Monday, April 30, 2012

How financially educated are you?

“The best way to help the poor is not to become one of them” -  Laing Hancock

Two weeks ago, the news that 80% of Filipinos don’t have a savings account caught my attention. The reason is that majority of Filipinos can’t afford the 5,000 peso maintaining balance of set by banks. Personally, if one would really want to open a savings account they’ll just need to find banks like BPI that offers as low as 1,000 pesos maintaining balance to open a savings account.

It struck me the reality that the majority of us Filipino have a bad habit of spending and have poor financial education. I have friends from different walks of life, from messengers to upper management that told me of their challenges regarding money.

I remember my parents talking about what happened to some of their friends and co-workers after retirement. Most of them become financially challenged because they lacked financial education. After getting a huge retirement pay, most of them spend it like crazy. They spend it to what they believe are investments like the houses they bought, businesses in faraway provinces, go to their dream vacation they’ve been dreaming of. Some lose it in vices like alcohol, bad women and gambling.

And then reality bites, expenses doesn’t stop whether you have money or not. The bills keep on coming and without enough money flowing in they resorted on selling properties, some are buried in huge debt and these people who spend their lifetime working will be forced to work again.

At an early age, I too have experienced this. I realized that I’ve been working for some time now but my savings aren’t that great.  Is there really a way to get out of the rat race? If there is really a money game, I’m losing. For such great effort exerted in work every day, I’m not earning that much.
So I came to question the system because for almost all of us, the system didn’t work at all. The more we earn, the bigger the expenses. Our salaries are even reduced even before we get it due to taxes and other deductions. Of course, we shouldn't just blame it all on the system because the true culprit is our spending habits. How we spend it all, like there is no tomorrow.

Before we were born, this kind of system is already in place. Many call it the rat race, some experts call it the money game. The game is simple; to be financially independent the money going in should be higher than the money going out. The money going in is called assets, the money going out is called liabilities. We just need to acquire real assets that work for us so that we don’t need to worry about liabilities. There are many ways to acquire real assets, see my previous post “Investments that work for you” to have an idea of what I’m talking about.

I listed some of the reasons why we need financial intelligence. Feel free to comment for suggestions that I can add up to the list:

1. Money is confidence. The more money you have, the more confident you become.
2. Financial Intelligence is freedom. The more you know how money works the less you worry about it. The less you worry about money, the healthier you become.
3. Financially independent people send their kids to the best schools.
4. Nothing beats the feeling of helping others. To be financially free, gives you the power to help more people. You cannot give what you didn’t have.
5.  5. The power to choose. Financially independent people have more choices regarding how to spend their time and work they want to have.

I'll be posting more free tips and tricks on how to manage your hard earned money and make it work for you. Feel free to join my tribe and subscribe to my newsletter. 

Wednesday, April 18, 2012

Investments that work for you

When I was in college, I've been given the opportunity to work for the Marketing head of our school as a on-the-job-trainee. My boss who eventually became my mentor was so passionate about investing that everyday he keeps insisting that I should read a very good book that he's reading. 

That book was "Rich Dad, Poor Dad" by Robert Kiyosaki. It was the first book that I've read about investing and little did I know that it will change the way how I think about money and the world around me.

Let's first discuss the difference between active and passive income. Simply put, active income is something we earn while working on something. Getting paid by doing our job is a classic example of active income. People pay us in exchange of the product or services that we offer.

Passive income on the other hand, is generated without doing any work at all. Sounds good isn't it? Imagine, if you have enough passive income you'll be financially free and can do whatever you want with your life without worrying about money.

I've listed some of the most popular types of investment vehicles that I've already tested. I'll just give a brief description of each because each investment vehicle will be discussed in detail in my next posts.

Time Deposit - The bank will pay you a bit higher interest rate if you let them keep your money for a period of time. Interest rates vary depending on the bank, amount of deposit and how long your money will be locked up.

Stocks - acquiring stocks (aka shares) makes you a part owner of the company or corporation that you invested in. If the company is earning, you will be earning too (The amount depends on how many shares that you bought). This is called stock dividends or simply dividend. Mostly companies pay every quarter while some pays one or twice a year. In my opinion, this is the most riskiest and most exciting investment vehicle because the market always tend to fluctuate.

Bonds - Bonds are like promissory note that was issued to you by a company or the government in exchange of the money you lend them for a period of time. It's one of my favorite investment vehicle because its nearly risk free. Interest rate varies from 5% to 21% and are subjected to taxes. Here in the Philippines, you can buy bonds from banks like Bank of the Philippine Islands (BPI), Banco de Oro (BDO) and Development Bank of the Philippines (DBP). 

Mutual Funds - If you know little about investing, I think this the most safest way to start. Mutual funds works like this, investors purchase "units/funds" from a company that offers mutual fund services. The company have a finance manager that manages all the money collected and invests the money to different investment vehicles like stocks or bonds. 

There are still many types of investments that I want to try, like real estate and gold. However, we'll discuss in detail the four investment vehicles that are listed above.

Wednesday, April 11, 2012

Awesome Bum's Top 10 Greatest Anime of All Time

When I was a kid, my grandfather and I were very close that we always watched different cartoons everyday together (both American and Japanese), in the morning and  afternoon. I grew up watching Tom and Jerry, Felix the cat, Little women 2, Zenki, B'TX, etc.

As I grew up, different anime masterpiece was shown in national TV that I was so inspired that I can't help myself but to dedicate this blog post to honor them.

Ten: Gensomaden Saiyuki

Gensomaden Saiyuki is an adaptation of a chinese famous novel "Journey to the west". The anime is about the journey of the four anti-heroes namely Genjo Sanzo, Sha Gojyo, Cho Hakkai and Son Goku. They were ordered by the three aspect of buddha to stop the resurrection of Ox-Demon King, Gyumaoh. The main characters are high ranking gods in heaven before they were reincarnated on earth as punishment to a certain incident. When I first watched this anime on AXN, I immediately became a fan. The anime was presented with a new style of visual effects during fight scenes and confrontations. The anime is not only about action, it also mixes some comedy and drama to the story.

Nine: Bleach

I first saw this anime when it was featured in our college newspaper. The writer gave it high ratings so I became curious and watched it in youtube. Eventually, I became addicted to it that I even watched it during office hours (sorry my past employer). Anyway, the story is about a young man named Kurosaki Ichigo who can see dead people (even dead animals). One day, he bumped to Kuchiki Rukia a shinigami aka Grim Reaper (or Death God or Soul Reaper whatever you may call it). Rukia was injured by protecting Ichigo from a hollow and have no choice but to give some of her spiritual powers to Ichigo. But Ichigo absorbed all of her powers, became a shinigami himself and slash the hollow to pieces. As the story progressed, Ichigo became more powerful than a captain rank shinigami and protected Soul Society and Karakura town from its enemies.

Eight: Hajime No Ippo

Every Filipinos love boxing. And everyone can't help but relate and sympathize to the story of the young protagonist, Ippo Makunochi. Ippo was bullied in school and avoided by his classmates because of his study-work schedule giving him no time to socialize. When he was cornered and beaten up by some bullies from his school he was saved by Takamura, a boxing genius that later inspired him to become the strongest boxer in Japan.

Seven: Gundam Wing

I watched this anime when I was in fourth year high school (damn, i'm old). For me, this anime shows that war doesn't solved anything. It just brings grief and sorrow to both parties and mostly the current and the next generation suffers because of it. Anyway enough of me being sentimental. This anime is the story of five unique and remarkable gundam pilots that was chosen and trained by five scientists that rebelled against "Organization of the Zodiac" aka Oz. The mobile suits was called Gundam became the metals used in constructing the suits was called Gundamium. The five mobile suit pilots was sent to earth to free the colonies from the Alliance's opressive rule.

Six: Naruto

Naruto was one of the few anime that offers a rich collection of characters but still gives emphasis on everyone of them. I was impressed on the number of ninja moves, uniqueness of each character and unpredictable fight scenes. The story is about the child Naruto who was sad and indifferent because of the cold treatment of the Leaf Villagers towards him. He was treated this way because the nine tail demon fox was sealed inside him and the villagers believe that the demon fox was Naruto himself. As he grows strong through hardship and training, he also struggles to be acknowledged and to earn the respect not only by his masters but also by the people.

Five: Yu Yu Hakusho

Who can forget Eugene's signature shout "ReiGan" or Ray Gun!! Yusuke is the original name but I prefer to use the name Eugene because it was the name used when it was dubbed here in the Philippines. Eugene(Yusuke), Alfred(Kazuma), Vincent(Hiei) and Dennise/Denise(Kurama) formed a team that was sent to fight the evil guys under the direction of the baby boss of the underworld Jericho(Koenma). I used to watch it on Channel 13 and I became really frustrated when it was always replayed back on the first episode. Thank God, the series was transferred to GMA 7 making it one of the most popular show in the Philippines.

Four: Slam Dunk

I watched this first in AXN and I was hooked in this series because of its funny yet serious approach. The story revolves on Hanamichi Sakuragi a self-proclaimed Tensai (genius in Japanese) as he joins his schools' basketball club (Shohoku) because of the girl he likes (Haruko). By joining the club, Sakuragi met diifferent people like his rival Rukawa, baskeball captain Akagi and many others. The series ended before the national tournament starts and I'm one of the fans who's still praying for a second season.

Three: Death Note

What will happen if one of the best criminal mind and the world's best detective collide? The anime is about the story of a young genius who founds a mystery notebook that can kill any person by writing his name on it. Because of the number of the criminals he killed, interpol has summoned the best detective to chase him. With unbelievable twists and unpredictable story line this anime is a must watch!

Two: Voltes Five

"Borutesu Faibu Ni" I bet that you're singing this while reading. I first saw this anime when I was 6 years old and during that time it was extremely popular. Even today, majority of the people I know especially the younger ones still knows who Steve, big Bert and little john is. This anime is a classic and laid the foundation of anime fandom here in the Philippines.

One: Ruruouni Kenshin

In my opinion, Rurouni Kenshin (aka Samurai X in the US) is the best anime ever produced. I first watched this anime on Studio 23 and eventually became an avid fan. The story revolves around Kenshin Himura, the legendary swordsman that paved the way to the Meiji Era. Even though he tried his best to live a peaceful life, his dark past always seemed to haunt him. The reputation of being the strongest always attracts different challengers and even the government asks for his help.

This anime boasts an awesome soundtrack, superb fight scenes and amazing plot. If you haven't watched it, your missing half of your life. Just go to youtube or crunchyroll and give it a try.