This document provides an overview of investment options like stocks, bonds, and mutual funds. It discusses how stocks and bonds work, how investors can earn returns from them, and that mutual funds allow investors to achieve diversification with smaller amounts of money. The document also addresses insurance charges, sample investment plans, frequently asked questions about plans, and how passive income can be generated from long-term investments in mutual funds.

1. Investment
and
Protection
101
By Janice M. Payoyo

2. PRESENTATION OUTLINE
• Stocks and Bonds
• How do I earn?
• Mutual Funds
• Insurance Charges
• Sample Plan FAQs
• Passive Income

3. Bonds
• Are issued because the government
and or corporations want to raise capital
• Example- the government wants to fund projects
or a corporation wants to its expand operations
• If let’s say the govt wants to raise Php 1M, it will
issue a certificate saying that in exchange for the
Php 1M that you will give me today, I will issue a
certificate guaranteeing Php 1.5M in say 5 years
• Safe investment because of the high guarantee
that the amount borrowed will be repaid.

4. TYPICAL PERFORMANCE OF BONDS

5. Stocks
• Are issued by Corporations because it wants to
raise capital.
• Stockholders in effect become part owners of
the corporation because shares are issued to
him or her.
• More volatile or risky compared to Bonds but
have a higher potential to earn.

6. Stocks- How do I earn?
• You invest in stocks
Php 10,000 at Php 1/share = =
=10,000 shares
Traded in the stock market
• Price per share goes up to Php 1.10 per share
• Php 1.10 X 10,0000 shares = Php 11,000
• You earn 10% or Php 1,000

7. • If price per share goes down to Php 0.90
• Php 0.90 x 10,000 shares = Php 9,000
TYPICAL PERFORMANCE OF STOCKS

8. What is a Mutual Fund?
-”Mutual” because it is composed of the
investment of different people

9. Client A invests Php 10, 000
Client B invests Php 500,000
Client C invests Php 1M
THEY WILL ALL EARN THE SAME %
Your money will be managed by a group of
experts who will choose the stocks and bonds
that will earn well.
Your Php 10,000, if invested directly in the stock
market can buy only 2 or 3 stocks
But with mutual funds, it is invested in at least
30 Stocks

10. Pooled Funds vs. Bank Instrument
Comparison
YOUR EDGE (Variable Life)
Pooled Funds
Bank Savings
Affordability  
Safe (Regulated)  
Liquid  
Instant Diversity  Nil
Flexibility (Switching)  None
Financial Protection  None
Higher Gains  None
Prof Fund Managers  None
Income Tax Free  None
Garnish Free  None
Estate Tax Free  Subject to Probate

11. Types of Mutual Fund
• Bond Fund
• Equity Fund (Stocks)
• Mixed (Stocks and Bonds)
• You can choose a mix that will suit your needs
and risk appetite.
• Example – 50% Bonds (Safe)
-- 50% Equity (Volatile)

12. Insurance Charges
• For the first 2-3 years majority of your
investment will go to insurance charges
(depends on amount of insurance coverage)
• After which, almost all of your contributions
to the plan will go to buying shares of the
mutual fund.

13. Sample Plan
Monthly Investment Cash Value
Year 12
Cash Value
Year 18
Age 30
(Policy Owner)
Php 2,500 Php 500, 654 Php 1,144,645
Are these cash values guaranteed?
No, because it depends on the earnings of
mutual funds. The projected cash value
assumes that the average yearly earnings of
the mutual funds averages 10%. But so far, our
funds have been earning more than 10%
through the years.
How many years do I have to pay?
I would recommend a minimum of 12 years.
To get a larger amount of money, I would
recommend you to continue contributing to
the fund for as long as you can to further build
on your fund.
*Investment Bonus- starting the 11th until 20th
year we will be giving you 10% bonus of what
you’re paying. So, instead of Php 30,000 being
credited to your account, you will get Php
33,000.
Can I increase my investments to this fund?
Yes, anytime.
What are the modes of payment available?
Annual, semi-annual, quarterly
Monthly- thru credit card, BPI, BDO,
Metrobank and HSBC

14. FAQs Continued…
If I stop paying, will my plan automatically lapse?
For as long as the cash value in your plan is enough to cover insurance charges, it will
not lapse. Thus, the insurance benefit will be still guaranteed.
If I stop paying for my plan, will I be able to
revive it?
Yes, but once your plan accumulates cash values and it lapses, you have to pay all
unpaid months before you are able to revive it.
Where can I view details about my plan,
especially cash value?
• Register for Pru Access (see website www.prulifeuk.com.ph)
• Call Hotline 887-5433

15. You can do this with your plan!
Insurance Coverage Monthly Investment Critical Illness Benfit Fund Value
At Year 12
Php 1M Php 5,000 Php 1M Php 930,963
Php 3M Php 5,000 Php 1M Php 832,552
Php 5M Php 5,020 Php 1M Php 755,214
* Computations based on Age 32

16. Passive Income
• This simply means getting regular income from your
investment
• For example- after years of investing, you have
accumulated Php 1M
• If on the average (the earnings vary every year) the
mutual funds will give you 10%, you get
Php 100,000 per year
• You start getting passive income when you are happy
already with the amount that you accumulated and the
fund increases in value.
• It’s like picking fruits from a mature tree =)

17. Monitoring Your Investment
• I am not expecting my clients to be an expert in
investments, or to understand all the jargon.
• I just want all of you to be informed about what is
happening in the financial markets.
• If you’ll be needing money soon, let me know so
that I can make sure that your money is placed in a
conservative plan.
• It is difficult to expect Passive income if for you,
talking about the stock market is still like talking
about the moon. You at least have to know if the
trend is up or down.

18. If one day you wake up and find out
that the stock market is down because
of a crisis…
• BE HAPPY!!!
• It is a good opportunity
especially for those
paying monthly to buy
cheap shares.
• Know that in time, it
will go up again.

19. Additional Resources
(Website Articles)
• Why I Started Educating My Clients
• How I Taught My Mother and Uncle About the
Stock Market
• The Stock Market is Like Facebook
• Very Basic Stock Market Monitoring

20. www.janicempayoyo.com
O917-5050382