3 Big Personal Money Lessons I Experienced in My Life

1.) In financial management, what you don't know will hurt you.

I was in Cebu 5 years ago working as a Software Developer in a Japanese company. Back then I have to say that I was financially illiterate that's why it was easy for insurance agent to persuade me to buy an insurance policy from them with a very low return. I found out after I consulted credible people.

It was a costly mistake for me and I regret what I did. I feel sorry and mad at myself for letting that happen. Because of lack of financial knowledge, I was not able to properly analyze what I was getting into. That made me realize that I have to do something. It was my wake up call. I cannot be financially illiterate or else other people will just take advantage of me.

After that incident, I became keen in attending financial management seminars. I was introduced to AXA, one of the famous insurance companies globally. That's where I got my first investment which is a life insurance. After that I also became a member of IMG (Internation Marketing Group) which is where I learned how to invest in mutual funds.

A year after I had the chance to work in Singapore and I also became a member of Asensadong Pinoy, an organization with a campaign to educate OFWs about investments from paper assets to real estate. Regular meetings and seminars are held to continuously foster the wholistic growth of individual investors.

I have come a long way and I will not stop from learning. Everyday is a learning process. I would never forget that incident 5 years ago. If it wasn't because of that incident I would not have my wake up call and most likely I'm still financially ignorant by now.

2.) In order to achieve something, find a mentor or person who has been there and emulate him

This might be common sense but people tend to forget this sort of "life hack" if you will. After attending several seminars and meeting successful and wealthy people I noticed this common denominator. Successful people always have models or mentors that they try to emulate or follow. Why reinvent the wheel if it has already been done by somebody else? That's the reason I have my mentor on real estate investing, on mutual fund investing, on working out, on personal development, on meditation and even with my hobbies such as salsa or bachata dancing or playing guitar. When you find a mentor, just remember to be a good student and make sure you show that you're willing to do what it takes to achieve the results you want. Life is so short especially when you hit your 30's. ;) 

Life is just really fast and finding models to emulate in order to achieve your goals in life is one of the best ways to maximize your time in fulfilling your life goals.

3.) Don't be afraid to fail

I joined 2 networking companies for the past 2 years. The first networking venture I had, I did not get any income and I kept paying for the membership so I cancelled it after a year. Several months after that I joined another networking company which is popular among filipinos I should say. AIM Global is the name of the company. I'm no longer active with it but there's a chance I would get back to it in the future as I can see my right leg is increasing every month. But still, I would consider it as a failed venture as I did not earn any income.

I spent a lot of money and time to earn some passive income and yet I was not able to earn any.

Was I regretful? Was I bitter?

Probably a little. :) But still I know those failures don't define who I am as a person. There's a saying "It's not the number of times you fall but how you pick yourself up each time you fall." I know I learned a lot from those failures so I just treat them as valuable reference experiences instead. Besides, what doesn't kill you makes you stronger. :) And I always remember that winners are not afraid to lose. I quote Michael Jordan when he said "I can accept failure but I can't accept not trying."

Why you are still financially unhappy right now?

Whether you are trying to make ends meet living life from paycheck to paycheck or living life like you're attached to a time bomb of debts, you're definitely making wrong financial decisions which need to change A.S.A.P.

Below are some tips on how to reverse your fortunes when it comes to money making you happy in life instead of getting stressed always with your financial problems.

1.) Get rid of credit cards.

2.) Calculate monthly expenses and get rid of unnecessary expenses. Make sure there is an excess.

3.) Get rid of liabilities or avoid them. If you're a couple and just got married and you don't have any savings, you might want to postpone making a baby. Having a baby in this case will be an added financial responsibility. It's better if you can put yourselves in financial stability before adding another financial responsibility.

4.) Invest on insurance. A lot of filipinos doesn't know how important an insurance is in building ones financial portfolio. Many of us have heard stories of properties, cars getting sold because our family member got hospitalized.

5.) Educate yourself financially. This is very important. We would often say "if I only knew that my life would have been better" but we never ask ourselves if we really tried our best to search for ways to better our financial situation in life. Enough of those "bahala na si batman" attitude.

6.) Stop procrastinating and take action.

The Story of the Father and Son and their Carabao

One day a man who lived in the outskirts of the Cebu province was going to market with his son and his carabao. They met a couple on the way.

“Why walk when you have a carabao to ride?” called out the husband, “seat the boy on the carabao.”

“I would like that,” said the boy, “help me up, father.” And the father did that willingly.

Soon they met another couple in the sari-sari store. “How shameful of you!” cried the woman to the boy, “Let your father ride; won’t he be tired?”

So, the boy got down and the father rode the carabao. Again they marched on.

“Poor boy,” said the next person they met, “why should the sluggish father ride while his son is walking?”

So, the boy got onto the carabao, too. As they went on, they met some foreign travellers. “How cruel of them! They are up to kill the poor carabao,” cried one of the travellers.

Hearing this, the father and the son got down. Now they decided to carry the carabao on their shoulders. As they did so, the travellers broke into laughter.

The laughter frightened the carabao. It broke free and ran away.

Moral of the Story: You cannot please everyone.

(Source: http://www.philstar.com:8080/cebu-lifestyle/2014/06/01/1329764/man-and-his-carabao)
(Original: http://www.kidsgen.com/moral_stories/you_cannot_please_everyone.htm) 

Sharing my thoughts:

Everyone will have their own opinions about what they see in you. 

We live in a society where behavior is mostly dictated by the media. We try to conform on what we see on TV or what we see in social media (e.g. facebook) without realizing whether our actions are aligned to our values and principles in life.

No matter what you do or how you do it, people will have something to say about it. Some are bad and some will be good. But the bottom line is people will always have things to say. It's up to you if you let it affect you or not. You cannot please everybody however you can please yourself.

So get out and enjoy life to the fullest. Live each day like it's your last day but make sure that you do things you want to do in life and not from the expectations of other people and be smart with your decisions.  What's important is you're happy and you don't step on someone else's toes in whatever you do. 

We can associate this to investing and peer pressure in a way that even we know how important investing is to better our financial standing in life and yet not even the majority does it. 

Majority of our friends and families wouldn't understand us if we take action and invest for our future. But as long as we know that what we are doing is right and we don't harm other people in what we do, then that's all that matters. We don't have to be bothered with what other people would say about us. 

We don't please anyone. We only please ourselves.

Poor Mindset VS Rich Mindset

The big difference between the poor and the rich is actually their mindset.

Even if you are poor but you have a rich mindset you will prosper in life. That's what my mentor would always say. And I truly believe in it. Are people born with this mindset? I don't think so. It can be learned but the trick is you have to want it. This desire to learn will open up opportunities for you. You grab those opportunities. You open your mind to learning and you'll see yourself attending seminars and learn from people you want to emulate. You surround yourself with positive wealthy people or people that are in the same journey like yours. And next thing you know is that you become like them. This is how I cultivate my own rich mindset. It doesn't happen overnight. I had to attend tons of seminars year after year. I was open to new learnings. Slowly I was becoming like them.

Let me share with you behaviors I observed from people that have poor and rich mindset.

Poor Minded People

1.) They are financially illiterate.

2.) They are comfortable where they are in life. They just continue to do the same mundane things over and over again expecting a different result.

3.) They see money as a means to reward their selves or to make them happy.

4.) They have bad debt or they're having a hard time to eliminate their bad debt.

5.) They love to practice instant gratification. They upgrade with the latest gadgets, cars and go for travel even though they don't have any emergency fund or life insurance or debt is not yet fully paid. They upgrade their lifestyle every time their salary increased.

Rich Minded People

1.) They understand financial management is vital in one person's life because they know that finances properly handled also positively affects other areas of your life and responsibility is also lessened when you know how to handle your finances.

2.) They have that burning desire to prosper in life may it be to achieve financial freedom, tremendous wealth or anything like that. This desire keeps them open minded for learning new things and to the opportunities that come their way. This desire pushes them out of their comfort zone to try new things that will lead them to achieve their goals.

3.) They see money as the storage of their time value. Our employers buys our time through the form of a paycheck or salary. A rich mindset understands that if we spend all our time value (paycheck) we will never get it back because time lost is irreplaceable. This is the reason the rich mindset saves and invests.

4.) They have zero bad debt.

5.) They delay instant gratification knowing that greater things will come for those who wait.

There you go! Be sure not to follow what poor minded people do. A poor minded person will never get out of the rat race cycle. Turn yourself into a rich minded person and soon you will become one.  

How to find your passion in life

Having passion in life gives us direction. 

It gives us motivation each day as we wake up in the morning ready to face the challenges ahead of us. On the contrary, having no passion in life makes us live like zombies where we just tend to follow what other people are doing, observing what is the trend and following it. 

I remember reading an article which talks about the things dying people regret the most in life. One of which is not doing the things that really mattered to them. Instead they do things which is what other people would want from them. The result is its like you lived a life that is not truly yours, a fake one I may say. Sad but true.

Successful people have one way or another identified their passion in life and used it to achieve greater things. Take the case of Warren Buffet who is regarded as the world's greatest investor. He always had that passion for investing ever since he was young. Another example is Steve Jobs and his passion for making a difference. His innovations made our lives better. 

For those who haven't found or are not yet sure what there passion is, let me tell you one technique to identify your passion in life. This was shared by my business mentor when I attended one of his seminars. One should imagine that in this world all jobs will have the same salary and there will be only one currency. Let's say the currency will be in US dollars and let's say the monthly salary for everyone would be 1,000 dollars regardless of the job you have. What job would you want to do? 

This scenario would force you to choose the job that you truly love. And since you enjoy doing it that you don't even consider it as a job. That's where success comes after.

I hope this post helped you in a way to find your passion in life.

What is a big net worth if you don't have passive income?

I was in the office and searching some quotable quotes about financial management when there was this quote that struck me. It says "What is a big net worth if you don't have passive income?"

It struck me since I was this person. My net worth though is not that big but I know that I still don't have passive income. Yes my mutual funds have earned but those earnings are just in paper. Unless I liquidate it it's nothing but a number. That's why I got more convinced that what I'm doing now is right at least based on one of the goals I want to achieve in life. I'm putting most of my hard earned money on real estate with the goal of turning these properties into cash cows. Rental income from my properties will give me passive income in the future which will set me free financially. That is what I'm looking forward.

I withdrew some of my money in mutual funds and invested it in real estate. I remember listening to Robert Kiyosaki's teachings in youtube. He was telling that money working as currencies which tend to fluctuate in value everyday should be immediately invested in a real asset like real estate. Money working as currency will lose its value the longer you don't do anything with it. It made sense.

Debt Challenge

I challenge you to eliminate your debt! 

This is a big fundamental in building wealth. By the way, we are talking about bad debt here. In case you don't know, there are two types of debt. There is good debt and bad debt. A good debt is a debt in which somebody is paying that debt for you. An example of this is when you bought a real estate property let's say a condo unit and you had it rented out. In this case, you had the tenant pay your condo unit's monthly amortization. You indeed have a debt through your bank loan however your tenant is the one paying it through the rental income you receive each month making your loan a good debt. Having good debt is a good way of leveraging which is very essential in building wealth.

On the other hand, a bad debt is a debt that you're the one paying. Imagine the same scenario above but for some reason you were not able to get a tenant to rent you condo unit. This debt becomes a bad debt since you'll be obliged to pay the monthly amortization. It takes money away from you pocket. Really good investors don't really pay or at least put out a lot of money in order to acquire assets. They're usually very good in leveraging with banks.

So let's get back to eliminating debt. Whenever I say the word debt here, what I really mean is bad debt. It takes a lot of commitment and discipline in order to get rid of debt. I remember back around 5 years ago when I had a debt of around 100 thousand pesos I accumulated from using my credit card. I know it's not that big of a debt but who knows how big it will get if I did not decide to get rid of it right? I'm the kind of a logical person so I get stressed if I see some issues or problems around me. I know if I don't take care of these issues logically it will hunt me down in the future that's why I intend to resolve these issues... financial issues to be exact.

After attending the IMG seminar and learning that elimination of debt is one of the foundations of building wealth, I had a realization. I thought to myself that if I was able to build this big of a debt (for me it was already big at that time) then I should be able to build this much for savings instead. I twisted it around. So at that time around 2010 I decided to eliminate my debt and instead just build my savings equivalent to the debt I once had which is around 100 thousand pesos. I made the problem a challenge for me to overcome and it went well for me. From that point in time until now, I can honestly and proudly say that I have zero debt. I'm on my way to get some good debt though since I have to get loan to finance my real estate investments.

I have heard countless of debt stories throughout my life. I even had a good friend of mine who accumulated a lot of debt during his 9 years of working abroad. It's so sad to think about it and there's nothing I could do as a friend to help him solve his financial problem. All I know is I learn a lot from this stories and experiences and I take action to things that I can control like debt elimination. I feel good and free knowing that I don't have any bad debt to worry about. I may not have the latest gadget and branded and cool clothes my friends and colleagues have but what I do have though is peace of mind and that for me is priceless. I know for a fact that I will be able to afford it in time if I stay patient, committed and disciplined towards my goals in life.

To end this blog post, I challenge you to eliminate your debt and instead turn it into savings. To illustrate, if you have a debt of 300 thousand pesos, I challenge you to eliminate it for one year or as fast as you can and on the following year is you have to build a savings of 300 thousand pesos and build it from there. I tell you that it's gonna be worth it and it will forever change your life financially.