Make more money offline using money earned online

So you’ve managed to earn money online? Good for you!

What did you do with it? Bought a car? Got a laptop computer? Or treated your family and friends to Jollibee? In my case, I used my $1,000+ Google Adsense earnings in October to buy an LCD TV.

Nothing wrong with that, but do you know that if you defer gratifying yourself with luxuries, you’ll end up with something more?

I’ll show you how I used the money I earned online to make more money offline.

$4,500 Adsense check

In the article How to track Adsense checks sent via DHL, I wrote about receiving my Google Adsense’s Secured Express Delivery check sent in October through DHL.

Here’s a copy of that check, if you’re interested to see it.

The total peso amount of P204,311.30 represents the $4,500+ earnings from Adsense that I accumulated in 3 months.

Deferred gratification

After encashing the check, I initially thought of rushing to SM Appliance Center to grab the LCD TV I’ve always been planning to buy. But a few steps away from the store, I hesitated because I suddenly got reminded of the concept of the marshmallow test.

Like those kids in that emotional intelligence test, if I am able to defer gratification, I’ll end up with something more. The good thing here is that what’s at stake is not just another marshmallow.

I decided then to hurry instead to a Bank of the Philippine Islands (BPI) branch and deposited P100,000 ($2,223) to my BPI Trading account. At that point, I decided to use the money to trade stocks in the Philippine stock exchange.

Falling dollars, rising gold

I am not a professional stock trader. I do have little background on fundamental analysis, but absolutely nothing on technical analysis. But my business and economics courses in college taught me that in situations where the US dollar is falling, people tend to hold gold because it is considered a “store of value.” (See forum discussion: Dollar will further weaken next year, gold prices may rise)

In the Philippine context, your best bet in times like these is to buy mining stocks. The idea is that as the dollar plummets, the price of gold increases, benefiting mining companies. This explains why speculators consider the mining sector as “hot” right now and why prices of mining stocks have been soaring to all-time highs.

On October 9, I used my Adsense earnings to buy P100,000 worth of Philex Mining Corporation (Stock Code: PX) at P8.00. For the uninitiated, Philex is the largest gold and copper mining corporation in the Philippines.

One month after I bought PX, look where its price is right now.

Exactly one month after I bought it, PX is trading at its all-time high price of P11.25. Had I sold my holdings that day, I would have made 40% profit in just one month!

A week later, though, PX’s price has retreated to P9.80 but I’m still satisfied with a profit of 22.5%, although yet to be realized.

What this means is that my P100,000 is worth P122,500 after just a little over a month. It surely won’t be this much if I went on to buy that LCD TV as soon as I got the cash.

More ways to earn

By now, you’re probably thinking, “Yeah, right. How am I gonna do that, I don’t even know how to trade stocks!”

Fair point. But do you know that you have alternatives?

Have you tried investing in mutual funds, where you part your money to a competent investment manager who invests it on your behalf?

Or a similar instrument offered by banks called Unit Investment Trust Funds or UITF?

If you prefer liquidity, you probably would want to put your extra money on high-yielding savings or time deposit accounts.

You have a lot of options! Just drop by the PMT Forum to see how other people make and grow money.

The simple point is, learn to defer eating that marshmallow because if you wait, you’ll end up with two marshmallows. Or two LCD TVs. Or two cars.