12 Steps to Build Wealth on Any Income Hits NBS Latest Bestsellers List

I received an email from mr. Alvin T. Tabanag, a month ago, that his first book 12 Steps to Build Wealth on Any Income "made it to National Bookstores' latest Bestsellers List"- in just eight months!

I purchased his book, online, sometime in February 2009. After reading it for the nth time, I decided to become an Individual Distribution Agent (I.D.A.), primarily to share the book to my friends and colleagues.

I was able to sell and earn extra income. But what's more exciting was when I received thank you's and first hand comments and praises for the books from my friends and buyers.

They thank me for sharing to them ordinary pinoy's practical guide in saving and growing money.

I was able to sell the book to a Project Manager, Transco Engineer, Fullbright schoolar, Supervisors, ordinary employees, newlywed couples, friends and relatives.

All of them were glad that I shared the book. One of them said, "thank you for offering the book. I learned a lot about money and saving." Another one said, "this is the best pinoy book for beginners's journey to financial frredom."

After reading the book for the nth time, I was convinced by the author's goal of helping people understand personal finance. I was convinced that the book, really, should be in every family's house.

The book is simply written, yet it powerfully enhance learning and understanding of money. It has the power to increase Filipinos financial IQ, the easy way.

The author sprinkled it with timely Filipino sayings that if we seriously apply in our lives will help us achieve financial peace of mind.

Indeed, the book is written with a heart and the sincerest desire to bring to every Filipino the good news on how to achieve financial abundance, no matter how much one is earning right now.

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If you want a copy of the book, please feel free to contact 0906-366-9577 for order and free delivery within Metro MAnila.

Winning in Financial Game

Winning in financial game needs a lot of rigorous planning. Mr. Edmund Lao - candidate for Registered Financial Planner (RFP)status - compared it to a good game of chess.

Chess...an ancient game of strategy that traces its origin to India, has been around for centuries. The objective of the game is to capture the opponent’s king by checkmate within 2.5 hours, a position where the king has nowhere to go. When an opponent gets checkmated, the game ends.

The game has three main stages: opening, middle, and the end game. The opening consists of the starting and the developing moves by deploying key pieces to their most effective positions to control the center. The middle game is the planning and execution stage. It is here that complications arise. The skill of the player in defense and offense and making critical decisions determines the outcome of the game. Erratic evaluations from a deceptive move by the opposing player can cause a winning game to be lost. Making decisions can even gain or lose a tempo (time on/against the side of a player who seizes/wastes opportunity). This is where the nerve of the player counts a lot.

The end game is the result of a properly or poorly planned middle game.

Masters have varying styles: aggressive, conservative or both. It is usually the young ones who are aggressive and the young “once” who tend to be conservative.

In financial game, how do people move and win?

Financial planning is like a good game of chess.

The opening

Playing the opening game in chess poorly always results in a crushing defeat. The same principle applies to personal finance. When one starts earning income (more or less at the age of 22), it is the best time to begin the quest to win the money game by making savings a habit. In this game, money represents chess pieces.

As chess pieces are moved forward to attack, one has to move his money forward, too.

He has to learn how to manage money and make it work through wise and aggressive investment moves. By being in control early on through financial discipline, the financial success is not hard to achieve.

In chess, studying the position is a must in order to have a good chance of emerging victorious. The player has to seize the initiative at the opening. In financial planning, one has to study his position and gather information for him to make good financial decision.

Unfortunately, majority commit the same blunder by delaying savings early on and putting first instant gratification or having the herd (or heard) mentality in investing. This kind of financial blunder is very costly, as one cannot take back lost time. Self-control is the key to success. One has to be in control or else he will be under control. By committing himself to learn first, he already built a strong foundation for his personal financial planning.

Take advantage of time. Control your emotion and discipline yourself.

Think of your goal of checkmating your financial opponent (you). In chess, the opponent is the other player. In financial planning, the opponent is ourselves. It is out human nature to resist change. We need to overcome and change old selves if we want to succeed. The late Bruce Lee once said we need to empty our cup. That means we need to discard the old and useless and retain the useful/absorb the new ones. Be up to date with financial information and put it into action.

The middle game

As a person begins to earn more, his expenses, unfortunately, also begin to keep pace. It is sometimes inevitable that because of factors such as family needs, lifestlye changes, impulsive buying decisions or new investment opportunities, a person’s expenses exceed his income.

When this happens, a correct mindset plays a a very crucial role in keeping in check with your financial target.

Before investing your money, investigate first. Remember that scammers will be very happy to have a chip of your hard-earned money. They usually invite people to their business-opportunity seminar and will make them “feel good” and part with their money, only to realize later that they had been “hypnotized” and pressured into taking part with the organization; although not all business-opportunity seminars may be scams.

Financial planning has never been a “feel-good” session. In fact, financial planning will present to you the harsh realities of life that you need to address and solve! One needs to gather information and use logic before jumping into any decision. Ask around, make research or background investigation, weigh your options before risking money. Even if you failed because of a bad decision, begin again. Remember the sayings “It ain’t over until it is over” and “There’s no failure until one stops trying”? Like a chess game, a player in an inferior position still has the chance to win when his opponent makes a wrong move. As long as one does not quit, there is always room for success. Whatever the result, continue playing for a win.

End game

At last! We come to the end of the game and the battle of wits is almost over. The scenario now is much simpler and easier to analyze.

There are only a few pieces left on the board. Checkmate is in the offing. Only one will emerge victorious. The winning player remains composed and has plenty of time to make a move while the losing player is usually stressed and finds himself in time trouble. Then suddenly, checkmate! The question is: Are you the announcer or the receiver of the announcement?

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I thank Mr. Edmund Lao for the permission to publish the above article in this blog. I met him through Pinoy Smart Savers. He is an active contributor to www.income-tacts.com. He will earn his RFP status soon.

Holy Week Reflections and the True Lasting Investments

During the Holy Week I was able to reflect on the different form of investments that also matter and can last a lifetime and even beyond, with great returns.

Apparently, we are in a hard and uncertain time. Many companies are closing down and thousand of people are receiving pink slip. Even the once stable companies are threatened to collapse as earnings continue to suffer.

In this hard time, people are looking for income-generating projects, rewarding investments, or additional jobs. In my case, I joined direct selling or networking and multi level marketing organizations. I also joined Real Estate Company as a part time agent. More importantly, I continue investing in my financial literacy.

In this difficult time, too, we need to look upon the most important investments that we must have.

People are now seeking for the answer on how to have a worry-free future, on how to have “financial peace of mind”, or how to survive a financial crisis.

I believe everything is possible with the Lord’s guidance. So, why not we invest in our relationship to God? When we "seek God first, everything will just follow." Our investment to God will surely give eternal returns to us.

It was observed that more people were going to church during the Holy Week. A priest commented that in this hard and uncertain time "more people are asking for guidance from the Lord."

No doubt, prayer is so powerful; it can stand any recession or the harshest economic storm.

Indeed, we cannot get along without God. William James – the father of modern psychology once said that, “We and God have business in each other. Faith is one of the forces by which we live and the total absence of it means collapse.”

Dr. Alexis Carrel – a physician and author of Man, the Unknown said, “Prayer is the most powerful form of energy one can generate. It is a force as real as terrestrial gravity. Prayer like radium is a source of luminous, self-generating energy. In prayer, human beings seek to augment their finite energy. When we pray, we link ourselves with the inexhaustible motion power that spins the universe. We pray that a part of this power be apportioned to our needs. Even in asking, our human deficiencies are filled and we arise strengthened and repaired. Whenever we address God in fervent prayer, we change both soul and body for the better. It could not happen that any man or woman could pray for a single moment without a result.”

The Lord already gave us his Son to save us. Clearly, suffering is not for us anymore. So, when the tough time comes and our resources are near exhausting we can turn to God and we will surely not feel alone and we will achieve a lifetime abundance here and eternal reward in heaven.

Our families are our best allies, no matter what. It is important that we also invest in our families - whether it is our time, money, lending ears, our moral support or just our mere presence in one of our family member’s lowliest time.

Every one of us can be a source of light, inspiration, strength and hope for our family. It is quite magical, but my siblings, my parents, my relatives, and, even my one-year old nephew has the power to give me constant, unending inspiration to achieve more goals.

Investment in our family relationship is truly rewarding and lasting. After all, when all else fail; our family will always be there for us – especially if we established solid relationships. And, I do not only mean biological family here. Our family can actually extend to our in laws, the in laws of our siblings or the cousins of our cousins.

Most of the times, simple comments from the people in our everyday living are more meaningful than the periodical rewards and recognitions, for it stay in the heart. Likewise, simple thank you when you gave just a word of advice and encouragement to a confused fellow is divine as it reaches the soul.

Another important, lasting investment is our relationship to our friends, co-workers and children.

We can establish great friendship with several people from all walks of life, gender, socio economic status, educational attainment, religious beliefs and principles. Anyway, in time of difficult period demographics is not important anymore as real friends will not disappoint us.

I was once at life’s receiving end and I counted so much to some great friends who did not leave me in my most trying time. Even a simple pat on the back or simple words “you can” became powerful and gave me a glitter of hope.

I am sure all of us have someone whom we consider great friend. The secret to having a great friend is being that great friend first.

We should also invest in our relationship with our co-workers. We spend eight hours or more with them almost everyday so it is just right that we establish a harmonious relationship with them to make our works easy. The key word here is Respect. We should have and give it. We have to acknowledge individual differences. A former boss once taught me “different folk, different talk.” I have already proven it to be true. We cannot give the same treatment to different people. Most of the times, we have to adjust to the personalities of our co-workers, superiors or subordinates, while also making them understand our own personality and differences.

Several years ago, I was silently overjoyed when I received an unexpected comment from a subordinate. She said, “ginusto ko talaga makasama ka sa project kasi gusto ko malaman kung bakit ganon na lang kalaki ang respeto ng mga supervisors at katrabaho natin sa’yo.”

Most of the times, simple comments from the people in our everyday living are more meaningful than the periodical rewards and recognitions, for it stay in the heart. Likewise, simple thank you when you gave just a word of advice and encouragement to a confused fellow is divine as it reaches the soul.

Lastly, I think the most important form of investment is in the life of a child – whether it is your own child, your nieces and nephews, your inaanaks, or every child you meet. Every child in our life will bear witness to our existence. They may even continue to carry our legacies.

Many years ago, I read this beautiful message written by an anonymous writer. The writer said, “Fifty years from now it will not matter what kind of car you drove, what kind of house you have lived in, how much you have in your bank account, or what your clothes look like, but the world maybe a little better because you were important in the life of a child.”

I celebrated the Easter Sunday with Eduard Thomas – my one year old nephew – my siblings, cousin, and my sister’s in laws at Pasig Rainforest Park and Resort. It was a great time to connect and reconnect.

The Lord Jesus has risen and blessed us. May we now be a blessing to others. Let us give freely to gain even more – in whatever form it may be.

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CISA signed into law, in time for current global financial crisis

It is said that the current global financial crisis could be linked to the delinquent borrowers.

Last October 31, Friday, President Gloria Macapagal Arroyo signed into law the Credit Information System Act(CISA). The Law will create “a centralized credit information system that can be used by lenders to asses the ability of an individual or a corporation to pay loans.”

The law will create Central Credit Information Corporation – which will be chaired by SEC – to run the system. Borrowers with history of delinquent payment of loans will be denied of another loan application thus preventing financial institution of unnecessary risks.

The Central Credit Information Corporation will have an “authorized capital stock of P500 million. 60% of the shares shall be owned by the government and it will dispose 20% of it after five years. The remaining 40% will be offered to qualified investors provided that no single group will own more than 10% of the capital stock.

I believe this Act will help us become more responsible borrowers/credit card holders.

Alvin T. Tabanag – founder of Pinoy Smart Savers Learning Center – gives the following tips on how to stay out of huge debts:

1. Do not borrow money to buy things you don’t really need. A most efficient way ro accumulate huge debt is buying a lot of things you can live without. Do not abuse your credit card. Don’t use it to support a lavish lifestyle. Borrow money only for important things and for emergencies. A simple rule to follow in using your credit card: Do NOT use it to purchase something that you cannot afford to pay in cash. If you want “something nice” to have but unimportant, save for it instead of buying on credit.

2. Keep only one or two credit cards. The more credit cards you have, the more likely you will spend, and the bigger the possibility you can get into debt trouble. If you have more than a couple of credit cards, retain the ones with the more favorable terms and transfer the balances from the other cards. Get a pair of scissors, cut-up the unwanted cards and inform the concerned credit card companies that you will no longer use their card.

3. Treat your credit card as if it is cash. Buying with credit cards doesn’t feel like spending real money which makes it easy to spend more than you have to. Treat your credit card like cash so you will spend less. Set a limit as to how much you will charge to your credit card monthly and do your best not to exceed it.

4. Pay more than the minimum. Paying only the minimum every month will contribute in growing your credit card-debt to unmanageable levels. If you charge P3,000.00 monthly in your credit card and pay only the minimum, in 20 months you will have paid close to P29,000.00 and your outstanding credit card balance will be over P50,000.00

5. Use other sources of money to pay your debt. Be imaginative in finding money for debt payment. If you have money “sleeping” in a low-interest savings account, use it to pay your debt. Would you rather pay 3.5% in credit card interest monthly than give up one percent in deposit interest annually? I don’t think so. Consider taking out a less expensive loan to pay your existing loan obligation. But never borrow money that charges interest that’s higher than wht you are paying now.

6. Get yourself and your family insured. The wisest spender is not immune to unfortunate incidents like accidents, sickness and untimely death, which can give your finances a major wallop. Protect your family from financial losses and potential heavy debt by getting yourself and your family insured. At the very least you should have a life insurance and healthcare or hospitalization insurance.

These Too Shall Pass

Filipinos, really, should brace themselves, once more, to resist the hit of the forecasted economic crisis.

It is in the news for weeks: the meltdown of U.S stock market and its effects to the country’s financial institutions, much more, its effects to us – ordinary Filipinos.

Yesterday’s news report said that the country’s inflation rate has lowered by 1%. Yet, still, the prevailing rate is in two digits - which is much, much more higher compared to the same period last year.

The price of my favorite loaf bread is now P79.00. It was only P64.00 three weeks ago.

Prices of commodities are expected to further increase now that the Christmas season is approaching.

I think it is now the time for us to really practice saving. And, we should engage into income generating projects. Instead of losing money, we should be gaining it.

I am keeping a money diary. From there, I can clearly see my cash flow and I can plan my expenses. In the process, I am becoming a smart shopper. For fruits and vegetables it is cheaper to shop at wet markets than at mall supermarkets (even though they offer rewards to loyal shoppers). Most of the times, I have the best bargain deal with the wet market vendors. Furthermore, wet market goods are absolutely tax-free unlike in supermarkets where the 12% Value Added Tax (VAT) is already included in the receipt.

It really takes a lot of discipline when it comes to spending and saving. But it also pays a lot if it becomes our habit.

We should not compromise products quality to its price, however. Now that we had a melamine (which is printed in most plastic ware – meaning it is one of the compositions of plastic products) scare, we should be a label – reader (a friend’s advice).

Thanks to globalization and free-trade. Life-threatening products from foreign countries are now being sold here.

Chemically - contaminated creatures are dwelling in this chemically – contaminated world.

Ooops, my mind traveled again. I’m just stating some thoughts about economic crisis, inflation, price increase, money diary, chemical contamination? Melamine?

Anyway, the PSEi dropped to 116.45% yesterday – the lowest in the past two years. Peso, on the other hand, has weakened compared to dollar.

What else?

I think nothing can beat Filipinos.

For, these, too, shall pass.

Some Thoughts

With 12% value added tax and more than 12% inflation rate (the highest in 17 years), I think ours is one of the toughest of all generations.