Sunday, July 21, 2013

On My Way to Financial Independence

I'm taking this topic seriously since in my opinion it's high time that every Filipino should be financially educated. I'm one of the many workers in this country wherein whatever what's left of my monthly salary after taking out all the expenses (utility bills, amortization, tuition fee, allowances, shopping) that will be my savings. More often than not, my savings is not that big even if I wanted to. My mind set was, it's okay if it's not too big so as long I was able to save. Boy, I was so wrong in thinking that way.

I've been to stock seminars in Philippine Stock Exchange as me and my husband where interested in investing in stocks two years ago but so far it stuck being a "plan". I'm not sure if my husband will pursue this more than me as I'm eyeing to invest in mutual funds instead. Moreover since I can't really monitor the stocks/trading and analyzing which companies to invest into, it will be a lot much easier on my part if I let the fund managers do that work for me and trust them that they will invest my hard earned money in companies that had a stable track record in being profitable. What changed my decision? Recently I attended seminars about wealth management and financial distribution. The company aims to share a system in which every Filipino families will be financially educated from one member to the other thus being financially independent. Come to think of it, if you're financially independent you won't be worrying too much on what will happen in the future. Retirement, education, health, death, etc.

Sadly, people here in my country have a different perception of insurance or having themselves insured/secured. I guess with the horror stories that linked to insurances getting bankrupt or having no funds,  thus the fear. Not all insurances are bad. Of course, you have to do a research and ask the products being offered by the insurance companies you're interested in. If you think that's too much work, how about narrowing it down to those insurance companies who still stand tall after the recession and financial crisis that struck the whole world. That will be easy as they are a few of them that withstand that trying time.

I remember last year when I attended BDJ (Belle de Jour) fair last year in SM MOA Music Hall, one of their guest speakers in the seminar I attended is Fitz Villafuerte. He is known motivation speaker about finances and an entrepreneur. He has a blog titled Ready to be Rich which aims to educate Filipinos about their finances and how they can make money work for them instead of us working for money. Most of his pieces of advise are based form his personal experience as he is an investor himself.
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Here are some useful thoughts/ info he shared during his talk:

* Income minus savings is equal to expenses. In short pay yourself first before everybody else. Make sure to save at least 10% of your monthly salary. Based on a study, Filipino saved on an average of 10% or less of their monthly income whereas other Asian countries like Malaysia (saved 20% of their monthly income) and Singapore (50% of their monthly income).

* Emergency Fund should be equivalent to your salary for 6 months. This will come in handy when emergency situations like losing a job or eventually one of the members in the family got seriously ill. I admit up to now I don't have my emergency fund but hopefully next year I will be able to do this.

* Investing is making your money grow than inflation. Look for products that offers 10% interest or higher in a year. On Fritz's case his into stocks, trading, mutual funds and UTIFS. If you don't invest now, think of how much your Php 1,000 will take you after five or ten years. The world is fast changing and with a blink of an eye you will be surprised how many products cost way too much than before. Inflation rate in the Philippines is at 6% last year, how about on the next coming years?

I've started to take this road, one step at a time.
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Now the only question left for majority of the Filipinos will be, are you ready to have your Financial Freedom? As for me, I've already started making my way there. I will prioritize first the needs versus the wants and start saving religiously. I think that will be the very first step everyone should do.

"Financial Independence can be a decision not a dream."

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