Investing Pacquiao's Millions

In the recent boxing fight of Manny Pacquiao against Erik Morales, the Pacman's share of the purse was $2million plus a share of the Pay Per View TV proceeds which could be another $2million. Net of expenses and taxes, Pacquiao's net take home would be at least $2 million. If you add his last year's earnings, including all the product endorsements, he would have investible funds of $3 million or P160 million.

In the last few years, he has bought some properties in Mindanao, a few cars, put up a convenience store, given some balato, and lost some, so it would be safe to assume that about $2 million or P100 million is available for him to invest this year.

Investment strategy and tactics takes into consideration the personal statistics of the investor, such as age, productive years,family lifestyle, temperament, and other personal traits. Pacman at 28 years, with wife and 2 children would probably have another 5 productive years in his boxing career. The next 2 years would be the most lucrative years, after which his earning capacity would be declining. There is an earning potential of another $5 million but with the uncertainties in this career and industry, we will not consider the future earnings in this investment strategy. We will have another strategy when the future earnings are realized.

For the $2 million or P100 million now available for investment, the ideal investment allocation for Pacman is as follows: 30 percent should be in short term liquid investments, another 30 percent in medium term investments, and 40 percent in long term investments.

The short term investments should be in deposits and money market placements with reputable financial institutions. Half of these shoud be in pesos and half in US dollars. The medium term investments should be Unit Trust Funds equally in pesos and dollars that are invested in government securities and blue chip equities. These are usually marked to market funds which get the best yields in 3 to 5 years but can be liquified when needed.

The 40 percent for long term investment should be in income generating property investments. Leaseable townhouses, small buildings in good locations, and an orchard farm would be investments with current income and high capital appreciation that would beat inflation. Considering the amount at the moment, these would all be in the Philippines. When the additional $4 million investible funds are available, we can consider U.S. properties.

Over and above these investments, Pacman should invest in an educational plan for his children. Inspite of the problems of the pre-need companies, there are educational plans available from reputable insurance companies that sell sound educational plans. These are more expensive than the previously popular educational plans but these are worth the price and assure the tuition of the children.