I have been interested in playing in the stock market for the longest time but for some reason, I could never get the necessary information and the know-how to do it. I started with VULs and mutual funds but somehow, it was not giving me the satisfaction that I was looking for which, I think, only the “big game” would give me. And that is playing in the stock market. Then last month, I got a glimmer of light in still getting a chance to start playing in the big field when I called my Mom last month and she mentioned about a seminar by Bo Sanchez and members of the Truly Rich Club that is being held once a year.
My Mom wanted so much to attend but since the schedule of the seminar coincides with her company’s annual convention, she forward me the email containing the details and encouraged me to attend. I checked the email and tried to register only to find out that the event is full. I thought that was it, one lost opportunity. But a few days after, I received an email stating that they are opening a second session of the seminar on the same day. I immediately registered and paid the fee online. :D
So last Saturday, May 9, I attended the seminar “How To Make Millions In The Stock Market”. It was a 4-hour seminar with three speakers: Bo Sanchez himself; Mayi Lubaton, Financial broker at COL Financial and Edward K. Lee, Chairman and Founder of COL Financial.
In the span of 4 hours, I have learned a great deal and I would like to share a few with you. :)
From Bo Sanchez:
- The ultimate purpose of wealth is to love other people.
- This is akin to the saying, “give a man a fish and you feed him for a day, teach the man to fish and you feed him a lifetime.” We learn how to become wealthy so we can teach others to become wealthy, too. I am really encouraged with Bo’s house helpers as well as his driver. His ultimate goal then was to teach them to invest in the stock market and he is able to help them prosper through investing, he could teach everyone else to do the same. Lo and behold, his 31-year old helper now has about Php 800,000 worth of stocks. Isn’t that amazing? :D I was really inspired by that story, to be honest. I am the same age as his helper and yet I cannot claim that I have the same amount stashed somewhere.
- 85% lose money in the stock market because they do not know what they are doing
- It appears that a lot of people are lured to invest in the stock market without really understanding how investing in it works. And with that, instead of earning, they lose the money they invest. Also, most of these people are short term traders, meaning, they want fast return of investment. They sell stocks just because they were told to do so by non-reliable sources or they buy stocks from companies that are not really stable in the market.
Bo shared 4 rules of investing:
Rule 1: Invest small amounts every month for 20 years or more
This small amount is something that you wont use for the next 10-20 years. That would mean that you do not invest your emergency fund. There is a reason why it is called as such. :)
Rule 2: Invest when there’s a crisis
This rule makes the most sense to me when it comes to the stock market. The market crashes, everybody panics, investors immediately sell for fear of losing millions more. But it is true that there is opportunity in the midst of crisis. During a crisis is actually the best time to invest in stocks because the prices drop. For investors, these times are like the “mega midnight sale” of stocks. :D
Rule 3: Invest only in giants
Especially for newbies like me, this is a very important rule to remember. Invest in known companies with good reputation and you will never lose a cent in the long run.
Rule 4: Invest in a lot of giants
Start off with one giant and as you start earning from that one giant, invest in another giant, then another. As they say, never put all your eggs in one basket.
One other take away from Bo is this:
- Earn 100%
- Give 10%
- Invest 20%
- Live on the remaining 70%
From Mayi Lubaton: Building Wealth Through Stock Market Investing
- First and best way to start investing is to start saving. Have a reason/s to save and make those reasons personal and specific
- This one reminded me of The Secret. The Law of Attraction. One thing that stuck to me from that book is to make a visual of what you wanted, imagine it (if it is a car, cut out a photo of the specific car you wanted and imagine yourself driving that very car) and claim it and the universe will find a way to give it to you. Makes sense, right?
- Your money in the bank is shrinking in value because of inflation.
How do you earn from the stock market?
- price appreciation
- as the value of the company increases, the price of the stocks increases as well
- dividends cash/stock
- profits distributed by the company to its shareholders
5 Rules to remember when investing:
- Invest small and slowly.
- As mentioned above, do not put all your eggs in one basket. Start small in one big giant first. Then after a given time, buy additional shares from that giant.
- Buy at below prices
- I am not sure how to get this information if you do not have a broker but it seems that there is such a thing as below price. This pertains to the current price of a stock lot against a pegged price of stock lot. If the current price is lower than the pegged price, then buy the stocks if you have the funds.
- Stop buying when the prices are above the buy below prices
- Wait for the stock price to reach the target price. This would pertain to the highest peak price of the stocks. When the stocks reach this level, you may start to sell or wait for further advice from your broker.
From Edward K. Lee: Effective Formula for Financial Literacy
Key takeaway from Mr. Lee:
- Do not plan for your children; plan for yourself. Instead, teach them financial literacy
- This is for the reason that our children would eventually want different things from what we wanted for them. Encourage them to plan for their own future instead. And in order to help them achieve those plans, we need to teach them to be financially literate.
3 Basic Laws of Money
- Save 10-20% of your income.
- Invest it.
- Reinvest the dividends
One quote that I got from one of Mr. Lee’s slides:
“You should, at minimum, expect stocks to fall at least 10% once a year, 20% once every few years, 30% or more once or twice a decade, and 50% or more once or twice during your lifetime.”
– Motley Fool
There will and it is expected to have certain drops in the stock market but these market crashes are needed to have a higher return. As what one of the slides presented (well, several of them), every time that the stock market hits lowest points, once it bounces back, the trend becomes higher than the peak before it crashed. It only means that with every crash, the market comes back stronger.
These are only a few of the things that I have learned during the seminar. The rest I was not able to write down but I have retained it in my head. As what they keep on saying during the seminar, this is the best time to invest. And so I have signed up. Let’s start investing and start earning millions now! :D