To continue my discussion on retirement myths and realities, a lot of people made mistakes in their retirement plans. Take post-retirement income and expenses for example, many retirees have made inaccurate estimates on these numbers.
People expected some form of income reduction, but a lot of retirees failed to hit their target income (either coming from passive income source or from their pension). Aside from miscalculating their income, people failed to project their post-retirement expenses. Inflation, higher medical costs, and other factors contribute to the rising standard of living.
I admit my own retirement plan is still a work in progress. Although I have been saving and investing a portion of my monthly income, I still haven't made any concrete projection on my monthly income and expenses. I know I would still be supporting my three kids when I hit sixty and I am not sure how much financial support I still need to provide to them.
Part of my retirement plan is to learn how to become more self-sufficient. That is learning how to grow my own food and find ways of living without paying utilities. This means investing in things like gardening, buying solar panels for free electricity, storing and using rain water, using alternative forms of energy, and learning other skills.
Aside from learning how to be self-sufficient, I need to find other forms of investments and ways to earn money. It would be great to develop multiple income sources and not just rely on one or two income streams. I definitely won't rely on government pensions like SSS or Pag-Ibig to fund my retirement. With the way our government is being managed, I believe these institutions are one giant Ponzi scheme.
One area that I still need to do is to discuss my retirement plans with my wife. While we have established some common rules on how we manage money, we still haven't talked about the nitty-gritty aspect of retirement. She is open to the idea of growing our own food and using solar panels, but we haven't discussed things like how much financial support we will still be giving the kids during retirement.
To end this post, I will say that there is no easy way to plan for retirement. In fact, it takes a lot of courage and honesty to look at one's current financial status, have the right information to plan for retirement, and the discipline to save and manage one's investments.
Showing posts with label Financial Stuff. Show all posts
Showing posts with label Financial Stuff. Show all posts
Retirement Myths and Realities (Part 1)
I have written a few posts about my retirement plan and how I should manage my finances to achieve my retirement goals. Now that I am in my forties, I am thinking more about retirement and wondering if I am still in the right track.
With all the problems facing the world today, I think more and more people are pushing off their retirement dreams just to make ends meet. The global financial crisis affected a lot of middle-class people from first world countries. Things like rising costs, overpopulation, and global-warming contribute for an even more uncertain future.
HSBC Malaysia posted an article discussing people's misconception about retirement. It revealed how people's expectations do not actually match the realities of retirement. What I found amusing was that the average Malaysian plan to retire at 55 years old. I personally think I would still be working until 65 or 70.
One of the things that the article pointed about was the fact that many people love to retire early, but with rising life expectancy, people do not have enough money to support them till they reach seventy or eighty years old. Living longer means that you need to work and save a lot more.
Another thing that the article discussed was leaving a financial legacy to your children. People want to give their children some form of inheritance, like a sum of money or property. However, most retirees fail to consider the cost of supporting their children when they are in retirement. Many retirees continue to pay for their children's education and cost of living.
(To be continued)
With all the problems facing the world today, I think more and more people are pushing off their retirement dreams just to make ends meet. The global financial crisis affected a lot of middle-class people from first world countries. Things like rising costs, overpopulation, and global-warming contribute for an even more uncertain future.
HSBC Malaysia posted an article discussing people's misconception about retirement. It revealed how people's expectations do not actually match the realities of retirement. What I found amusing was that the average Malaysian plan to retire at 55 years old. I personally think I would still be working until 65 or 70.
One of the things that the article pointed about was the fact that many people love to retire early, but with rising life expectancy, people do not have enough money to support them till they reach seventy or eighty years old. Living longer means that you need to work and save a lot more.
Another thing that the article discussed was leaving a financial legacy to your children. People want to give their children some form of inheritance, like a sum of money or property. However, most retirees fail to consider the cost of supporting their children when they are in retirement. Many retirees continue to pay for their children's education and cost of living.
(To be continued)
The Dream of Early Retirement
This is something I would love to do. I don't know if I can actually leave work at an earlier age (perhaps at 45 years old), with three kids to support. I haven't talked to Jen about it yet and I think the first question she'll ask is what I plan to do once I "retire".
For me, retirement is not actually leaving work or the office. I picture retirement as a career shift, perhaps into a work that is less stressful, less demanding, and more fulfilling. I still want to earn money, perhaps discover a few passive income sources and spending more time with my family and my hobbies.
There are tons of videos and articles online, teaching people how they can retire early. According to these financial gurus, the three most common habits that can help you retire early are: (1) eliminate debt, (2) save, and (3) practice frugality.
I think I have mastered the first and second habits. But I still need to be more frugal and cut down on the urge for impulse buying. A big chunk of my cash outflow is devoted to savings and paying off various financial investments. It would be a challenge when all the kids go to school, but I think retiring early is a feasible goal that I can achieve.
Here are two interesting videos that I found online, hopefully they can inspire you to plan for your own early retirement:
For me, retirement is not actually leaving work or the office. I picture retirement as a career shift, perhaps into a work that is less stressful, less demanding, and more fulfilling. I still want to earn money, perhaps discover a few passive income sources and spending more time with my family and my hobbies.
There are tons of videos and articles online, teaching people how they can retire early. According to these financial gurus, the three most common habits that can help you retire early are: (1) eliminate debt, (2) save, and (3) practice frugality.
I think I have mastered the first and second habits. But I still need to be more frugal and cut down on the urge for impulse buying. A big chunk of my cash outflow is devoted to savings and paying off various financial investments. It would be a challenge when all the kids go to school, but I think retiring early is a feasible goal that I can achieve.
Here are two interesting videos that I found online, hopefully they can inspire you to plan for your own early retirement:
Reposting Interesting Video about the Global Financial Crisis
I found an interesting video documentary that explains the current global financial crisis, linking the dot.com bubble, the 9-11 terrorist attack, the US real estate/housing bubble, and the bail out bubble. What I found disturbing was the idea that we are all living in borrowed time. It makes you wonder when the next financial crisis would strike.
It looks pretty grim but ironically the local economy is doing good -- thanks to the income generated by the BPO companies and OFWs sending money back home. But I think governments and private citizens do their share in preparing for another possible financial crisis.
It looks pretty grim but ironically the local economy is doing good -- thanks to the income generated by the BPO companies and OFWs sending money back home. But I think governments and private citizens do their share in preparing for another possible financial crisis.
Money Management (How to Build Wealth)
This is an interesting video that explains how we should manage our money and build our wealth. It talks about money being allotted to three different types of "buckets" -- from the "budget for expenses" bucket, the "passive income and investment" bucket, and the "fun" bucket.
I like the idea of how the allotment of money changes when you become richer and it further changes when you actually have more money in your passive income and investment bucket to cover your expenses. That is true financial freedom.
Sometimes I wish we were taught these sort of practical money management lessons at school. I think children should learn about these concepts from an early age so they can learn how to manage their money and start building their wealth for the future.
I like the idea of how the allotment of money changes when you become richer and it further changes when you actually have more money in your passive income and investment bucket to cover your expenses. That is true financial freedom.
Sometimes I wish we were taught these sort of practical money management lessons at school. I think children should learn about these concepts from an early age so they can learn how to manage their money and start building their wealth for the future.
Retirement Dreams
I stumbled upon a financial article that featured an American couple who retired in their early 40's. I found the piece inspiring because they managed to plan early, and decided to save money for their retirement. Things like this take a lot of discipline and commitment. While their circumstances are different from mine, I believe I can use some of their suggestions to plan my own retirement.
I admit I have dreams of retiring early. But my situation is different from the Charltons. I have two kids and I live in a third world Asian country. The money I save would not be enough to sustain the standard of living that I want for my family and my children. I mean, I could choose to cut the costs of my kid's education and send them to a public school (which is way cheaper than private schools with a Chinese program). But this is not something I want for them.
There were three things in the article which reaffirmed my decision to focus on my own retirement plans.
1. Cutting Costs
One thing great about living with my parents is the fact that we get to split the monthly bills. Rent is free. We also have more people at home to watch over the kids. I admit I still get the occasional urge to splurge on things, but I think I can control this habit if I become more conscious of my budget and spending.
2. Agreeing on priorities
Planning for the future requires input from everyone involved. It's been a while since I talked to Jen about my financial goals and my idea of "retiring early". I think we both have different ideas on what "retirement" means. My idea of retiring means taking it easy but not totally getting out of work. Her concept of retirement is leaning more towards the "not working and living off your investment" kind of lifestyle. We do need to discuss about what we want, compromise on what we want for ourselves (plus the kids), and work towards that goal.
3. Living below your means
I believe this is something that a person needs to cultivate over time. You won't see the immediate results of being thrifty. There are times when I feel like I am depriving myself of the good things in life. But living a simple life has a lot of benefits, like having less clutter and stuff to control you.
I admit I have dreams of retiring early. But my situation is different from the Charltons. I have two kids and I live in a third world Asian country. The money I save would not be enough to sustain the standard of living that I want for my family and my children. I mean, I could choose to cut the costs of my kid's education and send them to a public school (which is way cheaper than private schools with a Chinese program). But this is not something I want for them.
There were three things in the article which reaffirmed my decision to focus on my own retirement plans.
1. Cutting Costs
One thing great about living with my parents is the fact that we get to split the monthly bills. Rent is free. We also have more people at home to watch over the kids. I admit I still get the occasional urge to splurge on things, but I think I can control this habit if I become more conscious of my budget and spending.
2. Agreeing on priorities
Planning for the future requires input from everyone involved. It's been a while since I talked to Jen about my financial goals and my idea of "retiring early". I think we both have different ideas on what "retirement" means. My idea of retiring means taking it easy but not totally getting out of work. Her concept of retirement is leaning more towards the "not working and living off your investment" kind of lifestyle. We do need to discuss about what we want, compromise on what we want for ourselves (plus the kids), and work towards that goal.
3. Living below your means
I believe this is something that a person needs to cultivate over time. You won't see the immediate results of being thrifty. There are times when I feel like I am depriving myself of the good things in life. But living a simple life has a lot of benefits, like having less clutter and stuff to control you.
Contemplating on my 13th month pay
I often get the mandatory 13th month pay and the bonus pay mixed up. The first one is required by law, while the second one is an option or add-on that the company gives, in addition to the employee's basic pay. For most people, like me, the extra money we get at the end of the year gives us an excuse to splurge and buy all the things we think we need, just to make our holidays more special. But when I think about it, the 13th month pay isn't really a gift from my employers, unless they are really generous to dole out bonuses to everyone in the company.
Now that I think about it, my 13th month pay is actually part of my annual gross income. This means that the extra money I am getting every end of the year is taken from the total salary I get every year. So if I earn 10k a month and get another 10k in December, this means my annual gross income is actually 130k and not 120k. One way to look at this is simply dividing the 130k over twelve months, which shows my actual monthly income (without any 13th month pay).
I never really received any year-end bonus ever since I started working. But I am grateful that I get my 13th month pay every year. Knowing that my 13th month is actually part of the salary that I should be receiving, makes me even more conscious of how I spend this money. My attitude would probably be different if I knew that the money I get is an add-on bonus, given by the company because of profit gains or excellent performance. I'd probably spend it all on gifts for my family, toys, and nice gadgets.
I'm planning to spend a portion of my 13th month paying off my yearly insurance and investment expenses. The rest would go to savings. I still have enough room in my monthly budget to buy the things I need to make its holiday season enjoyable for me and my family.
Now that I think about it, my 13th month pay is actually part of my annual gross income. This means that the extra money I am getting every end of the year is taken from the total salary I get every year. So if I earn 10k a month and get another 10k in December, this means my annual gross income is actually 130k and not 120k. One way to look at this is simply dividing the 130k over twelve months, which shows my actual monthly income (without any 13th month pay).
I never really received any year-end bonus ever since I started working. But I am grateful that I get my 13th month pay every year. Knowing that my 13th month is actually part of the salary that I should be receiving, makes me even more conscious of how I spend this money. My attitude would probably be different if I knew that the money I get is an add-on bonus, given by the company because of profit gains or excellent performance. I'd probably spend it all on gifts for my family, toys, and nice gadgets.
I'm planning to spend a portion of my 13th month paying off my yearly insurance and investment expenses. The rest would go to savings. I still have enough room in my monthly budget to buy the things I need to make its holiday season enjoyable for me and my family.
Annie Leonard's Happiness Store (for kids)
Something I'll let the kids watch when they grow older.
This video was made by the same creator who gave us the Story of Stuff.
This video was made by the same creator who gave us the Story of Stuff.
Rule of 72
Last week, one of my co-workers introduced us to a Financial planning adviser. The two of them represented a financial company that offers various investment products tailor-made to the client's needs.
The financial adviser gave a simple presentation which focused on personal finance and financial planning. He discussed the different financial products, as well as the investment habits of the typical Filipino (according to age group).
But one thing that got stuck to my mind was his reference to Albert Einstein's Rule of 72. The rule is to divide 72 by the interest rate you are receiving for a financial product. The number you get is the number of years it will take for investment to double. For example, investing 25,000 pesos with a 10% interest rate will take 7.2 years (72/10) for the money to become 50,000 pesos. This is the magic of compounded interest.
This shows that if you allocate more time you to an investment with a high interest rate, your money would grow faster. Simple as it might sound, there are other factors involved, such as inflation, taxes, and the type of investment you place your money.
The financial adviser gave a simple presentation which focused on personal finance and financial planning. He discussed the different financial products, as well as the investment habits of the typical Filipino (according to age group).
But one thing that got stuck to my mind was his reference to Albert Einstein's Rule of 72. The rule is to divide 72 by the interest rate you are receiving for a financial product. The number you get is the number of years it will take for investment to double. For example, investing 25,000 pesos with a 10% interest rate will take 7.2 years (72/10) for the money to become 50,000 pesos. This is the magic of compounded interest.
This shows that if you allocate more time you to an investment with a high interest rate, your money would grow faster. Simple as it might sound, there are other factors involved, such as inflation, taxes, and the type of investment you place your money.
World Economic Collapse Explained in Three Minutes
I like it when he said, "sell everything immediately... quickly..."
The High Cost of Electricity
We finally got our bill from the electric company. It was definitely higher than the previous month, more than double what we paid two months ago. With all the people protesting and complaining about the added cost, I was expecting our bill to be way much higher. I guess I over prepared myself mentally for this occasion.
This is one of those moments when I'm glad we decided to live with my parents. Since we are living under their roof, they are the ones that are paying for the utility bills. They have the money anyway, and they are willing to provide for us. This is definitely a big blessing on our part since we don't have to worry about the water and electric bill. Still, I guess we have to do our part in conserving energy. It's not that easy to cut back when you have a baby and toddler living with you.
A lot of people are blaming the electric company for the unreasonable price hike, but I think they had no choice. It hasn't rained for months and the water level in the dam is at a critical low. Despite the rotating brownouts and the limited supply of energy, people are still consuming endless amounts of electricity. It made me thing of how much we have taken things for granted. Conservation is probably the path we have to take in the near future.
This is one of those moments when I'm glad we decided to live with my parents. Since we are living under their roof, they are the ones that are paying for the utility bills. They have the money anyway, and they are willing to provide for us. This is definitely a big blessing on our part since we don't have to worry about the water and electric bill. Still, I guess we have to do our part in conserving energy. It's not that easy to cut back when you have a baby and toddler living with you.
A lot of people are blaming the electric company for the unreasonable price hike, but I think they had no choice. It hasn't rained for months and the water level in the dam is at a critical low. Despite the rotating brownouts and the limited supply of energy, people are still consuming endless amounts of electricity. It made me thing of how much we have taken things for granted. Conservation is probably the path we have to take in the near future.
Conscious Spending
I've been rereading some of my favorite personal finance blogs and I've decided to become more conscious of my spending habits. It doesn't hurt to tighten my belt and save money, frugality is the way to go nowadays.
So far I've managed to keep my expenses down to less than a hundred a day (during work days). This does not include the transportation expenses to get me to the office and back home. I've already set a budget for gas to cover the monthly driving expenses.
For now, the biggest dent to my savings are the baby supplies. I'm spending an average of 1,200 pesos a week for each child. This money covers milk, diapers, vitamins, and other kid-related expense. It's not that much as other parents would spend, but I am trying to keep track of these expenses as well.
I know I am saving money, but I think it is not enough to cover my long term plans for the family. It would be nice to rebuild the house, add a new room for Aaron and Nika. Jen has been giving me rough estimates as to how much preschool education would cost per child. So it would be wise for me to start saving as early as now.
So far I've managed to keep my expenses down to less than a hundred a day (during work days). This does not include the transportation expenses to get me to the office and back home. I've already set a budget for gas to cover the monthly driving expenses.
For now, the biggest dent to my savings are the baby supplies. I'm spending an average of 1,200 pesos a week for each child. This money covers milk, diapers, vitamins, and other kid-related expense. It's not that much as other parents would spend, but I am trying to keep track of these expenses as well.
I know I am saving money, but I think it is not enough to cover my long term plans for the family. It would be nice to rebuild the house, add a new room for Aaron and Nika. Jen has been giving me rough estimates as to how much preschool education would cost per child. So it would be wise for me to start saving as early as now.
Alternative Investments
Jen will be celebrating her birthday next week and I have already bought her gift. I had a hard time deciding what to give her, since she's not that particular on things. I thought of buying her a new mobile phone, since her current Sony Ericsson unit is experiencing battery problems. But I decided to buy her something that does not depreciate and could be worn on special occasions.
It's a small 14k Italian gold necklace.
I've been reading a few money/finance blogs that talk about alternative investments. I think gold and jewelry are some things you can invest on, aside from putting money in the bank. These things do not depreciate over time and they can be traded for food during times of war (or when the local economy collapses and paper money becomes useless).
Anyway, I spent last Friday morning visiting the jewelry shops at a nearby mall. I had around 5k as my budget for Jen's gift. I wasn't planning on buying anything yet. I just wanted to look around and see what's available in the gold market. There was a shop that was selling its jewelries at 40% off. I took a look at the stuff on their display case and found a nice looking cross valued at around 10k. Apparently the store is affiliated with the SM Malls and if I buy in cash (and present my SM advantage card), I'd get another 10% discount.
So I bought the gold cross at half its original price. I think it is a wonderful gift for my wife and also a good investment. At least we'll be able to trade it for water/shelter when the Philippine government falls apart or when peak oil actually happens.
It's a small 14k Italian gold necklace.
I've been reading a few money/finance blogs that talk about alternative investments. I think gold and jewelry are some things you can invest on, aside from putting money in the bank. These things do not depreciate over time and they can be traded for food during times of war (or when the local economy collapses and paper money becomes useless).
Anyway, I spent last Friday morning visiting the jewelry shops at a nearby mall. I had around 5k as my budget for Jen's gift. I wasn't planning on buying anything yet. I just wanted to look around and see what's available in the gold market. There was a shop that was selling its jewelries at 40% off. I took a look at the stuff on their display case and found a nice looking cross valued at around 10k. Apparently the store is affiliated with the SM Malls and if I buy in cash (and present my SM advantage card), I'd get another 10% discount.
So I bought the gold cross at half its original price. I think it is a wonderful gift for my wife and also a good investment. At least we'll be able to trade it for water/shelter when the Philippine government falls apart or when peak oil actually happens.
Recession Here and There
A close friend of my dad made a phone call a few weeks back, trying to catch up with my dad on the good old days. He migrated to the US shortly after my parents got married. He sent the next thirty years working there until he finally established his own shop in New York City.
He called my dad a couple of times, talking about life in the states, the friends they know, and the global recession. Things are pretty bad there in the US right now, he confessed. A lot of people have lost their jobs and their homes. My dad then said that the living conditions here in the Philippines are much worse, and while Americans have just begun experiencing poverty, Filipinos have been living through it for decades.
Then the phone calls ended abruptly. Just tell him I'm sleeping or I went to the province, my dad instructed us should his friend call. I asked him why he would treat one of his old friends this way. Apparently his friend was asking my dad for money.
He needed the money to pay off some debt -- for his home mortgage and his hardware store. My dad felt that it was absurd to send money to someone in the US; giving five thousand dollars is like donating a quarter million pesos. He should rely on his immediate family for financial assistance, my dad added. Two of his kids have finished college and should be able to help him out.
I felt sorry for my dad's friend. Calling my dad for help must be his last resort to fix his financial problems. His kids should be helping him out, but I'm guessing that they don't have work right now. Part of me felt angry at my dad for abandoning his friend. It seems he was putting more value to money over years of friendship. But my dad had valid points.
He called my dad a couple of times, talking about life in the states, the friends they know, and the global recession. Things are pretty bad there in the US right now, he confessed. A lot of people have lost their jobs and their homes. My dad then said that the living conditions here in the Philippines are much worse, and while Americans have just begun experiencing poverty, Filipinos have been living through it for decades.
Then the phone calls ended abruptly. Just tell him I'm sleeping or I went to the province, my dad instructed us should his friend call. I asked him why he would treat one of his old friends this way. Apparently his friend was asking my dad for money.
He needed the money to pay off some debt -- for his home mortgage and his hardware store. My dad felt that it was absurd to send money to someone in the US; giving five thousand dollars is like donating a quarter million pesos. He should rely on his immediate family for financial assistance, my dad added. Two of his kids have finished college and should be able to help him out.
I felt sorry for my dad's friend. Calling my dad for help must be his last resort to fix his financial problems. His kids should be helping him out, but I'm guessing that they don't have work right now. Part of me felt angry at my dad for abandoning his friend. It seems he was putting more value to money over years of friendship. But my dad had valid points.
Switching Banks
Our company finally made the decision to switch our payroll to another bank. They even invited some bankers from BPI to give a talk about the services and benefits of their bank.
They gave us five or six sheets of application forms to fill out. I was on my third form when I realized that half of the forms were actually credit card applications and applications to other financial services that the bank was offering.
I think it was a good idea to have employees sit down and talk with people from their payroll banks. It shows that the bank is actually concerned about its clients (even though they are employees) and want to help them achieve their financial goals.
The bankers were able to highlight several unique services that BPI can offer in their financial products. Some of the products that caught my attention were:
1. The BPI Maxi-Saver Savings - Where you are able to get higher interest rates (like the rates in a typical time deposit account) with your savings account. The rate depends on the amount in your saving account (the more money, the higher the rate). You must have a minimum of 50k to earn the base interest of 1.375%. If you don't make any withdrawals within a month, BPI adds a 1% bonus interest.
This product is somewhat similar to BDO's Optimum Savings Account, but the customer gets to withdraw money a maximum of three times a month.
2. Savings with Insurance - I've heard about this BPI product before and I consider it a good service for those who would want to save money and have some kind of insurance package tied up to their savings. The BPI Save-Up is an automatic savings account that automatically insures the client, based on his or her saving amounts. The client gets basic life, accidental death, and accidental dismemberment coverage.
3. Auto and Housing Loans - The bankers mentioned something important about loans which I never considered before. They advise customers who want to apply for a housing/auto loan to first talk to their banks before consulting the car/real estate dealer. They said that banks can offer lower rates and even customize loans based on the client's needs. This is important because car/real estate dealers do not offer these leeways or lower rates. They would only offer the standardized package for their clients.
4. Company/Bank Tie Up - The bankers kept emphasizing the fact that the bank is there to help the company and their employees. Thanks to the payroll account and the special arrangements made by BPI and our company, we get to have additional benefits and special rates whenever they deal with the bank. I guess these means we have an easier time to apply for credit cards and loans.
They gave us five or six sheets of application forms to fill out. I was on my third form when I realized that half of the forms were actually credit card applications and applications to other financial services that the bank was offering.
I think it was a good idea to have employees sit down and talk with people from their payroll banks. It shows that the bank is actually concerned about its clients (even though they are employees) and want to help them achieve their financial goals.
The bankers were able to highlight several unique services that BPI can offer in their financial products. Some of the products that caught my attention were:
1. The BPI Maxi-Saver Savings - Where you are able to get higher interest rates (like the rates in a typical time deposit account) with your savings account. The rate depends on the amount in your saving account (the more money, the higher the rate). You must have a minimum of 50k to earn the base interest of 1.375%. If you don't make any withdrawals within a month, BPI adds a 1% bonus interest.
This product is somewhat similar to BDO's Optimum Savings Account, but the customer gets to withdraw money a maximum of three times a month.
2. Savings with Insurance - I've heard about this BPI product before and I consider it a good service for those who would want to save money and have some kind of insurance package tied up to their savings. The BPI Save-Up is an automatic savings account that automatically insures the client, based on his or her saving amounts. The client gets basic life, accidental death, and accidental dismemberment coverage.
3. Auto and Housing Loans - The bankers mentioned something important about loans which I never considered before. They advise customers who want to apply for a housing/auto loan to first talk to their banks before consulting the car/real estate dealer. They said that banks can offer lower rates and even customize loans based on the client's needs. This is important because car/real estate dealers do not offer these leeways or lower rates. They would only offer the standardized package for their clients.
4. Company/Bank Tie Up - The bankers kept emphasizing the fact that the bank is there to help the company and their employees. Thanks to the payroll account and the special arrangements made by BPI and our company, we get to have additional benefits and special rates whenever they deal with the bank. I guess these means we have an easier time to apply for credit cards and loans.
Millionaire Next Door
I've been regularly reading Frugal Pinoy's blog and her latest article caught my interest. It's her review on Thomas J. Stanley and William D. Dank's book "The Millionaire Next Door".
There are a lot of interesting points that were covered in her review. Here are some that I found interesting:
A. Wealth is not the same as income
Having a high-income job does not equate to being wealthy. There are a lot of people who work in jobs that pay a lot of money, but they are not exactly rich. They cannot survive if they lose their job.
Most millionaires don't even look or act like millionaires. Based on my experience, this is true. I've seen a lot of millionaires who dress like people from the lower class, but they are filthy rich. Most of them don’t even have an MBA degrees, nor did they inherit their wealth from their parents.
B. Common traits of millionaires
The authors made a survey among American millionaires and found several common characteristics that they share (which probably explains how they managed to acquire their wealth).
1. Millionaires live well below their means. That's probably the reason why they are rich... they only spend a small tiny fraction of their money.
2. Millionaires allocate time, money, and energy in building wealth. They are goal-oriented people who are able to manage their money well and aim to become financial secure and independent. This means they can live well without regular employment.
3. Millionaires believe financial independence is more important than displaying social status. Having a lot of fancy stuff does not equate to being rich.
4. Their parents did not provide economic outpatient care.
This means that they did not rely on rich relatives or inheritances to get rich. They earned their money by themselves.
5. Their children are financially self-sufficient. Millionaires make sure their children can support themselves.
Now that I've finished reading the review, I'm thinking of getting a copy of the book. Financial independence is always one of the things I want to achieve, but somehow I find it difficult to do or actualize. I think this book would help me develop the right attitude with regards to savings and investment.
There are a lot of interesting points that were covered in her review. Here are some that I found interesting:
A. Wealth is not the same as income
Having a high-income job does not equate to being wealthy. There are a lot of people who work in jobs that pay a lot of money, but they are not exactly rich. They cannot survive if they lose their job.
Most millionaires don't even look or act like millionaires. Based on my experience, this is true. I've seen a lot of millionaires who dress like people from the lower class, but they are filthy rich. Most of them don’t even have an MBA degrees, nor did they inherit their wealth from their parents.
B. Common traits of millionaires
The authors made a survey among American millionaires and found several common characteristics that they share (which probably explains how they managed to acquire their wealth).
1. Millionaires live well below their means. That's probably the reason why they are rich... they only spend a small tiny fraction of their money.
2. Millionaires allocate time, money, and energy in building wealth. They are goal-oriented people who are able to manage their money well and aim to become financial secure and independent. This means they can live well without regular employment.
3. Millionaires believe financial independence is more important than displaying social status. Having a lot of fancy stuff does not equate to being rich.
4. Their parents did not provide economic outpatient care.
This means that they did not rely on rich relatives or inheritances to get rich. They earned their money by themselves.
5. Their children are financially self-sufficient. Millionaires make sure their children can support themselves.
Now that I've finished reading the review, I'm thinking of getting a copy of the book. Financial independence is always one of the things I want to achieve, but somehow I find it difficult to do or actualize. I think this book would help me develop the right attitude with regards to savings and investment.
Fixing Our Little House
With another baby coming, Jen and I decided that our house needed some improvements to accommodate everyone. It's a real challenge because the area is just around 24 square meters, roughly the size of a small studio apartment.
My parents suggested that we move back with them to the bigger house (we all live in a compound; my parents live in the main house while we live in our small cottage). But after careful deliberation, I decided that my family remain in the tiny house. At least we'd have our privacy and a toilet all to ourselves.
The main challenge is to decide how fix our bedroom and living room so two adults and two babies can live comfortably there. We already scrapped the kitchen and dinning area for this small space. The family would do their eating and cooking in the main house with Lolo and Lola.
I stumbled upon this cool website called apartment therapy. It offered ideas on how to manage your living space, no matter how small the living area.
Here are some houses that really caught my attention and gave me ideas on how to improve our house.
The first one is a room at Brooklyn, New York. I like the pull out bed and the moving book case. It really saves a lot of space for this 260 square foot apartment.
The second one is a work/studio at Princeton, New Jersey, which is 240 square feet. Here, the sofa also doubles as a pull-out bed.
These homes are suitable for just one person but they gave me a lot of ideas on how to maximize space.
My parents suggested that we move back with them to the bigger house (we all live in a compound; my parents live in the main house while we live in our small cottage). But after careful deliberation, I decided that my family remain in the tiny house. At least we'd have our privacy and a toilet all to ourselves.
The main challenge is to decide how fix our bedroom and living room so two adults and two babies can live comfortably there. We already scrapped the kitchen and dinning area for this small space. The family would do their eating and cooking in the main house with Lolo and Lola.
I stumbled upon this cool website called apartment therapy. It offered ideas on how to manage your living space, no matter how small the living area.
Here are some houses that really caught my attention and gave me ideas on how to improve our house.
The first one is a room at Brooklyn, New York. I like the pull out bed and the moving book case. It really saves a lot of space for this 260 square foot apartment.
The second one is a work/studio at Princeton, New Jersey, which is 240 square feet. Here, the sofa also doubles as a pull-out bed.
These homes are suitable for just one person but they gave me a lot of ideas on how to maximize space.
Crazy over HSBC Credit Card Promo
It seems that the local HSBC credit card group is hatching up another marketing racket to get their customers spending more money (using their card).
First, they have a raffle promo that lets customers win a Nissan Grand Livina.
Second, they have a Wednesday discount promo at all SM department stores.
And finally, they are giving off free mobile phones for every laptop (worth at least 40k) that you purchase at Electroworld.
It was the free mobile phone/laptop that caught my mom's attention. Actually she just wants the free Samsung B130 that you'd get once you buy the laptop.
She was asking me if a laptop was worth buying. I told her that she could buy one, get the Samsung phone and give the laptop to me as a gift. She ignored my suggestion and began asking about the mobile phone's feature.
I found it funny that all she really wanted was the free phone and not the laptop. What made it even more bizarre was the fact that she briefly considered buying an expensive machine that she doesn't know how to use, just to get something for free.
Eventually reality caught up with her. I guess realized that getting a new phone would mean taking the time to learn how to use a new gadget again. Plus the fact that we still had to pay for my dad's hospital bills.
So in the end, she just asked me to text HSBC and enroll her card to the Nissan Livina contest. At least that promo only cost her one peso.
First, they have a raffle promo that lets customers win a Nissan Grand Livina.
Second, they have a Wednesday discount promo at all SM department stores.
And finally, they are giving off free mobile phones for every laptop (worth at least 40k) that you purchase at Electroworld.
It was the free mobile phone/laptop that caught my mom's attention. Actually she just wants the free Samsung B130 that you'd get once you buy the laptop.
She was asking me if a laptop was worth buying. I told her that she could buy one, get the Samsung phone and give the laptop to me as a gift. She ignored my suggestion and began asking about the mobile phone's feature.
I found it funny that all she really wanted was the free phone and not the laptop. What made it even more bizarre was the fact that she briefly considered buying an expensive machine that she doesn't know how to use, just to get something for free.
Eventually reality caught up with her. I guess realized that getting a new phone would mean taking the time to learn how to use a new gadget again. Plus the fact that we still had to pay for my dad's hospital bills.
So in the end, she just asked me to text HSBC and enroll her card to the Nissan Livina contest. At least that promo only cost her one peso.
What is Your Money Personality?
I came across this article on the Philippine Inquirer Money Smarts section. It talks about your personal attitude or style towards managing your money, investment and finance. So are you a miser or someone who splurges every payday?
So I took the test and found out that I have a balanced personality.
Your money personality is: Balanced
People who exhibit a balanced money personality style enjoy making and managing money. They may view budgeting and investing as a game of sorts.
Money is viewed as a tool that is used to achieve ones goals.
While they often have a budget, Balanced persons do not become overly uncomfortable with the occasional unforeseen expense or in purchasing the occasional luxury item.
Balanced persons often feel that diligence, research and effort will reward them in the end.
If they invest, Balanced persons tend to have balanced portfolios and are often comfortable seeking advice from financial managers.
So I took the test and found out that I have a balanced personality.
Your money personality is: Balanced
People who exhibit a balanced money personality style enjoy making and managing money. They may view budgeting and investing as a game of sorts.
Money is viewed as a tool that is used to achieve ones goals.
While they often have a budget, Balanced persons do not become overly uncomfortable with the occasional unforeseen expense or in purchasing the occasional luxury item.
Balanced persons often feel that diligence, research and effort will reward them in the end.
If they invest, Balanced persons tend to have balanced portfolios and are often comfortable seeking advice from financial managers.
Insuring the Future
I find myself cash-strapped every first quarter of the year. Most of money I earn get siphoned off to pay various insurance bills - from my life insurance, car insurance, medical insurance, and other investments for the future.
I often get annoyed because I find myself paying for these things rather than use the money to buy something tangible or see the numbers increase in my savings account. I try to convince myself, thinking that insurance is another form of investment. And that the money I shell out is actually something that is beneficial for me in the future.
But with all the uncertainties in the economy, I'm not even assured that my insurance plans would cover everything I need in the future. The money might just cover the bare essentials. But with inflation and the fickle market rates, I'm not even sure if I'd get what I invested.
I recently asked one of the insurance agents about the status of my plan. She informed me that I would have to pay an extra three to five years, since the market is not doing that well and that the company would need more time to recover from their losses.
At that moment, I thought of canceling my insurance plan and withdraw my investments. It is difficult for me to shell out a substantial amount of money for something that would benefit me in the far future. But I realize that these insurance plans are there as a safety net for me. I might not benefit from it, but at least my family would.
So I've decided that I'd continue paying the insurance companies, trying to convince myself that I am investing in something good for the future. And I don't plan to get any additional insurance plans in the future.
I often get annoyed because I find myself paying for these things rather than use the money to buy something tangible or see the numbers increase in my savings account. I try to convince myself, thinking that insurance is another form of investment. And that the money I shell out is actually something that is beneficial for me in the future.
But with all the uncertainties in the economy, I'm not even assured that my insurance plans would cover everything I need in the future. The money might just cover the bare essentials. But with inflation and the fickle market rates, I'm not even sure if I'd get what I invested.
I recently asked one of the insurance agents about the status of my plan. She informed me that I would have to pay an extra three to five years, since the market is not doing that well and that the company would need more time to recover from their losses.
At that moment, I thought of canceling my insurance plan and withdraw my investments. It is difficult for me to shell out a substantial amount of money for something that would benefit me in the far future. But I realize that these insurance plans are there as a safety net for me. I might not benefit from it, but at least my family would.
So I've decided that I'd continue paying the insurance companies, trying to convince myself that I am investing in something good for the future. And I don't plan to get any additional insurance plans in the future.
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