Tuesday, October 5, 2010

investment check-up

Just as we have annual physical check-ups to maintain good health. We should also check on the performance of our investments and check our savings target as well. My goal is always to save at least 10% of any income that I earn and never to touch that money no matter what. If I want a new gadget or something, I save for that as well. As for emergency fund, I'm aiming for at least 6 months' living costs in a bank account. Finally, I strive to pay all non essential debt. I'm happy to note that everything is in order except for the emergency fund which needs topping up.

As to the performance of my "never touch money pool" for the past 12 months, here they are:
A. Invested in Australia
1. Savings account - 4.5%
2. Retirement account (called superannuation) - 10.1%
B. Invested in the Philippines
1. Savings account - 4.75%
2. Pag-ibig fund account - 5%
3. Mutual fund account - a remarkable 45%

It is very tempting to transfer most of the money into the philippine mutual fund account given the 45% return but I try to stick to the rules of diversification to protect the capital. Just remember to research where to invest. Place your trust in reputable institutions and adjust the allocation as needed. What is my motivation for setting aside a "never touch money pool", its simple; someday I would want to live on interest income without having to work. Happy investing!

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