Bo’s End-of-the-Year Letter

Where I Am Now in My Financial Journey

— and Where I’m Going in 2017

As the year closes, I want to personally thank you for being a faithful and happy member of the TrulyRichClub family.
My next statement is mushy but it’s the truth: Your trust is my fuel. (Gosh, I love that line. I didn’t read that anywhere else.
I wish I could copyright it. This is what I really feel.) I’m so grateful that you’ve allowed me to be a part of your life.
And there’s something else I want to do before 2016 ends.

My Financial Journey Revealed

Today, I also want to pull the curtain from my personal finances and show how I do it. I owe this to you because you’re my
friend in the TrulyRichClub family.
Why?
First, I want to lead by example. Here’s my guiding principle: I won’t tell you to do anything that I don’t do myself. It’s that
simple. The other day, someone asked me, “Bo, why don’t you recommend FOREX? There’s a way of doing it that’s not high-risk…”
Here’s my simple answer: Unless I start doing it (and do it successfully), I won’t tell anyone to do it.
I need to speak from truth.
Second, I want to share my ups and downs, especially my downs, especially my failures — because I want to encourage you.
Yes, I fail. But the most successful people in the world have the most failures, too. So, if you’ve got failures, hooray!

Yes, The Abundance Formula Makes People Rich

If you’ve been listening to my talks and reading my books, you may be familiar with my Abundance Formula: 100-10-20-70.
(I borrow a lot from other authors. But this is original.)
This is how I started in my financial journey: I always gave 100% in my work, gave 10% of my income to God, invested 20%
of my income for the future, and live on 70% of my income.
In the early years, I didn’t know how to invest, so I saved my 20% in my bedroom drawer. I didn’t even deposit it in the bank
because I felt it was such a small amount and going to the bank was a hassle.
But the habit of setting aside a portion of my income — no matter how small — was the bedrock where I built my financial
wealth.
When I hit 30 years old, three things happened: I decided to become rich (my mindset changed), I dove into entrepreneurship
(and failed lots of times before succeeding), and I learned how to invest in mutual funds. A few years later, I learned how to invest
directly in the stock market.
After many failures, a few of my small businesses started earning more — and I began to invest a bigger chunk of my
income.

The Abundance Formula with a “Missionary” Twist

I’m 50 today. (Yes, I know, I look younger. I look 49 and a half.) After 20 years of working on my finances, my personal
Abundance Formula is a little bit different today. From 100-10-20-70, it’s now 100-40-50-10. That means I still give 100% to my work
— that will never change; and I now give 40% to the ministry; I invest 50% in the stock market, real estate and businesses (more on
that later); and I spend 10% of my income for my daily needs.
Yep, 10%. Aside from the fact that my income has grown, I’ve remained simple in my tastes — perhaps to a fault. Let me
tell you a quick story. My wife and I both lost the wires to charge our phones. So we walked into an Apple store to buy two — one
for each of us. But when I looked at the price, I was shocked. P1,100 for a silly wire? I told her, “Sweetheart, I’m buying you this wire.
Because you deserve the best. But I can’t buy it for myself. I can’t stomach the price...” She laughed. After 18 years of marriage, she
was used to my antics.
So after buying the “original” wire for her, I looked for a generic gadget store and found my generic wire — complete with
gold trimmings — for P350 only. “One please,” I smiled at the saleslady. I was happy. I was happy until I started using it. Because my
wire has this bad habit of snapping off from my phone with the slightest movement. So if I’m charging it, I can’t touch my phone.
Groan.
That’s a tiny peek in my love affair with simplicity. No brand names, if possible. No luxury items. Through the years, though,
I’m slowly learning to buy more expensive stuff because they’re more durable (and they work!) and, thus, save money in the long
run.
Even if I can now buy a bigger and better house, I love our tiny house. I love the fact that we bump into each other often.
A few years ago, when my financial mentors visited my house for the first time, I saw real pity in their eyes. They felt sorry for me. I
knew what they were thinking: Their toilet was bigger than my house. (OK, that’s an exaggeration. But not too exaggerated.) But I
told them I was really happy with my home.
My vehicles are simple workhorses, too — not flashy. As a rule, I also buy used cars, not brand new.
I don’t even wear a watch.
I notice so many people, who earn well through their jobs or businesses, spend too much on high-lifestyle items. Thus, they
can’t grow their investments.
Because of my simple lifestyle, I’m able to live by my 100-40-50-10 “Missionary Style” Abundance Formula. As the decades
go by, I hope to shift to 100-50-40-10, and then to 100-60-30-10, and so on. I guess you know where I’m headed.
Which brings me to the next question…

How I Diversify My Assets

(And How Unbalanced They Are!)

To spread your risk, financial advisors say you need to spread out your investments to different classes — such as paper
assets (stock market, bonds, etc.), real estate, businesses, and so on.
Yes, that’s true. As your wealth increases, you need to diversify more. In fact, when you hit multimillions, it’s better if you’re
also multi-currency. So that if the dollar strengthens (like now), you’re happy because you’ve got dollars. Or if the peso strengthens,
you’re happy because you have pesos.
But I also believe that you should only invest in the asset class that you fully understand. Never get into something you don’t
know. Thus, the necessity to keep learning. (And that’s why you’re a part of the TrulyRichClub.)

1. Cash (5%)

I always teach people to have an emergency fund in the bank — at least three to six months of your monthly expenses. But
as you get older (that’s me right now), you want to make your emergency fund a bit bigger — about six to twelve months.
Aside from an Emergency Fund, I always set aside some cash for major stock market crashes. When the market dives, I have
some cash to buy at extremely “sale” prices.
In a future essay, I will teach you about corporate bonds as one way of parking your cash — with a little profit.

2. Stock Market (60%)

In total, it’s 60% in equities.

Sixty percent is a large portion of my net worth, and some financial advisers will say, “That’s too big. Your money is not
balanced.”
But the stock market is my passion (thanks to my mentor who passed it on to me).
I think the scenario would have been very different if my businesses were capital-intensive — like construction or real estate
or retail. But my small businesses are information-oriented. No equipment or inventory or real estate needed. I deal with bits and
bandwidth. Except for a few seats for our in-house call center, we don’t even have physical offices or store spaces.
But I divided it into countries: 48% of my assets are in the Philippine Stock Market, 10% in the US Stock Market, and 2% in
stock markets of other countries.

I Follow My Own Advice

In the Philippines, I buy the stocks I tell you to buy. (As a strict rule I impose on myself, I only buy or sell a stock a few days
after I tell you to buy or sell. Reason? I want you to get the best price. I have heard stories of how other stock advisers buy or sell
before they tell others to buy or sell. I believe that’s wrong. I love you too much to do that.) Because of this self-imposed rule, I’m not
able to execute on a few of my instructions — because the price is too far already. Thus, my average profit will always be lower than
yours, but I’m not complaining. I’m happy if you earn more.
 In the US, I’ve been investing for seven years now. I lost a lot of money at the start because I was young, brash and foolish. I
took too many risks in a country I was not familiar with. But I’ve learned through my painful lessons. Through the help of my mentor,
the past three years have been fantastic. This year alone, I gained a whopping 30% in my US investments.
A few people have asked me if the TrulyRichClub can start giving guidance on investing in the US. My answer: Not yet.
Perhaps one day…
Starting this January, I also decided to invest 2% of my net worth in the stock markets of other countries. I’m learning from
my past painful lessons, so I won’t invest big. When it’s a new territory, I now just take baby steps.

3. Real Estate (30%)

Would you believe?

Once upon a time, 90% of my assets were in the stock market — and 10% everywhere else. Not anymore. Today, just to
balance things off, I withdrew some money from the stock market and plunked it in real estate.
Some years ago, I was very active in buying and selling properties — thanks to the inspiration of Larry Gamboa. With my
partners, we bought foreclosed multi-door apartments and low-cost condos, refurbishing them and turning them into rentals, rent-
to-own, or quick sales.
But as I got too busy in ministry, I had to give this up. It was easy to give up because it was never my passion.
Today, aside from owning my little home, I have a few properties designed to give me passive income.
We’ll be relaunching Larry’s ThinkRichPinoy’s ongoing program very soon. If real estate is your thing, we’ll announce this to
everyone soon.

4. Other People’s Businesses (3%)

My previous investments in four businesses — owned by friends — were huge flops. I lost money. Lots of it.
But instead of being depressed, I listed these losses as very expensive tuition in the school of failures — the most expensive
and — if you’re humble to learn — the best school in the world.
My biggest learning?
First, I should really invest in my own businesses, where I’m in control. That’s the best scenario.
Second, if I do invest in someone else’s business, I need to choose my business partners very wisely. One doesn’t invest in a
business as much as in the people who run them.
So because I’ve been burned four times, I’ve decided to invest in my mentors’ businesses — only. I have yet to invest in a
newbie entrepreneur again. (One day, I will again — as my way of giving back. I’m just giving myself time to heal my trauma. Ha, ha!)
I love it when one of my mentors’ says, “I’m putting up a new business,” and though he doesn’t need the money (because
he’s got truckloads of it), he invites me anyway because we’re friends — or I invite myself into it. When one of my mentors says
he’s putting up a new business, you’ll hear the other guys say to him, “Pakurot naman…” (Can I take a pinch?) Now if other people
eavesdrop into our conversation and hear that one line only — out of context — they would think that this bunch of middle-aged
guys have taken their “bromance” too far. But I can assure you that the “pinching” is purely financial, nothing else.
Following this principle, my success rate has been much better. When an uber-successful entrepreneur runs a business, its
odds of winning are wonderful. In life, nothing is ever guaranteed. But the chances of making it are higher.
Today, I own a tiny part of two software companies, a would-be farm in a mountain, plus a small real estate company — all
run by my partners. Most of my ownership is around 10% of the companies, so it’s nothing to brag about.

5. Collectibles (1%)

Collectibles mean investing in paintings, antiques, other artwork, physical gold and silver, etc. Unlike some of my financial
mentors who are heavily invested in paintings (worth millions), I almost have zero — because I lack wisdom in the area.
I want to remind everyone of a principle that has saved me from all sorts of disasters: Never get into something you know
nothing about. There’s one big exception to that rule: If there’s a superstar in that area that you deeply trust — someone who has
had massive success for decades — who, in his kindness, takes you under his wing and mentors you through the process (much like
how you allowed the TrulyRichClub to guide you in the stock market).
Only once did I commission a painter-friend to make me a painting, but my goal was just to have something enjoyable to
look at on my wall. Because he was a friend, I got it at 30% of what it should have cost in a gallery. When he delivered the painting to
me, he gave me a certificate and said, “This will cost more when I die.” I told him, “You’re nuts. Please don’t die early!”
Some consider vintage cars as an investment. Two years ago, I wanted to start a bridal car business (partly to help a relative
who would run it for me). So I bought six junk Mercedes Benzes, the oldest being 1957 and 1966 — for a song. Like really dirt cheap
— because they looked like dirt. Honestly, I also have a fondness for looking at photos of vintage cars. (I told my wife she should
be thankful I like vintage cars, because that means the older she gets, the more beautiful she becomes in my eyes. She raised her
eyebrow and said, “Are you calling me vintage?” Oops! Me and my big mouth.)
Sadly, the bridal car business hasn’t taken off yet because restoring an ancient car is taking longer than expected. (They still
look like dirt, ha, ha!) With the restoration costs, I don’t consider these classic vehicles as investments. But who knows? There’s a slim
chance that when I reach 75, perhaps some rich kid would like to own pieces of history and buy them from me for millions.
One day, I visited the home of one of my mentors who loves to invest in art. As he toured me around his home, he pointed
to one painting that he bought three years ago for P80,000, but someone was buying it now for P300,000. He pointed to another
painting that he bought for P300,000 but is now worth P1.2 million. On and on he went, showing me how this and that painting
had risen in value.
That’s when I thought to myself, “Gosh, if instead of buying those six ancient Benzes, I just bought six paintings (obviously,
asking my mentor to tell me what paintings to buy), I wouldn’t be where I am now — still spending for their restoration — but
enjoying humongous profits.
Oh well. Such is life. I always learn from my failures more than my victories.

6. Insurance Products (1%)

Before I grew in financial literacy, I bought popular insurance products that combined insurance and investments in one
package — which, of course, proved more expensive. These heavily promoted insurance products are good for people who are not
yet financially wise. (And there are many out there, so if you work in the insurance industry, please go out and sell.)
Today, I teach people to buy their insurance and their investment separately. That way, insurance is very cheap. NOTE: In the
TrulyRichClub, we give FREE P100,000 life insurance to members who have been with us for more than one year — or those who pay
the annual fee. And very soon, you can upgrade your insurance to P1 million for a ridiculously low price that can never be matched
outside the TrulyRichClub — because we get it at a “group rate.” (Please wait for more news about this very soon.)

Never Stop Growing — Your Journey Continues!

If there’s one last message I want to share with you in my year-end report, it’s this: Never stop growing.
No matter how many failures I’ve had, my commitment to growth keeps my life exciting. As a member of the TrulyRichClub,
I’ll always give you a front seat view of my journey — all the ups and downs — hoping that you avoid my mistakes and be inspired
by the times I’ve done it right.
Why grow?
Because we owe it to the world. The world will be a lesser place if we don’t become all that we can be.
This is our mission — to serve.
So be the best version of your self.
And I’ll always be here with you in your journey.
Have an amazing 2017!

May your dreams come true,

Bo Sanchez

PS. Be a Money Magnet. Gain a new perspective on building wealth. Join our biggest
financial event of the year: WEALTHSUMMIT2017: Science of Wealth Attraction.
Upgrade your financial life. For details, visit www.trulyrichclub.com/wealthsummit.