My Mutual Fund Experience

To give you the back story, In 2013 the hubby and I invested on Vista, a savings plan of Zurich International and was paying US$750 monthly. After a few years we bought a life insurance (Futura) from the same company. In total we are paying $1041 per month which will mature after 15 and 10 years respectively.

Five years ago, obviously, there was no plan of moving back to the Philippines. I can actually envision myself being in Dubai forever. My kids will study here or maybe abroad but UAE would be our home-base, or so I thought. But interesting how our life can suddenly shift 360 degrees if we focus on what we truly want. You might be aware that the whole family will be relocating back to Philippines next year. A crazy idea for some and a total leap of faith for us.

Anyways going back to the story, now that we are moving back home, we understand that paying Php 55,000 per month to continue these investments in the Philippines is not realistic considering we are just starting again. It’s too much financial obligation and we don’t want to have this stress in the beginning. So, we decided to surrender the funds.

Note that I’m sharing this story not to tarnish the mutual fund industry, I am telling you this so you can make your own financial judgement by hearing (or reading) all sides before making any financial decision. This is specifically my experience with Zurich and their Vista and Futura products. I cannot comment on other mutual fund or life insurance companies because I don’t know them, they can be better or worse and I wouldn’t know. I’m not a financial expert either. It just so happen that I have extra money to spare and I don’t know where to put it before.

One more thing, this experience is the result of not reaching maturity. Will I really maximize my investments if I stay and complete the number of years required? I wouldn’t know. If you are a mutual fund investor and finished one, share your experience below please!

To be frank, I’m not comfortable to share the loss we incur because I was an advocate of mutual funds earlier. Just few years ago, I was proud to declare that I have a mutual fund investment and life insurance coverage. As if I’m better than the majority of Pinoys who don’t know where to invest their money. I’m more financially savvy than them, ha!

And telling this experience now is humbling. Admitting I am not always right and losing large amount of money made me realize that I’m not so savvy after all 😐

We had our meeting with our Financial Advisor few weeks ago and we were told that we will lose around Php 650,000 if we opt to cancel all our investments from Zurich. Ouch! No, it’s super duper mega ouch! She gave us few options to make it less painful but the reality is we will still lose that amount. It’s a difficult pill to swallow but decided to cut our loses now than to continue dig our grave.

If I am still my old self, I would probably blame myself and everyone around me for this loss. I mean that’s more than half a million peso! Good thing I’ve matured (I think!). I made a hasty decision before and I’m paying the price now but I’m learning a lot from this:

Things I learned from this experience:

  • Money is just money at the end of the day

Sure, P650,000 is a big amount of money to throw away and there are so many what-if scenarios in my head right now but the same way you lose or spent money, you earn it as well. More than the money, I would like to focus on the learning that comes with the experience. As I keep on saying, focusing on the negative will also just attract all the negative things and that’s not how I would like to continue my journey. You lose money? Get over it!

  • Don’t put all your extra money in one basket

You might have heard this advice before – don’t put all your eggs in one basket – it might be an old adage but consider it as the bible of investing. If there’s one thing I’m thankful about is that we didn’t put all our extra money into those funds. Over the years I learned more about different investment schemes and ‘buckets’. I started reading business and financial books and became more confident on where to invest.

  • I could have put my money under the mattress and it would have been better

Not exactly a good advice but this is how I’m feeling as of the moment. When you lose money, you would have regrets – lots of it. I should have done this, I shouldn’t have done that. Though regret is a feeling that we shouldn’t harbor so let me backtrack what I said…

I would actually encourage you to invest as much as you can in all investment strategies and portfolios out there (stocks, bonds, real-estate, business, VUL, crypto-currencies, etc.), whatever rocks your boat but RESEARCH EXTENSIVELY BEFORE DIVING IN.

  • Take responsibility of the outcome of your actions

I don’t actually blame anyone for this. I don’t blame Zurich nor my financial advisor because she’s just there to sell. If there’s anyone to that should take the heat, that would be me. I didn’t research. I just took the first investment opportunity that came my way. Although deep down I don’t actually blame myself either because I’m a newbie investor then. The only thing I know before was put all your extra cash in the bank so I thought mutual fund is a smarter option.

  • Work hard and work smart, and the fruits of your labor will be sweeter

Losing money doesn’t mean it’s the end of my dream to be financially free. If ever, it just intensifies my desire to learn more and succeed.

  • Manage my own money

This is a major learning for me. The thing about mutual fund is you let others manage your money because you have zero knowledge and confidence on where to invest it. In exchange of managing your funds, the investment company would obviously take fees to cover their cost (fair enough). Just like any investment scheme though, there is a risk involved and you might lose or earn but the investment company will still get their fees no matter what. This is not a scam, it’s just the way it is.

I realized that one of my money blocks (which I need to work on) is I hate dealing with money. I am hard working and would think of many ways to earn but once I have the money, I feel icky and don’t take charge of it. The husband is the one managing our monthly expenses and pay the bills, I rarely count change, I don’t budget. To be honest, I don’t even know how much exactly is my monthly salary (considering I’m the one doing our company payroll, I know right?). For me, money are just numbers.

I used to think that it’s a good trait that I’m not obsessed with money (well, actually I really think it’s an advantage) but at the same time I realize that I have to be a good steward of my finances too. I should know how much money goes in, how much I spend, look on ways to cut costs yet still live the lifestyle that we want. It’s interesting to learn about myself.

*****

We have another savings and life investment with Sun Life as of the moment and we are paying a much lower premium every month, and in Philippine Peso, thank goodness!

Based on our financial projection, we should be able to make the monthly payment even when we’re back home. I haven’t thought what should we do with it and we are not in a rush to make any decision now. Let’s see after a few months but definitely we will talk with our advisor to understand what we are paying and how to maximize our returns. Never again that we will be so naive. We should take control of our money and not money controlling us. You remember that right?

If you have mutual fund investments now I’m not telling you to surrender your funds but I want you to contact your financial advisor as soon as possible and ask all questions you can think of:

  1. What will happen if we stop paying?
  2. Can we freeze payment for a few months/years? And what will happen? Is there any penalty/charges?
  3. Why is my fund not growing as projected during the initial presentation? The answer here will vary and it’s your task to research if the answer is acceptable to you or not.
  4. This is not something you should ask your advisor but yourself: What are you after for? Is it for protection? Is it for college education of your kids? Is it to build your dream house? Is it for your retirement? Is it just to save? Whatever your answer here will give you an idea on how to proceed. As I keep on saying, research, research, RESEARCH! Google is free, use it.

Do you have any financial decision that you regret? I would like to hear and I hope you can share for others to learn from it.

Sharing Knowledge is Power!

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3 Comments on "My Mutual Fund Experience"

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Sally
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Thank you for sharing your stories it means a lot to the people who are putting their money in one investment. As for me I used to divided all my small savings in diff acct like insurance rrsp resp and tfsa even though it’s just small amount of money at the end of the day I have something to get . Also I really admire you. Good luck and more blessing to come

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