EastWest approved for insurance brokerage

EastWest Insurance Brokerage Inc. (EWIB), the newly formed, wholly owned insurance brokerage subsidiary of EastWest Bank (EastWest), recently received from the Insurance Commission its insurance broker’s license for life and nonlife insurance products.

This completes the regulatory approvals needed for EastWest to start its insurance brokerage undertaking.

The creation of its wholly owned insurance brokerage unit was approved by the bank during its annual stockholders’ meeting held in April. Subsequently, the bank secured Bangko Sentral ng Pilipinas’s nod for its P500-million initial equity investment in EWIB in June, followed by Security and Exchange Commission’s issuance of EWIB’s incorporation certificate in July.

EWIB President Peter Roy R. Locsin, a seasoned insurance executive with over three decades of experience in the industry, was tasked to set up and make EWIB a strategic business unit of the bank.

Locsin said EWIB would make insurance protection readily accessible and claims processing less complicated for both the bank’s corporate and retail clients.

“Unlike third-party insurance brokers, EWIB can assure its customers of dedicated service that will translate to affordable premiums, better coverage and convenience for them. 

In turn, the insurance brokerage undertaking will create more synergies with the bank’s clients and suppliers and enhance the bank’s fee based income,” he said.

Why China ‘Spill Over’ Poses Risks for the Euro Zone

China’s Slowdown – Risks for Euro

The economic slowdown of China could face risks for euro ranging from decreasing exports, capital outflows and exchange rate fluctuations, according to the European Central Bank – ECB. China the second biggest economy following the US plays an important role in the global trade and its economy seems to have slowed down every year since 2010.

It seems to be continuing in doing so till at least 2016 when the International Monetary Fund forecasts growth by 6.3%. From the start of 2015, the slowdown of growth in China has condensed euro area exports especially exports of machinery and transport equipment and this has brought about adverse consequence particularly for exporters of manufactured goods.

 According to the bank’s recent financial stability review, this has been accountable for around 90% of goods exports to China. The ECB which tends to control the monetary policy in the 19 countries using the euro informed that 1% point slowdown in Chinese real gross domestic products – GDP would drop around 0.1-0.15% points off euro area movement after around two to three years.

Confidence Shock – Led to Tightening of Financial Situation

The ECB have stated that an economic `confidence shock’ probably owing to a worse than expected slowdown in China could have led to a tightening of financial situation in the emerging markets with a further slowdown of euro area foreign demand.

It added that besides capital outflows from China if not compensated by the other private or official flows it could activate a depreciation of the Chinese currency taking into consideration, exchange rate depreciation of other emerging market currencies’. The bank has commented that China’s massive economy would mean that it had manipulated a significant effect on the charge of oil though this had declined in recent years as its rapid growth slowed down.

The U.S. crude oil prices had fallen by about 45% since the last year owing to an imbalance of demand as well as supply which has been partially motivated by the economic slowdown of China, an important purchaser of commodities.

Chinese Economy – Important Effect on Oil Prices

According to ECB, the Chinese economy size means that it has had an important effect on the prices of oil though its relevance had declined in recent years since the growth continued to weaken. Hence the influence of slowdown in China on the prices of oil could be limited but it significantly is based on whether the growth in other emerging market economies also slows down.

The background of global economic, including that of China could influence the decision of ECB on whether to extend or expand its 1 trillion euro – $1.1 trillion, asset purchasing program. It is said that the central bank is extensively expected to do so, when it would meet in Frankfurt on December 3.

In its report, the bank concluded that the influence on the euro area of a potential further slowdown in China eventually centres on the extent to which this slowdown spills over to the other emerging markets more generally and the point to which the subsequent loss of confidence tends to affect the global financial market together with global trade.

Banking giants learn cost of preventing another financial sector disaster

SEVEN years after the collapse of Lehman Brothers jolted the global economy, the world’s biggest banks may need to raise as much as $1.2 trillion to meet new rules laid down by financial regulators.

After years of work, the Financial Stability Board (FSB), created by the Group of 20 (G-20) nations in the aftermath of the crisis, published its plan for making sure giant lenders can be wound down and recapitalized in an orderly way, without taxpayer bailouts.

Under the rule for total loss-absorbing capacity (TLAC), most systemically important banks must have liabilities and instruments “readily available for bail in” equivalent to at least 16 percent of risk-weighted assets in 2019, rising to 18 percent in 2022, the FSB said on Monday.

A leverage ratio requirement will also be imposed, rising from 6 percent initially to 6.75 percent. The banks’ shortfall under the 18-percent measure ranges from €457 billion to €1.1 trillion ($1.2 trillion), depending on the instruments considered, according to the FSB.

“TLAC is one of the last bricks in the wall of the postcrisis-reform agenda,” said Richard Barfield, a financial-services risk and regulation director at PricewaterhouseCoopers Llp. Many big banks “will now resume the debt issuance that has been put on hold while waiting for today’s details,” he said. The FSB’s impact analysis shows that most of them “should be able to meet the requirements.”

The push to make sure banks are no longer too big to fail is also advancing on a second front, as Wall Street expands a revision of financial contracts worth trillions of dollars. The changes are expected to allow certain securities and funding contracts to remain intact for as long as 48 hours after a bank fails, said three people with knowledge of the matter.

The extra time is intended to give a faltering bank’s home government time to jump in and set up a healthy version of the doomed institution, something that’s difficult to do when counterparties have terminated contracts and fled.

Bank of England Gov. Mark Carney, who heads the FSB, said on Monday that the TLAC rules make a major failure less likely, because banks’ creditors know they’ll face losses in a collapse.

Previously, the “lenders, the unsecured creditors, to a bank were implicitly and ultimately explicitly relying on the state to back them up and, therefore, didn’t pay that much attention to what the institutions were actually doing,” Carney told reporters in Basel on Monday. “Now they actually have skin in the game, so to speak, and they will exert greater pressure, consistent with their fiduciary duties, and that in and of itself will make failure less likely.”

The FSB rules separate the liabilities needed to keep a bank running from purely financial debts, such as notes issued for funding. By “bailing in” the bonds—writing them down or converting them to equity—regulators aim to ensure a lender in difficulty has the resources to be recapitalized without using public money, and to allow the resolved firm to continue to operate. In a departure from previous practice, senior debt issued by banks is explicitly exposed to loss.

The hundreds of billions of dollars governments globally poured into banks reeling from the 2008 financial crisis were used as much to rescue lenders’ senior bondholders, whose claims sat alongside and were equal to those of depositors, as to bail out the banks themselves. The situation confronted governments with the choice of risking bankruptcy by rescuing the lenders or allowing the disorderly collapse of the financial system.

Carney said in an interview last week that it would take “several years” for banks to “reorganize their capital structure and also their business models” to comply with TLAC, and only then would regulators be in a position to resolve a major global bank.

Analysis done by the Basel Committee on Banking Supervision showed that two-thirds of the banks on the FSB’s list are short of their targets for 2019. Those in developed markets had 14.1-percent TLAC at the end of 2014 and need to boost that level by €498 billion in the next three years. Including the emerging-market banks, the shortfall amounts to €767 billion.

To put the shortfalls into perspective, across 29 global banks total outstanding debt security issuance was €4.5 trillion at the end of 2014, the FSB said. Average issuance is €156 billion, of which 81 percent matures in the next five years. The regulator said issuance to meet TLAC should largely involve “substitution of one bond for another with different characteristics, and not net new issuance of the full shortfall amount.”

Banks from the US, European Union, Japan and Switzerland account for the lion’s share of the FSB’s list of systemic institutions. The Federal Reserve moved on October 30 to apply the TLAC standard to eight of the biggest US banks, estimating their total shortfall of long-term debt at $120 billion.

“TLAC is crucial,” Nathan Sheets, US Treasury undersecretary for international affairs, said before the announcement. “It’s a very important step forward toward addressing concerns about too big to fail, giving large financial institutions additional buffers that can be drawn on in extremis to protect the taxpayer from having to bail out these institutions.”

Emerging-market banks on the FSB list have until 2025 to meet the 16-percent loss-absorbing capacity target, rising to 18 percent in 2028. This schedule could be accelerated if, “in the next five years, corporate-debt markets in these economies reach 55 percent of the emerging-market economy’s” gross domestic product, according to the FSB.

Authorities in some G-20 nations still lack the power needed to be able to resolve a major lender without turning to taxpayers, the FSB said. Along with bail-in, these powers include the ability to prevent counterparties demanding early settling of trades, the power to establish a bridge bank and to impose changes in company structure and management.

The regulator gives the US, EU, Japan and Switzerland a largely clean bill of health in its review of the G-20’s progress in implementing measures needed to resolve large cross-border lenders in an orderly manner. Yet, China lacks the majority of the powers it would need should one of them fail, according to the FSB.

The extent to which taxpayers can be shielded when major banks fail will depend on how bail-in works in practice.

“Let’s hope that it takes longer than in the past before governments have to get involved, because that’s one way of thinking about the bail-in process and how it’s supposed to work,” said Stefan Ingves, chairman of the Basel committee. “We just don’t know how it will work.”

-- Bloomberg News

Billionaire priest shares No. 1 business rule

IF this 83-year-old billionaire is right, one of the most important lessons of business school is pretty much wrong.

All that stuff about focusing on shareholders? Forget it, says Kazuo Inamori, entrepreneur, management guru and Buddhist priest. Spend your time making staff happy instead. He’s used this philosophy to establish electronics giant Kyocera Corp. more than five decades ago; create the $64-billion phone carrier now known as KDDI Corp.; and rescue Japan Airlines Co. from its 2010 bankruptcy.

From Kyocera’s headquarters, overlooking the hills and temples of the ancient capital of Kyoto, Inamori expresses doubts about western capitalist ways. His views are a reminder that many bastions of Japanese business don’t buy into Prime Minister Shinzo Abe’s plans to make companies more devoted to shareholders.

“If you want eggs, take care of the hen,” Inamori said in an interview on October 23. “If you bully or kill the hen, it’s not going to work.”

It’s a view that carries weight because of Inamori’s success. KDDI and Kyocera have a combined market value of about $82 billion. When Inamori was named chief executive of Japan Airlines in 2010, he was 77 and had no experience in the industry. The next year, he returned the carrier to profit and led it out of bankruptcy. In 2012 he relisted it on the Tokyo stock exchange.

Amoeba management

The secret, as Inamori tells it, was to change employees’ mentality. After taking the CEO role without pay, he printed a small book for each staff member on his philosophies, which declared that the company was devoted to their growth. He also explained the social significance of their work and outlined Buddhist-inspired principles for how employees should live, such as being humble and doing the right thing. This made them proud of the airline and ready to work harder for its success, Inamori has said.

The doctrine gained traction, in part because the line between one’s work and personal life is more blurred in Japan than the US. Not all of Inamori’s tactics are so spiritual. His “amoeba management” system split staff into often tiny units that make their own plans and track hourly efficiency using an original accounting system. His turnaround also cut roughly a third of the airline’s work force, about 16,000 people.

“Company leaders should seek to make all their employees happy, both materially and intellectually,” Inamori said. “That’s their purpose. It shouldn’t be to work for
shareholders.”

While that might not impress some investors, the man himself sees no conflict. If the staff is happy, they’ll work better and earnings will improve, he said. Companies shouldn’t be ashamed to make profits if they’re pursued in a way that benefits society, Inamori has said. He’s the second son in a family of seven children and grew up in Kagoshima, the birthplace of Japan’s last samurai rebellion.

Inamori Museum

IF Inamori’s teachings don’t always follow the typical management grad-school script; there’s no shortage of people wanting to learn them. More than 4,500 business owners attended the annual convention of his Seiwajyuku school in Yokohama last quarter. Inamori said he volunteers his time to speak to attendees, as part of philanthropic activities that also include funding the Kyoto Prize, a Japanese version of the Nobel awards. Beside the Kyocera
headquarters in Kyoto stands a five-floor museum dedicated to Inamori’s life and philosophies.

The companies Inamori has led are connected by more than their management approach. Kyocera was the largest shareholder in KDDI as of September 30 with 13.7 percent of voting rights, according to the phone company’s web site. The stake is worth $8.2 billion, almost half of Kyocera’s market value. Kyocera owns 2.1 percent of Japan Airlines, data compiled by Bloomberg show.

Hong Kong-based Oasis Management is calling on the electronic equipment-maker to return cash to investors by selling its stake in the airline and “greatly” reducing holdings of KDDI. Kyocera’s shares have risen 48 percent since Abe’s government took power in 2012, compared with an 84-percent gain for the benchmark Topix index. Return on equity, a measure of the profit companies make from shareholders’ capital, stood at 5.8 percent at the end of September, against an average of 8.6 percent for the Topix.

Investors “want to get the highest returns possible. I understand that,” said Inamori, talking about shareholders in general. He says the KDDI holding pays good dividends and serves as a buffer against hard times. “At times, company management has to say no to shareholders’ selfish requests.”

Seth Fischer, chief investment officer at Oasis, says this is an outmoded way of thinking. His fund is part of an influx of activists encouraged by Japan’s efforts under Abe to make firms more accountable to stockholders.

Not selfish

“WE are shareholders, not ‘selfish’ shareholders,” Fischer said by e-mail. “The view that management has a duty to protect the business from shareholders is exactly the behavior that Abenomics is designed to change.”

When Inamori talks about making employees happy, he doesn’t mean they’ll be putting their feet up. His brand of happiness comes from working harder than anyone else. It’s infused with the Buddhist idea of “shojin,” elevating the soul through devotion to a task. In a 2004 book on his philosophy, he questioned Japanese people’s increasing tendency to value leisure time.

Inamori’s less-extreme capitalism is a product of Japanese society, which he says, is less willing to accept gaps between haves and have-nots than western economies. Executives have to take that into account, he said.

“Companies do belong to shareholders, but hundreds or thousands of employees are also involved,” Inamori said. “The hen has to be healthy.”

-- Bloomberg news

Bitwalking Dollars: Digital Currency Pays People to Walk

Digital Crypto-Currency Generated by Human Movement

A digital crypto-currency which is generated by human movement has been recently launched. Bitwalking dollars could be earned on walking unlike the other digital currencies like Bitcoins which have been mined by the computers.

To begin with, users would be given the opportunity to spend what they have earned in an online store or trade them for cash. A phone application tends to count and verify user’s step with walkers with the opportunity of earning around 1 BW$ for around 10,000 steps – about five miles.

At first users would be provided with the opportunity of spending what they have earned in an online store or trade the same for cash. Nissan Bahar and Franky Imbesi, the founders of the project have got over $10m of preliminary funding from largely Japanese investors in order to aid the launching of the currency and develop the bank which verifies steps together with any transfers.

Murata, the Japanese electronics giant has been working on wearable wristband which would be providing an alternative option of carrying a smartphone to show how many BW$ the wearer has earned.

Bitwalking - Additional Incentive to Keep Fit

Shoe manufacturers are ready to accept the currency while a UK high street bank is in talks in partnering with the project at one of the UK’s largest music festivals to be held next year.It is said that the founders have a track record in disruptive technology which tends to help developing nations as well as the richer ones.

 Keepod had been launched last year, a $7 USB stick which performs like a computer in Nairobi, Kenya. The purpose of Bitwalking is to take the benefit of the trend for fitness followers by providing additional incentives in order to keep fit.

The global scheme intends to partner with sportswear brands health insurance firms, health services, environmental groups as well as advertisers who may be offering unique insights in the audience they may be focusing on. Employers in the future may be offered a scheme to provide to their employees in encouraging them to stay fit, with the currency they tend to earn converted and thereafter paid along with their salaries.

The average person in developed countries tends to earn around 15 BW$ a month, it is expected that in poorer countries where people need to walk further to school, work or to collect water, the Bitwalking scheme would be beneficial in transforming lives.

Currency to be Earned by Anybody

The influence Bitwalking would be making in developing countries does not seem to be lost on the founders and is the main reason in creating the currency. One of the African nations to join at the launch of the project, in Malawi, the average rural wage is about US$1.5 per day.

Carl Meyer, Bitwalking manager for Malawi, has set up the first two Bitwalking hubs in Mthuntama and Lilongwe for local people to be trained on how to trade the BW$ online for US$ or Malawi Kwacha, the local currency.

Bitwalking has not released the procedure used in verifying steps, officially but states that it utilises the handsets’ GPS position and Wi-Fi connection for the calculation of the distance travelled. Transfers of the new currency would be monitored cautiously with transactions going through a central bank which would verify individual deal utilising the block chain system used in transferring other crypto-currencies like Bitcoin. It is a currency which can be earned by anybody irrespective of who they are, or where they come from, according to Franky Imbesi.

Your Residential Property is a Liability, not an Asset!

In my previous post about how I can immediately achieve financial independence now (click here), I talked about downsizing my house. Some people may think it is due to the profit earned from downsizing. Actually, that is only 1 part of the equation. If you think harder, you will realised that your residential property (The one you stayed in without renting out) is a liability. Yes, it is the biggest liability for most people in Singapore (Maybe worldwide?).



Contrary to what your finance course taught you (If you attended one), your residential property is not an asset! You have to pay the mortgage/loan hence, money going out of your pocket. It only becomes an asset when it puts money into your pocket. The majority of us thinks that buying a house (liability) that increase in prices will make them rich. I hope you will not faint when you look into your mortgage loan that include your interest paid in your lifetime (If you are paying via CPF, you will be even more surprised with the accrual interest you owed to your older self when you sell your property). For example, a HDB 4 room BTO flat bought at $300,000 at 2.6% interest will cost you $432,185.93 after 30 years! This exclude any opportunity cost and property taxes too.

Let us illustrate an extreme example, if everyone has a place to stay for free or sleep on the street, we would actually have half a million more in your pocket. Moral of the story? Sleep on the street? Of course not! The less liability you owed to your residential property, the richer you are.

Here, some people will think I am short-sighted because you can make some money from buying and selling of residential flat. Come on, seriously?

Let us take a quick example of most cases of selling and buying a residential property. Here, you bought a $300,000 HDB 4 room BTO flat and after 5 years, you sell it at $400,000. You would have paid interest of maybe about $36,800 at 2.6% for 30 years loan and you renovated it for $30,000 for the first flat. Your profit will be $63,200. Then, you will need to renovate your new flat, say another $30,000, your profit will only have $33,200 left. This exclude the property taxes you have paid thus far. A rule of thumb, riding the property cycle of high and low prices, you sell high, you buy high. The same for when you sell low, you buy low. You will not benefit much from the property cycle if you still need a property to call it a home.

So, how do I profit from my flat? I have to say I am lucky that I gotten a BTO beside a MRT station and with high floor unit. I will be able to command a higher selling price than average, I guess. In the above scenario, I will sell it, say, $600,000. Then my profit will be $233,200. This profit will help me to get a free 3 room BTO flat at most location in Singapore and with some cash back. This is how the mathematics work.

Nothing is free, but if you can let go, everything is free. - Frugal Daddy

What could the Filipino Online Christmas Shopper Buy Next?

The overflowing number of products out in the market makes it almost impossible for Filipinos today to decide what the best ones to buy are. Now that the Christmas season is fast approaching, every consumer is faced with a streamline of options from the latest electronics, stylish clothing, fast moving consumer goods, and even in demand sensational items.

Lazada (www.lazada.com.ph), the Philippines’ One Stop Shopping and Selling Destination, knows the trendiest products out there to be enjoyed by consumers online. In a study conducted by Lazada, Bluetooth watches, GoPro action cameras, laptops, drones and smartphones ranked as the top products preferred by Filipinos to have this Christmas. Filipinos nowadays search for unique finds that are hot, sensational and at the same time worth the money. The infograph below illustrates the rest of the findings.

Lazada, with its nationwide delivery, makes these products accessible to Filipinos whether they’re in Luzon, Visayas or Mindanao. What makes shopping at Lazada even more advantageous is that you don’t have to experience the heavy road congestion going to the mall in order to purchase what you want. Also, you can buy products and have them delivered to your friends and loved ones wherever they are in the Philippines. And if you’re still thinking of which products are best to give to friends in other parts of the country, below are Lazada’s best-selling products per region.

55% of Filipinos spend most of their time browsing and researching for products which could potentially catch their interest. In this case, where the consumer doesn’t have anything specific in mind, browsing through categories could help with their purchase decision. Finding the best product within the category list is essential in choosing the right Christmas gift. In a comparative research of Lazada, we found out that for both Google and Lazada, the top-searched categories are Mobiles & Tablets and Computers & Laptops. Below are the top categories per platform.

Filipinos have truly engaged themselves in the wireless world. Lifting data from Google, 65% of Filipinos are actually online shoppers. Filipinos have wide access to the internet with 5 out of 10 being online daily. They usually course their online activity through mobile (the highest), followed by computer and tablet. Lazada has an available platform for each of these means to access the internet and the online shopping community. Filipinos start researching for ideal Christmas presents online as early as July and reaches its peak by November. Moreover, Filipinos consider these top three attributes whenever they shop: (1) value for money, (2) price, and (3) quality - all of which are trademarks of what Lazada has to offer to every consumer.

Filipinos are truly one of the trendiest shoppers. With all the best products and deals in store for them, it is a matter of choosing the best product to give this Christmas. The Filipino Christmas online shopper is not only the best giver but also awaits to receive the best gifts s/he could get during this most wonderful time of the year.

About Lazada
Lazada (www.lazada.com.ph) is Philippines’ largest online shopping mall and is pioneering e-commerce by providing a fast, convenient and secure online shopping experience combined with an extensive product offering in categories ranging from mobiles & tablets and consumer electronics to household goods, toys, fashion and sports equipment. Lazada is continuously striving to offer its customers the best possible shopping experience with multiple payment methods including cash on delivery, extensive warranty commitments and free returns. Lazada mobile applications for Android, iPhone and iPad provide additional convenience to its consumers’ allowing them to shop anywhere, anytime.

For more information, please visit http://www.lazada.com.ph. For updates on Lazada’s latest innovations, as well as activities, contests and promotions, connect with us via Facebook (https://www.facebook.com/LazadaPhilippines).

Philippines, Indonesia deposit insurers forge cross-border agreement

State-run deposit insurers of the Philippines and Indonesia have inked a cross-border cooperation agreement for information and expertise sharing. Philippine Deposit Insurance Corp. president Cristina Que Orbeta and Indonesia Deposit Insurance Corp. chairman Halim Alamsyah signed the memorandum of understanding (MOU) during the 14th International Association of Deposit Insurers (IADI) annual general meeting and conference in Kuala Lumpur, Malaysia last Oct. 29.

Citing globalization and the interconnectedness of the global financial system, Orbeta stressed the importance and significance of cross-border cooperation in protecting the depositing public and promoting financial stability.

She said the partnership with Indonesia alongside other Asian countries is a testimony to PDIC’s commitment to share technical expertise with its neighbors and enhance regional cooperation.

Under the MOU, the PDIC and IDIC would foster enhanced cooperation through exchange of information, prompt response to technical inquiries, effective support for exchange of experts and staff, conduct of bilateral meetings between the two organizations, and other activities that promote collaboration in addressing relevant cross-border issues.

The agreement is valid for a period of five years and may be extended upon joint consent of the parties.

The partnership also aims to further enhance the compliance of both the PDIC and IDIC with the Core Principles for Effective Deposit Insurance Systems formulated by the IADI, particularly on cross-border issues.

Both the PDIC and IDIC are IADI members. Aside from Indonesia, the PDIC has existing cross-border agreements with its counterparts in Japan, South Korea, Malaysia, Thailand, United Kingdom and the US.

PDIC was established through Republic Act 3591 in June of 1963 to provide depositor protection and help maintain stability in the financial system by providing permanent and continuing deposit insurance.

-- Philstar Business

PH Financial system posts ‘positive’ performance

Philippine financial system expanded further in the first half of 2015 due to positive market sentiment that boosted bank incomes despite some structural changes here and abroad, data from the Bangko Sentral ng Pilipinas (BSP) showed. Philippine banking sector -- which makes up 80.8% of the local financial system -- saw its assets grow by 9% to Php11.2 trillion as of end-June as the firms saw double-digit growth in investment and loan portfolios, the central bank said.

“Despite the moderation in credit allocation particularly with the real estate sector, the BSP remains proactive in its surveillance and use of macroprudential tools to mitigate the buildup of systemic risks,” the central bank said in a statement yesterday.

“The Philippine financial system... remains in a position of strength in the first half of 2015 amid structural shifts in the global and domestic financial landscape,” the BSP said.

Net profit of Philippine banks grew to Php68.9 billion in the first half, up by 8.1% from the Php63.7 billion recorded in the comparable January-June period in 2014, marking a recovery from the decline seen the year prior.

Income from trading activities provided the biggest boost. “Trading income, in particular, registered a hefty growth of 35.9% on favorable market sentiment during the first semester of 2015,” the BSP said.

Loans grew to Php5.4 trillion for first semester, growing by 14.6% from last year’s Php4.7 trillion. Meanwhile, deposits logged a 9% growth rate to Php8.6 trillion, though slower than the 24.5% expansion in the previous year.

“Funding profile remained stable with retail and domestic-oriented deposit liabilities continue to be the main source of funds,” the BSP said, citing a “modest” growth in deposit liabilities of banks.

The slower growth in deposits was due to the entry of more alternative investment products, such as insurance variables, that offer “more competitive” interest rates than leaving the money in the banks, the regulator said.

Despite an increase in lending, banks were able to trim the share of bad debts to their total loan portfolio to 2.4% from 2.7% the year prior.

Meanwhile, lenders’ capital adequacy ratio -- which measures their cover against credit risks -- stood at 15.1% on a solo basis and at 16.1% on consolidated basis, well above the BSP’s 10% minimum requirement and the 8% international standard under the Basel 3 framework. Capitalization on a solo basis covers a bank’s head office and its branches, while the consolidated basis includes its subsidiaries.

Banks also expanded their services in the first semester, with 638 banks operating 9,890 branches in the country, up from the 9,456 branches in the same 2014 period.

More ventured into electronic banking, rising to 268 from the past year’s 245. These services include electronic wallet, cash/remittance products, Internet banking, phone banking, mobile banking and hybrid mobile/internet via BancNet-MegaLink switch banking.

“Notwithstanding the sustained positive performance of the financial system, the BSP continues to closely monitor potential pressure points. This is in line with the BSP’s objective of promoting greater financial stability,” the central bank yesterday said.

The Philippine banking system is the only industry out of 69 sovereigns rated by Moody’s Investors Service that carries a positive outlook. Last year was the third straight year since 2012 that the sector held that tag from the global debt watcher.

-- Business World

PH mobile financial services growing leaps and bounds

Amdocs projects a strong growth in mobile banking in the Philippines as mobile financial services (MFS) are more universally offered or practiced across the country. Amdocs Vice President for Mobile Financial Services Justin Ho said the use of mobile money is a more effective way of reaching the country’s unbanked and underbanked sector.

Amdocs, he said, is a market leader in software solutions and services for the world’s largest communications, entertainment and media service providers.

He said, “Using MFS is three times cheaper than using a bank branch. The mobile financial service is the way to go. Banks and telecommunication companies can both participate in its success,” he recently said at a news conference on the subject.

When asked about regulatory concerns on MFS, he replied, “The Bangko Sentral ng Pilipinas has been inclusive and helpful in terms of providing the right regulation to promote MFS. It’s always open to adopt and welcome new ideas.” He added that the Philippines has a central bank that cares about financial inclusion unlike other central banks in the world He said the MFS penetration in the Philippines is no longer in infancy.

“In the next five years, that [MFS] will be mainstreamed,” he said.

“Banks of today are more advanced technologically but still siloed. We wanted digital. We provide mobile money.  “We have an MFS platform which is the most advanced,” he said.

Ho said people can put their domestic remittance in mobile money and use it to pay bills.

The salary of certain people may be dispensed via mobile money platforms and the government’s cash-transfer program may also be conducted using electronic wallets. He said such often underserved people like farmers who use so-called electronic wallets can keep track of their digital footprint. He also noted some 25 percent or 28 percent of Filipinos live below the poverty line and that financial inclusion is important to get people above the poverty line.

He cited a World Bank report which showed 69 percent of the population are unbanked Filipinos. They patronize loan sharks and pay more than 300 percent for the accommodation.

He also cited another survey in the Philippines which showed 38 percent of the Filipinos saying it’s easy to pay cash, 38 percent having privacy issues, while 27 percent do not know how to use the MFS.

He said 54 percent of the people surveyed trust banks and that a large chunk or 31 percent said they trust mobile banks.

-- Business Mirror

BPI mobile-banking users hit 1 million

The Bank of the Philippine Islands (BPI) has passed the 1-million mark for mobile-banking users and targets to acquire at least half of the lender’s clients over the next five years.

BPI Vice President and Electronic Channels Division Head Carlo Carmelo Gatuslao said 1 million of the 7 million BPI retail clients use the bank’s mobile app at present.

He said BPI already exceeded this year’s 40-percent growth target or 800,000 mobile-banking users by year-end. Combined online and mobile-banking users already reached 1.8 million and mobile-banking users alone reached 1 million.

“We expect our digital channel enrollment and usage to grow. We will offer more services beyond what we have now. Currently the penetration rate is 35 percent of our customers. Half of the bank’s customers will use electronic banking in five years. We can have half of 7 million bank clients in five years,” he said. He sees further growth in usage of mobile-banking services because of the convenience and efficiency it offers.

“With the BPI Express Mobile app, our clients can easily access their accounts and make financial transactions even with the most affordable smartphone. About 32 percent of smartphones users in the Philippines use it for data. In five years, the number of smartphone penetration will double,” he said.

BPI Assistant Vice President Frederick Faustino said mobile-banking financial transactions averaged 1.6 million transactions a month totaling Php12.6 billion. The transactions involve cash transfer and bill payments, Faustino said. He said most of the mobile-banking users were aged 20 to 45.

BPI’s leadership in Philippine mobile-banking was recently affirmed by two prestigious award-giving bodies in the financial services industry. The Asian Banker recognized BPI for the Best Mobile Banking in the Philippines award and the Bank Marketing Association of the Philippines awarded BPI as Best Electronic Delivery Channel.

The award honors the bank with a mobile-banking platform that demonstrates the use of the full range of current mobile device technology for financial transactions and services in the most intuitive and secure manner possible.

Earlier in the year, The Asian Banker also named BPI as the Best Retail Bank in the Philippines for 2015.

Payment Wallet Companies See Red in New Game Plans

Some Payment Wallet Firm – Locked out of e-commerce Segment

Some of the payment wallet firm are of the opinion that they get locked out of the successful e-commerce segment since companies running marketplaces tend to prefer their own subsidiaries or are determined in ensuring that customers spend any cash-back money on their own sites.

Oxigen for instance has said that it is no longer available on one of the biggest shopping sites of India. According to CEO of Oxigen, Ankur Saxena has stated that they are presently on Snapdeal prior to acquiring Freecharge and have decided to take them down.

He further stated that at one point of time they accepted wallets but now they want to come up with their own wallets. Freecharge seems to be the only wallet option on Snapdeal that has also launched cash-back options which tends to direct consumers to the unit’s offerings. Freecharge was acquired by Snapdeal in April this year, for almost 2,400 crore.

Snapdeal had refrained from responding to queries and Flipkart informed that it would not comment on its wallet practices. Saxena had mentioned that the trend would hurt Oxigen and that there would be an impact on the business if the customers are unable to use the wallet on a particular site, they would be compelled to utilise another mechanism to process the payment.

Paytm – Its Own e-Commerce Platform

According to managing partner, Ashvin Parekh of Ashvin Parekh Advisory Services, stated that striking boundaries on the e-commerce evolution could be envisaged as a restrictive exercise and that they have still not achieved anything with regards to permeation of e-commerce.

Market leaderPaytm, though does not seem to be too worried. Vice President Products, Paytm, Nitin Misra had commented that they have better acceptability and more consumers. Why would customer put money in a wallet which can be used only on that particular site and the cash back too cannot be utilised elsewhere?According to him the consumers is not dumb and if someone does not intent to permit them as a payment option on their site it is entirely their choice.

Paytm has expanded to begin its own e-commerce platform and the government as well as the Reserve Bank of India have made financial presence significant, making for an ecosystem wherein payment wallets would play a role together with various other elements. However, what is serious for such companies is having a large subscriber base.

Several Banks Launched Own Wallets

Towards the last week of October, Vijay Shekhar Sharma, founder of Paytm had received a message from State Bank of India which was not good news. The message stated that the nation’s largest lender together with its associate banks would not permit their customers to load money onto the Paytm wallet from their accounts.

The reason provided to their query was that the net banking services were only for shopping and not for uploading wallets according to Sharma. After independent wallet companies have started operating in India and gained reputation, several of the banks launched their own wallets.

SBI in fact according to reports by The Economic Times, recently, even planned to launch a wallet for feature phone users known as Batua, by next month. Chairman of Payments Council of India and the managing director of ItzCash, Naveen Surya, had stated that some players would always think that they are big enough and that they have adequate customers. However as one tends to go deeper and begin running independently the payment business, when it is separated from the core business, one would realize that it is difficult to create scale.

RAFI-Kool Adventure Camp holds its Alumni Homecoming 2015

More than 150 alumni of Ramon Aboitiz Foundation Inc – Kool Adventure Camp (RAFI-KAC) gathered to share best practices in the implementation of their school and community projects in the Alumni Homecoming 2015 with the theme “Taking Flight, Creating Change” held in KAC Adventure Education Center, Balamban last Oct. 24 to 25.

The projects implemented encompass the areas of education, health, environment, youth and community development, culture and arts.

Merliza Ipis, one of the KAC alumni from Toledo Science High School shared that big projects come from small ideas and that is with teamwork every problem can be resolved.

The two-day event benefitted the participants to learn from the sharing and discussions from the invited speakers and RAFI’s partners from Luzon and Visayas.

Among the speakers were alumni campers Tristan Aboitiz of Pilmico, Atty. Jamaal Calipayan of the City Government of Mandaue, Joe Aperdo of the Alliance of Argawanon Young Leaders, Rene “Tatay Ite” Vendiola of the 5th RAFI Triennial Awards, Tobit Cruz of Angat Kabataan, Elisabeth Baumgart of Ayala Young Leaders Alumni Association, Jerome Muñoz of KAC Operations Support, Atty. Christine Red and Ariel Baquillos both from Timawa (first alumni group of KAC).

Resource Mobilization, Stewardship in the Community, Personal Leadership and Creating Change through Environmental Involvement are the topics discussed during the event.

“I am very encouraged with the results of KAC. I see the energy and the hands that are really involved. Through the camp, I hope that everyone will no longer be afraid to share and face their fears. The KAC alumni are now in the position to act, to start the change from themselves”, shared RAFI President, Roberto Aboitiz.

The participants from the different public high schools, universities and organizations in Cebu City and Cebu Province include Lilo-an National High School, Toledo City Science High School, Talisay City Science High School, Minglanilla National Science High School, Alcoy National High School, Looc Norte National High School, Alliance of Argawanon Young Leaders, Argao Youth Heritage Society, Don Andres Soriano National High School.

“I really miss everybody. After 16 years, it is really an honor to be in front of my co-alumni campers and share my KAC experience. The best thing that happened after I experienced the camp is that I realized that I have the power, that I am not a “nobody” but I am “somebody” who can do something and create positive change. I hope all of the KAC alumni will not stop doing change because the camp is not just for the big group but it is for every individual personally,” shared Ariel Baquillos, alumnus from Camp 1 since KAC started in 1999.

On the second day of the event, KAC also recognized the People’s Choice Awardees.  Minglanilla National Science High School received the Best in Project Display for Exhibit, Best Project Presentation and Best Project Presenter. The People’s Choice Award for Best Project is the school project implemented by Toledo Science High School.

KAC has been offering adventure education programs for leadership and team development for youth and professionals for the last decade. It is a program under the Leadership and Citizenship focus area of the Ramon Aboitiz Foundation Inc. (RAFI).

It has recently opened the Philippines’ first fully dedicated adventure education center last August 2. For more information on KAC and its services, contact 260-9000 local 1001 and look for Althea May Santillan, or visit www.kac.rafi.org.ph or www.facebook.com/kooladventurecamp.

A Reminder of a Fundamental Truth about Investing

Late Sunday night I received an email from a consultant to financial advisors which included a sample letter in response to the terrorist attacks in Paris over the weekend, with the suggestion that many clients will be asking Monday morning about their investment implications and this letter could be a useful proactive communication.  I strongly believe in taking the long term view on investments, to the point that I tend to ignore short term, white noise 'news'.  But with this coming from a person I've followed for years and for whom I have a great deal of respect, I read his information closely.

Included in his letter were these paragraphs:

Today, you will see the world’s investment markets open lower, and probably close lower, as the horror of the events in Paris are translated into uncertainty about the world we live in—and, therefore, the safety of our assets, reflected in our stocks.  The markets always respond reflexively and negatively to threats to our safety.

But as the year proceeds through its last few weeks, the smart money always tells us that these downturns are temporary.  Fears that global enterprises are somehow worth less because blood was spilled overseas will prove to be overblown.  

Source:  Chicago Tribune

I decided to not send this or anything similar out, but wondered if I missed a great opportunity to make myself look smart by being in front of a bad day in the markets.  As the day unfolded, I was given another powerful reminder of a bedrock investment principle I have learned in my two decades in the financial business: No one can accurately predict the near future.

Yesterday the S&P 500 was up about 1.5%, with German and even French markets flat.  Hardly a negative response to the legitimate threat to our safety, and nothing like a fear of global businesses being worth less, despite widespread predictions from non-reactionary experts that the response would be exactly that. 

This has happened on a regular basis over the years.  Just when I think I have some insight into what is going to happen, the market makes an opposite and sometimes powerful move in the other direction.  Wall Street and mainstream media trains us to think that being able to forecast market moves are the key to financial success, and leaves us wanting to be able to predict the future.  The truth is that patient, disciplined investing is the only sure way to have a successful investment experience. 

The market looks poised to head north again today.  Maybe in the next few days or next week the markets will move downward, but it won't be because of a fundamental change due to the terrorist attacks. 

If market turmoil and headline news has you anxious about your investments or retirement readiness, we can help you separate the wheat from the chaff and help you have peace of mind about your financial future.

Filinvest brings "I OWN MY DREAM" advocacy to Cebu

Gotianun-led developer, Filinvest Land, Inc. (FLI) steps up its advocacy to build the Filipino dream with its campaign caravan and property festival today in its hometown, the "Queen City of the South."

Filinvest carries on its 'dream-building' mission by presenting its developments to Cebu. The property festival will showcase key projects in Cebu including the exclusive seaside residential enclaves in Cebu's newest lifestyle capital, the 50-hectare City di mare in south road properties (SRP) - the Amalfi and Sanremo Oasis. It also features mid-rise condominium One Oasis at the uptown district of Mabolo, Cebu.

Legacy of Dream Building

"it's never too late to set on a new dream and 'own' it. Just like how our founders, Andrew Sr. and Mercedes Gotianun envisioned their dreams for their family and building dreams for every Filipino," said Tristan Las Marias, senior vice president and Visayas and Mindanao Cluster head of FLI.

It was in Banilad, Cebu City where the Gotianun's built their first residential subdivision in the 1960s. Since then, Filinvest has become one of the largest, most-trusted and diversified real-estate developers in the country with over 150 ongoing residential developments in 45 key cities and 18 provinces across the country.

"Cebu will always be 'home' to Filinvest. From its humble beginnings in this city, Filinvest has become one of the most-trusted and largest property developers in the Philippines."

Filinvest has stregnthened its presence in Cebu with a myriad of developments in residential, office and hotel. These developments include the luxurious condominium project Serulyan Seascape macta, the exclusive residential communities Aldea del Sol, Corona del mar and Mactan Tropics, Cebu Cyberzone office towers in partnership with the provincial government of Cebu, Quest Hotel and Grand Cenia Residences, and Crimson Resort and Spa in Mactan.

I Own My Dream

Inspired by the success story of its founders, Filinvest has launched "I OWN MY DREAM," an advocacy that aims to empower Filipinos to work hard to achieve their dream of a better life and a brighter future for their loved ones to show its commitment to fulfill more Filipino Dreams.

"Theirs is a testimony that anyone can achieve their dreams through hard worj and passion. It is the very foundation of how the company came to existence. With this campaign, we want to motivate new generations of Filipino dreamers and doers," added Las Marias.

Meanwhile, dream advocate Yap said "he feels honored to be part of FLI's advocacy to touch Filipinos' lives." Yap carved his career in show business quite late than most actors yet he scored numerous acting awards since he starred in a hit primetime TV series.

Filinvest believes that Yap personifies I Own My Dream, "because he represents the Filipino Dreamer who is enjoying great success because he dared to pursue his dreams. He is definitely an inspiration that you can carry on a dream at any age," said Las Marias.

Joyride to Your Dream home Raffle Promo

Home buyers of FLI are up for a surprising treat with its "Joyride to your dream home raffle promo" that gives sixty lucky home buyers a chance to win Php25,000 each in the three monthly raffle draws, and three more winners the chance to drive home their brand-new Toyota vehicles such as Wigo G AT TRD; Innova G DSL MT; or the FJ Cruiser at the grand draw.

"Now that they have their dream homes at Filinvest, our home buyers even have the chance to drive a dream car with this new promo," emphasized Las Marias.

"With I Own My Dream campaign and Joyride to your dream home raffle promo, we wish to give back to the community, and continue to inspire a nation that time and again, have showed the world its tenacity and perseverance despite challenges in achieving their dreams. Filinvest shall continue to dream with you and build dreams for every Filipino," said Las Marias.

BPI sets new banking trend with Make the Best Happen Campaign

Bank of the Philippine Islands (BPI) is setting a new trend in banking with its Make the Best Happen campaign. Over and above offering its range of products and services, BPI first of all wants to support its clients by helping them focus on their life aspirations.

BPI, the first bank in the Philippines and in South East Asian region, has a wide range of consumer, corporate, and investment banking products and services. In a statement, Cezar P. Consing, BPI President, said the bank wants to focus on needs-based financial planning where individuals make decisions based not on returns but on the goals they want to achieve.

The process begins with helping clients identify their life needs and goals and then create a priority list based on those aspirations. Clients are then encouraged to make personal financial assessments, computing, among others, one's net worth, cash flow requirements, and even emergency funds.

Based on this initial assessment, BPI helps clients create a game plan, mindful of their budgets, goals, risk profile and investment options.

"BPI empowers Filipinos to make the best of their lives happen through its innovative and accessible financial solutions," Consing said. "We strive to know and understand the individual circumstances and financial needs of our clients, then offer financial advice. Only then do we propose certain solutions that are suitable and customized for each and every client."

Tricia Quiambao, Head of BPI's Strategic Management, said BPI's Make the Best Happen campaign is a different look on banking. "We put a premium on understanding our clients and their needs, whether it's to travel, or start a business, or fund their children's education," she said.

"As people become more and more aware of the world around them and the many possibilities and opportunities it offers, BPI would like to enable them to accomplish those goals and aspirations better, faster and more efficiently."

Rally Jereza, BPI Division head for Visayas and Mindanao,a dded: "Cebu has been a hub of out-of-the-box thinking, and BPI feels right at home with our trendsetting solutions. With Make the Best Happen, we aim to expand the conversation with our clients and friends, beyond solutions and into actual life and lifestyle choices."

The microsite devoted to the Make the Best Happen campaign - makethebesthappen.ph - addresses some of the top life and lifestyle goals of most individuals: travel, health, parenting, shopping, future, and dining. Its content is enriched every week with updated content derived from current areas of interests.

AXA Life Insurance buys Charter Ping An Insurance Corporation

AXA Philippines is acquiring Charter Ping An for Php2.3 billion, marking the consolidation of the Ty family’s life and non-life insurance businesses under one operation. The transaction, which will allow AXA Philippines a joint venture between GT Capital Holdings Inc.,  leading global insurance group  AXA and Metropolitan Bank & Trust Co. to own 100 percent of Charter Ping An, is subject to customary closing conditions, including the receipt of regulatory approvals.

“By consolidating its life and non-life insurance businesses, GT Capital further strengthens its presence in the country’s underpenetrated yet fast growing insurance industry. We will clearly benefit from the global insurance expertise of AXA, the local market knowledge and network of Charter Ping An, and the cross- selling opportunities among our component companies,” said GT Capital chairman Francisco C. Sebastian.

The deal is expected to be completed in the first quarter of 2016, GT Capital said in a disclosure to the Philippine Stock Exchange.

“Until then, all operations of Charter Ping An and AXA Philippines will be business as usual and shall remain separate, as they currently are,” GT Capital said.

The move will allow AXA Philippines, the second life insurance company in the country, to expand into property and casualty insurance.

Charter Ping An is currently the fourth largest non-life insurance company in terms of net premiums written and premiums earned.

AXA Philippines has been operating in the country since 1999, focused on the life insurance business and providing solutions for savings and investments, health, education, income protection, and retirement. It pioneered bancassurance operations in the Philippines, which is the distribution of insurance products through banks.

“We are very excited about this development, as now we can offer our customers a complete suite of protection products. From protecting themselves, their loved ones, their financial hopes and dreams, and now even their hard-earned assets and properties, we at AXA can be more present in their lives, “said AXA Philippines president and CEO Rien Hermans.

“With the entry into non-life insurance, we see AXA Philippines building on the top five position of Charter Ping An and definitely become a major player and be a top three company in a few years,” Hermans added.

AXA is ranked as the number one global insurance brand for seven consecutive years, from 2009-2015. According to the 2015 Fortune Global 500 list, AXA is the 20th largest corporation and 29th in the 2015 Forbes Global 2000 rankings.

For his part, AXA Asia regional CEO Jean-Louis Laurent Josi said the AXA group’s  “close partnership with GT Capital and Metrobank has enabled us to build a strong presence in this high-growth market and this milestone will create new opportunities for further growth, as well as to help enhance the local insurance sector with a wider range of offerings.”

At present, AXA Philippines has more than 630,000 insured. AXA Philippines has more than 2,100 financial advisers in 32 branches and 500 financial executives in over 750 Metrobank and PSBank branches nationwide.

GT Capital is a listed major Philippine conglomerate with interests in banking, property development, power generation, automotive assembly, importation, wholesaling, dealership, and financing, and life and non-life insurance. It is the primary vehicle for the holding and management of the diversified business interests of the Ty family in the Philippines.

Yellen: December interest-rate hike a ‘live possibility’

Federal Reserve (the Fed) Chairman Janet Yellen said last Wednesday that an interest-rate hike in December is a “live possibility” if the economy stays on track. Yellen described the US economy as “performing well” right now, with solid growth in domestic spending. At their meeting last week, policymakers believed that the threat of global headwinds had ebbed, Yellen said.

At its December 15 and 16 meeting, the Fed will consider raising a key interest rate from a record low near zero if the economy continues to grow at a strong enough pace to keep adding jobs and push annual inflation toward the Fed’s 2-percent target, Yellen said. Yellen stressed that no decision has been made yet, and a move in December will depend on how the economy fares between now and then. She reiterated that when the Fed does start raising rates, it will do so gradually.

She said she understood that “there is a great deal of focus” on the timing of the Fed’s first rate hike in nearly a decade. But she said the more important focus should be on the pace of rate hikes after the Fed decides to move.

“The committee’s expectation is that it will be a very gradual path and…will depend very much on the actual performance of the economy,” she said. Yellen’s comments came in response to questions during an appearance before the House Financial Services Committee on Wednesday. William Dudley, president of the Fed’s New York regional bank, said at a separate appearance later in the day that he was in full agreement that December was a “live possibility and we will see what the data shows.”

The main topic of the committee hearing was banking supervision and regulation. On that subject, Yellen said that the country’s largest financial institutions are still falling short of managing the types of risks that led to the 2008 financial crisis.

While Yellen acknowledged progress in making the financial system more resilient to shocks, she expressed concerns about the “substantial compliance and risk-management issues” at the institutions.

“Compliance breakdowns in recent years have undermined confidence in the [banks’] risk management and controls and could have implications for financial stability, given the firms’ size, complexity and interconnectedness,” Yellen said.

The group includes the eight largest banks in the US, a number of major foreign banks operating in the US and several large institutions that have been judged systemically important. Republicans on the House committee have been critical of many of the regulatory changes the Fed is undertaking to implement the 2010 Dodd-Frank Act.

Committee Chairman Jeb Hensarling, Republican-Texas, criticized the Fed for failing to provide enough details about the annual stress tests it conducts on the biggest banks to ensure they can withstand a severe financial downturn.

He told Yellen he had great concern about “how opaque and nontransparent” the stress tests are.

Yellen said that the Fed tries to provide banks detailed information about the methodologies it is using to structure the tests each year.

The Fed’s overriding goal is to make sure that it has sufficiently addressed the kind of problems that lead to the 2008 crisis, the worst financial crisis in the US in seven decades, Yellen said.

“We have made changes in our supervision that now allow us to supervise large financial institutions on a more coordinated, forward-looking basis,” Yellen added­.

-- Associated Press

My Definitions of Financial Independence

If you are reading the finance blogs, you will always hear the term "financial independence" popping out. Sounds boring? It sounded as if life can only goes on after achieving it. So what is financial independence?

According to Wikipedia, the explanation is : "Financial independence is generally used to describe the state of having sufficient personal wealth to live, without having to work actively for basic necessities. For financially independent people, their assets generate income that is greater than their expenses."



My definitions of financial independence is to live as per current lifestyles, except that I don't need to work actively for the money. This will free up time spent on work and more on events that are important to me. There is nothing more important than our lifetime. So, what is lifetime? Accordingly to Google search, the explanation of lifetime is : "the duration of a person's life." Let me know if you feel that your lifetime is too long or there is a money tag to it.

I always hear people saying they will have nothing to do if they are not working. Seriously? Let me help those people. Having nothing also means having everything. In the empty space of having nothing, there is plenty of room for limitless opportunities. You can stay in an island for a month, you can cycle around the world for a decade. You can challenge yourself to finish all the books in library. the list goes on. Whatever make you fulfilling with no regret at your deathbed.

For me, I have plenty to follow up with my family time. It is never enough just by giving my 100% of my time to them. There will never be enough time for them. I enjoy sports. I can swim every morning. Jogging every other day. Write and comments on blog. Meet up with like-minded friends. Travelling once a year, spending time to cook and enjoy the gift of cooking. Nurturing my child. The list goes on. Do I need to worry I got nothing to do after financial independence? Be my guest.

Ironically, there are people who will spent more while not working. Guessed they are confused after not working. I will actually have lesser fixed expenses if I don't work full time. For example, I enjoy cooking instead of dining out, less transport cost and able to tap on off-peak benefits, no income tax, no more leather shoes and so on. As I aged, I will have less insurance/annuities to pay and that offset the inflation cost somehow.

Nothing is free, but if you can let go, everything is free.