What comes in your mind from the word VEHICLE?
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For some, they will think of Vroom! Vroom! Vroooooooom!(That's how kids think of cars.) For the big men, they will say Ferrari! Jaguar!
Lamborghini! BMW! Toyota! and etc. And the others like: Water, Glycerin, Elixir, Syrup and etc. (Pharmacist Knows! :D) Those are great examples of vehicles. But do you know
that there are also vehicles for our money? What do I mean with that? Let’s start it with
the definition of vehicle.
What is Vehicle?
Vehicle is something that will help you (or things) to go from point A (starting point) to
point B (your goal point). What am I talking about? Let me give you an example:
ü From your home (this is your point A), you can drive your car (vehicle) to go to
your workplace (and this will be your point B).
ü From Philippines (point A), for you to go to France (point B) you can ride an
airplane (vehicle).
ü In taking medicines by mouth (point A) like tablets or capsules, you need
water (vehicle) to make it through your stomach (point B).
Does it make sense? (Okay I understand now. So what’s your point? What about the
vehicles for money?) Vehicles for money will not bring money from place to place. As it was said in definition point A is your starting point and B is your goal. In money, your
starting point will be the initial value of your money and your goal is to make it more.
Let’s say you have Php 10,000 and your goal is to make it as much as Php 1 Million.
Is that possible? Yes it is! How? You will use VEHICLES! If you’re going to put your
Php 10,000 to your piggy bank then it will be impossible for you to make it as much as
Php 1 Million. What are these vehicles?
VEHICLES FOR MONEY
1. Paper Assets
Paper assets are assets which you bought with your money in exchange of
stocks, mutual funds (MF), or unit-investment trust funds (UITF).
For example: In stocks when you buy a share from a company then your
asset is not your physical money anymore, instead the paper that will show
that you are a shareholder of a certain company.
Ø STOCK (in stock market)
Stock or also known as share is a type of security that shows ownership in
corporation and represents a claim on part of the corporation’s assets and earnings.
If you invested in a company listed in Philippine Stock Exchange (PSE) or called
stock market you are a part-OWNER or stockholder/shareholder
of that company. Let’s say you invested or bought some shares of SM Investments
Corporation (SM), it means you are a part-OWNER of that company.
Isn’t it sounds great? You own SM (even though only a part of it) because you
have your shares/stocks with that company. So how will you earn from it?
If SM gained profits, they will give you your share of that earnings
because you are a shareholder. What if SM doesn’t gain any profits?
Then you don’t have either but listen, is it possible that SM will gain no profits?
Of course no! How come Henry Sy is listed in Forbes’ Richest Men in the World?
that are still be there for about 10-30 years and gives as much as
20% average returns annually.
They say Stock Market is DANGEROUS or RISKY. Those people say that
without even knowing that risks can be handle. For decades, Stock Market shows
the highest returns (compared to other paper assets) in the long-run
(who else doesn’t want to have the highest return?). That’s why I chose this vehicle
as my first investment and harness the power of Compound Interest.
*In case you missed my article about the power of compound interest, you may read it HERE.*
Ø MUTUAL FUND (MF) and UNIT-INVESTMENT TRUST FUND (UITF)
These paper assets are almost the same but have differences. They are both handle
by fund managers unlike in stock, you are your own fund manager. So if you don’t
have time to study about which companies to invest with in the stock market, I
suggest to have one of these. These vehicles are offered by your trusted banks so
if you want to have one, ask your bank how. I’ll show you pictures of some details
and differences about these vehicles.
2. Real Estate Assets
Real Estate (physical assets) assets are property that gives you passive
income or profit. Your house is not a real estate asset. Why? Does it give
you any profit or passive income every month? No? Then it is not a
real estate asset instead it is a liability. “Assets put money in your pocket.
Liabilities take money in your pocket.” That’s how Robert Kiyosaki defines assets and liabilities. I recommend to try to read his book
“Rich Dad Poor Dad” and your life will change. For now, I don’t have
real estate asset yet so I don’t have much to say. Haha!
3. Business
Like real estate asset, I don’t have business YET too. But I am on my way of being an entrepreneur. Why? Because I believe that this is the best vehicle
for money. Come to think of it. The RICHEST MEN in the WORLD are
ENTREPRENEURS. Bill Gates (Microsoft), Warren Buffet (Berkshire
Hathaway), Mark Zuckerberg (Facebook), Henry Sy (SM), Michael Dell
(Dell), Phil Knight (Nike), and etc. They are all entrepreneurs and 74% of
millionaires in the world are entrepreneurs. I know it’s not that easy to start
business but you’ll never know until you try it.
Maybe you’re thinking that all of these are investments but for me these are also called
vehicles for money. For me, I have decided to have my first vehicle with the stock to
reach my goal as a millionaire. Now its your time to decide which vehicle do you think
will help you with your goals. Choose your vehicle wisely and have due diligence.
Enjoy the ride! God bless our trip! :)
All the best,
Paul Anthony R. Aguilar, RPh
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