Month: January 2010

Categories
Business Credit Card Investing Life Updates Money Mindset

Rich Money Habits Carnival: First Edition-Best Money Stories To Jumpstart Your Year!

Welcome to the first edition of Rich Money Habits Carnival-Best Money Stories To Jumpstart Your Year!

Every month we will be featuring the best articles in the world of personal finance through the Rich Money Habits Carnival. In this first ever edition, we’ve reviewed a total of 27 articles submitted by personal finance bloggers and picked 5 of the best money habits stories to jumpstart your year on the right note and inspire you in your journey to financial freedom.

Rich Money Habits’ Top 5 Picks

  • PT presents How to Negotiate Price posted at Prime Time Money. [RMH] Great tips and examples on how to negotiate to save on haircut, shipping, and freebies.  The advice, “don’t be afraid to  ask for a little something extra or a discount for being a good customer” is spot on.

  • Lovelymary presents 100 Extreme Ways to Save Serious Money posted at Accounting Degree.com.  [RMH] A very long list of unusual money saving tips bordering on being too cheap but funny nonetheless.  Some of my favorites are: on personal care-“No more toilet paper”, and on Food-“Ignore expiration dates.”  Hilarious! 🙂
  • Roshawn Watson presents Thoughts on Escaping The Rat Race posted at Watson Inc, saying, “Do you yearn to be free…really free? What would you do if money was not a limitation? Perhaps the primary reason for increasing your financial literacy is so you may indeed escape the rat race.” [RMH] Great solid tips and advice on achieving financial freedom.  More importantly, the article recognizes the fact that the battle is not in  learning the “how” but discovering your “why” in your journey to financial freedom.

Other interesting articles in this edition

Business

  • Frank Goley presents Strategic Planning for Business Success posted at Business Success Strategies, saying, “The business success strategies blog is written by small business success expert, Frank Goley, the chief business consultant for ABC Business Consulting. Frank has more than twenty years experience helping companies start, grow, turn around and succeed.”

Investing

Personal finance

  • nissim ziv presents Career Goals: Examples of Career Goals and Objectives posted at Job Interview Guide, saying, “It is only when a person has a clear thought about his/her career goals and objectives that he or she gets ultimate satisfaction from his/her job and therefore progress faster.  This article covers many examples for your career goals & objectives.”

  • Darryl Holland presents Why You Should Care About Your Credit Scores posted at Credit Secrets Revealed By Darryl, saying, “Learn to improve your credit score by up to 247 points in the next 90 days.Soon you will be able to proudly run a credit check with no shame.Stop paying more interest for your loans and credit cards.Start getting those low interest rate loans that you deserve.The Credit Secrets Revealed ebook will help you solve your credit problems.”

Real Estate

That concludes this edition of Rich Money Habits Blog Carnival.
Submit your blog article to the next edition of rich money habits carnival using our carnival submission form. Past posts and future hosts can be found on our blog carnival index page.

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Categories
Business Life Lessons Money Mindset Passive Income Personal Finance

Passive Income Opportunity Myths & Realities: How to Spot a Scam

The idea of a passive income attracts a lot of people mainly because it promises to earn you money while doing little or no work at all.  Some even think of having a passive income stream as an opportunity of a lifetime.  Who wouldn’t want to earn money while you sleep?  Who wouldn’t want to make money the easy way?  Who wouldn’t want to sit comfortably on the beach, drinking a glass of your favorite drink while your “passive stream of income” works hard to make money for you.

That is the dream, right?

 

What is passive income?

Passive income is the residual income you receive from rental properties, royalties from your books, licensing income from your businesses, etc.  This income is passive because it supposed to be earned with little or no work required from you at all.

While passive income promises a lot of things, it is NOT without a price.  Identifying the myths & realities of a passive income opportunity allows you to spot if it’s an opportunity of a lifetime or a total scam.

 

Myth: Little or no work at all

Reality: A lot of upfront work

 

The most common myth about a passive income opportunity is the allure of not having to work at all while money keeps coming to you.  While this may be true at some point, it is NOT the complete picture.  In most cases, the reality is that setting up these passive streams of income requires a LOT of hard work especially in the beginning.

Real Estate

One of the most common examples of a passive income is rental income from tenants through real-estate properties.  To some degree, it is a passive income. But still not purely 100%. If you are the one managing the property, you have to worry about maintaining the property and possibly fixing toilets in the middle of the night. 🙂  If you do hire a real-estate managing company, then you would need to make sure they do  their job and worth more than you’re paying them.  Otherwise, you stand to lose more compared to running the business on your own.

Business

Ask any employee what they plan to do after retirement.  Most of them will answer that they want to go into business because “finally” they have enough capital to do so.  Unfortunately, it could be the riskiest move they will ever make.  The odds are against them.  Statistics say that 9 out of 10 businesses fail in the first 5 years.  Few do make it.  Others are forced to go back into employment.  The rest are content to live a “cheaper” lifestyle and forego their dreams.

Running a business needs your time and attention.  It demands your focus.  For that reason, it is not a passive income until you’re able to setup your business systems.  Setting up these systems will demand your hard work, your patience, not to mention your time and money.

If you’re able to set these systems up properly and hire a great CEO to run your business, only then can you let the system work for you and allow it to give you a steady stream of passive stream income.

However, if you setup the wrong system, especially if the system requires you to be the one managing the property, you will end up having a job instead of a sustainable business system.

 

Myth: You need a lot of money

Reality: Having money is not a guarantee

 

Some people think that building systems to create passive income requires a lot of money.  The reality is that successful entrepreneurs are not hindered by the lack of money in setting up their business systems.  They even use it as an inspiration to be more creative in selling their ideas to potential investors and partners.

While having money is an asset to a savvy entrepreneur, it is actually a liability for someone who doesn’t know what he is doing.  A lot of money in the beginning for an inexperienced businessman can be a hindrance to his success.  With money readily available, a frustrated and inexperienced entrepreneur can just throw away money at any problem that comes his way.

This is hardly the way to set up a business system.  It will only make the problem worse because the real problem is not identified and fixed, hence, the system does not improve.  All it does is throwing money down the drain.

In the end, money is an asset or a liability depending on how a person makes use of it.

 

Myth: Setting up a passive income stream is very hard

Reality: Setting up a passive income stream can be learned

 

While setting up a passive income requires a lot of work especially in the beginning, it certainly is not limited only to hardworking individuals.  Sometimes, not wanting to work hard can also be your asset as it forces you to think of ways to setup the business without you having to work for it.

You can choose to hire hardworking employees to do the work for you.  You can spend your time learning and figuring out how to set up efficient systems.  You can concentrate on the 20% of things you do that brings in 80% of your output and delegate all the rest.

Doing any of these things allows you to leverage your business system to complement your employees’ strengths and provide more high-value offerings without necessarily doing the work yourself.

Internet

In this day and age of living in the information superhighway, it is now easier for someone to be in business. With access to the internet, someone working at home can setup a blog or sell stuffs through ebay, amazon, or other online stores.  While this requires you to learn how internet businesses and marketing works, you can certainly hire someone to do it for you if you really don’t want to be involved in the technical details.

Making money online is such a popular dream for many of us.  The reality is, it is also NOT for everyone. It requires a lot of learning, patience and self-discipline to make the system work.  As with any brick-and-mortar business, it also needs your skills, time and attention.  It demands your focus and unrelenting desire to give more.  And with more and more clutter competing for your customers’ attention, there’s no other way to serve but to stand out and give your customer ALL you’ve got.

 

Demystifying the myths of building a passive income stream is only the first step of a lifelong journey.  The only way for you to learn how to build these systems, is to do it yourself, always remembering that something worth doing, is worth doing well.

In the same way that an overnight success is actually a culmination of a decade long history of working hard, building passive income streams is a journey laden with challenges and opportunities.

In the end even though creating passive income may be an opportunity of a lifetime, it is still up to YOU to make it happen.

 

P.S. CLICK HERE to email me if you would like to learn a legitimate, legal, low-capital investment with huge passive income potential.

Categories
Life Updates Personal Finance

RMH Reader’s Survey-It’s time YOU get heard and get a chance to win Robert Kiyosaki’s bestselling book, Rich Dad Poor Dad

Over the past weeks, I’ve been writing mostly about myself.  I wrote about my financial situation the past year, my goals for this year, as well as my health & investments.  Enough of my stories.

This time I want to hear from YOU.

Let me know your thoughts, your dreams, and your ideas on how this site can help you achieve your financial dreams.

Participate in the first ever Rich Money Habits Reader’s Survey .

Click here to take the survey

Take the survey and get a chance to win Robert Kiyosaki’s all-time bestselling book Rich Dad Poor Dad-What the Rich Teach Their Kids About Money That the Poor and the Middle Class Do Not! for FREE!

This survey will officially close on February 21, 2010.   After the survey is closed, I will choose among those who participated in the survey who will receive the FREE book give-away.

Hurry! Take the survey NOW!  Answer the 7 questions in the survey and get a chance to win our FREE giveaway – Robert Kiyosaki’s bestselling book Rich Dad Poor Dad!

IMPORTANT NOTE: The FREE book is a paperback edition.  Only one copy of the book will be given away.  FREE shipping is available to Philippine and US residents only.  If you’re based on another country, you’ll have to shoulder the shipping for the book.

Categories
Bonds Investing Personal Finance

How to Invest in Retail Treasury Bonds in the Philippines – Interests and Fees

Last October, I wrote a story on how my wife and I were able to invest in Retail Treasury Bonds (RTBs) in the Philippines.  We’ve practically forgotten about it until we received a letter from the bank informing us that they have already credited our settlement account with Bank of the Philippine Islands (BPI) Capital Corporation.  We just received our first quarterly interest!  🙂

Here’s a picture of the interest payment we received.

image

The net amount is just as we expected.  Our total investment amounted to PhP 200K with a tenor of 7 years at 7% annual interest. This would translate to an annual interest amount of PhP 14K per year or PhP 3,500 per quarter before-tax.  Note that the Gross Amount indicated in the above picture is the same as our computed quarterly interest of PhP 3,500.  This amount is taxed at 20% (or PhP 700) which further reduces it down to PhP 2,800.  This is the net amount after taxes.  This is the amount we expected to receive every quarter for 7 years.  Not very exciting but certainly beats the interest on savings accounts. 🙂

There’s one thing I didn’t expect though — fees.  Included in the letter are 2 debit transactions which I missed in the fine-print.  One is a PhP 7.25 Custody Fee and the other one a PhP 25 Transactional Fee-Security Deposit.

image

I’m guessing we were assessed with these 2 fees because we purchased the RTBs from a bank, which is basically, a secondary-market.  Unfortunately, it looks like these two fees will also be deducted every quarter.

In effect, the PhP 2,800 interest is (again) deducted a total of PhP 32.25 fee which brings down the amount we will receive every quarter to PhP 2,767.75.  🙁

Anyone experienced the same thing or know how these two fees are computed?

Things I learned while investing in RTBs:

1) Invest now.

If we waited until we had ALL the answers, we would still be wondering today how to invest in RTBs.  Yes, we were assessed a PhP 32.25 fee that we didn’t expect but the net amount is still better than interest from a savings account or even time deposits. 🙂

2) Read the fine print.

If we’ve read the fine print, we would not have been surprised by these fees.  Yes, it may be tedious to go through every form and double check all information indicated in each form, but a 5-minute checking on the fine-prints can save you time (and money) in the future.

3) Don’t be afraid to fail.

We’ve known RTBs for quite some time, but only decided to invest a few months back.  We were afraid to fail and lose money.  We were content to leave our money sitting idly in the bank via savings or time deposit accounts.  Now, our money is working for us, and making us money – even for only a little amount.  This money is passive income.

I know that the interest amount is small, but imagine if you’ve invested 10x the amount we invested…it would give you a quarterly “passive” income of PhP 28,000 before tax.  That’s around PhP 9,000 every month.  If you can live on that income for a month, then you’re practically free!  (at least for the tenor of the investment:))  That’s money you did not have to work hard for.  That’s money given to you whether you worked at your job or not.  That’s money working for you and setting you free.

Categories
Life Updates

Be featured in the 1st ever edition of Rich Money Habits Blog Carnival

Today, we are launching the first ever edition of Rich Money Habits Blog Carnival.

This edition is now accepting submission of the best money stories and articles showcasing money habits that make people rich through personal finance, business, investing, stocks, mutual funds, bonds, real-estate, internet marketing, and more.

Submission of entries is until January 26, 2010, at 12 midnight Pacific Time.

So hurry, submit your stories and articles now and be one of the chosen few to be featured to the first ever edition of Rich Money Habits Blog Carnival.

Let your story be heard.  Be featured.  Be Inspired.

What is a Blog Carnival?

“A Blog Carnival is like a magazine. It has a title, a topic, editors, contributors, and an audience. Editions of the carnival typically come out on a regular basis (e.g. every monday, or on the first of the month). Each edition is a special blog article that consists of links to all the contributions that have been submitted, often with the editors opinions or remarks.” – blogcarnival.com

Categories
Investing Life Updates Money Mindset Mutual Fund Personal Finance Stocks

My Financial Goals for 2010: Get Into the Money Game

As I’ve mentioned in one of my recent articles describing my financial journey last year, my wife and I were pretty lucky in 2009, being able to transition back to working as an IT professional in the Philippines even in the midst of the worst recession since the Great Depression.

As a consequence, our financial situation at the start of 2010 is relatively OK as summarized below:

  • We don’t have any debts.
  • We have an emergency fund.
  • We have a little bit of savings on top of the emergency fund.
  • We both have Life Insurance.
  • We have started investing in RTBs.

As you can see, our financial situation is relatively safe. However, we are still slaving ourselves into the 9-5 job.  We still need to wake up early in the morning, go to the office, sit in front of a computer, think & type on the keyboard the whole day and then go home to take a rest.

We have cash, but we don’t have TIME.  I want to have both cash AND time.  And I won’t get that if my cash is sitting idly doing nothing while I am working hard the whole day.  I want my cash to work hard too, so that someday I don’t have to work as hard anymore.  That’s why I want to learn to invest my money.  That’s why I want to get into the money game.

I understand that aiming for financial freedom will take some time.  And I’m ok with it.  It will require that I learn more and more each day how the money game works.  And I’m up to the challenge.  I will probably lose some money along the way.  And although I think it will be painful actually losing money, I’m looking forward to the lessons it will teach me.

Here are my 3 financial goals for 2010:

I originally planned to list 10 goals, but I realized it’s too much.  I’m really not a big fan of remembering things so I’ll just keep it short this time.

1) Buy a House

Ever since I got married, my wife and I have been planning to buy a house.  We worked in Malaysia for two and a half years and we were able to set aside at least a down payment for a decent house.  The only problem is, we have NOT found our dream house yet.  Worse, we don’t even know where we want to live.

Our work and my in-laws are both located in Mandaluyong.  Naturally, we would want to live somewhere near to save on cost and for convenience.  Unfortunately, Mandaluyong is not the most tranquil and home-friendly-neighborhood place often portrayed in movies.  It is a busy commercial area and business district.  So all you see are tall buildings, noisy buses plying the busiest highway in the Metro they call EDSA, and lots and lots of busy people going to their work everyday.

We want a nice single-detached home with enough backyard to have a little garden where our kids could play.  We want a house where the air is fresh and we could walk along the neighborhood while watching the sunrise.  We want a safe community for our kids, where they can play around with other kids, much like what we both used to do when we grew up.

The two pictures are contrasting to say the least.  But there’s no other way to be closer in making our dream house a reality than to actively checkout the houses for sale now.

2) Invest 20% of My Money

As I’ve said earlier, our money is hardly working for us.  Last Monday, my wife was shocked when she heard that the 180-day time deposit interest rate is currently at 0.25%!  What??! Only 1/4 of 1%!??  I think I’d rather keep my money with me, thank you.

Yes, we’ve started investing in RTBs. We got 7% interest on a 7-year tenor bonds.  But it’s hardly enough when you take into account the 20% tax on the interest as well as the rising inflation.  I’d say it’s just a little bit over breaking even.

So this year, my goal is to invest the 20% of my money in something that will earn at least 10% per year.  I’ve already opened an online stock brokerage account, but I have not bought any stocks yet.  So my goal is to finally start investing.  I’ll probably start actually investing in mutual funds, businesses, and more this year as well.

This is precisely the reason why I described my goals this year as “getting into the game”.  It’s easy to read about the different vehicles on where to invest your money.  But it’s another story to actually do it.  You haven’t actually learned anything until you’re already doing it.

3) Be consciously alive

I spent my birthday last weekend having a nasty cold & cough.  Hardly a great way to celebrate a birthday.  On top of that, most of my holiday vacation was spent in my room trying to recover from another cold & cough I got a few days before.  It’s very hard to celebrate when you’re getting sick all the time.

I want to enjoy life, while I’m young and even when I’m already old.  Who’s to say that we should sacrifice now for the future, when what we have is only today.  Yesterday is gone. We don’t know what will happen tomorrow, or the next day.  Or even the next year.  What we have is NOW.

So I’ll start enjoying the present.  I realize that we can and should enjoy today and prepare for tomorrow.  My problem has been always thinking about the future that along the way I forgot to appreciate the blessings I have today.

That’s not to say I should be spending like crazy.  My goal is to start consciously living day to day with the energy of a young kid.  Be amused.  Be inspired.  Be wondering.  Be excited, once again.  Be alive.

Yes, I will still think about my future. I will still try to learn from my past experience.  But this time, I’ll try to be more conscious of the present moment.  Just like now.  I’m having a conversation with you, and having a great time.

Categories
Life Lessons Money Mindset Personal Finance

Health Is Wealth – Why Your Health Is More Important Than Your Money

Have you ever heard the saying “Health is Wealth”?  I am not sure who coined the phrase but I think there’s a degree of truth to that statement.  It may even be more important than all the money you have.

If your wealth is a number, your health would be the leading “1” on a $1,000,000,000 (one trillion dollar) jackpot.  All the other zeroes represent your material wealth – a house, a car, your investments, family, friends, etc.  As you can see, without the “1” in front, it will just be $0,000,000,000 which is basically NOTHING.  This is the same as your health.  If you’re NOT healthy, if you’re getting sick all the time, all your riches do NOT matter…

I got sick with cough and cold the past couple of days…again.  With the very hectic schedule during the Holidays, and my wife and I making ala “amazing race” from Manila to the northern part of the Philippines they call Ilocos & Cagayan, topping it off with the pressure of going back to work on a night shift immediately right after the race (ooppss..I mean vacation? :))…I was REALLY exhausted…as a result, I got sick (again).

Eating right

Sadly, I’ve not been eating right for the past couple of months…

I almost always eat out at delicious but not so healthy fast food restaurants, eating tasty fried chicken, fatty “sisig” or inihaw na “liempo” (grilled pork belly?).  I’m just too lazy to cook food when I get home after a long day at work.

Coffee is my water.  I drink coffee in the morning, in the afternoon and at night.  Sometimes I feel the strongest brewed coffee I drink can no longer keep me awake.  The good thing is…I easily ended up getting not one but TWO Starbucks planner even before the Holidays. 🙂

When I don’t drink coffee, I splurge on sodas.  There’s even a time when I drank 2 liters of “DIET” coke (a.k.a. Coke Light) each night for a couple of days…That’s when my body started to give up and I got the nasty cold & cough.

Being physically active

When I was in Malaysia, I used to play badminton or tennis twice a week.  I also have this basketball game with friends every weekend.  On top of it all, our office was a good 1 kilometer “walking” distance from our condo.  As you can imagine, I had several physical activities lined up for me to keep my body moving and healthy.

When I came back to the Philippines, it was a complete 180 degree turn for me.  The only exercise I did is to have my fingers tap at my computer’s keyboard all day and all night long.  I convinced myself that I was “too busy” tapping at the keyboard to do anything else, much less a physically challenging activity called “exercise”.  Not even once was I able to go to the gym because of laziness.  No wonder my belly seems to be getting bigger and bigger everyday. 🙂

Where do I go from here?

I really don’t believe in New Year’s resolutions…but I realize I must change or I’ll keep getting sick again and again.  So first thing I want to do is to get well from this persistent cold & cough.  Second, I’ll try to keep my self healthy for a change.  Eat healthy food.  Minimize coffee and sodas.  Drink more water instead.  Eat fruits.  And lastly, I want to go finally use the gym at the condo and get my money’s worth at the hefty association dues I pay every month.  Wish me luck!

How about you? How are you keeping yourself healthy in 2010?

Categories
Life Updates Personal Finance

A Look Back on my Financial Journey in 2009

I have been reflecting the past couple of days on the many blessings I’ve received in 2009 and realized that no matter where you are, no matter what you do, there’s only one person responsible about your finances – YOU.

Living in Malaysia

My financial journey over the past year started by working as an IT professional in Malaysia.  My 2-year contract with my foreign employer just got extended for another year.  To top it off, my wife also got absorbed by our client company and got a new contract.  We both got a raise, though it was only minimal due to the ongoing recession.  We were both safe & fortunate to say the least.

Some of our friends were not as fortunate.  Their employer had to terminate their contract to cope up with the recession.  Some even have their families with them, which makes it more challenging.  Panic was everywhere. It was disheartening to see everyone trying to stay focused while their eyes reveal their fear, wondering whether it was their turn to be let go.  The recession made everything “temporary”.  Nothing was permanent.  Not your job.  Not your house.  And certainly not your visa. 

Thankfully, my wife and I was not hardly hit by the ongoing recession. 

Financially, we were doing OK.  We still had jobs.  We still had each other.  We have earned enough to put up an emergency fund.  We have stayed debt free. And more importantly, we were able to set aside some of our money, which we could use to support us if our employer decided to shorten our stay in Malaysia. 

If we learned one thing in our stay in Malaysia, it is to be prepared, always.

On the bright side, we were also able to enjoy some of the money we earned. We splurged on a lot of “doodads” as Robert Kiyosaki puts it.  We bought a 32’’ Sony LCD TV (which is now broken and could not have it fixed because it costs more to repair than the original price I bought it for – duh??), a Nikon D60 DSLR (which I love to this day), and a Macbook which my wife loves very much because she can do her video editing projects and post her Facebook pictures very easily with it.

We could have stayed in Malaysia if we wanted.  However, something was just not right.  We knew something was missing and we had to change.  And after much discussions over dinner and sleepless nights, we decided to take the chance of finding what we were missing in our home country – the Philippines.

Going Back Home to the Philippines

By middle of 2009, I got a call from my previous employer from the Philippines.  They have a big project going on and wanted to check if we’re interested in going back to the Philippines.  At the time, my wife and I have been contemplating whether to finally go back home or not.  To cut the story short, we left a life full of promise in Malaysia to a seemingly challenging life back home with family and friends in the Philippines.

To be honest, the next two months were REALLY challenging.  We had to immediately report to work as soon as we arrive in the Philippines.  We didn’t have any vacation at all.  We had to squeeze everything including preparations for our working papers, fit to work health clearance, and unpacking the 5 “balikbayan” boxes in a span of two weeks.  To make it worse, a 10-day self-quarantine was required after arriving at the airport because of the ongoing AH1N1 virus scare.

It’s been 5 months now since we arrived and I like to think that we have already adjusted living in the Philippines again.  Yes, work is stressful and challenging.  Yes, because of stress we got sick a lot of times during the past few months.  Yes, the traffic is bad and watching bad news on TV is sickening. But on the bright side, there were also lot of things I’ve been very thankful for for the past few months. 

First, my wife and I were able to attend Bo Sanchez’s Truly Rich Financial Seminar and Truly Rich Financial Coaching Program since we’re now in the Philippines.  We learned a lot, not only about the many ways you can make & invest your money but also about how my wife and I view money as a tool to help ourselves and other people. 

Second, I get to eat my favorite Filipino food like “longganisa” (locally made sausage), “inihaw na isda” (grilled fish), “chicken and pork adobo”, and many many more. 

Lastly, I am also thankful I was able to spend some time with my mom and dad, as well as my in-laws.  I get to know more about them, their concerns, their plans, their dreams.  The time I’ve spent with them is priceless and I won’t trade it for anything else in this world.  

All in all, year 2009 was great for us financially.  We were able to transition from being an IT professional in a foreign country to a similar work in the Philippines.  We’ve started investing in Retail Treasury Bonds.  We’ve also opened an account in one of the leading online stock brokerage firms in the country (I’ll tell you more about this in one of my upcoming articles).  And we’re also starting to learn to give back to other people.

How about you?  How was your financial life the past year?