During our Sunday family lunch, I overheard my uncle’s plan if ever he wins the lottery. Technically, you only get 720M out of the 900M cash prize since the government takes away 20%. He’ll splurge 120M and put the remaining 600M on a time deposit, earning him 6M a year at 1% annually. Not a bad plan, but the inner fund manager in me thinks I can do a better job at managing that kind of amount.
Here’s my plan. In summary, 180M goes to tax, 120M goes to necessities and splurging, 155M goes to businesses (earning 40M annually) and 445M goes to investments (earning 14M annually). Conservatively, I can earn 54M per year or 5.5M per month, much of which will be plowed back to the lending company.
By the way, I thought it would be easy to spend almost 1B pesos, but it’s harder than I thought.
Real Estate and Cars. I’ll be investing in a 1-bedroom condominium in The Viridian (15M) in Greenhills because I feel at home there. Been hanging out in that area since I was young and it’s at the center of Metro Manila. Will also build a simple Scandinavian-inspired house in Valle Verde or Greenhills (35M). We have a property in Tagaytay midlands so I’ll build a modest rest house there (15M) For my own car, I’m not sure if I’ll get a BMW 3 Series (3.5M) or a vintage 90s BMW. I’ll also buy a Mazda CX-9 (2.6M) for the family.
Student Loan and Youth Org. I think I still owe the Asian Institute of Management 800K so I’ll pay that off. For the past year, I’ve been actively involved in a religious youth org as their finance officer. I’ll donate 1M to startup a business to make their operations sustainable.
Shopping and Travel. I try to be a minimalist and majority of my clothes are from Uniqlo so I’ll only splurge 500K for shopping. 1M will go to my travel fund so I can do volunteer work in Eastern Europe for 2 months, I’ll go around South America for a month and will try to visit the North Pole to see the aurora borealis.
Insurance, Savings and Venture Capital Fund. I’ll allocate 500K to buy health and life insurance for the family, 10M will go to savings distributed among 5 commercial banks. Together with some classmates from grad school, we’ll put up a VC fund with an initial capital from me amounting to 20M.
Online Magazine. I used to have a passion project related to online magazines so I’ll put in 5M to start a new one with my brother since he knows this industry well.
Below is a spreadsheet that I made outlining the investments in business and funds that I’ll make.
Jollibee and Mang Inasal. These food franchises have some of the best return on investments in the industry. Will setup a Jollibee (40M investment, 1.2M net income per month) and Mang Inasal (20M investment, 1M net income per month) in an emerging town somewhere in Pampanga, Cavite or Laguna.
Apartment Building and Commercial Complex. Will also build two 10-door apartment buildings (20M investment, earning at 150K monthly) in Cavite or Laguna near an industrial park, and a small commercial complex in a rural area (20M investment, earning 180K monthly).
Lending Company. My main income will be from the lending company (50M initial loan portfolio, lent at at least 5% per month, net of 20% per year) that we’ll set up. My previous jobs in commercial banking and consumer financing makes me confident that we can pull this off. Also, we have technology that can take care of lead generation, credit scoring, distribution and collection to anywhere in the Philippines. The portfolio will consist of salary loans in close partnership with employers, and SME loans.
Development Financing Companies. 50M (earning 6% annually) will be invested in SEDPI, a development financing company where I have a board seat. 30M will be split equally between two strong credit coops – NSCC in Ilocos Norte (8% yearly interest) and ARDCI in Bicol (5% yearly interest).
Time Deposit. 30M will be split equally between BDO and BPI time deposits, earning conservatively at 1% for 360 days. This is just for capital preservation.
Stock Trading. I’ll give 20M to my younger cousin who can play with the fund and give hopefully at least 8% annual return. He started when he was in college, losing 500K of personal money. Now I guess he’s more knowledgeable because of that loss.
Local Funds. I’ll dedicate 50M to be invested in ATRAM and Phil Equity funds, earning at an average of 3% annually. These can range from mutual funds, fixed income securities, feeder funds, etc.
Foreign Funds. Most of my money will be split in foreign asset management companies / banks, and I expect these funds to earn at least 2% annually. HSBC HK gets 50M and Citigold SG gets 50M. I’ll put in 80M in Credit Suisse and another 80M in UBS.
Crypto Market. I still think that blockchain is the future so I’m setting aside 5M in for the crypto market and I’m hoping it will earn at least 1% yearly. This will be invested in Invsta, a New Zealand company.
Now that I have a plan, time to line up in the nearest lottery outlet and pray that luck will be on my side!