As we celebrate and greet all fathers out there a Happy Father’s Day today, I can’t help but look back at what I believe are just some of the most powerful words that caused a paradigm shift in me, when I read the book Rich Dad Poor Dad by Robert Kiyosaki.

In the book, Robert narrated how his two dads’ way of thinking were worlds apart. In chapter one, his Poor Dad, who was actually his biological father, said “The reason I’m not rich is because I have kids.”. On the other hand, his Rich Dad, who was really the father of his best friend Mike, said “The reason I must be rich is because I have kids”.

Blaming others versus being proactive

Think about it for a moment. The Poor Dad was blaming his having kids as the reason he is not rich. Maybe he thinks that because of his kids, he has a lot more expenses, and he can’t save enough money he can use to invest in real estate for example. Maybe he thinks that he has no time left for real estate investing because he has to do his part to take care of his kids, which obviously takes a lot of time.

Rather than taking control of his life, he blames others.

The Rich Dad was totally different. I have a feeling he believes his kids are his inspiration to be the best dad he could be. He loves them so much that he wants only the best for them, and instead of blaming them, they have become the “big enough why” that fuels his passion to become truly rich and financially free. Without this, even one knew how to be rich, it won’t be sustainable.

He was proactive and took charge of his life.

Which would you rather be?

Why I’m glad I have read Rich Dad Poor Dad

At one point in my life, I too felt that I was trapped in the rat race because I became a dad. I felt I had no choice but to face reality that being stuck in the rat race is something that comes with being a father. I believe I had this feeling barely four months after my son was born way back in 2005, and It was just a month after I accepted a job in another company.

The pay was good, but I had to travel to Bauan Batangas almost every other day, and then I had to head back to the office in Makati in the evening. Keep in mind that after all of this, I had to drive home to Provident Village in Marikina back then.

Later on, my staff introduced me to the book Rich Dad Poor Dad, and after reading chapter one, I knew that I was not really trapped in the rat race. I realized that I should never blame my being a father if I was stuck doing something I would rather not.

From that point on-wards, I knew that I always have a choice. It was really up to me to make that choice, which I did.

Now I just have to teach my son CJ what it means to be a Rich dad who is truly rich, so that he himself can become one when he grows up and becomes a father, maybe in 25 years (my wife insists that should be at least 30 years from now) .

I believe the best way is to lead by example.

A Happy Father's Day greeting card from my son CJ (here's the cover)

A Happy Father's Day greeting card from my son CJ (here's what he wrote inside)

Happy Father’s Day!

To our success and financial freedom!

Jay Castillo

Real Estate Investor
PRC Real Estate Broker Registration No. 3194
Blog: http://www.foreclosurephilippines.com
Follow me in Twitter: http://twitter.com/jay_castillo
Find us in Facebook: Foreclosure Investing Philippines Facebook Page

Text by Jay Castillo and Cherry Castillo. Copyright © 2011 All rights reserved.

Full disclosure: Nothing to disclose.

PS. Facing foreclosure? Tired of being a landlord? Need to liquidate your proprty because you need money? Click here to sell your property fast!

"The reason I must be rich is because I have kids" – a Father’s Day reflection is a post from: Foreclosure Investing Philippines

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Welcome to the fifth and last part of this series on the 3 types of income one can get through real estate investing. Before you begin reading this article, I recommend you review the first four parts:

How to get portfolio income through real estate investing

Earned income through real estate investing

Passive income through real estate investing – the path to financial freedom(Part 1)

How passive income through real estate investing can lead to financial freedom(Part 2)

In this series finale, let me share some final words and how one can use all three types of income to achieve financial freedom. Here goes…

Recap and some afterthoughts…

Portfolio Income

In a nutshell, portfolio income in real estate is basically income on paper in the form of equity. You still need to either sell or refinance a property to make use of your equity. Any property bought below market value should have a big potential for a gain in equity, if it really was bought below market value.

Portfolio income may boost one’s net worth and may give one bragging rights, but as Rich Dad would put it, someone’s net worth is often “worth less” than they think. In other words, if one’s equity cannot be turned into cash, or if the property cannot generate any positive cashflow, then those properties are “worth less” as they really are not  assets that put money in your pocket but are rather liabilities that take money away from your pocket.

Speaking of paper assets, one may soon be able to invest in a Real Estate Investment Trust or REIT here in the Philippines, which I believe is a form of paper asset. More information about REIT in the Philippines can be found here: Real Estate Investment Trusts (REIT) – The next big thing in real estate

Earned income

Earned income that one can gain through capital gains, and commissions(now referred to as professional fees because of the RESA LAW) is a relatively quicker way of earning from real estate investing, but should not be looked at as a means to get rich quick.

I believe that the earned income one can get through capital gains from flipping properties should be used to acquire passive income generating assets later on.

Although it may appear that earned income through flipping properties received a bashing from me when I compared it to the rat race, make no mistake, I still believe that we still need to flip properties for capital gains as it is a great way to build capital. This can then be used later on to buy bigger deals that can produce bigger positive cashflow, much like lesson #2 in the Top 7 lessons I learned from playing Rich Dad’s Cashflow 101 game.

Passive income

Passive income, considered by many as the holy grail of real estate investing, can really help one become financially free, but there are a lot of things one should remember when investing for passive income. Let me summarize them below.

1. Proper pre-screening of tenants is needed to avoid “tenants from hell”. Failure to do this can spell disaster.
2. Rental properties require competent property management and maintenance.
3. It is the hardest real estate investing technique to do because finding properties that can generate positive cashflow is more difficult than finding properties that can be flipped for a profit, and this applies whether you buy foreclosed properties from banks, or those that are for sale by owners or FSBO’s.
4. It may sound simple, but is definitely not easy.
5. Although it may not be easy, it is easier than most people think. It is definitely easier than spending most of your life stuck in the rat race as an employee.
6. Negatively geared rental properties can become positively geared eventually through rental escalation(Thanks Gio for reminding me about this through your comment), provided the property is in a good location. Of course, it would be ideal to have a rental property produce positive cashflow from the very start.

Which investing strategy should you use?

Do you invest for equity and build you net worth, or for capital gains through flipping (wholesaling and retailing), or for passive income by acquiring rental properties? If you ask me, I believe it would be better to combine all of them! let me try to explain as follows:

1. “Make money when you buy, not when you sell…”

In other words, make sure you buy properties below market value. How much below market value? That would depend on your profit targets but a safe target would be to acquire properties between 40% to 50% below market value. In effect, that discount would translate to a bigger potential for equity gain. This would help ensure that a deal will really be profitable, provided you were able to arrive at a fairly accurate estimate of a property’s market value.

2. Raise capital through earned income/capital gains

As mentioned earlier in this post, one can potentially raise capital faster by flipping properties that are bought at a price below market value for capital gains, or even through the accumulation of “professional fees” by acting as a real estate broker or agent. These can then be used later on to buy bigger deals that can produce bigger positive cashflow.

3. Use the capital to acquire passive income generating assets

The capital that can be raised through flipping properties can then be used to acquire income generating rental properties.

There you have it folks…

I hope you have enjoyed reading this series as much as I enjoyed writing it.  I would like to believe that I have this burning passion for real estate investing and I wish that somehow, I was able to share this passion of mine through this post. Feel free to let me know what you think by leaving a comment below. Thanks!

Let me leave you all with a quote from Herbert Spencer, which I often hear from Ebb, a teammate of mine in the RYP team:

“The great aim of education is not knowledge but action.”

Herbert Spencer-English philosopher (1820 – 1903)

To our success and financial freedom!

Jay Castillo

Real Estate Investor
Real Estate Broker License #: 20056
Blog: http://www.foreclosurephilippines.com
Follow me in Twitter:http://twitter.com/jay_castillo
Find us in Facebook:Foreclosure Philippines facebook page

Text by Jay Castillo and Cherry Castillo. Copyright © 2010 All rights reserved.

PS. Are you a new visitor? Click here NOW to start learning more about foreclosure investing in the Philippines

PPPS. Don’t be the last to know, subscribe to e-mail alerts and get notified of new listings of bank foreclosed properties, public auction schedules, and real estate investing tips. Inbox getting full? Subscribe through my RSS Feed instead!

3 types of income in real estate investing and which strategy to use is a post from: Foreclosure Investing Philippines

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The Money Summit and Wealth Expo 2010 promises to be the biggest wealth building and income opportunities conference in the Philippines, featuring 4 proven ways to build wealth and generate passive income. The Money Summit and Wealth Expo will be held on July 2-3, 2010, 8:30AM to 5:30PM, at the Carlos P. Romulo Auditorium, RCBC Plaza, Makati City.

But why should one attend? Let me try to give you 10 reasons…

Top 10 reasons to attend the Money Summit and Wealth Expo 2010

(in no particular order)

money-summit-and-wealth-expo-2010

1. Property Forum founder Noli Alleje – Although Noli “El Subastajero” Alleje is more famous as a real estate auction expert, he himself is also a real estate investor. I am quite used to seeing Noli handle public auctions they conduct and I look forward to hearing him speak for the first time on how to make quick profits through foreclosures.

2. Eden Alemania-Dayrit – Eden will be talking about her real estate investing strategies. Eden is one of the Think Rich Pinoy Franchisees. Although I often see Eden as she is a classmate of mine in a real estate class we are both attending right now, I know I will learn a thing or two each time she speaks.

3. Jomar Hilario – Jomar Hilario is dubbed as the Timothy Ferris (author of the book “The Four Hour Work Week”) of the Philippines who works only four hours per week and yet earns so much more than the monthly salary he used to get working for a big consulting company, and I want to be just like him. For those who don’t know, I created this blog last October 2008 right after I volunteered and helped facilitate one of his internet marketing workshops just over 1 year and 7 months ago. Jomar always has something new to teach and I look forward to learning more from him.

4. I shall sharpen my saw – I believe that the moment a person thinks he knows everything, that person will get left behind. That is the reason why I consistently try to improve myself by attending seminars like this. I look forward to learning a lot of new things which are practical and actionable. Some people might even say that that I am a seminar junkie and they are right. If it were not for my being a seminar junkie, I’d probably be stuck in the rat race up to now.

5. I am really interested with the Business Track – Along with my teammates in the RYP Realty Team, we want to turn real estate investing into a real estate business where we are the business owners. We want to set it up in such a way that it would be like a turnkey business. I believe that the business track will really help us with this and should also help other attendees as well.

6. This is neither a get rich quick scheme nor a scam – The Money Summit & Wealth Expo features 16 real life successful entrepreneurs, top investors, best-selling business authors, sales superstars, and money experts, who walk the talk. They are already rich and successful and have been money experts for a long time.They are not professional speakers who make money through seminars, they are real money experts, real investors, real entrepreneurs, and real millionaires. Need I say more?!

7. I want to rub elbows with like minded people – Those who will be attending will obviously include people who also want to be rich and financially free, those who are already rich and financially free, and everything in between. It is always nice to be with like minded individuals as we can network with one another, synergize, and help each other succeed.

8. This will help enhance the entrepreneur in me – I truly believe that attendees like me will not only be inspired to take the path to entrepreneurship, we will also know how to start, and enhance the entrepreneur within us. With so many successful entrepreneurs sharing their knowledge, it would be hard not to find at least one entrepreneurial path that fits us. I intend to find multiple paths to help provide multiple streams of passive income.

9. Get a lot of free, legally downloadable e-books and audiobooks – By registering  through this link on or before June 12, 2010,  you will be able to get a lot of legally downloadable e-books and audiobooks, at absolutely no additional cost. These tools will help address the seven most common obstacles to success, and a whole lot more.

10. If you attend and use our link, you will be helping us win the Apprentice challenge – Yes, we are on the last leg of the apprentice challenge, and once again, we need your help. I believe that if we win, everyone wins, as we are committed to share virtually everything we will learn to those who are willing and are also committed to learn real estate investing. We believe being Trace’s partners would really help speed up the learning process not just for us but for everyone else as well. I have said it before and I will say it again, if we win, no one gets left behind!

Full disclosure – Please read!

I would like to disclose that we will be earning 10% of the proceeds if you buy using our link, but we have decided to donate 50% of our net profit to Bo Sanchez’ Anawim and Grace To Be Born.  Anawim is the home of 55 abandoned elderly plus a few orphans and physically and mentally handicapped persons. By signing up with us, you are helping us help the poorest of the poor. Grace to be born provides counseling and a halfway house for pregnant young women who are being forced to have an abortion.

With your registration to the Money Summit and Wealth Expo 2010, you are actually supporting a baby because we are donating part of the ticket proceeds to the Grace to be Born ministry of Bo Sanchez.

We are allocating the rest of our profit to those who may want to refer a friend, and earn 5% of the summit fee. That means if your friend avails of the VIP Pass, you get Php224.75. Refer 10 friends and earn Php2,247.50!

I hope to see you at the summit! Please  forward to your friends and relatives. Thank you!

To our success and financial freedom!

Jay Castillo

Real Estate Investor
Real Estate Broker License #: 20056
Blog: http://www.foreclosurephilippines.com
Mobile phone (Call/SMS): +639178843882
Follow me in twitter:http://twitter.com/jay_castillo
Find us in Facebook:Foreclosure Philippines facebook page

Text by Jay Castillo and Cherry Castillo. Copyright © 2010 All rights reserved.

PS. Are you a new visitor? Click here NOW to start learning more about foreclosure investing in the Philippines

PPS. Don’t be the last to know, subscribe to e-mail alerts and get notified of new listings of bank foreclosed properties, public auction schedules, and real estate investing tips. Inbox getting full? Subscribe through my RSS Feed instead!

Top 10 reasons to attend the Money Summit and Wealth Expo 2010 is a post from: Foreclosure Investing Philippines

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A guest post by Sha Nacino

For the past few weeks, I have been on a six-day work week. This set-up really drained my energy. Most importantly, it made it impossible for me to go home to our province, a 10-hour bus ride from Manila. I miss my family so much! How I wish I could go home and see my family as often as I want.

Last Saturday and Sunday, I had no work – a very rare chance! I wanted to go home to our province but I was already so tired, physically and emotionally. I just decided to have a laidback weekend where I could relax, sleep, eat, read, think, and write.

Image by Sha_Nacino

As I was reflecting, I noticed that there are so many interesting activities outside the confines of the corporate world. There’s toastmasters, a public speaking club that will help you develop your communication and leadership skills. There’s swimming, which is a good way to beat the heat. There’s travelling. Photography. Badminton. Running. Jogging. Volunteer work. And many more!

I engage in all these activities and more! You could just imagine how physically taxing that was.  Not only that, some of these interests could be expensive too!

I couldn’t juggle everything!

I want to do everything! Yet, I don’t have all the time and money to pursue everything at the same time. I have to cut down on some of these activities. Guess where most of my time goes? Yes, to my work because I spend at least 11 hours a day 5 days a week in the office (inclusive of travel time).

Does my work make me happy? Let’s just say that I love a lot of things about my employer – the culture, the people, the activities, its corporate social responsibility projects, its personality development programs, and interest clubs.

But if money were not an issue, I would definitely be somewhere else. Yet, I cannot resign just yet because my work is my bread and butter.

I need more time and money!

I want to have more time and more money at the same time.  I want to have as much time as I want to spend with my family and loved ones. I want to have more time to do volunteer work. I want to have more money to help our less fortunate countrymen. And I also want to have more money so I can do the things I want to do.

If I work overtime, I could increase my money but this also means less time for my family and other important things in life. How could I have more of both time and money?

What my mentors taught me

My mindset was limited because I knew only of one way to earn money – that was through my job in the corporate world. If I wanted to have more money, I needed to work overtime.  I need to work hard for money!

Then I met my mentor Robert Kiyosaki through his book “Rich Dad Poor Dad”. I was shocked when he said that I could earn as much as I want even without working! He termed this as passive income. He also advised me that instead of working for money, I could make money work for me.

Wow! I felt so liberated! If I could learn the art of earning passive income and of making money work for me, then I could have more time to spend with the persons that matter to me most and I could also have more money to use to help others.

When the student is ready, the mentor will come

Last August 2009, I attended the Think Rich Pinoy Seminar of Larry Gamboa, author of “Think Rich Pinoy”, “Grow Rich Pinoy”, and co-author of Trace Trajano in “Think Rich Quick”. This got me really interested in real estate investing.

I guess I was ready to learn more about real estate because a few months back, I met my real estate mentor Trace Trajano. Trace taught me and my team how to invest in real estate with little or no money down. Trace conducted his first ever Think Rich Quick seminar in March 27, 2010. After learning from Trace’s teachings, my team was able to sell a condominium unit in just six days! Trace is really a fantastic mentor!

Dedicated to your success,

Sha Nacino

Sha Nacino is Trace Trajano’s co-author for the book “Think Rich, Yuppies!”. Sha was also a former teammate of mine in the now defunct RYP Realty team.

Added on September 20, 2011:

Sha Nacino NOT connected with Trace Trajano

by Sha Nacino

This is to inform everyone that I am NOT anymore connected with Mr. Trace Trajano. I do not endorse him or any of his seminars and programs. I also do not intend to do any business with him moving forward.

We co-authored the book Think Rich, Yuppies which was published earlier this year. The book is our last project together and after the initial printed copies of the book are sold, the book Think Rich Yuppies will no longer be printed and distributed.

I have moved on. At present, I am writing books on personal financial management. I am also committed to continue writing many more books on financial management and other topics. If you have any comments, please email happysha.ph@gmail.com.

Source: http://seminarphilippines.com/2011/09/sha-nacino-not-connected-with-trace-trajano/

—

Jay’s thoughts

In a nutshell, Sha just wants to be financially free, who doesn’t?! I totally understand where she is coming from as I used to be as busy as her, if not even busier. I am happy for Sha because she decided to take action and make concrete steps to be financially free.

Good luck Sha and to everyone on the same journey!

Added on September 20, 2011 - I’m also happy to see that you have also moved on, just like me, as mentioned here.

To our success and financial freedom!

Jay Castillo

Real Estate Investor
Real Estate Broker License #: 20056
Blog: http://www.foreclosurephilippines.com
Follow me in twitter:http://twitter.com/jay_castillo
Find us in Facebook:Foreclosure Philippines facebook page

Text by Jay Castillo and Cherry Castillo. Copyright © 2010 All rights reserved.

PS. Don’t be the last to know, subscribe to e-mail alerts and get notified of new listings of bank foreclosed properties, public auction schedules, and real estate investing tips. Inbox getting full? Subscribe through my RSS Feed instead!

A busy yuppie that wants to have more time and money is a post from: Foreclosure Investing Philippines

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During our lunch break at the office yesterday, I begged off from doing something which I have dreaded for the past 12 years in the corporate world, Christmas party presentations! You might be asking what the heck does this have to do with investing in foreclosures in the Philippines? Read on to find out.

This year it is going to be different
During this time of the year, most of us unlucky enough to be employed in a company who force employees to participate in Christmas party presentations that only cause undue stress and humiliation, dread the thought of being forced to go through it all over again. If some people want such activities then fine, let them volunteer for it, and spare those who don’t want to make a fool of themselves.

I really find it silly that people tolerate such a time wasting activity  during the time of year when people who really do work are busiest because of the reduced workdays and tighter deadlines, simply because it has been a tradition. I would rather have games and other really fun activities where people just need to attend the party and have fun, relax, and enjoy.  That’s what having a party is for, right?!

Since I have already decided to quit the corporate world (my last day is at the end of December 2009… yipee!), I said to myself that enough is enough and I did not attend our group’s practice for our Christmas party presentation that was to eat up half of my lunch break. Instead, I decided to visit the bank officer handling my account to pay for the fire insurance for a foreclosed property I recently purchased.

We always have a choice but…
Wait, before anyone of you thinks of quitting your jobs to start investing in real estate, bear in mind that I am at this point after more than 4 years worth of preparations and I already have income streams other than my earned income from my job. Besides, with or without my real estate investing activities, I can see that I really would have called it quits for a lot of reasons that I would rather not discuss here.

Whew, with that out of the way, let me continue by saying that although we always have a choice, there are times when making the choice is really more difficult. In my example above, it was easy for me to choose paying for the fire insurance for my property over practicing for a dance number where a forty year old like me will have to wear a mini-skirt and dance to the tune of “Nobody nobody but you” by Wonder Girls… such an unpleasant thought, definitely not my idea of having “fun”.

But what if you had to make a choice between your son’s first ever recital and a conference call with your counterparts from abroad. How about choosing between being with your wife on her birthday or to be in Singapore for a regional meeting or spending your birthday with your wife and son or be in an annual planning session… the list goes on and on. I had to make these difficult choices in the past. Not anymore…

Just what is time freedom and how do you get it?
My definition of time freedom is being able to spend your time freely to do what you want, when you want, and with who you want. I believe that time freedom is a by-product of having passive income streams, and a good example would be those from passive income generating properties.

How? Buy a foreclosed property with a good enough net operating income to produce positive cashflow, fix it up, rent it out or sell it through a lease option. Might sound easy but it’s not, keep in mind it took me four years to buy three foreclosed properties. However, if this will help me get time freedom, then I believe it is all worth it. Besides, although it is not that easy, it is definitely possible and is not as difficult as you think.

So the next time you feel like giving up on real estate investing, just watch a video of your Christmas party presentations and ask yourself “Do I really have to do this…?!”. It just might help you snap out of it. Merry Christmas everyone!

—

To our financial freedom!

Jay Castillo
Real Estate Investor
PRC Real Estate Broker License #: 3194
Blog: http://www.foreclosurephilippines.com
Follow me in twitter:http://twitter.com/jay_castillo
Become a Fan in Facebook:Foreclosure Philippines fan page

Text by Jay Castillo. Copyright © 2008 – 2011 Jay Castillo. All rights reserved.

PS. If you are a new visitor, please start here to learn more about foreclosure investing in the Philippines.

PPS. If you feel that anyone else you know might benefit from this post, please do share this to them and don’t forget to subscribe to e-mail alerts and get notified of new listings of bank foreclosed properties, public auction schedules, and real estate investing tips. If your inbox is getting full, you may subscribe through my RSS Feed instead.

The importance of time freedom, one example why I want to be financially free is a post from: Foreclosure Investing Philippines

In this post I will share how to compute for monthly amortization payments for foreclosed properties without the need to use any special mortgage calculator. By the way, this would also work for installment loans for assets other than real estate where the monthly amortization payments also contain both principal and interest.

If you’re a real estate investor or if you want to become one, I’m pretty sure you’re interested to learn how a loan calculator or mortgage calculater works or at the very least, you want to learn how to calculate for monthly amortization payments.

If you lack any interest on mortgage calculators or if you are simply afraid of numbers, I’m really sorry but you have no choice but to learn this because real estate investing is a numbers game.

Real estate investing is a numbers game

Real estate investing is a numbers game and one number that you need to know is the monthly amortization you will have to pay for a foreclosed property that you are looking at. It will help determine if an investment property will produce a positive cashflow. Without positive cashflow, you will have no passive income, and you can kiss your dreams of becoming financially-free goodbye…

I’ll keep it short and simple

You will need the following information:

• The loan balance or Principal amount. This is selling price less down payment, if any.
• The payment term or how long you intend to pay the loan
• The annual interest rate of the loan. You get this from the bank where you intend to buy the foreclosed property or the bank where you intend to get financing.
• The amortization factor that corresponds to the payment term and annual interest rate. You can access a table of amortization factors here: Amortization Factors Table

Monthly amortization = Principal x Amortization factor

For example, you saw a foreclosed property being sold for Php 1 Million and you can purchase it with only 20% down payment, with a maximum payment term of 10 years, at an annual interest rate of 12%. What would be the monthly amortization you will have to pay if you bought that foreclosed property?

First determine the Principal amount. With a selling price of Php1,000,000 and a minimum down-payment of 20% which is Php200,000, the loan balance or principal would be:

=Php1,000,000 – Php200,000

=Php800,000

From the given example, the payment term is 10 years and the annual interest rate is 12%.

The corresponding amortization factor for a loan with a payment term of 10 years with an annual interest rate of 12% would be 0.01434709 which you can find here: Amortization factor rate Tables

Now let us calculate the monthly amortization payment:

Monthly amortization = Php800,000 x 0.01434709

= Php11,477.67

Want to check if this is correct? Try entering the same information in this site’s mortgage calculator which you can find by clicking here.

Keep in mind that the resulting monthly amortization payment we got above is a blended amount containing both principal and interest. If you want to determine the principal only or interest only amounts, this can be done by creating an amortization table with separate columns for interest and principal. I’ll be sharing how this can be done in another post.

I’m quite sure though that there are interest only mortgage calculators out there although I can’t say if there are any that are available for free. Do let me know through the comments section if you do find one.

Determining positive cashflow

Going back to our example above, what if you learned that the current rental rates for comparable properties in that area average at around Php12,000.00 per month? Does that mean you’ll get a positive cashflow since the average rental rates are higher than the monthly amortization? It is tempting to think so, but one should also consider vacancy rates, monthly maintenance costs, property management expenses, monthly dues to the home owners association or condo corporation (depending if the property is a house in a subdivision or it’s a condo), property taxes and other applicable taxes(VAT or percentage tax, whichever is applicable), insurance, maintenance reserves, etc.

I’ll stop for now with the monthly amortizations and I’ll just discuss these other things to consider in another post. I would not want anyone out there to feel overwhelmed.

Now what?

As they say, practice makes perfect so why don’t you try computing for the monthly amortizations for any of the foreclosed properties that you might be interested in from the various lists available in Foreclosure Philippines? If you learn how to do this, you would then be able to easily compute for the monthly amortizations of a property by hand, as long as you have enough information. It would also help if you have a printed copy of the table of amortization factors handy.

Questions? Please do leave a comment below.

Happy learning!

—

To our financial freedom!

Jay Castillo
Real Estate Investor
Real Estate Broker License #: 20056
Blog: http://www.foreclosurephilippines.com
Click here to contact me via E-mail
Mobile phone (Call/SMS): +639178843882
Twitter: http://twitter.com/jay_castillo
Facebook: Foreclosure Philippines fan page

Text by Jay Castillo. Copyright © 2009 All rights reserved.

P.S. – If you are a new visitor, please start here to learn more about foreclosure investing in the Philippines.

P.P.S – If you feel that anyone else you know might benefit from this post, please do share this to them and don’t forget to subscribe to e-mail alerts and get notified of new listings of bank foreclosed properties, public auction schedules, and real estate investing tips. If your inbox is getting full, you may subscribe through my RSS Feed instead.

How to compute monthly amortization payments without a mortgage calculator is a post from: Foreclosure Investing Philippines

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This is the third part of a series on Managing Finances. If you have not read the first 2 parts, head on over to Part 1 and Part 2!

In part 2 of my series of posts on managing finances, I mentioned that I would be discussing more about how I tracked my expenses and the tools I used to do these. For now, I’ll just focus on how I track my expenses. This is not rocket science.  I only need to record exactly where my money is going, particularly my cash on hand. Based on experience, this is where my money gets “lost”.

How many times have you wondered where your money went when it was still more than a week to go before payday?! Have you ever tried but failed to remember exactly where you spent your money? Get my point?!

Other expenses that are paid through a credit card, online banking, and through checks are easier to track because these transactions are automatically recorded and these are all written on the statement that arrives every month. However, I still do my best to record all of these daily simply because I want to make sure that the monthly statements I get are accurate.

My first tool – a pocket notebook
Believe it or not, I started tracking my expenses with a small notebook which I had in my pocket wherever I went. No, it was not a small laptop but a real notebook where I wrote down my expenses everyday. I then transferred the data to an excel sheet later in the day. I used to do this everyday but things went out of hand, literally, when I misplaced the small notebook. You can imagine the anguish I felt when I lost my notebook and I still have not transferred a couple of weeks’ worth of data to excel. This is the reason why I gave up using a small notebook to track my expenses.

Pocket Excel to the rescue
After I misplaced my pocket notebook, I decided to enter data directly to an excel sheet instead. Based on the the first entry on the excel sheet that I created for this purpose, I started doing this last August 22, 2007 and I have been doing this up to present day. You would think that this was very tedious because this meant that I had to be in front a computer everyday to do this right? Wrong! I didn’t have to. It just so happened that my sister had lent me her O2 XDA IIs when I accidentally crushed my Nokia 6280 in a moment of stupidity when I sat on it. Lo and behold, I now had a phone that had pocket excel. I copied the excel file from my desktop to my PDA. I have attached a printscreen of the excel sheet below. Ayos ba?! (Isn’t it nice?!)

Since I carry my PDA phone anywhere with me, I can input my expenses whenever I get the chance to do so. I can record money that goes into my pocket (the credits) and out of my pocket (the debits). As you can see on the printscreen above, the excel sheet I created simply includes the date, payee or payor, credit, and debit, and remarks (not visible on the printscreen).

Sometimes I would have to enter rough estimates of expenses if I forgot the exact amounts. I can later double check the amounts from all the receipts that I keep. By the way, I do throw away all those receipts once I transfer the data from pocket excel into MS Money. I see no point in keeping receipts, unless of course I would need them either for reimbursement purposes at the office, or for warranty. I’ll discuss more about MS Money in future posts about managing finances. By the way, I’m quite sure most new phones nowadays would have something similar to pocket excel and some like the iPhone would even have iPhone apps very similar to MS Money.

Why bother to track expenses?
It is quite obvious that it takes a lot of effort for me to track my expenses (though nowadays it takes just about 10 minutes a day). Why do I bother doing something which some would consider to be tedious and time-consuming? I do it simply because I want to show to the Universe that I am really managing my money and I intend to “win the money game” – a term I often hear when I listen to T Harv Eker.

I don’t track my expenses just to know where my money is going, I do it to ensure that the right percentages go to my “money jars” as discussed in my previous post. Before I even decided to track my expenses, I had already decided how much of my money was to go to my FFA, LTSS, Play, Tithe, Education, and Expenses accounts. Without this, tracking my expenses would be nothing but a waste of time. I also believe in the saying that “You cannot manage what you cannot measure”. When I see myself approaching the maximum amount for Expenses for example, I can adjust accordingly by stopping myself from spending more. By tracking my expenses, I help ensure that I am managing my money in such a way that I will definitely win the money game, get out of the rat-race, and become financially free!

It’s your turn
Still think you have no money to invest in foreclosed real estate? If I haven’t made it clear enough, you are supposed to build your FFA account and use it to finance your first real estate deal. The following is a summary of the steps you need to take:

1. Commit that you want to manage your finances and act based on your decision. If you don’t act, you’re just dreaming.
2. Decide the percentages you are to put in your money jars. I forgot to mention that these are flexible. It really is up to you.
3. Start tracking your expenses and manage your money. Do you think you’ve got what it takes to handle the first 30 days?!
4. Build your FFA until it can already finance your first real estate deal!

Conclusion
This post got delayed because I was pressuring myself to come up with a final post on managing finances that contained everything I wanted to say about the subject with the thought that once part 3 was published,  it’s over and done with. However, I realized that this would not be right. Managing one’s finances is so big so I really can’t just condense all of it in just 3 posts. This simply means that this is not the end of it and I will continue to write about managing one’s finances as I have barely scratched the surface. Topics that come to mind: How I got out of credit card debt, How to finance your first real estate deal, managing personal finances resources in the Philippines, etc…

Please share your thoughts on this as I also appreciate all of your inputs! Thanks!

If you have not yet read the first 2 parts of this series, head on over to Part 1 and Part 2!

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To our financial freedom!

Jay Castillo
Real Estate Investor
Real Estate Broker License #: 20056
Blog: http://www.foreclosurephilippines.com
Social Network: http://foreclosurephilippines.ning.com
Mobile: +639178843882
E-mail: ph.investor@gmail.com

Text by Jay Castillo. Copyright © 2009 All rights reserved.
P.S. – If you are a new visitor, please start here to learn more about foreclosure investing in the Philippines.

How I track my expenses and manage my money is a post from: Foreclosure Investing Philippines

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