What are these and How do they affect our Financial Capacity?
Is there a Recommendable System for us to Manage our Finances? Part I
Income - Savings = Expenses
How much income do you earn?
What are the things so budget for your expenses? How big or how little goes into your savings?
Income is defined as an economic wealth that is generated in exchange for an individual's performance of agreed upon activities or through investing capital. Income is consumed to fuel day-to-day expenditures.
It is a word that Can Mean a lot to a person. One can spend his income for going to the beach, eating in a fine dining restaurant, buying a new shoes or a book. It can also be spent by paying the electricity bill, providing allowance to your child or simply buying food for your daily needs. Each person have different standards of living depending on how much income do they have. The higher income you have, the more things you can buy or purchase. However, this Income should be spent wisely. Having an Income means having the ability to spend and to save. If you spend, you use your income to have a goods or services in return which you can use in the meantime. In saving, you put the money you earn into a tool or a system that in the future can have gains, losses or be retained.
So how does one manages his or her income? Here are two Cases:
Case 1
Mary works as a Call Center Agent in Ortigas and earns 25,000Php monthly. She usually have good times with her friends on weekends, gives a part of her income to her parents and shops for new clothes regularly. At the end of the month Mary usually deposits 5,000Php to her Savings account.
Case 2
Lei is a Restaurant Staff and makes 12,000Php a month plus her daily tips. When she gets home, Lei puts the tip she had for the day in an Envelope. Weekly, Lei deposits 500Php to her Bank account. She also hands some money to her parents then the rest that are left are for her personal needs. Every month she also puts in the bank the money she had in the Envelope.
Whom do you think handles the money wisely, Mary or Lei? Why?
Where can We Learn a System on How to Manage our Money?
Money is important to each one of us. We Earn. We Spend. We Save. With money we can provide for our basic needs such as food, shelter, clothing. It also gives us the opportunity to enjoy a Lifestyle we choose to have. We also have the responsibility to save and invest for future needs.
There was this Seminar held by John Calub titled "How to Become a Money Magnet"
A friend wrote an article for me about the said event:
On How to Become a Money Magnet
by Miguel
Oscar D. Castelo
As a Financial Advisor, I constantly seek
ways to improve my service to my clients and teach them new things, that’s why
I never get tired of attending seminars and trainings that would help both them
and me.
I started the month of September by
attending a seminar provided by John Calub on how to become a “Money Magnet” by
managing your money well and having the proper mind set to achieve your
financial goals. Obviously I wanted to learn more so that I can teach more, and
paying 500php for knowledge that I would be able to use forever was a cheap
price to pay.
What struck me the most, during the seminar
was the methods and techniques that I have learned as regards to paying
yourself first before you pay for your bills and buy your necessities, a
process that most Filipinos are not familiar with and the main reason why we
always seem to burn through our salaries really fast. Have you ever heard of
the saying “mabilis mawala ang pera”? That was what John Calub was referring
to.
Another aspect of the seminar which caught
my attention was the notion that you will never become rich or financially free
and stable if you just keep your savings in the bank. This is something that I
actually tell my clients about. It is not enough to spend less than what you
earn and put the difference in a savings account, that’s pointless because it
will never grow. You will need to “spend
less than what you earn and invest the difference”. The best part of this
was that one of the safe investment mediums John Calub was talking about is
something that I specialize in which is “Variable Life Insurance” (financial
protection plans packaged with Investments). John told his audience to seek a
Financial Advisor and Life Insurance Agent because they can help kick start
safe investments. You can imagine how much I was trying to restrain myself from
standing up in a crowd of over 1000 people and shouting, “Financial Advisor
right here I specialize in Variable Life Insurance, talk to me after the
seminar”.
All in all, it was a great experience as I
now teach what I have learned to my clients as part of my service. Whether they
get Life Insurance from me as crucial part of their financial planning method
doesn’t really matter, for as long as I see them financially free in the future
because of what I was able to teach them, I would consider myself repaid for my
efforts.
I would like to end this entry with a
question.
When you retire, do you suppose your money
will outlive you? Or will you outlive your money?
If you answered that your money will
outlive you, then congratulations you probably are financially free or at least
on the road to getting there. You are part of the few people who can eat at a
fancy restaurant without the need to look at the right hand column of the menu
(where the price is located). Or you don’t need to charge everything on your
credit card because you’re still waiting on your months’ salary.
But if you answered the latter, and you
feel that what you make won’t be able to support you until the final days of
your life then ask yourself why. Maybe you need to learn how to manage your
money properly.
I find it funny that we spend such a long
time in school to receive a degree in order to get a good job and earn money
but we were never taught how to handle it. For that reason I take pride in my
work as a Financial Advisor, because I teach people something that they do not
actually learn in all their years inside the four corners of the classroom that
cost our parents a small fortune just to put us through school.
I’d like to give a shout out to all my
fellow Filipinos who would like to learn more about how to manage your own
money and make you stop working so hard for the money you earn to the point of
breaking your backs and not enjoying life.
But instead making your money work hard for
you simply because you deserve to become rich while you enjoy the company of
your friends and family as well as enjoying what life has to offer.
I would love to share what I have learned
from this experience as well as what I have learned throughout my career that
would make the financial lives of Filipino people better.
Have a Good day and
may God Bless us all
Miguel
Oscar D. Castelo
Pru
Life UK Financial Advisor
For
inquiries you may contact Oscar at: 09178039114 or 6711686
