Reader Mail #28: Questions and Comments About The Story of Mr. Invest Now and His Friends

Updated: February 28, 2014

First of all, I’d like to thank everyone for all the great feedback on my previous post, The Story of Mr. Invest Now, Mr. Catch Up and Mr. Wait Longer.

Along with the positive reactions to the story, also came a lot of questions and comments. The most common ones, I will now answer below.

How do I start investing?

The first step towards becoming an investor is to learn how to save money REGULARLY – it should become a habit.

Build an emergency fund first. If you have dependents, then you must get life insurance. Also, having health insurance is very important.

Investing is preparing for the future, but you must PROTECT THE PRESENT. You should be ready for any financial emergency that could come any time in your life.

Once you are able to get into the habit of saving regularly, and have acquired the proper protection. Then the next step is to INVEST IN KNOWLEDGE.

That is, to learn about the different investments out there such as time deposits, bonds, stocks, real estate, unit investment trust funds, mutual funds and many others.

Read: A Beginner’s Guide To Investing In Anything and Everything

Where did they invest? Is 10% growth possible in real life?

Mr. Invest Now, Mr. Catch Up and Mr. Wait Longer all invested in a mutual fund (it’s said in the story). But the truth is, they could have invested in a UITF or the stock market, and would have had the same results!

The compounded annual growth of their investment was 10% – is this possible in real life? The answer is YES! And I will show you three actual investments that had a CAGR of more than 10%.

Before reading on… be sure that you know what CAGR means. If not then read this first: Compounded Annual Growth Rate Calculation

PhilEquity Fund Inc.
This is a mutual fund by Philequity Management Inc. which started in January 1995. Their office is in Pasig just in case you want to invest in this.

Last January 3, 1995, the NAVPS of PhilEquity Fund Inc. is 1.1103 and as of February 26, 2014 it is now 30.9689. And by using the CAGR formula, you’ll see that compounded annual growth rate of this mutual fund is 18.69% for the past 19 years!

Odyssey Philippine Equity Fund
This is a unit investment trust fund (UITF) by the Bank of the Philippine Islands (BPI) which started in May 2003. You can invest here through any BPI branch.

Last May 20, 2003, the NAVPU of Odyssey Philippine Equity Fund is 96.56 and as of February 24, 2014, it is now 405.99. The CAGR, when calculated, would give us 13.95% for the past 11 years!

Universal Robina Corp
This is a company listed in the Philippine Stock Market, owned by the Gokongwei family. They got listed in the PSE in March 1994. You can invest in URC through any accredited stock broker.

Back in December 1994, the stock price of URC was playing around P15.50 per share and as of February 26, 2014, it closed at a price of P137.00 per share, giving us a CAGR of 11.51% for the past 20 years!

The above are just three examples of investments that grew by more than 10% – and believe me when I say that there are probably other mutual funds, UITFs and companies in the stock market that have performed better.

I used these as my examples because I actually have these investments, so it was easy for me to dig up their historical prices.

So where should you invest?

The answer is you should invest in knowledge first – because when you are already financially educated, you would actually not ask that question.

Read: What Is The Worst Investment

The story did not account for inflation and market fluctuations

Yes, the story ignored inflation and assumed that price did not fluctuate.

First, the country’s current inflation rate is playing around 4%, which simply means you should put your money in an investment that grows higher than that if you don’t want to lose the value of your peso, which makes our 10% example acceptable.

Second, the risk in price volatility is balanced by the use of COST AVERAGING. By regularly investing every year and staying invested for at least a decade, they are able to ride through the market ups and downs.

Remember that investing is long-term, and that’s exactly what they did… and what you should do as well.

Read: An explanation of the Cost Averaging Strategy


A reader named yuri left this comment (edited for clarity):

For Mr. Invest – it’s good for him to start early and end early. However, did he enjoy his time during the time he was investing? Time and Money are 2 different things. You may have millions, but did you invest for time, experience, friends and family?

I am currently 30 years old and I don’t even have P50,000 in my savings but when I checked my investments (time, experience, friend and family), I know I gain so much for a lifetime.

I have traveled places that are now destroyed by calamities. I have experience things that I can only experience with agility (that comes with age). I have adventures that were shared with friends and family.

In this case, I might choose to be Mr. Catch Up or even Mr. Wait longer, they might invested more money because they have started late. But I hope those times that they have not invested in money, were invested in time, experience, friends and family. Which are priceless I believe.

What if Mr. Invest Now, died early? What happened to his investments?

Just my 2 cents. No harm intended.

If Mr. Invest Now died early, then his investments would go to his heirs, who will then enjoy his legacy. His money will not go to waste because it will be used by his loved ones.

Lastly, life is indeed not about the amount of money that you have, but about the experience of living it.

That’s why you should invest… not because you want more money, but because you want to be able to afford your dreams.

Read: How to Become Rich AND Happy

Got more questions? Leave a comment below and I’ll answer them as soon as I can.

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Photo credits: wonderwebby and hungrytiger11


  1. I liked the last part of your blog Fitz, and the way you provide answer! =) Actually I was contemplating to answer those questions raised by Yuri on your previous post. As I got the same concerns from my friends and office mates.

    Just want to add, investing (now) doesn’t mean you will limit yourself to enjoy and experience life, you just have to know the status/level of enjoyment you want to experienced. That means, putting into consideration your means (income) versus the lifestyle you want to feel. Getting on a vacation month after month with just 20K Php income may not be an ideal lifestyle for that particular income bracket.

    Also, it also doesn’t mean that there’s no fun in investing, because there is! Once you see your hard earned money, earn money for you without doing physical work that’s when you find joy and a peace of mind that you made a right decision. I know, because I experienced it.

    And lastly, as what Fitz says on some of his blogs “Personal Finance is always Personal”, so it’s up to you if you put into action what you’ve learned. What you know will not make you wealthy, but what you DO with what you know will surely make you wealthy. And that’s what this blog site is all about, this is just a medium to educate us and action must always come from us. Godbless!

  2. The Yuri comment is one of the reasons why readers of financial blogs should educate themselves further. This blog has taught me to set aside not just money for savings, but money for leisure, money for particular goals, money for monthly expenses. in short, budgeting.

    It is nice to travel and enjoy your money while we are young, BUT, caveat, our agility and ability to earn can be gone just as fast. That’s one of the reasons why we should take care of our financial future. Not to brag but at age 33, I can say that I can travel monthly if I want to, buy an expensive bag every other month if I want to, but no, I choose to spend our money deliberately. What is money saved for leisure will be the only money spent for leisure. I will wait for my investments to generate enough passive income to fund my wants. You see, if you start saving and investing early on, you can start harvesting the fruits of your labor early on, like maybe 2 years from now on my part. In the meantime, I shall save 50percent of my income and still able to enjoy life because of money set aside entirely for leisure. This is more enjoyable for me actually because you have no worries while vacationing since you know that all your expenses are already covered, as compared with traveling and worrying where to get money to pay the bills when you come back.

    Just my two cents.

  3. these conversations and blogs are very educational.people who seek financial freedom should start investing in their knowledge now! try to read some more so you can learn some more…investing is just a part of the whole process that will lead you to financial freedom…and there’s a lot more to learn and study…

  4. One of the gems I learned in grad school is to plan your old age.

    Planning your old age is not given enough importance because most people don’t expect to live old enough. Yes you may die early, but the opposite is just as true. You may live until 90 years old (I’m 33 and I may have 50 years more years ahead). And in order to enjoy those golden years is that you plan now while you are young.

    Physically you will get weaker and work opportunities won’t come as much. The key question should be: What do I want to do when I become a senior citizen? It’s not just money but you could harness a talent, etc which you could use to keep yourself busy when you’re old. Also, being independent financially is important in enjoying your old age.

    So you were right Fitz in saying that if we die young, then we’re still not losers because our loved ones could enjoy the fruits of our labor. And if we live long enough, we could have a pretty good time getting old. Either way investing is a wise thing to do 😉

  5. About Peso Cost Averaging, my gut feel tells me that this is the right strategy. I have been reading so many articles in the net explaining this strategy but unfortunately I have yet to see a blog/ article that talk about PCA and includes the cost (everytime you buy shares/ units or inflation). Sir, is there a possibility that you can talk about this and show it in a more realistic way?

    Just recently I invested with FAMI balanced fund. I plan to put in P10,000 a month. I put in money because at least with this, I will be forced to save. But is 10% p.a achievable? If i were to include the upfron costs (FAMI charges 2% front end). Meaning If I put in P10,000 a month, I will also be charged P200 a month.

  6. @michaelgnm
    I believe the reason why there’s no one who illustrates an accurate picture of PCA is because their intention is to make its explanation simple enough to understand by those unfamiliar with the strategy.

    If you start to include the fees and charges, the average person can get confused.

    In any case, from my personal portfolio, I’ve noticed that those fees and charges don’t really have a significant effect on the strategy. In some cases, particularly in the stock market, the fees and taxes are later on offset by the dividends you’ll receive.

    Lastly, I hope you were able to read Part 3 of my PCA series, I used actual stock prices for JFC and ALI to illustrate the effectiveness of this strategy. Here it is:

    How To Pick The Right Stocks For Cost Averaging: Passive Stock Market Investing Part 3

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