Do you want to be Financially-Wealthy?

“ ’Pag ako yumaman…” is a phrase we often hear from family and friend. This is to justify that all of us generally want to be rich, who doesn’t want to be rich in the first place? We say money makes the world go round because we need it to cover the costs of living. That is why we work so hard to earn and be able to provide the best for our family.

Here are questions you should ask yourself if you really want to be financially-wealthy:
 
1. Do I really want to be rich?
Some people just want to live simply, eating non-luxurious meals, living in a fairly decent small home – no worries.Other people think that it is not necessary to be rich, are you one of them? Some people think that having a lot of money means that you’re greedy because you can have all the things that you need. While some people needed to have more money to secure the lives of people depending on them. It’s your choice; it’s your move that will make the change in your life. The formula is really simple: Focus on your goal; do things that will lead you to your goal and avoid things that will lead you to the other end.

2. Are you doing something to be rich?
If you’re born-rich, you may have a lesser problem than the others. The problem is that it’s not the case for everyone. Most people in the Philippines needed to go to work or start their own business just to survive a day, and to be rich, people should make significant moves to be really rich. If you’re the latter, being rich will not be possible if you do nothing. Increase the channels of your income and make the real move. Aside from your job, you should also have small business, or start saving in a right manner like in a bank deposit or investment.

3. Do you tend to overspend?
The little moves count. The daily expenses define your whole cash flow. If you really want to be rich, make every financial move count. Before you spend on something, will it take a big effect on your cash flow? Overspending doesn’t only mean one-time-big-time-purchases. It can also mean regular, big expenses. For instance, taking a cab every day can cost you around PHP3,000 a month for a regular PHP150 per day in 20 days of work. If you try to reduce your cost by taking an actual commute like carpooling and taking the train, you will be saved from big costs, thus more savings. Always find ways and remember that small moves count.

4. Do you have bad vices?
A certain vice will surely cut your savings – whatever that may be. Aside from effect in your money, it may also have effects on your attitude towards achieving your goals. Most of the time, it could be a hindrance to what you really want to be. Change your bad ways and prioritize your activities.

5. Do you have a financial plan?
Lastly, do you have a financial plan? Do you have a real goal? Financial experts say that to be able to be someone you imagine, be more detailed about your dreams and make visual representations to remind you about it. Talk about your dreams all the time – discuss it with your colleagues, with your family and loved ones. Write it down and read it every time you need motivation. Make a solid plan to make your financial dreams not just a dream, but a goal to achieve, not someday, but soon.

After all the questions asked, do you think you’re going to be rich?

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At what age should you get life insurance?

There's really no pre-determined age when it suddenly becomes necessary to take out a life insurance policy. However, if there are people who depend on your income - especially children or a spouse - there's a major benefit to taking out a policy when you're young.

When you take out a policy in your 20s or 30s, the provider takes into account that you're paying premiums for a number of years when, statistically, there's relatively little risk that they'll have to pay out. Unfortunately, that risk goes up a little with each passing year. It stands to reason that younger policyholders can lock in lower premiums than the aged.

Ideally, however, it is important to get insurance if you have dependents. For young ones and with no dependents, getting an insurance with more of investment option would make a better sense.

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Mutual Fund 101: The MF Investment Cycle

1. A Mutual Fund (MF) acts as a link that allows interested investors to pool (gather) their money to buy the units of mutual funds. The funds are contributed by the investors through opting a pre-defined Systematic Investment Plan (SIP).

2. This fund is then supervised, managed and led by a fund manager who is appointed by a mutual fund organization. The fund manager uses his expertise to channel and invest these collective funds in different financial securities of the market.

3. Financial securities include; stocks, bonds, shares, short-term money market instruments and other securities. Now let's assume that investments made in these securities have generated profits.

4. These generated profits also called as returns and made from financial securities are afterwards passed back to the investors. These profits or returns are distributed to the investors only after charging (deducting) the managerial and administrative expenses.

5. After receiving profits, investors may decide to continue their investment in mutual fund. This is known as reinvestment. The main objective of reinvestment is to generate further income from the units of the MF.

Hope you learned something :)

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"Burger or Insurance?

What would you choose?

Having a life insurance policy is just like spending for a burger per day, plus the benefit of you being insured.

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What Young Adults' attitude towards money should be

Being 20-something is tough. You look for a decent job, save up for your dream house and try hard to please your parents. Being a young adult is a confusing rollercoaster ride.

If you’re 20-something, chances are you may feel that you’re not ready for the "real world" just yet. Therefore, you are prone to committing money mistakes that can cost you your dreams, your slim bank account, and even your relationship with your loved ones.

If you're in a good company, don’t be a victim. Equip yourself with information by reading this guide specifically made for you.

1. Falling into the trap of lifestyle inflation.
You can either be a fresh graduate or a senior employee – the amount of your salary doesn’t matter! What matters is where your salary goes.

Does it happily go to investments? Is your bank account healthy? Is your investment portfolio progressive?

Or does your salary sadly go to luxury purchases? Do you have a love-hate relationship with your bank account? Do you have any idea what an investment portfolio is?

Having money that you worked for really lets you feel that you’re in absolute control. So does this mean that with your new job, you immediately need a new condo, a new car, a new set of clothes and a new gadget to go along with it?

Absolutely not.

If you start falling into the mindset that you need the latest things just because you can afford them, then you will find yourself mistaking this materialistic pleasure as happiness. If this is the case, then you’re going to be stuck in a never-ending cycle of fake bliss.

This cycle of fake bliss is incredibly expensive.

Advice: Don’t depend on your possessions for your happiness. All new things get old after a while. You will never be contented.

2. Thinking of credit cards as 'free money.'
Did you know that major credit card companies have a list of young adults who they can contact as soon as they’ve landed their first job? Expect that nagging phone call. These companies would call you up and tell you that you’ve met their “requirements” so you’re eligible for a credit card account.

What are the basic requirements for a credit card account?

Seriously, if you have disposable income and are willing to pay out-of-this-world interest rates if you failed to pay your monthly dues, then you’re qualified!

Your credit card is not free money. It’s a piece of plastic that you use to buy things that you can’t afford at the moment. It makes you buy impulse purchases just because you can.

For example, if you use your credit card to buy a toothbrush. The toothbrush is P108. YOu would be thinking that the interest would just be minimal you neglected to pay your dues on time.

After a while, you finally decided to check on how much you owe. You used your credit card to buy one toothbrush. You've never used it again but you never paid your balance as well. Now, you owe P3,500.

That’s a difference of roughly P3,400! Do you really want to shell out extra cash just for the sake of instant gratification?

Advice: If you don’t have the self-discipline to pay your monthly dues on full and on time, I suggest that you refrain from even opening a credit card account. Don’t even think about it!

3. Ignoring the importance of budgeting.
The idea of budgeting seems overwhelming. Some people take the concept of budgeting to extremes.

Some would even have charts, graphs and Excel recordings of everything up to the single centavo.

And the others? They don’t even have any idea of how much they spend every month!

After all, how can you treat a disease if you can’t even diagnose it? How can you find your way if you don’t know that you’re already lost? How can you solve your problem if you’re not even aware of its existence?

4. Failing to invest in yourself.
Just because you’ve finished college doesn’t mean that you should stop learning altogether. Actually life after college is the best time to continue your education! No one will be around to encourage you to improve yourself, so you should have the initiative to pursue personal development.

Don’t mope around and expect that you will grow magically when you’re not really exerting the right amount of effort.

Also, don’t think that you can’t afford to spend money on personal development right now. At the end of the day, you’re not really spending your money – you’re investing it. You will reap the rewards in the future so be patient.

Advice: Attend seminars on how to expand your job eligibility. Network with relevant people in your dream career and learn from them. Take up a new language. Enroll in cost-effective courses that are related to your industry. Read inspirational books!

5. Neglecting precious opportunities to start saving up for retirement.
Get this: we should start saving up for retirement while we’re still young so that we can enjoy the reward when we’re already old!

When we start early, we can afford to invest small amounts because we have more time. This makes sense, doesn’t it?

Warren Buffett once said, "The rich invest in time, the poor invest in money."

You should not wait until you’re old enough to save. Doing so will just make you more pressured. Plus, if you wait until you’re substantially old, you need to invest larger amounts of money because you’ll have less time!

Advice: Sure, enrolling yourself in SSS is a common plan of action. However, don’t just be content with this pension plan – you should move one step further and start investing (maybe stocks or in insurance policy with an investment option). If you still have 10-20 years before retirement, putting your retirement account in investment is the best option..

Keep these tips in mind to help you take on the real life. Your older self will thank you for it.

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