Financial Literacy –

What is it?
Financial literacy is the understanding of a Quik n’ EZ
variety of financial areas including themes
related to managing personal finance, cash and Finance
investing. Financial literacy also includes the
aptitude for principle in finance and ideas such Essentials
as financial planning, compound interests,
handling debt, efficient savings techniques,
alongside the time value of money.
Pamphlet
Three Quick Ways to Positive
Financial Attitude
○ Don’t be too hard on yourself for past
financial errors.

○ Stop competing and comparing with

others.

○ Build and maintain disciplined habits (both

financially and non-financially). -----------------------------------------------------------------------

Personal Financial Basics

1) Build your own financial calendar.
Payment of taxes and credit card bills on time
------------------------------
should be treated as very serious matters.
Schedule them thoroughly.

2) Attention to Interest Rates.

Give wide attention to your compound interest 3) Calculate Your Net Worth. NW is the difference
rates. It may help you decide which debt or between your assets and debt. It is a highly important
savings obligations you should prioritize first. number that can indicate to you where you are financially.
This may serve as a tracker for your financial progress.
Quick Financial Questions (with Explained Answers)
1) If you have P1000 in a savings account gaining 2 percent interest a year. After five years, would you have a) exactly the amount, b) more, or c) less of it?

You’ll definitely get more than P1020 at the end of five years… this is due to your interest will compounding over time. You gain interest on the money you save and on the
interest your savings got in the previous years. Here’s how it works: a savings account with P1000 and a 2 percent annual interest rate would earn P20 in interest for a final balance
of P1020 by the end of the first year. Applying the same 2 percent interest rate, the P1020 would earn P20.4 in the second year for an ending balance of P1044 at the end of that
year. Using this same pattern, the account would progress to P1104.1 by the end of the 5th year.

2) Picture that the interest rate on your savings account is 1 percent a year and inflation is 2 percent a year. After one year, would the money in the account buy more than it does
today, exactly the same or less than today?

Less. The reason is inflation. Inflation is the degree at which the price of products and services increases. If the annual inflation rate is 2 percent but the savings account only earns
1 percent, the price of products and services has outperformed the buying power of the money in the savings account on that year. In other words, your buying power did not catch
up with inflation.

3) If market interest rates increase, what does typically happen to bond prices? Does it grow, drop, stay the same, or is there no correlation at all?

When market interest rates go up, bond prices go down. When interest rates go down, bond prices go up. Always remember that as market interest rates go increase, more new
bonds come to market paying higher interest yields than older bonds sold previously, making the older bonds worth lesser.

4) True or False: A 15-year amortization usually needs higher monthly installments than a 30-year amortization, but then again - the total interest over the lifespan of the debt will
be lesser.

TRUE. Assuming same rates for the two loans, you will pay a lesser amount in interest over the course of a 15-year loan than with a 30-year debt because you repay the principal
at a quicker rate. This as well explains why the per-month payment for a 15-year loan is higher. For example, you obtain a 30-year amortization at 6 percent on a P1,500,000 home.
You pay P8990 a month in principal and interest charges. In the span of 30 years, you will pay P1,737,570 just for the interest. On the other hand, a 15-year amortization at the
same rate will cost you a lesser amount. You shall be paying P12,660 per month but only P778,410 in total interest – nearly P1,000,000 cheaper.

5) True or False: Purchasing one company's stock typically delivers a safer return than a stock mutual fund.

Generally speaking, investing in a stock mutual fund is less risky than investing in a single stock because mutual funds are diversified investments. Diversification lessens and
spreads the risk by applying the funds on an array of various investments. With one company’s stock, all your funds are committed to a singular basket. If the price drops when you
sell, you will lose value and money. But with a mutual fund that invests in an array of companies, you lessen the odds that a price drop for any single stock will adversely affect
your return. Diversification generally may lead to a steadier performance in a variety of market conditions.

3 MAJOR FINANCIAL SERVICES/PRODUCTS SUGGESTED FOR THE PEOPLE

1) Mutual Funds
A mutual fund is a kind of financial instrument consisting of a pool of money gathered from numerous investors to invest in securities like bonds, stocks, and other assets. Mutual
funds are functioned by dedicated money managers, who decide where to assign the fund's assets and attempt to produce gains or income for the fund's investors. A mutual fund's
range of investments is organized accordingly so towards the investment objectives stated in its prospectus. You may utilize the following mutual funds companies below:

Top 4 Mutual Funds Companies (as of August 24, 2018) 1-Year Return
Sun Life Prosperity Dollar Advantage Fund, Inc. 5.41%
Cocolife Fixed Income Fund, Inc. 5.38%
Sun Life Prosperity Money Market Fund, Inc. 2.31%
ALFM Money Market Fund, Inc. 2.28%

2) Life Insurance
This is an agreement amongst insurers and policyholders in which the insurers guarantee payment of a death benefit to specified recipients upon death of the insured. The insurance
company promises the death benefit in consideration of the sum of premiums paid by the insured.
Always remember to discuss thoroughly with your agent every single details of your policy.
Below is a reliable shortlist of preferred life insurance companies in the Philippines:

Sun Life of Canada (Philippines)

Philippine AXA Life Insurance, Corp.
BPI-Philam Life Assurance Corporation
Philippine American Life and General Insurance Company, Inc.
Pru Life Insurance Corp. of U.K.
Manulife Philippines

3) Stocks
A stock (a.k.a. shares/equity) is a kind of security that implies proportionate ownership in the issuing corporation. This enables the stockholder to that part of the corporation's
assets and incomes. Stocks are purchased and peddled usually within stock exchanges, but there can be private sales also. These dealings have to follow government regulations
that were and are meant to guard investors from deceitful practices. Based on historical data, they have outperformed most other investments over the long run. Only buy stocks of
a company that exists in the Philippine Stock Exchange.
You will be assisted by a broker or a brokerage firm for your trading. You can buy stocks in person or if you want, or simply opening a stock-trading account thru valid online
brokers. A list of accredited online brokerage hubs is provided on the last page.

Accredited Online Brokers to Start Investing in Stocks

NOW
(with minimum-deposit information)

Broker Website Minimum Deposit to Open an account

AB Capital Securities, Inc. www.abcapitalonline.com P10,000
Abacus Securities Corporation www.abacusonline.com.ph P10,000
AP Securities Inc. (formerly Angping & Associates Securities, Inc. www.angpingonline.com P5,000
BA Securities, Inc. https://baseconline.psetradex.ph not mentioned
Accredited Online Brokers to Start Investing in Stocks
NOW
(with minimum-deposit information)

Broker Website Minimum Deposit to Open an account

BDO Nomura Securities, Inc. https://www.bdo.com.ph/bdonomura/ none as long as you have BDO Online Banking account
BPI Securities Corporation www.bpitrade.com none if you have BPI account
Coherco Securities, Inc. www.cohercotrade.ph P150,000
COL Financial Group, Inc. www.colfinancial.com P5,000 for EIP; P25,000 for Active Traders
DA Market Securities, Inc. itrade.psetradex.ph P50,000
F. Yap Securities, Inc. www.2tradeasia.com P25,000
First Metro Securities Brokerage Corporation www.firstmetrosec.com.ph P5,000 for new clients
HDI Securities, Inc. https://hditrade.psetradex.ph/ P25,000
Investors Securities, Inc. http://investorsonline.psetradex.ph P25,000
JAKA Securities Corp. https://jakaseconline.psetradex.ph/ not mentioned
Lucky Securities, Inc. https://luckyseconline.psetradex.ph not mentioned
Maybank ATR Kim Eng Securities, Inc. www.maketrade.com.ph P25,000
Meridian Securities, Inc. https://msitradeonline.psetradex.ph P25,000
Optimum Securities Corporation https://optimumonline.psetradex.ph not mentioned
Papa Securities, Corp. http://www.p2ptradeonline.ph/ P5,000
Philstocks Financial, Inc. (formerly Accord Capital Equities Corp.) www.philstocks.ph P5,000
RCBC Securities, Inc. www.rcbcsec.com not mentioned
Regina Capital Development Corp. https://reginacapital.psetradex.ph not mentioned
Timson Securities, Inc. https://timson.com.ph P25,000
Unicapital Securities, Inc. www.utradeph.com P10,000
VC Securities Corp. http://vcsecurities.biz/ P10,000
Wealth Securities, Inc. www.wealthsec.net P10,000