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My Financial Awakening: Good Morning!!!

on March 23, 2013

“The rich get richer and the poor get poorer.”

Sounds true… but is it?

Six years into the workforce, I began to wonder how to better my situation.  I didn’t like being in the rat race and I didn’t want to retire poor.

I began to read books on money management, investments, and entrepreneurship as well as books on personality development.  I attended free seminars on the workings of the stock market and I paid for some seminars on how to make my money work for me.  I read up on articles from the internet on how to change my employee mindset to an entrepreneur mindset.

And like a 1-week-old kitten, I felt my “eyes” open for the first time.  There is hope after all, for a middle class girl like me!  I suddenly realized that I was blessed to be where I was because I was born with a choice to either go up or down the financial ladder!

So what did I learn?

1.  Have a financial goal.  For me, this is to be able to provide a comfortable life for my family and to be able to retire early and still live comfortably.  I would like to see the time when I would work just because I WANTED TO and not because I NEEDED TO.

2.  It doesn’t matter how much you earn, what matters is how much you save. After receiving my paycheck, I prioritize my savings.  I save at least 20% of my income and allot the remaining 80% for my expenses.

3.  Live within your means and live simply.  At first, I found it hard to live off on only 80% of my income. I started to document all of my expenses daily (to be OC about it, I recorded everything down to the last centavo!).  After 1 month, I discovered I could take out most of my unnecessary expenses like frequent eating out, movies, shopping… However, I didn’t want to feel deprived so I set a budget for my “Happy Fund.”

4.  Look for ways to augment/supplement your income.  My significant other and I tried our hand in two businesses.  The first was a food cart business which sold rice toppings and street food.  Unfortunately after 9 months, we had to cut our losses.  The employees of the office building where we put our cart apparently did not have that much buying power.  So despite us lowering our prices and giving out discounts, they still preferred to buy from a carinderia outside the building.  (Mental note:  Location, location, location!)  The second business was a scrub suit/linen business.  Since we were just starting out, we decided it was more cost effective to outsource the sewing.  Our mistake:  We were at the mercy of our sewers and when they couldn’t deliver the quality required at the designated time, we lost our clients. (We haven’t given up on this, we just need to revise our business plan!)  Presently, my significant other and I are freelance sales marketing associates for a corporate giveaway company.

5.  Don’t just depend on your active income.  There is such a thing as passive income.  Passive income means that you don’t use your own talent, time, and energy in order to earn.  How do you do this?  Through investing in mutual funds. In mutual funds, there are fund managers who study, research, and choose the best companies or government securities to invest in.  You only need to invest a minimum of 5,000 pesos ($125) and you can sit back, relax, and let the fund managers to the job for you.  The 5-year return of my peso bond fund is now 40%; the 3-year return of my balanced fund is 68.5%; and the 3-year return of my equity fund is now 100%.  Not bad eh?

6.  Pay it forward.  If possible, allot 10% of your income for helping others.  You can give it to your church, to charitable institutions, to orphanages, or to wherever your heart tells you.  Believe me, this makes it all worthwhile.

7.  Be an inspiration to others.  Teach others whatever little you know on how to better their finances.  Here in the Philippines, the majority of the population is still living in poverty.  I read or heard from somewhere that the poor are poor not because they don’t have money, they are poor because they have lost hope.

So, the question is… am I rich yet? No, it’s still a long way, but I know I’ll get there in God’s perfect time.

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One response to “My Financial Awakening: Good Morning!!!

  1. […] A little later on, I realized that I was actually lucky to be in the middle because I had a choice.  It was up to me to choose if I wanted to have a better life.  I had all the tools that I needed, including a little money, to get where I wanted to go.   […]

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