I’m really encouraged by the potential of the younger breed of financial practitioners. Through time, I came to realize that age has nothing to do with wisdom and that we can learn much from the young. I am proud to feature the 2012 Outlook of a very young and bright financial planner who is full of zeal, insight, knowledge — but I am most impressed by his passion to educate Filipinos financially and promote stewardship, Mr. Marvin Germo.

2012 Outlook of Marvin Germo

The Philippine market has been moving sideways for the past year and based on history the  longer a certain market is sideways the stronger the upward or downward push that would follow.  Amidst the doom and gloom that people are projecting in the financial markets of 2012, my outlook is quite optimistic brought about by:

-The move of the world economies to the emerging markets like the Philippines, as money have been flowing to these markets due to cheaper costs, bigger growth potential  and the murkiness of the European and American markets, have made a stronger case to build businesses in emerging economies.

-More government spending, cleaner transactions, higher approval ratings would certainly boost business confidence in the country which would translate into more jobs and bigger business ventures.

-Robust fundamentals in Philippine based companies which are in expanding industries such mining, energy, and construction will see continued growth this year and thus bring in more jobs and business.

To top all this things, I remain optimistic due to the fact that I know God’s Blessing is in the Philippine and because of that I know that the great days of this nation are still right ahead of us!

Marvin Germo is the General Manager of Ephesians Management Corporation and is a Financial Planner and Advisor who is one of the up and coming personal finance gurus that this generation has ever seen. His Passion and zeal to educate the Filipino people has translated into transformed lives, financially free families and has moved ordinary consumers into investors.

He is an Entrepreneur and Financial Resource Speaker who out of his eager desire to make an impact in this nation has spoken in different spheres of society – corporations, government agencies, churches, schools, clubs, organizations, and numerous public events. His ability to breakdown complicated investment concepts and translate it into something that is simple, basic and understandable has made him one of the most sought after money speakers in the land.

He completed the Registered Financial Planners Institute (RFPI) program, he is a Stock Market Trader & Investor more than four years experience in the Philippine financial industry. He also owns (www.marvingermo.com), a financial planning help site. He graduated from Mapua Institute of Technology with a Bachelor of Science in Electronics & Communications. He has just recently completed the Philippine Stock Exchange Certified Specialist Course in the Ateneo Center for Continuing Education.

Question: Should I invest in a life insurance or use the money to expand my small business?—Mary Anne Maloles Tesoro via Facebook

Answer: I am a firm believer of life insurance. I make sure my life insurance policies are always in force as they give me and my wife peace of mind. With the way I travel and the many hazards I face like sleeping audiences and bored readers, life insurance is an important risk protection tool for me. Life insurance is first and foremost a tool for risk management by way of a risk transfer mechanism. Simply put, certain life risk such as untimely death or serious physical breakdown can be assumed by way of an adequate life insurance policy. Since I am married, happily at that, and have four lovely children, having the protection of a life insurance policy is a priority.

Life insurance as an investment is another story. The primary purpose of life insurance is to provide financial protection against life’s risk but investment can be a secondary benefit. It is difficult to compare life insurance with other forms of investments because of the nature of insurance itself. Life insurance needs to deal with actuarial tables and a lot of probabilities because of its primary tables. All those probabilities need to be accounted for and adequate provisions must be made. When you invest in a life insurance policy, not all the money goes to investment as some is allocated for insurance premiums. There are many types of life insurance but since you are referring to it as an investment, I assume you are talking about the variable universal life or unit linked insurance—an insurance  policy with an attached investment similar to Mutual Funds or Unit Investment Trust Funds. Variable type insurance will not perform at par with a mutual fund or a UITF because not all the money is invested in the funds—premiums for insurance protection are allocated from the money invested and these are recurring charges. The bigger the coverage, the smaller the amount goes to pure investments. Its advantage, however, is when the insured (or investor) dies, the named beneficiaries will get both the insurance coverage and investments as well as some estate tax benefits.

Comparing life insurance and small business is like comparing apples with durian, which are worlds apart. Further, the issue of risk and return comes to play in this concern and business is always risky and speculative. Business is also where you can really earn a lot of income and it can substantially grow your capital, albeit all the risk it carries. I’d like to look at insurance as a way to protect future income while business or investments is a way to maximize income. Will business be better as an investment? Definitely! A good business idea coupled with a good business plan and impeccable timing can make your capital grow bigger and faster than paper assets. But, as the saying goes, the higher the yields, the higher the risks. Most start-ups fail and the percentage of those that succeeded is quite disappointing. Yet, I believe we should take a wee bit more risk with our money and be a tad more entrepreneurial—as cliché as it sounds, no guts no glory. Just be prudent and know what you are getting into.

Know your objectives. If your objective is substantial capital gain or adequate provision of income, life insurance products are not the answer—business or other investments are. If your objective is moderate capital growth with financial protection against life’s risks, then life insurance is something you can consider. Also, life insurance products are long-term in nature.

Should you choose between life insurance and business? I say you may need both. If you have loved ones depending on you and your income, you definitely need to assess your life insurance needs. If you are disappointed with the gains you get from other investments like time deposits or special deposit accounts (yields are lower than inflation) then do consider other investments, small (or large) business being one of them.

Just a friendly reminder: Before letting go of your hard-earned money, investigate before investing; check out your alternatives and if need be, talk to professionals. Remember, prudence is always a good virtue.

This article also appears at the Philippine Daily Inquirer

I recently guested in Antony Pangilinan’s show “Magbago Tayo’ at Radyo 5 (92.3) & Aksyon TV. My good friend and school buddy, and one of the country’s best training expert Ardy Abello was pinch hitting as the host as Anthony (also a good friend and school buddy) was in Davao.

I shared my thoughts on the usual personal finance stuff I usually talk about which was great, but I was delighted to interact with another guest who was talking about his new book, Productive Pinoy. The author was Yeng Remulla, a very young and successful entrepreneur who was also a former member of the famous band True Faith. Yeng’s book is an awesome way for us to review ourselves and improve our productivity. It is really encouraging to see young guys like Yeng taking the lead in helping improve Pinoys in general. During the hearty discussion in the show, Ardy and I was enthralled by the wisdom of Yeng — specially when Ardy shared an excerpt from his book. The snippet was all about how to stay in focus and Yeng’s 10 point recommendation hits the spot, bulls eye!

Here are Yeng’s priceless tips:

(1)  Phone in Silent Mode. Use the features of your phone. Missed call logs are there to help you. Don’t worry you can always return the call when you are ready. Don’t feel guilty!

Note: Don’t miss a call for an important event or a transaction about to happen.

(2) Ignore text messages during your Focus Time. You can always read it later. Don’t put it to vibrating mode either.

(3) Turn off your email notification app or your email app.

Close any window in your desktop that you are not using. Yes, including those Messenger and Facebook windows.

(4) Check your email two to three times a day only. Avoid checking your email every 10 minutes. Set time intervals. Set a few minutes in the morning around 10:00am, then check again around 3:00pm. Find out what time works for you.

This will allow you to reply to your emails in bulk, saving you time and allowing you to focus on other things. Besides, it’s more fun to answer emails simultaneously.

(5) Close and lock the door. If you run a home-based business, you’ll find it difficult to separate work and home. Decide to close doors. Consider that room your nine to five office. Let your family know that you need that “uninterrupted” time to get things done.

If you are attending to kids, set your FOCUS Time during nap time or while they are watching their favorite TV shows. In this way, the interruption is minimal (they forget about you when they are watching).

(6) Set a fixed schedule for your FOCUS Time. Make it predictable. Make the people around you aware of this schedule. This will lessen interruption. Let them know that this is your sacred private time.

(7) Your To-Do List must be within reach. Let’s say you are working on a project and your creative juices are flowing; suddenly, you remember something important that you need to do and it’s not related to what you are currently doing. This is how to proceed: Grab a pen and write it down on your To Do list. Then, forget about it and continue with what you were doing earlier.

Writing it down or dumping it on paper frees your mind from thinking about it. If you are running your To-Do List app in your computer, keep that window minimized or in the background. Pop when needed.

(8) Hire an assistant to filter your calls. Answer only calls that you need to answer yourself. Write an instruction on how to handle phone calls– give it to your assistant. This will save you time and energy.

(9) Finish all errands in the morning or in the evening.

Deciding when to do errands frees your mind from worrying about it. Block an hour or a little more to do errands all together.

(10) Go somewhere else. Leave the house or the office. Go to the nearest café, the ambiance might inspire you. It might get you in the mood to be creative or analytical. Go to Starbucks and try a hot, grande breve latte. Put 3 packs of brown sugar. It’s not in the menu, but the barista will be delighted to make the drink for you. Sip and enjoy!

I’m enjoying Productive Pinoy book and it is teaching me so much on how to improve things I normally do. A highly recommended book not just for entrepreneurs but for everyone.

Well done Mr. Yeng Remulla! We need more guys like you to write books and teach guys like me.