Taxation of UITF income

Q. Will a separate tax be imposed on my earnings once I redeem my Unit Investment Trust Funds (UITFs) participation?

A. No, as long as proper taxes have already been collected prior to the redemption of your UITF participation. That’s according to Senen Quizon, a tax manager at Punongbayan & Araullo, who wrote the article “Taxation of Unit Investment Trust Funds (UITFs)” published in Business World Philippines on August 2006.

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Jobs posted in the PMT Forum (Nov. 2006)

Jobs available: 

(1) Flash Designer for a local magazine
(2) Part-time, home-based website content writer
(3) Web Copywriter 

Continue reading for more details.

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Basic Investing Concepts

You've taken the Type of Investor quiz, determined your investment objectives, and learned different investment options available to you. Now it's time to take a refresher course on some fundamental concepts related to investing.

Diversification 

No matter how trite this saying is, it still applies to you: Don't put all your eggs in one basket. Diversify your portfolio to ensure that funds are distributed among several different investments or instruments in order to spread out the risk. The more diversified a portfolio is, the less vulnerable the investor will be to the poor performance of a single investment.

Risk and Return

Risk refers to the uncertainty of the outcome of an investment. Typically, the higher the potential return of an investment, the less predictable is the return. In short, higher returns are accompanied by higher risks. It is therefore important for an investor to match his risk appetite with his chosen investment.

Long-term vs. Short-term investing (Investment Horizon)

Before making an investment, an investor should first assess for how long he intends to hold on to the investment. Generally, holding an investment over a long period of time works in favor of the investor because risk and uncertainty tend to reduce over time. If one prefers to invest only in the short run, he should place his funds in less risky and highly liquid investment products such as time deposits, treasury bills, and money market funds, among others. But if the investor is willing to accept a certain degree of risk and wish to invest for a long period of time, he may feel comfortable investing in relatively high yield but also high risk products such as equity mutual funds, Unit Investment Trust Funds (UITF), forex trading pool, etc. 

Before investing, find out your investment objectives first

You probably know by now the different types of investment products. Before deciding whether to go for time deposits or mutual funds or UITF or savings accounts, assess your objectives for investment first.

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Performance returns of mutual funds in the Philippines (as of 11/24/2006)

Updates January 2010:

• Mutual Funds Philippines Report – 2009
• Mutual Funds Philippines Report – 2008
• Mutual Funds Philippines Report – 2007

Following is a summary of performance returns of Philippine mutual funds as of the week ended November 24, 2006.

As always, when analyzing mutual funds you should not simply look at the NAVPS or Net Asset Value per Share. This number does not necessarily tell you whether the fund is performing well or not, but the change of the NAVPS over time does. Never assume that a fund with a high NAVPS means it is generating high returns. You need to look at actual returns of the fund over a certain time horizon.

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Overview of the different types of investments

Citibank provides below a short and simple explanation of various investment options available to investors. For a more detailed discussion of these investment products, read the Time deposits, stocks, bonds, mutual funds, real estate: Where to invest my money? article.

DEBT INSTRUMENTS

When the government or a corporation needs to raise cash, it may borrow from investors. A corporation can borrow privately from lending institutions using promissory notes. A corporation can also borrow publicly by issuing commercial papers which are registered with the SEC.

On the other hand, the government can borrow from the public through instruments such as treasury bills, notes and bonds.

Since debt instruments are normally longer-term investments, interest payments tend to be higher than term deposits.

STOCKS

A common stock is a unit of ownership in a corporation for which the holder can vote on corporate matters and receive dividends from the company’s earnings. Therefore, when the investor purchases a stock, he becomes a part-owner of the whole company.

Although investing in stocks involves higher risks versus investing in debt or money market instruments, you can take advantage of the higher earning potential that can be gained from stocks through capital appreciation and dividends. Furthermore, stock investments have in general outperformed bond and money market instruments over time.

FUNDS

An investment fund pools money from unrelated investors with similar investment objectives. The fund is managed by a portfolio manager who invests the money in a portfolio of securities and / or other instruments according to the specified investment objectives.

A fund offers several distinct benefits to investors:

• As a single investor, it may be difficult to achieve diversification. Funds enable you to purchase various types of securities and other instruments to build a diversified portfolio.
• The fund is managed by experienced professionals who have access to information on the economy and market movements.
• Through the fund, you can invest in a diversified portfolio, enjoying the same earnings potential from the securities that would have been accessible exclusively to institutional investors.
• Funds make it possible for investors to buy instruments at a lower cost. When the fund buys different instruments, the cost of buying these instruments is divided among all investors versus the sole investor bearing the total cost.

Tips to avoid scams on eBay

Consider the following stats related to eBay-related scams, as reported by Javelin Strategy & Research:

• Nearly 100 people in eBay become victims of identity fraud every five minutes;
• Total losses amount to $600,000;
• Around 11% of members fall for a typical spoof or phishing scam.

An article published on the December 2006 issue of Entrepreneur magazine gives the following tips to protect oneself online when buying or selling goods on eBay.

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Make your credit card work for not against you

A credit card is a great convenience. With just one thin square of plastic, purchases can be made wherever we are without having to bring cash. Yet some people view credit cards with suspicion, thinking it may lead their finances astray.

The truth is, your credit card can work for you or against you depending on your spending habits. If you are in control of your purchases, your credit card can be a most convenient tool.

Here’s how to make your credit card your friend.

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FAQ on Google Adsense PIN

All Google Adsense publishers are required to enter a Personal Identification Number (PIN) in order to be eligible to receive payments from Adsense. You will receive the PIN via mail after your earnings balance has reached $50. Adsense publishers in the Philippines have reported that it usually takes around 20 days to 2 months before they receive the PIN from Adsense.

Below is a short FAQ about the Google Adsense PIN.

• Why is a PIN necessary?

The PIN (Personal Identification Number) is key to verifying your Google AdSense account so that you can receive payments. Once your account balance reaches $100 — provided you have entered the PIN and removed all other holds from your account — you will be all clear to receive payments from Adsense.

PINs were issued starting January 28, 2005 — if your account was approved before this date, you do not need to enter in a PIN.

• What does a PIN mailer look like?

PINs are printed on PIN mailers, which are white 4.5 x 6 inch (11.4 x 15.2 cm) postcards. Below are the front and back images of the PIN mailer that Google sends to publishers.

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How to become a successful entrepreneur in 10 minutes

What to Do When You Want to Give Up

Any successful entrepreneur will tell you that starting a business isn't always a smooth ride. Doors close. People object. Stuff happens. Here are some 10-minute actions you can take when you feel like throwing in the towel and walking away from your dream.

• Calm Yourself Down. Breathe. Count to 10. Go for a walk. Do something that will take you out of your emotional reaction and give you perspective on your situation.
• Read Your End Goal Statement. Remind yourself of what you're creating and why. This tends to jump-start your motivation because you've written it in the present tense, as if it were happening now.
• Change Your Focus. Make a list of the positives. This could include what you have achieved, the contacts you have made or how much you have grown through the process thus far.
• Look for the Opportunity. Ask yourself, "What is this situation trying to teach me?" Challenges can be the most valuable form of feedback. Any setback, glitch or crisis can be used as an opportunity to help you move forward.
• Get Support. Hire a coach. Find a mentor. Consult an expert. Talk to an objective person (someone who believes in you) who can help evaluate the situation, answer your questions or guide you in finding the right solution.

Creative Ways to Find 10 Minutes

Your day is already scheduled with everything you should do and need to do. Making time for something you want without compromising other tasks can be difficult, but it doesn't have to be. Here are some creative ways to find 10 minutes to start building the business you've always dreamed about.

• Try to wake up 10 minutes early, and use the time as soon as you wake up.
• If you take public transportation, use the time during your commute to work. If you drive, take 10 minutes in the parking lot before you head into the office.
• Make time for your task while your computer is booting up.
• Take 10 minutes during your lunch hour or afternoon coffee break
• Use any time you're on hold on the phone.
• Use the time during the commercials of your favorite TV show.
• When your kids are napping or after they go to bed, spend 10 minutes on a task.
• Use the time while dinner is cooking.
• Take 10-minute breaks from watching your kids in the evening–alternate child-care shifts with your spouse.

- Excerpts from "Got a Minute?" by Cornelia M. Flannery, published on the September 2006 issue of Entrepreneur Magazine

[tags]Pinoy entrepreneurs, forum, Philippines, entrepreneurship tips, guide[/tags]

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