SAVE and Be DEBT FREE by Avoiding Envy and Self-pity

By:  Gilbert M. Forbes
DepEd QUEZON
Region IV- A CALABARZON

"One of the main reasons why most of us get into debt is because of envy (inggit) and self-pity (awa sa sarili)"  This was what financial and wellness coach Chinke Tan just explained over ABS-CBN in an interview made by the Kabuhayang Swak na Swak.

Graphics uploaded from kukis.org through google.

Years, ago, during the advent, this was also explained by our parish priest.  Envy usually leads us getting into buying things which we can avoid such as new gadgets, branded clothing etc., just because we are envious of our peers.  The fact however is that these things will not define who we are.

Early on, particularly those who were taught the value of simplicity and thrift, those who just get off from abject poverty as a result of new employment and getting educated are taken into this mess due to self-pity.  This two, envy and self-pity are dangerous.

Now, may I ask you, what happened to your SALN and current financial status.  Is it getting better?  Every time we buy something we ask ourselves, do I really need it?  Is there no other options.  Am I not buying or getting into this just because I am shy.

Remember this, true friends will not let us down.  True friends will not put us into trouble.  True friends already know who we are from head to toe.  With regards to our peers be it in the community or in the work place, there are other best ways to prove our worth.  It's in our character, not on what can be seen from the outside.

In the beginning, there might be some questions, commotions.  But it is only temporary.  Once they've got to know more about us, they've got to admire us.  And admiration and respect is totally free.  Isn't it beautiful folks?

The primary key is that we should be contented on what we have right now but not satisfied.  Meaning, we could be contented living in a rented apartment but we are not satisfied because we are planning and working saving to buy a house of our own in the future when we already can.

You may want to read more articles at Financial Literacy and Wellness

(Mr. Gilbert M. Forbes is an educator who was also a victim of financial ignorance.  Upon stumbling on a financial literacy book a decade ago, financial literacy or wellness has become a part of his personal advocacy aside from politics, good governance, education and environment.  He holds baccalaureate and post-graduate studies from the Philippine Normal University and have been a school head for more than ten years now.)

Financial Ignorance Is Expensive

By:  Bo Sanchez
Philippines renowned best selling author, lay minister and entrep

(Excerpts or one of the articles from the book 8 Secrets of the Truly Rich)

"The number one problem in today’s generation and 

economy is the lack of financial literacy."

 — Alan Greenspan

Some people think buying a book like the 8 Secrets of the Truly Rich is expensive.  I also give financial seminars and people think the price we charge is too high.  If you think financial wisdom is expensive, then try ignorance. You’ll realize it’s a million times more expensive.

FACT: We could all be educated but financially ignorant.

For example, in the past 10 years, I’ve lost a lot of money. Simply because I was stupid about money.  After getting married, I was able to scrape a decent amount of savings into our bank account every month. And with some very generous gifts from our ninangs.

During our wedding, after a few years, my savings reached P200,000 plus. (Sssshh. Don’t laugh too hard.)  That was when a friend asked me if I would like to put my money in the investment company she was working for. “You’ll earn two percent a month,” she said, “and you’ll help me earn a commission from your investment!”

And instantly, I invested our P200,000. After all, two percent a month came down to 24 percent a year—so much higher than the banks’ interest. That was also the time when my wife finally got pregnant.  The thought of becoming a father was an incredible feeling.  But together with my excitement was the stark realization that the baby would now be totally dependent on my finances for the next 20 years of his life.

That thought sent chills down my spine.  We borrowed a wooden crib from a cousin and prepared P20,000 for the birth of our baby. We were ready, or so I thought.  During the delivery, my wife suffered heart palpitations reaching 200 beats per minute and the doctor ordered an emergency Caesarian operation.  Yes, I almost lost my wife and baby. That emergency operation saved their lives.  After three days of confinement, I received the bill from the hospital:  P56,000.

Gulp.  Have you ever received a solid punch straight to your solar plexus?  That was how I felt at that moment. So I called my friend and asked if I could get my investment back. Perhaps just P40,000 of my P200,000 to pay the hospital bill.  She said, “I’ll try...”  “Try? Why try? Isn’t that my money?” I asked, “I need to pay the hospital.”  “It isn’t that simple,” she explained. “Your money is being used.” “What do they use it for? Who owns this company anyway? How long have they been in business?” (Do you see how wise I was? I was asking these questions after I invested my money.)

“We’re a small firm that lends money to tricycle drivers.” “What...” Have you ever seen a cat staring at the headlights of an oncoming truck? That’s how I looked. “And collection hasn’t been very good,” my friend’s mutter was barely audible. “So that means...”  “uh, that means we’ll have to wait for new investors to come in before we can return a part of your money.”  In other words, I waited for three years for nothing. After that the company closed, folded up, crashed, disintegrated, imploded, sunk to

the depths of the earth, vanished into thin air.  With my P200,000 with them.

Don’t you see?  I was financially dumb.  Let me give you my credentials: My I.Q. is 132, I have above-average  social skills, I finished Philosophy in college, I took post-graduate courses in Theology, I founded four organizations, and I’m a more-or-less over-all wholesome guy... But all these don’t take away the fact that I was a financial nincompoop.  I was 100 percent financially illiterate!

Here’s what I found out...

You could be a doctor with three PhDs behind your name.

You could be an engineer building huge bridges in your spare time.

You could be a very holy person, praying three hours a day.

You could be a scientist inventing the first car that runs on spit.

You could be 97 years old.

You could be an extremely loving saint.

You could be a diva with the voice of Celine Dion.

But you could also be financially illiterate.

A world-renowned surgeon doesn’t open up a busted TV set and say, “I operate on people, I guess operating on machines would be a breeze.” No, it won’t be. It’s a totally different world.  So it is with money.  Knowing how money works is a totally different field of expertise. Financial ignorance is expensive.

You may also like reading the complete book in this link in PDF Format:  8 Secrets of the Truly Reach
7 Tested Ways to Consider When Buying a House and Lot You Want to Call Your Home  
7 Key Financial Advise to All Young Professionals and Wokers Who Are Starting to Earn a Living  
Things the Rich Do Every Day that the Poor Don’t  
 

Things the Rich Do Every Day that the Poor Don’t

(Based on Tom Corley’s 20 Things the Rich Do Every Day, on his website RichHabitsInstitute.com and Bo Sanchez Don’t Try to Appear Wealthy.)  

Wondering why the rich get richer and the poor poorer.  Aside from gigantic resources, what do the rich do every day that the poor don’t do?  What are possibly their values and attitudes? 

1.      86% of wealthy love to read vs. 26% of poor.

Instead of more hardwork, the poor gambles. 
 (google search photo)

2.      88% of wealthy read 30 minutes or more each day for education or career reasons vs. 2% of poor.

3.      63% of wealthy parents make their children read two or more non-fiction books a month vs. 3% of  poor. 

4.      86% of wealthy believe in lifelong educational self-improvement vs. 5% of poor.

5.      81% of wealthy maintain a to-do list vs. 19% of poor.

6.      67% of wealthy write down their goals vs. 17% of poor.

7.      80% of wealthy are focused on accomplishing some single goal. Only 12% of the poor do this.

8.      6% of wealthy watch reality TV vs. 78% of poor. 

9.      44% of wealthy wake up three hours before work starts vs. 3% of poor. 

10.  74% of wealthy teach good daily success habits to their children vs. 1% of poor.

11.  84% of wealthy believe good habits create opportunity luck vs. 4% of poor.

12.  76% of wealthy believe bad habits create detrimental luck vs. 9% of poor.

13.  23% of wealthy gamble. 52% of poor people gamble.

14.  70% of wealthy parents make their children volunteer 10 hours or more a month vs. 3% of poor.

15.  36% of wealthy bought only second hand cars and most kept their ordinary cars for years versus the 66% of the not so wealthy who bought luxury cars.

16.  100% of wealthy saves 20% or more vs. 2% of poor.

In addition to these lists, most of the really wealthy rarely wore designer clothes, rarely lives in expensive homes, rarely have expensive vacations, rarely bought luxury cars.  They lived way below their earning capacity, so that they could save more and multiply their money through investments and business.  Most of the really wealthy didn’t reside in upscale villages because it would only pressure them to mantain an upscale lifestyle—something they didn’t want to do.  And most didn’t change homes for 30 years or more!  They trained their kids in the values of simplicity, frugality and hard work.

Now, what about us, the middle class and the ‘masses’ or the common people?

7 Key Financial Advise to All Young Professionals and Workers Who Are Starting to Earn a Living

By:  Gilbert M. Forbes
DepEd Quezon, CALABARZON

Do you still remember when you were still studying until the time when you were already looking for a job?  You were able to survive and live within your means given the meager allowance from your parents, siblings or benefactors.  In fact, there are lots of time that you were still able to save from these highly budgeted and exact allowance given to you.

Compare it to your current financial status now that you are already earning for a living as a newly employed worker or young professional.  Are you still able to save?  Is money still a big problem?  Does it still play a big picture in your life? If the answer to all these questions is a resounding yes, then, you could have been going straight to the trap of financial difficulties in unimaginable magnitude as compared before when you were still studying.  You need a total life style check.

(moneytools.org photo)  They should manage money wisely.

First Key.  Reflect and analyze.  What went wrong?  Is your spending habit the same as before or it skyrocketed after finding a regular job. Commonly, once we reached a new level in our lives such as having a regular source of income comes an upsurge in our spending habits.  We begin to need things we don't need before.  These are wants which are not necessary and thus could be set aside like weekly or even monthly dine out with the family to a popular food chain, branded clothing, high-end cellphones, computers even un-planned house repair or renovation and expensive education of siblings.  The right thing to do as advised by various financial coaches is that, an increase or an additional income for the family should not mean an increase in their spending habits.  They advised that, if we are still living with our families, only our share for the food expense and groceries should be added to our regular expenses.  Meaning, if we are spending four thousand a month when we were still in college until the time we graduate and start looking for work, only the share for food, groceries and lets say utility payments should be added and the rest should go directly as savings.

Second Key.  Revisit your goal and life's dream.  Everybody's goal is to achieve certain level of financial security.  Others call it, an improvement in ones living condition.  But given the scenario above, without considering financial coaches advise, it is unlikely that things will get better.  Consider this.  What if there is sudden emergency such as sickness that requires hospitalization among one of the members of the family?  What about when you opt to decide to settle down and start a family of your own?  How will your financial status go along?  Imagine the quality of your life ten to fourty years from now.

Third Key.  Live on less and simplify.  G.K. Chesterton once said that there are two ways to get enough:  One is to continue to accumulate more and more. The other is to desire less.  Bo Sanchez in his bestselling book Simplify and Live the Good Life explains that we should focus on what we have not on what we don't.  It's because, satisfaction doesn't come from getting what we want but from wanting what we already have. "Some take their pleasure from dining in classy restaurants, going on trips . . . and owning the latest home theater equipment.  I've chosen the simpler path: If i can simply be with my wife, or take a quiet stroll under a canopy of stars, or play with a child, or read a good book in my home, or laugh with friends over an instant pancit canton, I consider myself richly blessed," said Bo Sanchez in his book.  Certainly, we could have a lot at the comfort of our homes with our family, friends and the community.  All these for free!

Fourth Key.  Budget and start savings at once.  Start budgeting and along this start also writing down your daily expenses.  Analyze it after a month to know the pattern of your spending and you will be surprised by the result.  You will know that you are spending quite a portion of your monthly pay on things you don't really need or you could be over spending on some that you could cut back later let say cellphone load, bottled water or even softdrinks.  Continue budgeting and listing your daily expenses until it becomes a habit so that it would be easy to track and monitor your expenses.  Once you made it a habit, start saving as much as you can.  Take note, savings is an expense for the future, so a decided or target portion of your income should automatically be deducted to your monthly pay then budget what has been left.  Start saving for the following:

• buffer fund.  Set aside money until you are able to save at least 5-months of your gross salary.  This will give you and your family a fall back in case you got laid off from your work.  You will have enough money that can supply your needs while you are looking for a new job.  If you want six months or a year equivalent of your gross salary, much better.
• irregular expense account.  this is a savings account intended for seasonal expenses such as tuition fees, family celebrations such as birth days, wedding anniversary, Christmas, new year etc.
• protection fund.  if your the sole bread winner, you need to be protected in a form of life or the new one, a variable insurance so that whatever happens to you, your family will be in good hands for a certain period of time.  You may have personal with regards to this matter.
• marrying or settling fund.  For those who are actually of marrying types or whose ultimate aim is creating a family of their own, there is certainly no time and money to waist.  One need to have a longer foresight of the future otherwise, life will be more difficult in the future.  Since, as singles, most are still living with the parents. save as much as you can.  The bigger chunk of your income, let say 50% or even more of it, the better.
• retirement fund.  aside from SSS or GSIS, financial coaches and analyst highly recommend to have an additional retirement fund because your retirement and pension will probably be not enough to live decently . As we age, we would need medications. Right now, there are 3-in-1 retirement fund (health care, life insurance and investment in one) like Kaiser which is a long term plan which covers beyond 60yrs old & above based on the health funds accumulated. Get a quote here https://402183ph.imgcorp.com/quote/kaiser or m.me/financialwellnessclubph
• health care card.  If you are still young, you could also consider getting a health care cards in addition to your Phil Health. If you are the bread winner, you may get one for your dependents too.  It will help and save you from financial problems in the future as such, unwanted or unplanned debt which is a common occurrence. The downside however of healh care card is that there is no investment return like the one mentioned above.  Its up for you to decide however.

 Save, save, and save to earn interest from it instead of the creditor earning so much interest from you through loans.

Fifth Key.  Avoid going with the tide.  Don't let things such as the clothing you wear, jewelries, cellphones you use define yourself.  Aware and financially educated people don't use material possessions as barometer of wealth or financial stability but on your networth instead.  Get along with people who have embraced simple lifestyle and have clear financial goals for their future.

Sixth Key.  Create your financial plan based on your life dreams.  Bo Sanchez explains that writing down a financial goal is an exercise in faith and an exercise in personal commitment.  He said that it helps our mind to open up and think of ways how those goals would be met.  As such, it would led us going back to our divine appointed mission in life- because that was how God was going to provide for our needs and desires.

Seventh Key.  Purify your thinking and motives about money. Money isn't evil.  the LOVE of money is.  Money is something that can be used to love or hate, to build or destroy, depending on how you use it.  In other words, it can make you holy or it can make you evil- much like anything else in life.  Purify your thinking towards money by embracing the truth that God wants you to have some material things to live a human life, enough for your needs and more than what you need, so that you can be generous.  Money should come from our highest values.  Money should be taken as an instrument to do more good.  That is to provide for the basic needs of our families.  To be more generous to those in need.  To support and help our churches and the ministry of your choice.

We should not forget that we could not simply give what we do not have.  But in all of these, put God first!

Reference:  Sanchez, Eugenio R., Jr., Simplify and Live the Good Life, Shepherd's Voice Publication 2008

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7 Tested Ways to Consider When Buying a House and Lot You Want to Call Your Home

By:  Gilbert M. Forbes
DepEd Quezon, CALABARZON

Everybody is excited of owning a house and lot.  But what if suddenly, your excitement turns into a disaster?  This usually happens when ones expectation to the property and the community falls below the perceived and even expected standards.  But these can be prevented if the following tips shall be considered.

1.  Long Term Goal and Income.  Consider your purpose and alternatives.  If you’re currently renting a house and the amount of rent is just enough to pay for the monthly installment of a mortgaged house and lot and the distance difference from the work place as compared to the property you are renting is manageable, you can go for it.  If not, and there are other alternatives, think twice.  You may still need time and possibly is advisable not to venture at having one.  Remember, a house and lot as financial adviser experts are saying will never be an investment unless it creates passive income or once it is sold and created reasonable profit.  You should also consider your current monthly income and your budget.  Should it eat up a sizeable portion of your income and your ability to save for both emergencies and future needs, you should consider post phoning it.  If it will result in over-stretching your budget, you might be having trouble and problems in the future, the worst-case scenario, your property after sometime got foreclosed.

2.      Payment scheme and interest rates.  Don’t be fooled by zero equity and graduated monthly installment schemes because you’ll end up paying more than expected in the long run.  Before getting a real state property like a residential unit, make sure that you have disposable cash or have savings enough to pay for the equity as well as emergency funds to pay for the monthly installments.

Most of us could only afford mass housing units.
(photo courtesy of google search)

Avoid credits e.g., issuing post dated checks for a year on a monthly basis or a cash loan to pay for your equity because it may over-stretched your ability to pay in the future.  This may result in default of payments and the worst case scenario, foreclosure of the property.  Instead of having a graduated installment, choose the fixed monthly installment plan from the very start of the paying period or years.  It will help you see the reduction in your principal, as such, lesser interest payments in the long term.

3.      Developers track record.  You should consider having a background check on the developer.  How long have they been in the business and what kind of social responsibility do they carry.  Don’t be amazed by their catchy marketing phrase, strategies and unresistable pricing and promos.  Consider having a research investigation on their numerous projects.  What are the feedbacks among the existing owners in those projects?  Are they satisfied of how their property turned out to be?  You could also consider the turn-over among their agents and employees plus the working relationships and satisfaction levels among their laborers.  Be reminded of fly by night developers who are after the profit, and of course your money, nothing more nothing less.

4.      Quality and workmanships.  Affordability of the unit should not sacrifice quality and workmanships.  All the specifications in the building plan should have been carefully followed.  Watch out for these particularly on low-end or mass housing units, even the high end ones for corrupt practices is a common place, among the laborers, foremen and project engineers either with the direct or indirect knowledge of the developers.  This usually happens when the workers are underpaid and their privileges are cut short or simply don’t exists at all.  When checking sample units and most importantly the unit you are planning to purchase, bring along with you persons who if not an expert is knowledgeable enough in building and construction who can tell you if the property is worth enough the amount of money you’re going to pay.  Also remember that with the advent of strong typhoons that are now becoming ordinary, it's resistance to this should also be one of the primary consideration.

5.      Location of the property or the subdivision.  The location should not be too far from the urban center.  If you reside in the city, except NCR and other highly urbanized cities in the country, it should be within 5-10 kilometer zone from schools, universities, hospitals, malls, government and business centers.  It should be strategically located that possible commercial growth is happening in 5-10 years as the city center gets crowded and some of the business operations get transferred to the suburbs or areas outside the city.  It will contribute much to the expected increase value of your property.

6.      After sales service and warranty.  Be sure, that after sales service and warranty is clearly stated in the contract.  Based on experience, one year warranty is no good, but 2-3 years is better just in time that construction defects may come out.  If your developer don’t offer it, then you may opt to look for other developers.  There could be better offers than what they can give.

7.      Residents institutional culture, values and orientation.  If the subdivision is no longer new, lets say, three years or more and already has an organized home owners association, consider how rules are implemented and are getting followed.  Consider small bits of traits that should exist in a planned neighborhood being a subdivision perse, e.g., a.) pathwalks, are they not occupied for personal utilization of home owners such extension of their sari-sari stores, talipapa, plants, dog house, car park, etc;   b.) what about garbages and presence of litters particularly in vacant lots;  c.) presence of stray dogs and cats.  The given samples are tests of their values and character.  If you can take it, then go on, if not, find another one or better just stay where you presently are to avoid head aches in the future.

There’s really much pleasure and joy in finally having your dream house that you can call a home of your own.  But owning one don’t merely come with a price.

(The writer has been a home-owner of a mass housing unit for almost eight years now.  He has been a member of their association's election committee since he resided on his unit in 2009 as such have been pretty much aware of what is going on.)

An Example of Financial Ignorance

14 Million Pesos is a already a very big big amount of money that one can receive now a days.  Even a retiring level two management employee in government could hardly receive three million at present.

But it is just very sad that it is gone in only three months.  Should he put it in business, even it didn't succeed, at least, he has helped employed some.

It only shows how important is the knowledge of how money works and should work not only among the rich but most importantly to the common people.  Here is the complete article from the Manila Bulletin as appeared on Tuesday, March 13, 2012.

 Lotto Winner Spends P14M In Just 3 Months

MANILA, Philippines - For three months, Dionie Reyes (DR) - winner of P14,125,032 in the Lotto 6/42 draw on April 22, 2008 - lived the life of a millionaire, something he had been longing to experience.

He lived in a P4-million house in a posh subdivision, drove around in a sports utility vehicle (SUV), and gave goodwill money, ranging P1,000 to P 850,000, to relatives and friends. He also gambled daily, womanized, and went on regular drinking sprees.

In an exclusive interview, DR told the Manila Bulletin that he did not regret throwing all the money away, because it was his, he enjoyed it to the hilt, and he did not take it from anybody else.

"I won it from a lotto game of PCSO (Philippine Charity Sweepstakes Office)," DR said. "It was my money. I spent my P14 million in three months," he admits.  But in the end, he felt sorry for his unbridled spending spree.

From being an instant millionaire, DR now owes some people about P500,000.

And to underscore his current state of living, DR underwent a heart surgery at the Philippine Heart Center (PHC) last September without any cash on hand. And he had to thank the PCSO management for helping him pay for the cost of operation of about P500,000, more or less.

Nearly four years after his lucky streak, the married native of Las Piñas, now 47, with an 11-years-old adopted son, said he wants to tell his story so others who may strike gold, or already did, with the lotto games may learn a lesson or two from his experience.

When this pen pusher, rather Blackberry user, told him his name will not be mentioned to shield him from any uninvited or unintended consequences of his coming out in public, he won't have it that way.

"If you are not going to mention my name, then there is no use telling my story. Readers may not believe your article. You may even use my photograph," he insists.

"After all, I have nothing to fear. That was about four years ago already. I had spent all my winnings. Nothing is left, except my house and the things I gave my relatives, office mates, friends, and acquaintances," he says.

DR recalled that before his mother Paz died at 71 in 2004, she used to tell him that she had been praying for him to win in the lotto play.

"Anak, ipinagdarasal ko na manalo ka na ng lotto para makatikim naman tayo ng ginhawa (Son, I have been praying that you win in the lotto so we can have a better life)," DR recalls his mother telling him.

DR proudly said that being the youngest of his six siblings made him the favorite of his mother. He has five sisters and a brother.

About four years after his mother's demise, DR finally hit the jackpot, using a Lucky Pick, System 7 bet worth P70. A System 7 bet has seven combinations.

"It was a Tuesday when I hit the jackpot. My boss announced that a lotto machine gave out the winning numbers for 6/42, Lucky Pick, and System 7," relates DR.

"I had all the three categories. So, I silently hoped that I am the winner," says DR. He did not check his ticket yet.
Wednesday evening, after work, like in many other days before, DR went on another drinking session.

He still did not check his lotto ticket in his wallet, which by then was already drenched with his own urine because of too much drinking.

Friday, at lunch time, while eating with an office mate, DR took out his smelly wallet and got the 6/42 ticket. He had memorized the winning combination, 09-15-18-23-28-40, which had at stake P14,125,032.

"Uy, I got three... four... five numbers," DR exclaims, as excitement overwhelmed him. He said he no longer mentioned he got all the six drawn numbers. He just nudged his officemate, who got the message.

"At 1 p.m., accompanied by my boss, I had my winning ticket validated at the PCSO's Internal Audit Department. The lotto machine did not accept it at first because of urine smudge. So, the validation was done manually, entering into the lotto machine the security numbers in the ticket," recounts DR.

The PCSO validation machine confirmed DR won the more than P14-million jackpot.

"After about an hour, I got the check and I went to the bank, still with my boss," he said.
"Lahat tayo may pangarap. Gusto ko talaga magkaroon ng kotse, magandang bahay, at makahawak ng malaking pera. Kaya sinabi ko sa bangko bigyan ako ng isang milyon na cash at tulungan ako makabili ng Toyota Fortuner na usong-uson noon," he recalls with fondness.

He said he was adamant he wanted to go home driving his new car, and a million-peso cash with him. The bank made sure he got them. It was already evening when he got his shiny Sports Utility Vehicle (SUV).

Later, DR also bought a P4-million house and lot at BF Homes in Las Piñas.

Out of his winnings, he gave his six siblings P50,000 each; another P500,000 to one of his nephews for a three-door apartment he wanted to build; and from R1,000 to R30,000 to some of his office mates; and R100,000 to his boss.

He gifted a nephew of his wife with a car worth P850,000, a Mitsubishi Fuzion. DR now hitches a ride with him every time he goes to work.

For a month, he did not go home to Cavite where he lived at the time he won. He stayed with a sister-in-law in Parañaque City.

When he finally showed up in Cavite, he gave away from P5,000 to P50,000 to some friends and neighbors.

DR estimated he gave away about P2 million or more for "balato" to relatives, friends, neighbors, and office mates, not counting people he did not know who came to him to borrow money.

"I just gave them and told them not to pay me back," he says.

Just over a year later, he sold his car and then his house at BF Homes. He bought another house also in Las Piñas worth P1.7 million. He now wants to sell the house to pay off debts.

DR narrated that the rest of his money, about P10 million, was gone in only three months.
"I spent all my money through daily gambling, especially cockfighting, drinking sprees nightly, and womanizing. Almost every day, I lost a minimum of P100,000 in cockfighting. It was very quick, I had an especial ATM (automated teller machine) card issued by my bank," DR says.

"Every time I came home, my wife just cried and cried. She asked me many times to stop. I did not listen. My siblings also asked me to change ways and have a new life," he recalls.
"I did not listen to any of them. It was my money, anyway. I won it fairly not at the expense of others," DR maintains.

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Value of Personal Finance as Advocates Promote Validated by Orman's Visit, A Wake Up Call to Skeptics

By:  Gilbert M. Forbes 
DepEd Quezon, CALABARZON

Photo from www. siliconangle.com

Personal awakening on the value of managing finances well came to time when I was almost broke seven years ago.  The toll of financial mismanagement is great because until now, instead of being on a savings stage and creating passive income, I am still struggling on getting out of debt the fast as I can.

Slow as it may, but we are doing well.  From having debt to seven major creditors, we are now trying our best to get out of the remaining three of which the house and lot where we reside is included.  From having a negative net worth, we are now experiencing a positive net worth for three years and it is continuously increasing. 
 
With the difficulties our family has to pass, since, experiencing for the first time having a positive net worth three years ago, I was inspired to include financial literacy in the work place as one of my personal advocacy.  It later included this medium.

However, fellow workers acceptance of the concept is still weak.  I could still remember one time that a fellow worker said in defense of her colleague that I should understand that we have different set of values when it comes to finance.  That we should just leave it that way.
 
The problem however, is due to being enslave to credit, as a result of complicated lifestyle their productivity in the work place have been affected tremendously.  Some have to do business in the work place even when it is greatly against the work place policy and ethical standards. Their lukewarm attitude towards the value of simple living and managing finances only proved them wrong upon the visit of Internationally Acclaimed Personal Finance Expert, Suze Orman who warned Pinoys of their spending habits which is patterned after the Americans.  
 
“ Filipino consumers should avoid going the way of the US, which had allowed its economy to grow on credit (card) and lending to people who could not afford homes and have been grappling with more people “on a highway to poverty.” “Build this country on cash (meaning save more and more) so that it could never collapse, then you can change your lives,” said Orman, who was raised in an unruly Chicago neighborhood and who used to wait on tables and sleep in her car before transcending poverty as a broker at American investment house Merrill Lynch.

The American personal finance guru spoke strongly against incurring debt to purchase non-essential things, noting she had watched her own country fall apart because of this.  She said consumers must distinguish between good and bad debt, good debt being amortizing to one day own a home.
I could say however is cautioned must be undertaken when applying for a house and lot.  Be sure that your budget and ability to pay is considered or else, home amortization would also led you into trouble.  Investing in real state is better if it will generate income enough to pay for itself or you are renting a home and the rent is more than enough for rent to own financing.  If not, its better to invest in agricultural lands which could be must cheaper particularly in rural areas.

Orman also advised OFW’s to consider whether sending money to adult brothers or relatives would only be encouraging dependence. “Is it possible that it’s hurting them rather than helping them?,” she said, adding that some people may not reach their potential or may not be driven into making contingency plans because they have remittances to fall back on.

But she stressed that for parents, it’s a whole different light, as she herself would want to take care of her mother. For young people, they should realize that their best commodity is time and that by starting to regularly save a portion of their earnings regularly, they will accumulate more wealth with the help of compounding, which means earnings from an initial investment are reinvested over and over, according to Orman.

With the help of compounding, she said a person who would set aside $100 (or Php100) a month starting the age of 20 would end up with $1 million (or Php1 million) upon reaching 60.  But if one waits until age 30 to start setting aside, the same person will end up with only $300,000 at age 60. This 10-year delay in starting an investment plan has thus cost the person $700,000, she noted.

“Every single person in this world has the ability to be more and have more and it’s the choices that we make about ourselves that become our net worth,” she concluded. I am just sad that I am already 20 years or more late because until now, I am still settling for the eradication of my debt.  I wish, I could have learned all of these when still new in the service and fresh from college and from the success of having between ends meet.

If it would have been, we are already millionaire and could have been helping more and the nation instead of being still in-debt.  Thanks to the strong will that God has provided us through the years.  His guidance and presence gave us enough wisdom to delay gratification though at times we still had some buying sprees.

Reference:  Dumlao Doris C., Philippines to shine in global community soon, says finance guru Suze Orman, Philippine Daily Inquirer, Feb. 28, 2012.

You might also like: 

Pagiging Mayamang Tunay (Being Truly Rich: A Series on Financial Literacy and Personal Finance in Filipino)

Being Truly Rich: Gaining Financial Freedom (Paglaya sa Kakapusan) Second Part in a Series  

Knowing How Financially Healthy or Un-healthy We Are (Being Truly Rich: Third Part in a Series)

Eight Steps to Get-out of Bankruptcy and Debt (Walong Paraan ng Paglaya sa Pagkakabaon sa Utang)  

Financial Education, A Must for Teachers   

Ten Tips: Keeping Away with Spending Spree Every Holiday Season

Gilbert M. Forbes

 Keeping away with spending spree every Christmas season is challenging budget and financial wise individuals once more.  Stores are really keeping up with the time when bonuses are released to all salaried workers and employees both government and private- making their displays more mouth watering and extremely tempting than ever.

Photo courtesy of google search images.

Shelves are updated with new and trendy items particularly tech and gizmo stores. These stores have even partnered with credit card companies to allure customers of buying their new models of cell phones, computers, high resolution and dynamic LCD and LED television sets, etc.  One wouldn't be exempted of thinking of buying one of these to replace their ancient gadgetries for those who have long settled to surplus items like me.

To others who are riding with the craze of always embracing whatever is new on a yearly basis will certainly not be left behind starting from their trendy cell-phones or wardrobes.  But to those who are already awaken and have already decided to prepare for a financially independent life, how could they escape the temptations?  Here are the tips.

1. Pay your debts.  If you have a debt, think of paying it first.  If you can pay it in full, better.  It will free you from a lot worries and stress in the future.  It is very liberating for an active income earner to be debt free.  If you are highly indebted, this is the opportune time to reduce it considerably and start to get out of it as fast as you can.
2. Get enough protection.  Consider getting enough protection by buying an insurance equivalent to a ten-year total expenditure.  In case something happens, your family shall no longer worry of your financial obligations.  This is the beauty of insuring yourself.  There are lots in the market tailored fit to your needs.  Caution however must be applied in selecting one. 
3. Save it all!  If you have no debt, start save and start increasing your passive income as fast as you can.  Having all your bonus and 13th month pay as a saving will be a great start.  Financial experts are saying that bonuses and other financial rewards salaried workers receive every Christmas season are not categorized as active income.   As such, they are suggesting that it should not be spent and should go directly as savings.  But since we just learned it, we could settle saving at least 20- 50% of it.
4. Budget and stick to it.  Budget with the family members so that they will not only get acquainted with the beauty and art of budgeting but be informed and consulted as well with your financial plans and status.  In this way, they will no longer be expecting so much from you.  Budget is the lists of things to buy for a given time or season like Christmas.  List down only things that are really needed.  Review the budget two to three times for the last minute changes.  There is no more rewarding for any individual if he/she is always successful in sticking with her monthly budget. It is a part of self-restrained and discipline- a key to simple living and financially rewarding future.
5. Write.  Prepare a list of things to buy and start bargain hunting as early as possible and avoid the rush.  List only the things you really need.  Compare the price from store to store so that you can have the best buy and save a lot.
6. Prioritize.  When buying a gadget or something consider its immediate use.  For example, if you will just use a cell phone to call and text, the cheapest quality cell phone in the market will do.  But if your job requires high connectivity, an android phone versus an Iphone or blackberry would be a lot cheaper.  Are there no other alternatives but to have this gadget?  Is it part of our priority?
7. Avoid temptation.  Do not be tempted nor influenced by peers most importantly by personal ego.  When temptation is sinking in, ask only yourself with these questions:  Do I or we really need it? If we need it, can we still post phone having it?  If not, in what degree will it benefit us the most considering our financial standing?
8. Think of the end in mind.  Always think of the end in mind as the best selling author of 7 Habits of Highly Effective people, Stephen Covey says.  When you think of the end in mind, you are thinking of the future that you want for your self and your family.
9. Read and Learn.  Buy your self an easy to understand book on personal finance. There are best sellers available in the market in accordance with your location and nationality.  Nothing can surpass the motivation and inspiration that will be provided by reading and being knowledgeable.  It is so far the best investment that you will make other than ordinary material things.  It will help you grow.
10. Act now.  The earlier, the best.  There is no other time but to do it right away.  Every minute and single days lost can no longer be replaced nor recovered.  The element of time is of primordial importance to a financially rewarding life.

We all intend to have a happy, wonderful, fantastic life.  So why should we let ourselves complicate things when we can simplify it.