Sunday, October 31, 2010

Financial Freedom - Our Goal

When I was invited to join the Rotary Club here in our area, little did I know that I will meet a person who I consider to be my mentor in life. I have been working since my college years, have ventured into small businesses over the years but I have yet to see my niche in life which will help me or guide me to my goal which is to be financially free by the time I retire. I read a few books which made me understand that I will never reach my goal as long as I am employed and thanks to Robert Kiyosaki's book of Rich Dad, Poor Dad, I think I have an idea how to reach my goals. The big problem is, how will I start or what will I do next?

According to Kiyosaki, people are grouped in 4 classes. Employed, self-employed, businessman/woman and investor. Majority of our population is unemployed (which was not included in this group) a big portion is employed, some are self-employed and business owners but only a few are investors. Judging by the groups, you can immediately see that financial free people belong to the business owners and investors. Why? Simply because they do not work for money but let their money work for them. How is this so? Unlike me, I earn when I work, which is my active income, these people earn through their passive income. Their money multiply by themselves and they live only by the interests of their investments, which are their passive income. It is no secret, the rich gets richer and the poor becomes poorer.

People do not get rich by how much they earn. They get rich by how much they save. No matter how much you earn, if your expenses are as much as your revenue or maybe higher that how much you make in a month, chances are, you will be broke in a month or two if you lose your job or your business. Saving takes so much discipline that only a few realizes its advantages. Regular people get their savings after their expenses which sometimes get zero amount because expenses are so high nowadays. My mentor told me that in order to have savings, here is the formula. Income - savings = expenses. One must get a fixed amount of savings in a month and the money left is for expenses. What if the money left is not enough for expenses? You should make ways to increase your income and not get anything from your savings. Once you discipline yourself to increase your savings and channel it to other ways to grow and multiply, then there you are, you are on your first step to reaching your goals.

Once you accumulate savings will they automatically make you rich? If you have a million in time deposit, will that make you rich? Another no. Time deposit usually gives you 2.5-4% annual interest, so your 1 million will earn 40,000 in a year, break it into 12 months and you get only 3333 in a month. That hardly supports a family of 3 or 4. How about 2 million in time deposit? 80,000 a year, 6,000 a month, still not enough. Probably 10 million in time deposit. Truth is, time deposit is just one tool, and there are a lot of tools out there which are better than time deposit. Some give you 5% annual, some 10% others even 40-50%. But, the higher the rewards, the more risk you are exposed to. How will you be able to handle these risks to gain more? Education. You need to study all these tools to maximize your income potential. Some say people get rich in stocks but a lot of them also loose big. It is really a risk, so if you just join the bandwagon of buying stocks just like everybody else, you will end up just like everybody else.

My mentor told me that in order to get rich, you must be involved in three aspects. Business, real estate and stocks. All of these require money, and not just little but big money. Unfortunately I only tried one aspect-business, and was not successful. But, I am not giving up. I have much to learn and have much to gain. In order to gain wealth, a person should have 2 things, discipline and time. During my youth I have lots of time but no discipline. As I grow older, I have discipline but only little time. But it is not too late. I have 5 years to reach 40 and 15 years to reach 50. If everything goes well, my target is to retire by the age of 55 to enjoy everything that I have worked for. So, that's it, my goal is to be financially free by the age of 55 and the more money I have, the more I can share and give to others and the more quality I can spend to my wife and children.

Sunday, October 24, 2010

Bayantel DSL Speed

After 10 months of using Sun Broadband Internet, we finally decided to apply for a Bayantel DSL connection. I figured Sun Broadband will improve their service for months and I was a bit controlling our expenses for internet subscription so I opted for prepaid. Unfortunately, despite Sun's aggressive campaign of getting up to 3.0 mbps internet speed, the best we got ranges from 600-800 kbps during lean hours and 100 kbps on peak hours. We live in Project 4 Quezon City area and I am sure there is a near cell site since Cubao and Eastwood (which are 7-10 minutes drive from us) are prime business locations. Maybe prepaid users are not priorities, but I also have a friend, who uses Sun postpaid but says he also has a crappy connection.

I tested our connection speed at yesterday and today. Yesterday I got 700 kbps during peak hours and today I got 1.03 mbps also on peak hours. Not bad, considering our plan, 999 is the second cheapest. Plan 999 promises 1.0+ mbps on their billboards and advertisements and by the looks of it, they are truthful. Hopefully they will be consistent most especially during peak hours. I was considering to get the 1299 plan but I decided to test the plan 999 first and upgrade later. Seems to me, our current speed is acceptable. The reason we shifted from prepaid to postpaid is my wife is beginning to use the internet more frequently for the past two months. I was the one who started blogging (through my friend's inspiration) but my wife got the hang of it when she started to gain more "mommy" friends online. She has been purchasing prepaid cards everyday and we end up spending Php 1500 a month for prepaid and for a retarded Sun broadband connection. Logically, DSL connection will be cheaper for a low monthly plan. And yes, connection is much better. So there it is, my wife and I are both happy and she can blog as much as she wants (except when my 3-year-old son dominates the pc). Incidentally, if you are a mom blogger or a female, you might want to check up my wife's blog and her friends. Here is the link:

Sunday, October 10, 2010

President Noynoy Aquino First 100 Days

It was President Noynoy Aquino's first 100 days last October 5, 2010. He had his speech and "Report to the Boss" at La Consolacion College Auditorium in Manila. After his speech, the program allowed different Filipinos from all over the country, even overseas to ask a question to the President about his plans related and other issues which concerns their provinces and regions.

It was an informative program, with the President mentioning his administration's accomplishments in less than four months and other projects in line for the coming days, months and years. His speech was applauded several times and the viewers can see that the audience was satisfied with his speech. In the middle of the program, during the question and answer part, several UP Manila students stood up, held bond paper sized placards and shouted their criticisms on the present government's plans on limiting the budget allocation for education.

UP students are known for years to be activists and militants of current administrations. Together with Polytechnic University of the Philippines (PUP), these schools are training grounds for students who are passionate about their beliefs in politics. They are introduced to organizations who are headed by activists or members of political groups who usually go to the streets and show to the public their protest actions. The Philippines is a democratic country and the government exercise maximum tolerance to protest actions because they believe it is every Filipino's right to express his opinions and beliefs to issues that directly affect his life and the lives of his fellow Filipinos. Personally, I had a block mate before in UP Diliman who was so passionate about politics that he decided to skip his classes and instead join an organization who are known to have protest actions to any current political issue.

It was both good and bad that the students were able to get the attention of the President and all other public officials involved but I would say this time it was really premature. If you analyze the situation, 100 days is a very short time to make changes which could make a difference to the country's situation economically. In about 3 months, the present government had exposed a lot of anomalies with regards to the use of millions of government funds to give unreasonable salaries to Government Owned and Controlled Corporations (GOCCs), the president had a trip to the US and got a millions of grants (not loans) to fund projects in the provinces and invited investors to give jobs to Filipinos. It may not be a big accomplishment, but these things can be a start of something good for the country. We may be a democratic country but we must give the present administration a chance to prove themselves and fulfill their promises made during the election period. 100 days is very short time to give criticisms, judge performances or even go to the streets and blame poverty to the present administration. I would say give Noynoy a year or two and see his accomplishments and then make it a point to inform him and his cabinet members issues that are not given priorities.

Actually, asking the President programs and plans for a certain city or province is like barking at the wrong tree. Each province has a governor, each city or town has a mayor and each district has a congressman. These people control millions of pesos in their annual budget and it is their priority to uplift the situation of their constituents and improve the economic value of their city, town or province. Even here in Metro Manila, you could see which cities are performing good and who are the mayors who use public funds to improve their city or just putting them inside their pockets. For example, Quezon City and Makati, both prime locations for residential and commercial establishments. Can you compare the business districts of both cities? How about slum and squatter areas for both cities? Did both previous mayors bragged about their accomplishments or did the progress of their cities came from private investors and not from the local government? How about the provinces? Which mayors and governors did their jobs? Can you compare the province of Davao to Samar? How about the Negros province compared to Mindoro? Palawan and Bicol? Ilocos and Isabela? Were pork barrels of congressmen used for progress or just for mansions and other properties abroad?

The Philippines need time to recover from the economic turmoil the Arroyo and Estrada administration gave us. The Estrada had 2 years and Arroyo 9 years. That is a total of 11 years. How could you fix it in 100 days? It is like asking a farmer to plant rice in hectares of barren land in a span of 24 hours. Or asking a janitor to mop and wax the floor of a basketball court in 3 minutes. We need time and patience. Sadly Filipinos are known to be very impatient. It is our major flaw and it is one of the reasons why until now, we are a third-world country with a very big population.