Time Value of Money: So What?

I know there have been a lot of speculation and general mystery on  whether or not one investment vehicle is better than the other over a period of time.  Some people think why should they invest their money, and would it be better to invest it elsewhere? 

The answer generally lies in the time value of money (TVM), what a certain sum of money will be worth later in the future depending on a specified rate of return.  For savings accounts, it's typically around 0.375% per annum.  For mutual funds or stocks, around 7%, and for time deposit around 3% per annum.  Specifically for Ayala projects, the rate of return is projected to be anywhere from 8% to 20%, so that should already be a good indication how much the project would be worth after a period of time, especially for our pre-selling projects. 

For example, over a 5-year period, with the above-mentioned rates:

• Savings account: Future value of a 3M investment will be 3,056,673.46
• Mutual funds or stocks: Future value of a 3M investment "could" be 4,207,655.19 (stocks and mutual funds are not fool-proof and carries with it a certain degree of risk especially if not managed properly)
• Time deposit: Future value of a 3M time deposit for 5 years will be 3,477,822.22

Ayala projects with a projected rate of 8% conservatively, the future value of a 3M investment in a condo project such as The Lerato or Kroma Tower in Makati would be around 4,407,984.23 at time of turn-over.  More so now that Ayala is investing around 60 billion in the ongoing development of Makati, real estate property rates will typically trend positively as well.

That's just an example of how much your investment might be worth 5 years from now, with rates remaining more or less the same as they are now.  If you want to read up more on TVM, click HERE.  Play around with a future value calculator to get a better feel of it.

Hope that helps you understand how to make better investment decisions! 

-Jon

What's The Plan?

A couple of months ago, prior to when I stumbled onto the works of Mike Brooks, Brian Tracy and Tom Hopkins, I had a vague image in my mind of what I wanted: a house of my own, a new vehicle, and to get married to my fiancee Me-an.  As far as I know, those were my goals. 

The problem was, I didn't know how to make them come true.  I was trying to hit those targets in the dark.  Sure I passed the licensing exam for real estate brokers, but that didn't really get me any closer to making my goals come true.  My only thought was: if I sell enough, I'll have enough money to hit those goals.  So a couple of weeks ago, a thought hit me back: how am I going to sell enough to make enough money to hit those goals???  Yeah, I know, sometimes my mind is slow to the point of stupidity, but I'm glad I finally came around to the question.  Result: I started looking around online for instructional materials on sales, motivation, and goal-setting.  Hence, the 3 aforementioned gentlemen. 

Listening to their works was like magic!  My mind started to open up to the reality of selling, and how difficult it really is.  I always had this impression that selling was straightforward: if there was a need, just offer the product that answers the need and voila!  Boy was I surprised!  There were steps necessary like prospecting, qualifying, presenting, then finally closing the sale.  There is etiquette involved, tactics and strategies, and mind-altering mental instructions and affirmations!  There's bits and pieces about family, health, friendship, teamwork, and so much more.  More than that, the goal-setting instruction that I got specifically from Brian Tracy has got me moving.  Now, I have real goals, and action plans and steps that I must take to make them happen.

So, what's the plan?

Find out what you want to do, make plans and steps to achieve that, and pay the price willingly.  In other words, keep studying to arm your mind with new ideas and ways, and keep keeping on and never give up.

So, what's changed?

Good question.  At the very least, I've started to learn Tai Chi.  I've started an abs workout to trim my waistline.  And I've set a 200 meters target for my weekly swimming activity.  For my financial health, I have made plans to learn investing in mutual funds and stocks, as well as joint ventures, and buying and selling properties.  I have to fine-tune the action steps, but I now have a light leading to my goals, and that's the best gift I'll ever get this Christmas, maybe for the rest of my life even. 

My goals:
"I earn at least Php100,000 a month by March 2012."
"I own a 3-bedroom townhouse in San Juan by January 2013."
"I own and drive a Mitsubishi ASX by April 2012."
"I marry Me-an by December 2012."
"I enjoy traveling abroad and going to beaches with Me-an by January 2013."
"I own and use a Motorola Xoom by March 2012."
"I am strong and healthy by February 2012."
"I secure an educational plan for Kyle by April 2012."

When The Torii Residences starts selling, you better believe my life's gonna start moving very quickly towards those goals!  I can't wait!!!  Everyday, I'm gonna look at my goals and visualize my house, my car, my wedding, my tablet, my strong and lean body, and my kid's educational plan.  Those things will happen, as sure as the sun rises everyday!  I'm gonna keep keeping on until I can write new goals towards bigger and better things!  Hmmm... Maybe I should upgrade to a 4-bedroom townhouse?

Upgrade your life!!!
Jon