family, a social life, etc. There are more important things to do
than to watch over your stock investments everyday. “Investment” should be
“money making money for you.” Just gradually add to your investment every month.

3. Saves your MONEY.

If you don’t know what you’re doing, you’ll most likely lose your money in the
market. A mentor will teach you a simple strategy of spending about 20 minutes
every month to buy and sell your stocks. And you’ll certainly retire with millions
after a few years.

I started investing in the Stock Market on March 2011. Following my mentor’s strategy,
my investment has grown at 12% a year. Not only did my investment grow, I’ve also grown as a
person.

I’ve also learned the concept of accumulating wealth and being generous at the same
time. I’ve learned that there is no lack or scarcity in this world. Everything is provided for.

If your concern is all just about making more money, you can easily find mentors on
facebook. They’ll teach how to make money. And I see that as a problem. How to make money
is easy to teach. But how to handle money and how to handle yourself when you have the
money – they are difficult to learn.

That is why I recommend Bo Sanchez as your mentor as well. (Hindi ako mapapahiya by
recommending him to you.)

He will teach you how to invest, change your financial mindset and grow in abundance.

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 [BUILD WEALTH THRU SIMPLE STOCK MARKET INVESTING] By Art Francis Añana

III. HOW TO BEGIN INVESTING IN THE STOCK MARKET

If you decide to have Bo Sanchez as your Mentor, you will have to become a member
of his Truly Rich Club. By being a member, you will receive:

1. Investment Guide
Current Buy Below Target
Stocks Price Price Price Recommendation
AC 943 956.32 1100 Buy
RLC 23.6 23.16 28.95 Stop
MEG 6.25 5.17 6.2 Sell

This will serve as your guide so you do not lose your money in the Stock Market. It will
give you a recommendation when to buy undervalued stocks, when to stop and when
to sell them.

2. Inspiration
These monthly messages will encourage you, build you up, and enrich your soul while
helping you achieve your dreams. Topics cover The Abundance Mindset, Clarity of
Vision, Financial Planning, etc.

3. Insurance
This is a free P100K Accident and Life Insurance after 1 year membership, or if you
have paid the 1-year membership. This is good as long as you are a member.

I’ve recently asked a friend to give me a quote for a Life Insurance. And guess what, a
P150K Life Insurance would cost you P11,000 a year to be paid for 5 years.

While in the Truly Rich Club, we get it for free.

4. Income Opportunity
Every member of the Truly Rich Club is given the opportunity to earn affiliate income
when he/she invites someone to join. The Club has a monthly fee and the member
earns a small portion from that membership fee.

I recommend the Truly Rich Club because of this simple fact:

70% of Lotto winners go bankrupt and have broken family relationships after 5 years.
It is really important that you know how to manage not only your wealth but also your
health and relationships as well.

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 [BUILD WEALTH THRU SIMPLE STOCK MARKET INVESTING] By Art Francis Añana

* Monthly Investment at 12% Growth Rate

10 yrs 15 yrs 20 yrs 25 yrs 30 yrs 35 yrs

1,000 230,039 499,580 989,255 1,878,847 3,494,964 6,430,959
2,500 575,097 1,248,950 2,473,138 4,679,117 8,737,410 16,077,399
5,000 1,194,804 2,532,564 4,890,155 9,045,036 16,367,356 29,271,785

This is a sample computation of how much you’ll be retiring with, if you commit to invest
a certain amount every month.

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 [BUILD WEALTH THRU SIMPLE STOCK MARKET INVESTING] By Art Francis Añana

What are Blue Chip Stocks?

In the game of poker, Blue chips are used as the highest denomination in value. This
means that these companies are the most prestigious, reliable, stable, well-established giant
companies that have operated for many years already. These stocks are also being actively-
traded in the Stock Market – which means there is always a seller when you want to buy, and
there is always a buyer when you want to sell.

TRC mostly recommends Blue Chip stocks. These are the recommended stocks of TRC
over the years. Their rates of return are well above 12%.

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IV. HOW TO JOIN THE TRC

1. Go to: tinyurl.com/trulyrichfilipino. Or simply CLICK this LINK

2. If you see this, you’re on the right page.

3. Read the whole page and scroll down to the bottom. Choose “Philippine Residents” if
you live in the Philippines. If not, choose “International Residents”.

Make sure to see my name at the bottom left corner. I give free consultation, answer
your questions, help you open an account, give you a copy of the excel worksheet
“Investment Computation” (this calculates how much you’ll have in X number of years by
investing X amount every month), etc. in exchange for using my link. You can message
me during business hours Monday to Saturday 8am-5pm
Message me on facebook: @thebossclubph

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4. Fill-up the form and pay your monthly or yearly subscription (depending on which you
choose) thru credit card or bank deposit.
5. Once you’ve paid, you’ll receive an email that will give you access to the TRC platform.
There you can see the StocksUpdate.

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V. HOW TO OPEN A COLFinancial ACCOUNT

1. Go to: COLFinancial.com
2. Click: “Open an Account”

3. You will be redirected on a page where you will:

a) Choose your Account Type (COL Starter, COL Plus or COL Premium). Your
account will be automatically upgraded once it reaches the minimum investment
level.
b) Fill-out the Application Forms
c) Prepare the Additional Requirements
d) Submit the Forms and Requirements
e) Options on How to Fund Your Account
4. Once your Application Forms are sent, a COL Agent will schedule an interview with you.
This is to verify your identity.
5. Once you are approved, COL will send you an email containing your Username and
Password. You will use it to access your COLFinancial Account.
6. The next step is to change your password. Go to: COLFinancial.com. Type in your
Username and Password (the one COL sent you).

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7. Click “Home” and “Change Profile”. Then change into your new Password.

I only recommend COLFinancial because I personally use this as my online Stock Broker.
As I said before, if you have existing accounts with these banks, opening a Stock Market
Account with them is fairly easy.

• BPI – Bpitrade.com
• Metrobank – Firstmetrosec.com
• BDO – Bdo.com.ph/bdonomura

I am not affiliated with COLFinancial whatsoever and I do not earn anything for
recommending them. I am just one of their satisfied customers.

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VI. STEPS TO BUYING YOUR FIRST STOCK

1. Click on "Trade/Portfolio" tab

2. Click "Trade/Enter Order"

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3: Type in the “Stock Code” of the company you want to buy

Example:
Metrobank is MBT; Banco de Oro is BDO; and Ayala Land is ALI; etc.
What companies shoud you buy? At the Truly Rich Club, members receive a list of
recommended stocks, which change constantly.

4: Type in the number of shares you want to buy.

Imagine you're investing P5,000 and you're buying Ayala Land (ALI).
Let's say ALI’s current price is P39.6 a share. So divide P5,000 by P39.6, and you get 126
shares.
All companies require a minimum number of shares or what they call "Board Lot" every time
you want to buy shares. You'll find the Board Lot at the lower right hand corner of the
webpage.

For example, ALI’s Board Lot is 100. If you have P5,000, the most you can buy is 100 shares,
not 126.

5: Type in the price of the stock.

I suggest you look at the highest amount at the “Ask” column and type that peso figure in
so that your order gets done fast. Because you're a long-term investor, the cents won't
matter much to you.

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6: Click "Preview Order"

It will bring you to a page where you'll review your order. Enter your password again, click
"Place Order" and that's it.

7. Check Your Stock Portfolio

You now have a stock portfolio. No, that's not a leather briefcase. Where will you see it?
Click the "Trade/ Portfolio'' tab. And then click the “Portfolio'' and see if your order is
there. If the order was already made, you’ll find it in your portfolio.

Congratulations!
Do a twist, eat some ice cream, and say,
"Thank You, Lord."
Because you've just bought your first stocks!

DID THIS BOOK HELP YOU UNDERSTAND AND APPRECIATE THE STOCK MARKET?

If so, I only ask ONE FAVOR from you.

Please use my special affiliate link if you do decide to join Bo Sanchez’s Truly Rich Club. I
will earn a tiny commission from your membership. Don’t worry because the price will still be
the same. There won’t be any added cost on your membership.

My affiliate link: https://bosanchezmembers.com/amember/go.php?r=15031

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DO YOU STILL WANT TO USE MY AFFILIATE LINK BUT YOU’VE ALREADY

JOINED THE TRULY RICH CLUB?

How nice of you to think about that. Here’s what you can do.

1. Please contact the Truly Rich Club at any of their numbers:

- 0917-899-0296 - 0917-875-5660
- 0917-853-3693 - 0917-621-0465

2. Tell the Customer Representative I invited you to join the Truly Rich Club. Use my
details below:

Name: Art Francis U. Añana

Email address: antit_3@yahoo.com

3. The Customer Representative will then ask you to email them this message.

“Hi. I was invited by Art Francis U. Añana to join the Truly Rich Club. His email address is
antit_3@yahoo.com. Thank you.”

4. Send the email message to: support@trulyrichclub.com

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VII. THE 4% RULE

How much money do you need before you can retire? Or to be frank about it, how much
money do you need to survive in retirement?

Let me introduce you to the 4% Rule. This is only for you to have a specific number you
can aspire for. This will be good estimate of how much you’ll probably need.

And this is how you do it. Multiply your Total Yearly Expenses by 25. (Or your monthly
expenses x 12 months x 25).

Let’s say your Total Yearly Expenses is P1M.

Multiply it by 25, and that gives you P25M.

That means you need to have P25M in your portfolio so you can retire comfortably for
the rest of your life.

How does this work?

Let’s say your Stock Market portfolio pays dividends and appreciates in price at a
conservative rate of 8% per year. Inflation then eats about 3-4% a year. That leaves you with 4%
you can reliably spend FOREVER.

The 4% Rule for retirement refers to your ‘safe withdrawal rate’. It is the amount of
money you can withdraw each year from the starting value of your portfolio.

So what is 4% of P25M is? Guess what?

It’s P1M.

And P1M is equivalent to the Total Annual Expenses you computed, right?

Though there are still factors to consider here such as inflation, medical expenses,
emergencies, etc., this is still a good rule to follow.

There are a lot of videos that talk about this. You can learn more about this rule by going
to Youtube and type “4% rule.”

Or read my facebook post:

How Anyone Can Spend P100K Every Month for the Rest of His/Her Life
https://bit.ly/2IeUrfw

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VII. FREQUENTLY ASKED QUESTIONS

1. Is the 12% annual growth realistic?

Go to: https://bit.ly/2VtHUb7

2. Wouldn’t my investment dry out after a few years following the 4% Rule?

Go to: https://bit.ly/2zYPQLb

VIII. RECOMMENDED READINGS FOR FURTHER STUDY:

The Richest Man in Babylon by George S. Clason

The Millionaire Next Door by Thomas J. Stanley & William D. Danko

The 8 Secrets of the Truly Rich by Bo Sanchez

“It takes skill, talent, hardwork and patience to make money.

But the only way to keep it is to follow God’s way.”

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