Is Financial Freedom Achievable?

Financial Freedom is an overly used term, especially in the internet or social media posts. Truth is, most scammers used this term to lure innocent investors. But what exactly does it mean? Do you have to seriously take measures to achieve it?

Achieving the so called 'Financial Freedom' is no easy task as it involves not just one or two steps but a series of steps that must be done 'one slice at a time'. Below are some measures you can commit to doing so you'll get closer to achieving 'Financial Freedom'.

1. It is a long-term commitment - You need clear goals to keep you on track in order to be successful. On a piece of paper or computer document, make a list of each goal that you want to reach in order to be successful. Some examples are to pay off your credit cards, save money for a down payment for a house, or retire at a certain age.

2. Make a Budget - A budget is your playbook for how to spend your money. You need it to keep your spending within reason and help you to ensure that you have enough money to cover your current needs as well as to save for your long-term goals.

3. Resolve to live debt-free - If you are currently in debt, plan your budget so that you can get out of debt more quickly by making extra payments. If you are not in debt, continue to live that way by putting off your purchases until you have saved enough to cover them.

4. Reduce your expenses - Cutting spending by even a small amount on a regular basis will make a big difference in the long run. Live frugally by learning to recognize the difference between want and need.

5. Increase your income - It is wise to have more than one source of income, both to increase your savings more quickly and as insurance in the event that you lose your job. There are a number of ways to supplement your income, from working a part-time job to developing streams of passive income (your VUL insurance policy passively earns income).

5. Invest your money - Your money will grow much faster if you invest it rather than leaving it in a savings account. The increase in value will enable you to reach your goal of financial independence much more quickly.

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Controlling Weekend Spending

We tend to get excited every weekend. Though, the problem with the weekend is that it’s much easier to spend money because there is typically a lot going on. Whether it’s going out for a bar hopping or going out to eat at a local restaurant with your friends, colleagues or family, the opportunities for spending money are seemingly endless, whew!

But do you want to start saving money over the weekend? We share some tips on how you can save money on the weekend.

1. Focus on free or inexpensive activities and entertainment - like inviting your friends to your house to watch movie, etc.

2. Only go out one night a weekend (if it can't be helped) - Some of us live for the weekend and love the social scene. If you go out every Friday and Saturday night it’s bound to take a toll on your wallet. Consider changing your habits by staying in or having friends over one night a weekend.

If you must go out both Friday and Saturday every weekend, make small changes to spend less. Order cheaper food and drinks at restaurants.

3. Set a weekend spending budget - No one likes to be confined by a budget, but budgeting can be extremely effective if your goal is to reign in spending.

One thing you can try is the cash method of budgeting. Set aside your budget for each weekend, but set it aside in cash. if that cash runs out, you can no longer spend money on entertainment or restaurants that weekend (remember, avoid using your cad, if you have one!)

Having a goal like this in mind will provide some extra motivation to stay within your weekend spending budget.

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Understanding Mutual Fund

How much profit would you earn in a mutual fund?

Some gain higher returns, some get thousands while others millions. It really depends upon the fund invested, the period it is invested and the performance of the fund.

Income or losses are computed via NAVPS (Net Asset Value Per Share) from the time you opened your account to the time you closed or redeem.


 

Apparently, the higher the investment and the longer it is invested, the higher the return or profit. It is recommended to invest in long term.

It is also recommend to check the past performances of the mutual funds so you know which one performs better.

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Is your Emotional Spending takes a toll on your finances?

Emotional spending occurs when you buy something you don't need and, in some cases, don't even really want. as a result of feeling stressed out, bored, under-appreciated, incompetent, unhappy, or any number of other emotions. So if there are ways to control emotional spending, these must be them:

1. Cut Down Impulse Buys ---
One way to cut down on emotional spending is to avoid making impulse purchases - and that doesn't just mean you should avoid buying gum in the checkout line at the grocery store. Whenever you're at a store - whether brick-and-mortar or online - and you find yourself wanting to buy something you didn't already want before you got there, don't buy it. Make yourself wait at least 24 hours, if not longer, before making a decision about whether to buy the item. You'll often forget about the item as soon as you leave the store. If, after 24 hours, you still really want it but a nagging voice in your head is telling you that you don't need it or can't afford it, try to postpone the purchase for a week or a month so you can think more clearly about the decision. If it helps, keep a wish list of the items you've refrained from buying so that you can ask for them when your birthday comes around or pick them up when you know you can afford them.

2. Focus on Saving ---
And sometimes, spending can mean saving, by investing. There are better ways to spend your money like put it in an investment that will grow it overtime (investments like in a Mutual Fund is ideal).

3. Close you eyes to Temptations ---
The next step is to limit your exposure to the situations that tempt you to spend. If it's the mall, plan to visit only a couple times a year, or try shopping online instead. If online shopping is the problem, find other, non-shopping websites to occupy your time, or replace some of your internet time with another activity. If you always find yourself spending more when a particular friend or relative is around, try to schedule free or inexpensive activities with that person, like getting coffee, cooking dinner, or going for a walk.


The goal here isn't to stop buying anything fun - if we didn't occasionally buy enjoyable things with our money, it would be difficult to get up and go to work every day. However, by becoming more conscious of your shopping habits, you'll develop greater control over your finances and you'll be able to really enjoy the purchases you make without the dread and guilt of having spent too much.

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OFW? You need to ask these 3 things before buying Life Insurance.

3 Things OFWs Should Ask Before Signing A Life Insurance Policy
 

So if you you are an OFW either still out of the country or already here in the Philippines, before you sign that life insurance application form, keep in mind these three important details: 

1. Is the person you're talking to a licensed financial advisor? 

According to the Insurance Code:

No person shall act as an insurance agent or as an insurance broker in the solicitation or procurement of applications for insurance, or receive for services in obtaining insurance, any commission or other compensation from any insurance company doing business in the Philippines, or any agent thereof, without first procuring a license to act from the Commissioner, which must be renewed annually on the first day of January, or within six months thereafter.
Someone who is acting as an insurance agent and is soliciting life insurance applications needs to be licensed by the Insurance Commission to do so.

So if the person you're talking to is soliciting life insurance applications from you, make sure that they're licensed first.

After all, it is your money. It's only right that you protect it. 

2. Is the life insurance company you're signing with authorized by the Insurance Commission of the Philippines? 

Take a look at this list provided by the Insurance Commission - if the company that your acquaintance is introducing to you is not authorized by the Insurance Commission, you need to stay clear. 

Based on Section 187 of the Insurance Code: 

No insurance company shall transact any insurance business in the Philippines until after it shall have obtained a certificate of authority for that purpose from the Commissioner upon application therefore and payment by the company concerned of the fees hereinafter prescribed.

3. Are you signing in the Philippines? 

You're signing your life insurance application form with the intent of securing a life insurance contract with the insurance company. 

What's the importance of the contract? It's to "obligate" the insurance company to give you the benefits that you availed from them. 

As per the Civil Code of the Philippines: 

Art. 1159. Obligations arising from contracts have the force of law between the contracting parties and should be complied with in good faith. 
For the life insurance company to have an obligation to you, your life insurance contract needs to be governed by the law in where they are executed. 

In this case, your life insurance contract is governed by the Philippine laws, so you need to sign in the Philippines - or it can be rendered void. 

Meaning, no benefits! It's as if you didn't sign anything.

Also, going back to the Insurance Code of the Philippines, about your life insurance advisor's license: 

Such license shall be issued by the Commissioner only upon the written application of the person desiring it, such application if for a license to act as insurance agent, being approved and countersigned by the company such person desires to represent, and shall be upon a form prescribed by the Commissioner giving such information as he may require, and upon payment of the corresponding fee hereinafter prescribed. 

Your financial advisor's license to act as an insurance agent:
- needs to be approved by the company (doing business in the Philippines) and,
- is issued by the Insurance Commissioner (of the Philippines) 

Your financial advisor's license is only valid in the Philippines.

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