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  
 

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

You may also like:

 Why Living a Simple Life Style
Sustaining Gained Grounds on the Way to Financial Freedom 

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   

Sustaining Gained Grounds on the Way to Financial Freedom (Tuloy-tuloy Tungo sa Kalayaang Pinansyal)

Ni:  Gilbert M. Forbes

Sadyang mahirap at punung-puno ng hamon ang landas tungo sa Kalayaang Pinansyal lalo na kung isa’t kalahating dekada ka ng guro, empleyado o manggagawa.  Ang paglaya pa lamang sa pagkakautang ay isa ng napalaking pagsubok na tila ba imposibleng ipasa lalo na kung iisipin na kung minsan ay parang hindi yata nakikisama ang panahon tulad ng biglaang pagkakasakit sa alinman sa kasapi ng pamilya at iba pa.

Subalit sa kabila ng lahat ng ito, ang pinakamahalaga ay ang dalisay na hangarin at pagnanasa na makalaya sa kakapusan sapagkat sa huli, kung magiging mabuway tayo sa gitna ng mga pagsubok ay lalo lamang lalala ang sitwasyon at lalambong ang panginurin ng isang maaliwalas na bukas para sa atin.

Sa pagkakataong ito ay dapat mahalagang bantayan natin ang ating disposisyon sa mga bagay na maaaring magpahina sa ating pagnanais na makalaya sa kakapusan at bagkus at magpatianod na lamang sa tinatawag nilang agos at gulong ng buhay na kung tutuusin ay pawang tayo ang may kontrol.  Ilan sa mga ito ay ang sumusunod:

• Impluwensya ng kapwa lalo na ng mga kaibigan, katrabaho at kaanak- Halimbawa nito ang kuwento ni Berto na nagsimulang magtanong sa sarili kung tama nga ba ang kanyang nilalandas ng mabasa ang aklat na Pera Mo Palaguin Mo (Wealth Within Your Reach) ni Francisco J. Colayco noong huling bahagi ng 2005.  Pano ba naman, tatlong libo na lamang ang neto ng buwanang sahod na kanyang tinatanggap kaya nagpasya syang subukan at tila nagtagumpay naman sya.  Nabayaran nya ang mga pangunahing pagkakautang at tumaas ang buwanang neto sa mahigit sa walong libo at nagsimula ng makaipon hanggang sa siya ay magpakasal noong 2008 sa isang babae tulad nya ay praktikal din.  Pinagpasyahan nila na pinakasimple lamang ang kanilang kasal at hindi lalampas sa Php50,000 ang kanilang gagastusin upang hindi na sila mangutang pa ng panghanda subalit dahil sa impluwensya ng mga kaanak, kaibigan at mga katrabaho ay hindi ito nangyari.  “Minsan lang kayong ikakasal,” anila.  Sa medaling salita, naubos ang inipon at nagsimula silang may utang na nadagdagan pa dahil sa ceasarian hospitalization ng isilang ang kanilang panganay.  Hanggang sa kasalukuyan ay binubuno pa rin nila ang mga pagkakautang na ito na inaasahan nilang matatapos pa sa 2015 kasabay ng pagsiguro sa edukasyon ng kanilang panganay at ng kanilang buhay at kalusugan.   Isa lamang ito sa mga halimbawa ng mga impluwensya ng mga taong malalapit sa atin.  Nandiyan pa ang mga biglaang gimikan tulad ng mga party, buying spree, fashion, at iba pa.  Malimit sa hindi, sila ang una-unang kukumbinse sa atin na bumili ng ganito, kumuha ng ganito tulad nila.  
• Kultura at Pagpapahalaga-  Ang nabanggit na halimbawa sa itaas ay masasabi ring impluwensya ng kultura at pagpapahalaga.  Kasal, Birth Day, Piyesta, Pasko, Bagong Taon, Araw ng mga Puso, Mayuhan.  Lahat ng ito ay ating pinaghahandaan at ipinangungutang, para kanino? 
• Ang pagnanais na maging katanggap-tanggap, in at kung minsan bida o pupolar-  Dahil nais nating walang masabi sa atin ang ating kapwa at tayo ay nakikisama, umaayon na lamang tayo sa agos.
• Media, Materyalismo at Komersyalismo-  kung dati rati radio lang at bibihira ang may TV, ngayon, ordinaryo na lamang ito sa bawat tahanan.  Hindi na lamang natin naririnig kundi nakikita pa natin ang napakaraming produktong ipinopromote.  Media now dictates how we would dress, eat and even breath!  How willing are we to be dictated and influenced?

Sa lahat ng ito, ang ating lubus-lubosang pagnanais na makalaya sa kakapusan at marahil, ay maging iba sa nakararami ang magtatakda kung hanggan saan tayo lulugar.

Ngunit higit sa lahat, napakaganda ring balikan at alalahanin ang ipinangako, plano at tagubilin sa atin ng ating Panginoon.

 “For I know the plans I have for you," declares the LORD, "plans to prosper you and not to harm you, plans to give you hope and a future.”- Jeremiah 29:11

“Let us not become weary in doing good, for at the proper time we will reap a harvest if we do not give up.”  Galatians 6:9

Ang May Madudukot Ay Ang May Isinuksok

Sadyang mahirap ang umiwas sa kaway ng materyalismo.  Kung wala kang tiyak na layuning pampinansyal, tiyak na imbes na mauna ang pagbabayad sa pagkakautang ay siguradong mapupunta ito sa mga produktong in lalo na sa panahon ng kapaskuhan.

Sa pagpasyal pa lamang sa mga shopping malls at iba pang mga pamilihan ay naghambalang ang mga bargains.  LCD televisions, laptop at netbook computers, china phones, querty branded phones, damit, sapatos, pagkain, at iba pang mga produkto.

Ako mismo ay natutuksong lumiban na muna sa pagbabayad ng utang upang bumili ng mga kagamitang pantahanan na sinasabi at idinidikta ng aking isipan na kailangan naman.  Halimbawa na lamang ay bagong sala set, dress closet, cooking rack, at bagong touch screen cell phones.  Wala pa kase kaming sala set at pati bagong kurtina ay kelangan din.  Kelangan ding dagdagan ang dining chairs at bumili ng bagong unit ng cell phone para may contact sa bahay.

Nakakatukso ngang gamitin na ang credit cards namin sapagkat may mga offers na sa March pa ng darating na taon ang simula ng pagbabayad.  Ngunit hindi puwede ang magpadalus-dalos sapagkat 25% ang monthly deficit ng monthly income para sa monthly expenses na napupunan lamang ng mid-year bonuses at iba pang incidental cash incentives.

Pero sa lahat ng ito, lutang na lutang ang katotohanan na madali ang mangutang ngunit napakahirap magbayad. Lubhang napakahalaga ng katotohanang mas dapat mauna ang pag-iimpok sa pinakamabilis na paraan na dapat samantalahin ng mga wala pang utang at bago pa lamang sa larangan ng paghahanapbuhay o pagkita ng pera.

Sa ganang amin na matagal na at ang nauna ay ang pagkakamal ng utang at hindi ng impok, ay ang makalaya sa pagkakautang sa pinakamabilis na paraan.

Sadyang mahirap, at maituturing na nakakahiya, o nakakaalangang isipin na ang iba ay nakabibili ng nais nila kahit na kung minsan, eh mas angat ang ating mga hanapbuhay at mga sweldo pero sa panahon ng krisis at biglaang pangangailangan, ang tanging may madudukot ay ang mga may isinusksok.

Seven Ways to Avoid Bad Debt (Pitong Paraan ng Pag-iwas sa Masamang Utang)

Sa mga naglipanang produkto ngayon at sa pagnanais nating maging -in sa barkada at sa lipunan, marami sa mga nagsisimula pa lamang na kumita ng pera ang dahan-dahan nang lumulubog sa pagkakautang at kakapusan ng hindi nila namamalayan.  Marami ang hindi pa panahon ng sahod ay kailangan ng mag-cash advance o kaya’y isanla ang kani-kanilang ATM Cards na usung-uso ngayon sa mga pabrika at mga pribadong kumpanya.  Ang mga datihan namang  may pagkakautang at babago pa lamang nakalalaya rito ay ganun din.  Bigla nilang namamalayan na may utang na naman sila na kailangang bunuin at pagsikapang bayaran.  Malimit dahil sa mga gastusing hindi pana-panahon at hindi naman maituturing na biglaan tulad ng tuition, panghanda sa birth day, reunion, paskuhan at iba pa.

Upang huwag mabulid at matukso sa utang, makatutulong ang sumusunod na tips o mungkahi sa bawat isa atin.

• Magbasa, mag-aral, at bumili muna ng mga aklat tungkol sa Financial Literacy bago ang pagporma at mga gadgets.  Sa oras na magkatrabaho tayo at magsimulang kumita. Unahin agad ang magtabi o mag-impok at pagbili ng mga aklat tungkol sa kahalagahan ng Financial Literacy, at Personal Finance upang magkaroon ng kaalaman kung paano at bakit kailangang lumaya sa kakapusan.
• Panatilihin ang dating uri ng pamumuhay at paraan ng paggastos na tulad noong wala pang trabaho. Bilhin lamang ang mga pangunahing pangangailangan sa tahanan.  O kung nakatira pa rin sa magulang, share sa pagkain at iba pang gastusin sa bahay at itabi na lahat ang matitira.
• Magbudget at maghanda ng tinatawag na irregular expenses account o listahan ng mga gastusing pana-panahon kung dumating tulad ng pagbabayad ng tuition, pagbili ng mga uniporme at mga gamit pampaaralan, Pasko, Birth Day, Valentines Day, Anniversaries, at iba pa at isama na ito at paglaanan upang maiwasan ang pangungutang sa panahon na ang mga ito ay kakailanganin.
• Huwag matoto o maingganyong mangutang.  Iwasan at ituring ang utang bilang isang nakahahawa at nakamamatay na karamdaman.  Tandaan na lahat ng utang ay masama kung ito ay nagiging dahilan upang mabawasan ang inyong kita at halaga ng ari-arian o asssets.  Umutang lamang kung gagamitin sa isang negosyo na siguradong kikita.
• Huwag kumuha ng isang bagay na pahulugan o mangutang para lamang bumili ng isang bagay tulad ng mga alahas, gadgets, damit, mga kasangkapan sa bahay at iba pa.
• Panatilihin ang budget sa dating antas kahit na tumaas na ang buwanang suweldo dahil sa mga nabayarang utang, o umento at ibulid ito sa mga nalalabi pang pagkakautang o kung tapos na ay impokin upang lumago sa pinakamabilis na paraan.
• Huwag padalus-dalos at paimpluwensya sa tukso ng materyalismo at ng kapwa at ituon lamang ang tingin sa layuning makalaya sa kakapusan sa pinakamabilis na paraan.
• Maging simple at huwag mag-astang mayaman.  Sa ngayon, hindi pinag-uusapan sa mataas na lipunan kung anong mga mamamahaling gamit meron ka kundi una muna rito ang uri at laki ng iyong mga investments.

Tandaan, na malaki ang tulong na magagawa sa atin kung tayo ay walang masamang pagkakautang sapagkat iwas isipin din bukod pa sa mas mapapabilis ang ating pag-iimpok.

Maaari ring tunghayan ang sumusunod:

Basics on Personal Finance

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   

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

Ayon sa isang eksperto sa paghawak ng pera o tinatawag na financial management specialist na si G. Francisco J. Colayco, "kaya ng bawat isa ang magingmalaya sa kakapusan. Kung ikaw ay kumikita, mayroon kang pagkukunan ng puhunan at ito ay kaya mong palaguin. Kailangan lang ay mag-umpisa ka na agad."

Nailagay sa ating kaisipan na mahirap maging mayaman ang mahihirap. Ang pagiging mahirap daw ay bigay ng tadhana o kaya naman ay kawalan ng swerte. Ito ang uri ng mga paniniwala na dapat alisin upang maging malaya sa kakapusan. Ayon kay G. Colayco, ang pagkita ng salapi at pagpapalago ng kita aymagkasing-halaga. Ang dapat daw nating matutunan ay ang magplano sa pamamahala ng ating kita. Ayon sa kanya dapat nating tandaan ang mga sumusunod:

• Alamin ang pangangailangan sa hinaharap.
• Paghandaan at alamin ang mga wastong paraan upang makamit ang perang sasagot sa mga pangangailangan.
• Ibagay o baguhin ang iyong pangangailangan para sumang-ayon sa iyong kakayahan.

Kailangang ating tandaan na ang kayamanan ay ang pagkakaroon ng salapi na pangtustos sa oras ng ating pangangailangan. Ang ating pangangailangan sa araw-araw ang magtatakda kung ano ang sapat na kayamanang akma para sa atin. Ang ating pangangailangan sa araw araw ay dapat iakma sa ating kakayahan. Dapat tayongmamuhay kung ano lamang ang ating kaya.  Ayon kay Colayco mayroon daw apat na antas ng ating kakayahan sa pananalapi:

• Antas ng Pag-uumpisa - ibig sabihin ang lahat ng iyong kita ay galing saiyong sariling oras at pagod. Ang pinaka-unang dapat mong gawin aymaghanap ng pagkakakitaan. Ang iyong sariling lakas at talento ang iyongunang puhunan kung kaya dapat mong pagyamanin ang iyong sarili dahil ito ang una mong puhunan.
• Antas ng Pagpapalaki ng Kita - Narating mo na ang antas na ito kung nagtatrabaho ka pa rin ngunit 20% ng iyong kabuuang kita ay nanggagaling na sa interes ng iyong ipon o kita ng napamuhunang pera.
• Antas ng Pagkakaroon ng Kita Galing sa mga Ari-arian (Assets) -Narating mo na ang antas na ito kung nagtatrabaho ka pa rin ngunit 30-60% ng iyong kabuuang kita ay nanggagaling sa interes ng iyong naipon o kita ng napamuhunang pera.
• Antas ng Pagreretiro - Narating mo na ang antas na ito kung 100% ng iyong kita ay nanggaling na sa interes ng iyong naipon o kita ng iyong napamhuhunang pera kung kaya maaari ka nang hindi maghanap-buhay.

Ang mga antas na ito ay hindi nakabatay sa gulang ng tao. Maaring bata pa aymarating na ang antas ng pagreretiro dahil sa matalinong pamamahala ng pera. Maaari rin namang kahit matanda na ay hindi pa ito makarating sa pinaka mataas na antas. Hindi rin masasabing huli na ang isang tao kung siya ay magsisimula sa matalinong pamamahala ng kanyang pera kung siya ay matanda na. Walang pinipili itong edad.

Ngunit mas makabubuti na habang maaga pa ay kumilos na sapagkat sa lahat ng nawawala na di na puwede pang ibalik ay ang oras o panahon.  Reference: Modyul 19, Ang Pilipinas sa Pambansang Kaunlaran, Bureau of Secondary Education, DepEd Complex, Meralco Avenue, Pasig City. 

You may also like to read:

•  Ang Tunay na Mayaman (Being Truly Rich: A Series on Financial Literacy and Personal Finance in Filipino) 
• Knowing How Financially Healthy or Un-healthy We Are (Being Truly Rich: Third Part in a Series)  
• Seven Ways to Avoid Bad Debt (Pitong Paraan ng Pag-iwas sa Masamang Utang) 
• Value of Personal Finance as Advocates Promote Validated by Orman's Visit, A Wake Up Call to Skeptics   
• Financial Education, A Must for Teachers

Ang Tunay na Mayaman (Being Truly Rich: First Part in A Series on Financial Literacy and Personal Finance in Filipino)

By:  Gilbert M. Forbes
DepEd Quezon, CALABARZON

Para sa marami sa atin, mayaman ka kapag ikaw ay nakatira sa isang mansion sa loob ng sikat na subdibisyon. Maraming sasakyan, kumpleto ang bahay sa kagamitan, mamahalin ang kasuotan at alahas sa katawan at malaki ang suweldo o kita. Ngunit gaano man karangya ang pamumuhay ng isang tao sa ating paningin, hindi ito sapat na batayan upang maituring ang sinuman na mayaman.

Para sa mga eksperto, ang usapin ng yaman ay nasusukat sa kanyang net worth at kung gaano ito tatagal. Ang net worth ay ang kabuuang halaga ng pera at ari-arian pag binawas na ang lahat ng pagkakautang o lialibilities. Halimbawa, maituturing na mas mayaman pa ang katulong ng isang milyonaryo sa Ayala Alabang kung ang kanyang ari-arian at pera ay kulang pang ipambayad sa lahat ng kanyang pagkakautang.

Bukod sa net worth, ang yaman ay nakabatay rin sa uri ng life style o pamumuhay. Halimbawa, kung may 150 Milyon ka at wala nang inaasahan kundi ito at dahil sa marangyang pamumuhay ay nakatakdang tumagal lamang sa loob ng 40 taon ay mas mayaman pang maituturing ang isang ordinaryong magsasaka na kumikita lamang ng sapat at nakapagtatabi ng sapat para sa kanyang pagtanda o pagreretiro.

Sa makatuwid, ang tunay palang mayaman ay iyong naabot na ang antas ng tinatawag na kalayaang pinansyal o 'financial independence' ayon sa antas na nais o pinili. Ito ay ang antas ng pamumuhay na hindi mo na kailangan pang maghanapbuhay sapagkat sapat na ang iyong ari-arian para suportahan ang mga batayang pangangailangan sa araw-araw ayon sa uri ng pamumuhay o life style na nais habang buhay.

Syempre, kung nais natin ng marangyang pamumuhay, mangangailangan ito ng malaking halaga ng passive income. Ang passive income ay kitang mula sa naipundar na mga negosyo kung meron, ari-arian tulad ng paupahang bahay, bukirin, interes ng perang naimpok sa bangko, dibidendo mula sa mutual funds, stocks at iba pang investments, pension mula sa retirement fund bukod sa SSS o GSIS at iba pa. Active income naman ang tawag mula sa ating kinikita sa ating trabaho na bunga ng ating pagpapawis, kakayahan, lakas, talento at iba pa.

Ang kalayaang pinansyal o financial independence ay tinatawag ding retirement stage ng mga financial experts sapagkat hindi muna kailangan pang puwersahin ang sarili upang maghanapbuhay o mapako sa routine ng regular na trabaho. Ito iyong estado ng pamumuhay na ikaw ang may kontrol sa iyong oras at ito ay maaaring makamtan sa maikli man o mahabang panahon depende sa paghahandang ginagawa mo ngayon.

Kaibigan, kung hindi ka masaya sa pinansyal na katayuan mo ngayon, pano ka kumikilos upang ito ay masolusyonan? Ipinagwawalang bahala mo ba ang mga bagay na maaari namang mapaghandaan at maiwasan ngayon pa lang? Alalahanin sanang ang lakas at kalusugang dulot ng kabataan ay may hangganan.

Ang sabi ng Bibliya sa wikang Ingles, “The wise man saves for the future, the foolish man spends whatever he gets.” Proverbs 21: 20. Saan ka nabibilang kaibigan?

(Ang artikulong ito ay kauna-unahan sa mga serye ng mga sulating inihanda para sa kamulatang pinansyal ng mga guro, empleyado sa pamahalaan at pribadong sektor, manggagawa at sa buong sambayanang naniniwala sa kabanalang hatid ng pagiging mabuting tagapamahala ng mga biyayang nagmumula sa poong Maykapal. Inspirasyon ng sulating ito ay ang aklat na Pera Mo Palaguin Mo o Wealth Within Your Reach ni Francisco J. Colayco at Rich Dad Poor Dad ni Robert Kiosaki.)

Maaari ring basahin ang sumusunod:

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)

Sustaining Gained Grounds on the Way to Financial Freedom (Tuloy-tuloy Tungo sa Kalayaang Pinansyal)

Financial Literacy, A Must for Teachers

By Gilbert M. Forbes
DepEd Quezon, CALABARZON

(Note:  This articles also applies to all young professionals, newly and currently employed both public and private, members of the informal economy, entrepreneurs, and all who have a way of earning.)

Having no resources to support education in other fields that will warrant a higher income, many opted to take education as a stepping stone but still land as a full time license teacher in the end. Teaching however in the public school at present already command an above the daily minimum wage salary.  In fact, above the entry level salary of call center agents and most professionals starting a career.  So, becoming a teacher and getting employed should be making a difference to the family members and most of all to the individual teacher in the economic bracket where most teachers came.  Handling finances properly should have been a way for a better life - much better life of poverty prior their graduation in college. But this is not the case of some of our new and even senior teachers.

Photo courtesy of Google Images.

Upon permanent employment was the improvement in their buying capacity and so the sudden change in their lifestyle including immediate family members. Instead of putting savings a priority, of increasing their net worth, they stumbled on a spending spree. They start renovating or constructing a new house without careful planning, start to buy signature clothes, gizmos and gadgets. In other words, they start to embrace a middle class life style instead of maintaining their previous simple life style only to find out later that they are already indebted to the neck. What is worst at times, they have exploited family members to join them in the band wagon. The cost, they have become poorer. The worst case scenario is that some family members became dependent which is not the case when the teacher is still studying to be one.

It is very frustrating that many of these teachers education were financed by peoples taxes (for those who studied in state colleges and universities) and subsidized by the government and some private individuals as scholars (for those who studied in some private schools) to help them get out of poverty but end up even poorer due to complicated lifestyle for some after just three to five years in the service or worst after marrying a bum.

On the other hand, others became highly indebted after financing expensive education of younger siblings which don’t match their interest and skills or are just results of peer influence, a fad. These courses charge very high tuition fees and yet the probability of getting employed after graduation is so thin and so appears to be so impractical that it has only put the financier in debt in the end.  Or failure to save or get protection for emergencies like sickness and death.

These situations proved to be not only demeaning and alarming on the part of the teacher experiencing it but to their mission of educating the youth and most importantly to teaching as a profession. Commonly, end result is burnt out and lack of professional direction. Hence, their mind is already pre-occupied where and how to get money to meet their daily needs. They have memorized and master when and how they could renew their loans in different lending institutions in every three months. Some even does it on a monthly basis leaving them with only a quarter of their monthly salary for a living—supplanted by renewable loans from any available credit sources. Indeed, these debtors have mastered the art of loaning and in return have lost their sense of propriety.

With the influence of materialism so strong that some have forgotten the disparity between what is needed and wanted, financial literacy or stewardship is seen to be a form of relief if not the total solution. This is something that should be looked into not only by Teacher Education Institutions but most importantly by the Department of Education to educate teachers, students, and the rest of the stakeholders. The Commission on Higher Education and the Technical Skills Development Authority in partnership with other government agencies should also do the same.

If everybody would be financially literate and educated, they would be motivated to plan for their future, embrace a simple life style or live simply, become responsible stewards, and to acquire the means to help more i.e., to be wealthy or financially independent. As spiritual and religious writers put it, they’ll  be financially independent or get rich for others in their respective pace. Just imagine if all salaried workers both in the government and private sectors including the OFW’s will learn and practice how money works as a result of being financially literate to a lesser extent. Come to think of its effect to the country’s progress and economy!

(This article also applies to other government employees particularly policemen who because of being financially illiterates have become hoodlums and kotongs in uniform. To other government employees and politicians who have become corrupt, private employees and OFW’s who even with their fat salaries have not improved their lives. To micro entrepreneurs and informal sectors of the economy who have stagnated through the years.)

You may also liked:

7 Ways to Avoid Bad Debt

Ang Tunay na Mayaman

The Value of Personal Finance

(The writer is an educator who was also a victim of financial ignorance.  Upon stumbling on a financial literacy book in 2005, he realizes his own situation and soon 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 currently employed as a school head in DepEd.)

What to do with 13th month pay

INQUIRER.net
First Posted 06:15:00 11/04/2008

Common Pnoy psychology when receiving additional money or the money itself is to think of what he can buy out of it. Very few think of saving or doing the things that experts will advise. The following are the things that we could do with our 13th month pay and of course, to our bonus.

1. Pay off debt. If you have substantial credit card debt or other forms of debt, use your 13th month pay to pare down this debt. This will help you shorten the paying period and lower your interest expense. Being debt-free is liberating and will improve your financial standing.

2. Save. If you haven’t started a savings fund at all, this is the time to do so. We’re up for uncertain times ahead financially because of the global financial slowdown, so save when you can. Use the full amount of your 13th month pay to jumpstart your savings fund, or if you have other needs to meet, save at least 10 to 20 percent of your 13th month pay.

3. Invest. Saving is putting away money for the future. Investing is making that money work for you. If you put your money in investment vehicles, it is possible to earn interest or yield on it without you having to put extra work in. Examples of investments you can go into using the amount received as your 13th month pay include: time deposits, mutual funds, unit investment trust funds, and equities or stocks. Time deposits give a higher rate of return than savings accounts, but your money will have to be locked up for the entire term (e.g., 30 days, 60 days, 360 days, etc.). You can have a more diversified investment portfolio using mutual funds and UITFs which are available through financial institutions and banks, respectively. With these, you can invest for as little as P5,000. Mutual funds and UITFs come in different forms and may invest in fixed income instruments, bonds, or stocks, or a combination of these. With direct investment in stocks, on the other hand, you may take your pick of a company stock and invest for the long haul even with just the minimum board lot (minimum investment required). Investments come with certain risks, so study the matter thoroughly before jumping in. We recommend consulting with an investment specialist that can help you determine your risk appetite and investment horizon – two critical things to know before you get started.

4. Start a small business. Yes, you can do this even with just a small capital. Use your 13th month pay, for instance, in buying ingredients and start a cupcake business you can attend to during the weekends. If you like fashion, buy clothes wholesale in bargain centers or have clothing apparel subcontracted then sell these to your friends and officemates. You may be surprised that some businesses can be started with just P5,000 to P30,000 in capital. Even at P500 one could start a small business.

5. Share. The Christmas season is a time for giving and sharing, so why not share your blessings? Many orphanages would be happy to receive a donation for orphaned kids. Some organizations like World Vision and UNICEF also let you sponsor a child’s education for as little as P450 a month or meet their needs in other ways. There are also a lot of people needing medical help, and it will be a blessing to them if funds can be coursed through organizations like Kythe, among others. Those are already five wise ways to spend your 13th month pay, and we haven’t included shopping yet. Think about it and decide wisely.

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