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“World Bank sets ‘expiration date’ on poverty”

Two children beg on an pedestrian overpass in Manila

When I was little, I always wondered about the beggars in the streets, how they ate, how they slept, and how they felt about life in general.  I felt sorry for them and felt guilty that I ate three meals a day, had a  house to sleep in, and had a chance to go to school.  I used to give the street kids/adults some coins when I had the chance but I was told that they would just buy rugby or some cheap drug so I shifted to giving them simple foods like biscuits instead.

As I got older, I envied my classmates who were rich.  They didn’t seem to have a care in the world and during recess, they could buy whatever they wanted without counting their money first, unlike me.  I knew exactly how much I had and I had to budget my money wisely.

A little later on, before my financial awakening, 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.

Yes, even those living below poverty have this choice but they don’t have the tools to better themselves, maybe they have resigned themselves to their situation and lost hope, or maybe they just need a little inspiration from us to change their mindset.

In my own little way, I have started to share what I’ve learned about managing finances and investing to my workmates and friends.

I really wish to see a Philippines that is free of poverty in 2030.  May God bless the leaders of the World Bank in this endeavor.


Photo courtesy of http://www.philaid.org

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My Financial Awakening: Good Morning!!!

“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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My Financial Awakening: In the beginning…

I’m a doctor; therefore, I’m rich.  This is probably the greatest misconception.

I come from a middle income family.  Both of my parents were government employees who were barely able to make ends meet.  Despite our grandmother sending us to school and saving my parents this trouble, there was little left after budgeting for basic needs.  Like many Filipinos, my parents had an employee mindset.  “You should study hard and get good grades so that you can get a well-paying job,” they told us.

When I was in preschool, I was valedictorian! Ahem.  My parents probably saw my potential and instructed me, “When they ask you what you want to be when you grow up, tell them you want to be a doctor,” and they continued to brainwash me until med school.  I knew I had a choice but I just didn’t want to disappoint them.  I knew they equated being a doctor to being rich.  I knew that they wanted me to give our family a better chance at life.  So, I studied hard, got good grades, got a scholarship in med school, and passed the board exams.

And guess what? I am now rich!  No, not yet.  Apparently, being a doctor does not equal to being rich like my parents thought!  What my parents didn’t know was that after passing the boards, they would have to support me for another 3 to 10 years through residency and fellowship.  What they didn’t know was that residents and fellows got meager wages/allowances during training.  What they didn’t know was that we needed money (a lot!) in order to buy shares of stock to be able to practice in a reputable hospital or have a clinic put up.  What they didn’t know was that the majority of patients were unable to pay our professional fees.

My mother died of pancreatic cancer during my second year of med school and my father retired right after I passed the boards.  It was my turn to support our family.  I decided not to pursue residency and proceeded to gain employment.  Like any new board-passer, I did my share of moonlighting in small clinics and hospitals.  I became a lecturer of microbiology and parasitology and later of medical transcription.  I was then asked to manage a medical transcription company which unfortunately threw in the towel due to internal conflicts.  After exploring the other faces of medicine, I decided to practice as a school doctor.

Six years into the wonderful world of employment, I woke up one day with a cold, heavy stone in my stomach.  Nothing was happening.  I chased every payday, sighed with relief upon receiving my paycheck, and chased the next payday.  I was officially in the rat race.  I had nothing saved.  I felt a wave of panic course through my body.  This was when I realized, “There must be a better way!” Hence, was the start of my financial awakening…

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