 This is how much I would have made if I had deposited half of my allowance every month from 1995 to 2005. And the end result is, today is Rafael from Hardware Sugar and today we have a special video which doesn't necessarily involve tech but actually it is what we use our tech for which is making money through online investment. This episode of Hardware Sugar is sponsored by Alexander McQueen's. So earlier last week, I released a video about the S21 Ultra and I complained that it didn't come with the faster power bringer. And Alexander McQueen's was kind enough to give his two cents that I was too cheap. How manaman cha? So it got me thinking, how much money would I have made if I had placed my very small grade school allowance in the stock market back in 1995? And how much would it be today in COVID-2021 era? Surely it really can't be that big of a deal, right? So ever since college, a number of people have always been coming up to me asking me how do I get into the stock market? And so I always sort of give them a regular spiel. And the spiel is, number one, you don't need to have a lot of money. Number two, almost anybody can get into it. And number three, no, it's not a place where you get rich quickly. If you can buy a Starbucks once a month or twice a month, you can afford to invest in the stock market. It can be as simple as investing money in an equity fund. And that's how I started out. So what is an equity fund? In simpler terms, an equity fund is first and foremost, run by a fund manager, a professional, a professional who is the one who does the everyday buy and selling of stocks. Number two, this fund manager collects money from investors like myself, like yourself, whether it be a small amount as 200 pesos to 10,000 pesos to 2 million, it's all the same. And number three, that collected money from all the investors gets placed inside one basket. And then that fund manager now has capital in order to buy individual stocks from the stock market. Now, as investors in the equity fund, we do not own the stocks that the fund manager buys. Instead, when we put money into the equity fund, we convert our cash into shares. And now we have a share within the fund. And that share goes up in value or decreases in value depending on how well the fund manager performs in his everyday buy and sells using the collective cash. And I'm gonna prove my point that you can invest a small amount of money and be shocked at how much you get back if you just have the patience and perseverance to wait. And I'm gonna show it in a manner which even you can resimulate for free. In grade school, I always had a daily allowance of 20 pesos. And I know it was 20 pesos because I used to buy a Magnolia juice box at the canteen, which was 10 pesos. And I would have at least one during the morning and one before I went back home. However, you know, let's be realistic. I would need to spend my allowance at some point. So what we're gonna do is I'm going to place half of my allowance from grade school, high school and college all into the same equity fund. I will exclude April, May and December because that was summer vacation and Christmas break where I didn't have an allowance. All right, actually you only need two websites in order to do this. So the first one is the Bloomberg website and then you make an account, it's free. And then go to watch list. And then for this example, I've already made a watch list called school allowance. However, it is empty. So that's the first website. The second website you need is fillequity.net. Their equity fund dates back to 1995, which was when I was in grade one. Now you just go to 1995, make sure you select it, you select the proper fund. So we will select the fill equity fund ink, get an FPS. All right. So we have the Bloomberg on the left, which will calculate the value of our investment in real time to present day. So you don't need to do any math anymore. All you need to do is just encode and Bloomberg will take care of itself. And again, it is a free site. At least for this part, it's free. Watch list. I've already made a watch list called school allowance. You press add symbol. You find the symbol of the equity fund, which is fillequity column PM. You click it. And now it's asking for what date I bought in. To make things simple, let's just assume that I always invested on the last trading day of the month. The last trading day of January 1995 was January 31. So you just select January 31, 1995. So the only thing we need to do is look up the nav, which is 1.0804. So our capital of 200 pesos divided by 1.0804 will give us 185 shares. So you type in 185 shares. And then for the price, you just put in the nav because that's what it is. How much per share each costs. Whoa. So this is actually pretty cool because our single investment back in January 1995 has led to a 3,036% gain. And that gain is 6,069 pesos. So if I withdrew my shares today, I would get a total of 6,269 pesos and 80 centavos back because that is my net gain plus my capital. As you can see here, our capital for this entire investment is listed here. We take one peso. But really, this is not bad considering I would have thought 200 pesos was a trifle. So actually now I'm really excited what it will look like after I've encoded grade one. Now we're gonna see how patience pays off. Oh, hey, not bad. Not bad for 200 pesos. We did pretty good here. Essentially I only put in 1,793 pesos that I assumingly would not have used or I would have survived if I hadn't used it. And I came out with a gain of 2,578%. Okay, so the best way to invest in a stock market is when you are young because you can wait. You can wait for it to grow. And secondly, the purpose of the stock market is for you to also understand the importance of patience and endurance and self-control. Everyone has their own amount of savings which they may not need for the next 10 years. Whatever amount you think you won't be needing to use for some time, just put it into the market. Essentially money you don't need can actually just be saved by placing it in the market for an extended period of time. Note however that it's not really a saving per se because if it was a savings account that amount of 1,793 would not have changed, okay? That amount would have stayed the same. So I just finished encoding 90.95 to 90.97. So that's three years. And if you, as you can see, our capital cost was only 5,376 pesos for three years. For three years, okay? Three years. And our gain is 101,000. I mean, I just wanted to report on how astonishing it is, how we take into consideration small change, for instance, or a small amount, and then it just sort of, with time it just blows it up into something humongous. You know, if I was in grade school again and someone told me that my measly 20 pesos or 50 pesos or 10 pesos in change would actually amount to something this large if I actually put in the patience and the time, I really would not have believed that person. You know, you know how in school they always tell you that every peso counts? It's different when you're actually seeing the real numbers. So far, ever since we started in 1995, all the way up until 2002, we only put in a capital of 45,795. Presently, we have a gain of 465,341 pesos. I just wanted to highlight again that where we come from, that we place 200 pesos once a month, and then we switched it up to 500 pesos. And then in 2001, we moved it to 1500 pesos all the way up until present. This is how much I would have made if I had deposited half of my allowance every month from 1995 to 2005. And the end result is, okay, so our total gain is 728,386 pesos. So if we sold all those shares, we would get today 828,101 pesos, which includes the 728,386 pesos gain and our capital of 99,714 pesos. So here's my immediate reaction to this. To be honest, I was actually expecting a little bit larger because when we first started out, we were looking at a 3,000% gain, but now we're only at a 730.47% gain. And the reason as to why the 1995 gain was so big was because it was the eldest of all the lot sizes we placed in. In short, the longer you leave money in the stock market, the higher the chance that it will grow and that it will grow larger. November 27, 1997 was there longer than the 2001 and yet the 2001 had a larger gain. This is probably because my allowance during 2001 was 150 pesos a day as opposed to my allowance back in 1997, which was 20 pesos a day. And my second realization is the most important, which is did we lose money? Hell, we did not lose a centable. Every single investment lot, as a gain, it may not be as large as some of the other lots because I placed a larger capital on some months or that specific day was just a really good time to enter the stock market. And while some other days just weren't, just to name a few, this takes into consideration the 1997 Asian financial crisis, the 2001 People Power II Revolution, the September 11 attacks in 2001, the Hello Garcy scandal back in 2004, the 2007 Global Financial Crisis, and this also takes into consideration 2020 COVID. In fact, if it wasn't for COVID, we would, this amount would be dramatically higher. In spite of all those crises which the Philippines has gone through and which the world has gone through, there is still a significant gain. I don't think that $728,000 is anything to laugh at. Essentially, you put in $100,000 and you come out with $828,000 all in all. That's a great deal. I really encourage you to do this simulation on your own because one, it is risk-free. You're not trading with real money. However, you're dealing with the actual valuations if you had really placed the money. And two, that way you can simulate based on your own kind of income. You might be making a little bit less or a little bit more than other people. But the point is that you are rewarded for your patience and your perseverance if you just allow your money to grow. So there are some caveats. First, people really do lose money in the stock market. So you just don't go in there guns blazing and then just hope that you're gonna make that much money also. However, you can minimize your risk which by through two ways. One is always leave your money for the long term, okay? You need to fly by night. Second, invest in an equity fund because equity funds don't generally fluctuate in high numbers as opposed to individual stocks. And lastly, a index fund is the safest among equity funds because there are also more risky equity funds as opposed to less risky equity funds. Phil Equity Fund Inc, the specific fund I invested in is on the relatively higher risk as opposed to a index fund. However, Phil Equity also has a index fund if you want to invest there, you can. And another caveat to keep in mind is inflation or the buying power of an amount of money at a specific period of time. So obviously 200 pesos back in 1995 was worth a lot more than what 200 pesos is worth now. So for the purpose of the example, I went and checked the inflation rates from 1995 all the way up to 2019. And after that, I made an Excel file of every rate and then I got the average. So the average inflation rate annually was 4.47%. So in short, if you want your money to just maintain its buying power, it needs to grow 4.47% a year. How do we know if we kept up with inflation? Easy, we do a compound interest calculator. So you just go to CalculatorSoup.com and you type in the amount. So 200 pesos at a annual rate of 4.47224 and then we compound it annually. So there you have it, the equivalent value of 200 pesos back in 1995 is 600 pesos in 2019 standards. In order to overcome inflation, we only need to get 400 pesos, but we made instead 6,139 pesos. So in short, did we overcome inflation? Yes. So in addition to tech content, we'll also be releasing our little know house on business and investing. If you have any questions, feel free to drop a comment down below and to suggest for any other specific topics about gaming or investing. We want to thank our top fans, Asher Anima, Richard Ongkinko, ITX addict John Occia, Christian Espinosa. Thank you so much for supporting our channel. We really greatly appreciate it.