This little book has been long overdue.
I’ve been planning to write this for the longest time.
But I felt it wasn’t the right time.
Because I was still in the process of teaching my three house helpers how to invest. My theory was this: If I can teach them how to invest, I can teach anyone. Do you know the problem with the stock market world? They don’t speak English. Honest. They speak in some strange dialect that is spoken only in the second moon of the planet Uranus. But I’ve solved that problem. If my maids can understand me, then anyone can understand me. Today, my helpers are investing in the stock market and they’re very happy. I’ll Hold Your Hands Every Step of the Way Here’s another thing I’ll do for you. Each month, I’ll send you a very short “Stocks Update.” I’ll tell you what companies I’m investing in and how they’re doing. Why will I give this “Stocks Update” monthly report? To give you guidance and inspiration. Especially when there’s a crisis, my “Stocks Update” will be crucial. It will prevent you from selling your stocks because of your panic—and lose your money. And it will encourage
you to do the very opposite—buy great companies when the prices are very low. If this is the first time you’re investing in the stock market, I’m excited for you. You’re taking charge of your financial future.
Everyone Ought to Be Rich
I preach to thousands every week. I write bestselling books that are read by thousands more. I also speak everyday on radio and TV to millions. People think I’m pretty big. So big that I meet only big people. Well, I do meet big people. I lead small groups for big leaders and big businessmen. We call these small groups Caring Groups. In these groups, we care for each other. We pray together, chat about our lives, and study God’s Word. But people don’t know that I lead a very different kind of group at home. Every week, I lead a Caring Group consisting of my three helpers and my driver. Each week, we pray together, chat about our lives, and study God’s Word. I have so much fun in our weekly meetings. I’m able to help them in every aspect of their lives. My driver is married. So I teach him how to strengthen his marriage and become a great father to his four kids. My helpers are all single. So I coach them how to relate with their boyfriends. (My other name is Dr. Love.) I teach them how to remain pure and discern guys. Oh, we talk about everything under the sun. Their relationship with God. Their physical health. And yes, their personal finances.
“How Much Do You Pay Them?” When I tell people my helpers invest in the stock market, people ask me, “My gosh! You must pay them a fortune.” No, I’m not Sharon Cuneta. I heard she pays her helpers P25,000 each. (That’s only a rumor. Maybe it’s true, maybe it’s not.) If it’s true, then that’s great. I pay my helpers generously, but not that much. I’ll later tell you how much I pay them. But you see, that’s not the main problem. No matter how high their salaries are, they still can’t save anything. Let me tell you why. Whole Civilizations Depend On Their Monthly Padala They send most of their salaries back home. They send it to their parents, siblings, nephews, nieces, aunties, uncles, cousins, including their pet carabao. Sometimes, I feel my helpers are supporting entire civilizations. Without their monthly stipend sent back home, the economy of an entire barrio will cease to exist. People will loiter on the road aimlessly. Children will die of starvation. And the world will come to an end. That’s not the only problem. My helpers know enough to save a little every month. So they don’t send everything back home. And for a few months, their savings accumulates. It reaches P2500 and they’re happy. But then, the inevitable happens. My helpers receive a text message: A cousin’s husband’s nephew’s neighbor’s mother is in the hospital. Could they please send P2500? If not, the patient will die—and they’ll carry the guilt of that person’s death in their conscience forever. So they send it. And they’re back to zero. Again.
Every time their savings grow beyond P2,500, their family knows. Call it ESP. Call it telekinesis. Relatives smell it. And they call. So to avoid this problem, I taught my helpers a simple system. Believe me, the system works. Let me teach it to you now.
How to Retire a Millionaire
“The stock market is dangerous!” Have you heard that before? I have. Many times. And you know what? I agree. After all, statistics say that 85% of stock market players lose their money. Believe me, billions have been lost. But whenever people say, “The stock market is dangerous!” they’re referring to trading in the stock market. Not investing in the stock market. There’s a big difference. In this little book, I’d like to teach you how to invest in the stock market, not trade. If you want to trade in the stock market, this book isn’t for you. Please look elsewhere. Here’s the basic difference: Trading is buying stocks and selling them within a day or a few days. Investing is buying stocks and selling them in six months or never! Warren Buffet, the richest man the stock market has ever made, said, “Only buy something that you’d be perfectly happy to hold if the market shut down for ten years.” Here’s why I believe you should be investors: I don’t believe ordinary people should be trading. I repeat, 80% of people lose their money in the stock market. My belief is that most of those 80% are traders. Another word for trading is “speculating.”
As Mark Twain said, “October is one of the peculiarly dangerous months to speculate in stocks. The others are July, January, September, April, November, May, March, June, December, August and February.” In trading or speculating, you don’t look at how strong the company is. Any company is game—even what they call “penny” stocks. These are companies whose stocks are worth centavos. Because they’re considered very risky. So leave the trading to full-time traders—the people who do this full-time, studying about it 8 hours a day. Investors invest only on the great companies. Because we’re in for the long haul. And instead of trading, you should focus on your business or job. Focus on your core competency. Stick to your game plan. Everything that I’m teaching you here at the TrulyRichClub. Through your business or job, you create the money necessary to invest in the stock market. One of the Greatest Inventions: Money Cost Averaging If you want to invest in the stock market, there’s only one choice: Money Cost Averaging. That’s just a fancy name for buying stocks of great companies, little by little, each month. Perhaps P5000 a month. Or P10,000 a month. Or whatever fixed amount you’re can set aside from your monthly earnings. Can’t afford P5000 a month? No problem. My maids can only afford to save P2000 a month. So every third month, they invest P6000 into the stock market. The important thing is to do it regularly. Discipline yourself. The moment you get your salary, divide it according to the 5 “envelopes” I mentioned in Chapter 1.
When you do this, you’ll find your money growing steadily year after year. What About Recessions? Now here’s a powerful point I want you to read carefully: When you adapt this Money Cost Averaging strategy, you’ll be buying without much thought to the bouncing of the market prices. You’ll hear a lot of talk like this… “Is Ayala Land cheap today?” “Do you think Jollibee will go up tomorrow?” “Is BPI’s price expensive today?” “Perhaps PLDT will be lower tomorrow? Here’s a nice way of answering all these questions: Who cares? Because in 10 years—they don’t matter. An oil crisis explodes all over the world. Buy your stocks anyway. A political crisis erupts in the country. Buy your stocks anyway. A world economic recession happens again. Buy your stocks anyway. Keep buying those great companies. This is the secret of the wealthiest people in the world. Do You Want to Become Rich? Do What the Rich Do. One of the richest men in the world, Warren Buffet, has a rule on investing in the stock market: “Be fearful when others are greedy, be greedy when others are fearful.” When the economic recession happened last year, Buffet was like a little kid in a giant candy store that has declared an “All-Items-Must-Go” Sale.
Great companies were selling their stocks marked down at half-price. Some of the best imported chocolates were at 60% off! Little boy Warren couldn’t believe his eyes. Even with his vast amounts of money, there was so much good stuff to buy. So Buffet went on a buying spree—picking up stocks of solid companies left and right. While people were fearful, he was brave. Remember this when you’re doing your Money Cost Averaging. Are you ready? Let’s enter the Candy store.