Marginal Investor Savings Program Update

The Starter Investor Begins Saving to Build Equity

Effective from our update on April 5, 2023, we have rebranded from Marginal Investor to The Starter Investor. For additional details, please visit our About Us page.

SAVING IS THE BEST STARTING POINT for the beginning marginal investor to build equity for stock trading and investing.

If you have nothing to start with but your definite desire to become a successful investor with millions in assets, then it is most important we find a way that can squarely monetize our talents. One can be employed and receive a salary in return for the services rendered to the best of our abilities. Thus, we can generate some cash flow from which our savings may come. Let me share with you a principle lifted from the book The Richest Man in Babylon:

"A part of all you earn is yours to keep." 

The practical application of this idea was illustrated in one of my previous posts Finding the Money for Investment. For one with a salary of about 150,000 pesos a year, the savings rate of 2% to 3% will result in cash savings of about 3,000 to 4,500 pesos in one year. This would be enough to open a BPI Express Teller Savings account and a BPI Direct Trading account for our BPI Trade stock trading operations. 

Savings Program

Our Savings Program inception date is October 1, 2007. The gross savings amount is the balance at the end of the month indicated.

No.			Month		Gross Savings		Savings To Date		Monthly Average		Per Cent of Salary
1			Oct - 07		160		160		160		1.3%
2			Nov - 07		440		600		300		2.4%
3			Dec - 07		-		600		200		1.6%
4			Jan - 08		-		600		150		1.2%
5			Feb - 08		100		700		140		1.1%
6			Mar - 08		25		725		121		1.0%
7			Apr - 08		-		725		104		0.8%
8			May - 08		-		725		91		0.7%
9			Jun - 08		600		1,325		147		1.2%
10			Jul - 08		500		1,825		183		1.5%
11			Aug - 08		100		1,925		175		1.4%
12			Sep - 08		-		1,925		160		1.3%
13			Oct - 08		-		1,925		148		1.2%
14			Nov - 08		400		2,325		166		1.3%
15			Dec - 08		120		2,325		163		1.3%
16			Jan - 09		1,600		4,045		253		2.0%
17			Feb - 09		2,000		6,045		356		2.8%
18			Mar- 09		350		6,395		355		2.8%
19			Apr - 09		850		7,245		381		3.1%
20			May - 09		575		7,820		391		3.1%
21			Jun - 09		1,975		9,795		466		3.7%

Last Update: July 4, 2009 This post is updated monthly until we reach our goal of 50,000 pesos in savings for this Marginal Investor Savings Program.

Savings Program Reactivation Date: March 15, 2023

After 185 months and 14 days since starting on October 1, 2007, we are concluding this program. We have a net cash savings of Php5,000.00, which we have forwarded to GCash. 

Additionally, we have Php10,000 in savings for maintaining the balance of our Bank of the Philippine Islands (BPI) Settlement Account.

And another Php5,000.00 for maintaining the balance of our BPITrade account. 

We have also used some of our savings to purchase common shares of Banco De Oro (BDO) Unibank, Inc. and Jollibee Foods Corporation (JFC) through BPITrade for a total of Php15,000.00 stock portfolio.

• BDO acquisition cost: Php 5,000.00

• JFC acquisition cost: Php 10,000.00

Despite the time elapsed since the inception of our savings program, we were only able to accumulate Php35,000.00, which is a small portion of the desired amount. As a result, we have decided to restart the program. This will be the final update for this post.

However, we are not ending our journey here. We are restarting with a renewed sense of purpose and a broader investment horizon. Our goal is to continue providing valuable insights and guidance to our readers as we navigate the ever-changing landscape of the investment world.

We understand the importance of constantly learning and adapting, which is why we are excited to embark on this new chapter. We will be sharing our progress and experiences with you through future posts, so be sure to stay tuned.

In the meantime, if you want to follow our journey as we restart, you can refer to the related post that we will be sharing. We are committed to maximizing our returns while managing risk effectively, and we invite you to join us on this exciting new venture.

Related post:

Building Wealth in Later Life: Investment Opportunities for the Fourth Quarter (Ages 55-65)

Trading Profits of A Swing Trader: Our Basic Formula

The Starter Investor Trading Profit Formula

Effective from our update on April 5, 2023, we have rebranded from Marginal Investor to The Starter Investor. For additional details, please visit our About Us page.

TRADING PROFITS ARE RECKONED according to the formula suggested by Benjamin Graham, author of the book The Intelligent Investor: The Classic Text on Value Investing.

The use of this equation was illustrated in a previous post entitled Measuring Our Stock Trading Profit. We define trading profit as the difference between the previous total sell price and the new total buy price.

Hence, our stock trading operating cycle starts with our cash position which is then converted into our stock portfolio upon completion of our buying order. Selling our stocks creates receivables. Upon collecting cash from the sale transaction, the operating cycle starts anew when we use the cash collection to pay for our new buying order.

Swing Trading

Swing Trading is, at this time, the primary business activity that drives our stock trading operating cycle, as well as our main profit generator.

Trading Profit Updates

The main goal of our operations is to demonstrate how many trading cycles it will take before we double our money.

We achieve this by generating a trading profit of at least 4,050 pesos based on initial trading capital mentioned in one of my previous posts Awakening of the Marginal Investor or Speculator.

Cycle No.		Date		Shares	Total Buy Price		Total Sell Price		Trading Profit		Profits To Date
		23-Feb-09		20	4,055		-		-		-
		27-Mar-09		20	-		4,414		-		-
1		01-Apr-09		20	4,067		-		347		347
		17-Apr-09		20	-		4,434		-

Last Update: April 26, 2009

This post is updated regularly with the latest completed Stock Trading Operating Cycle.

The BPITrade Settlement Account: BPI Direct Savings Bank

BPI Direct new maintaining average daily balance

The BPITrade announcement

BPI TRADE LOWERED THE MONTHLY MAINTAINING Average Daily Balance of BPITrade settlement account with BPI Direct Savings Bank, says the email advisory it sent out to clients:

--- On Thu, 4/23/09, bpitrade@bpi.com.ph wrote:

From: bpitrade@bpi.com.ph
Subject: BPI Trade Settlement Account
To: Marginal Investor
Date: Thursday, April 23, 2009, 4:12 PM

Dear BPI Trade clients:

Greetings!

Please be informed that the monthly maintaining Average Daily Balance (ADB) of your BPITrade settlement account with BPI Direct Savings Bank has been lowered from P5,000 to P500.00. As a non-ATM deposit account, the BPITrade settlement account will earn interest as follows:

Interest Rates (per annum)
If daily balance is:
PhP 0 - 499 0.000% p.a.
PhP 500 and above 1.750% p.a.

Please visit the FAQs on the BPITrade website for more information.

Thank you.


BPI Trade Team

Visting the BPITrade FAQs

Following the suggestion, we visited the FAQs page on the BPITrade website for more information:

"What is the minimum investment required to open a BPITrade account?

There is no minimum investment required to open a BPITrade account. However, before you can purchase shares of stock, fixed income securities, or mutual funds, you must first deposit funds into your BPITrade Bank Account. The BPITrade bank account ("Settlement Account" maintained with BPI Direct Savings Bank) requires an Average Daily Balance of only PhP 500.00 (emphasis by Marginal Investor)."

 

Good for starter stock traders

This development is a boon to the beginning stock trader. First, it decreases the time required to accumulate sufficient funds for starting your first stock trading operating cycle. Second, it contributes to the much needed liquidity or cash position of the beginning stock market investor.

For those familiar with the game plan proposed in my earlier posts How to Build Equity for Your Speculative Stock Trading and Finding the Money for Investment, we said that for one who saves a minimum of 275 pesos monthly or on the average 2% to 3% of his or her monthly salary or earnings, we need a year to accumulate funds for opening and maintaining a BPI Expressteller Savings Account.

With the lowered monthly maintaining ADB of a BPITrade Bank Account, it would now make sense to open a BPITrade Account in just over a year of saving money, and place our first stock market buy order in under two years of accumulated savings. Third year into our savings program, we are already warming up on the stock trading game, and well on our way to converting our stock trading profits into a more secure investment vehicle like investment funds.