May 22, 2009

It’s BONUS time!

Posted in 4 Steps to Financial Freedom, extra income, planning at 3:07 pm by kimsan23

Most of us in the Philippines don’t get our bonuses til Christmas season.  Some of us get it quarterly or in the middle of the year.

I work for a company that has paid out bonuses both in the middle and at the end of the year.  They basically split the 13th month bonus (a mandatory gov’t benefit) in half.  The first half is given to the employee at the end of May, so that employees with kids could pay for enrollment and other school fees.  The other half is given on the first payday of December just in time for Christmas shopping.

For people who don’t understand our salary structure here in the Philippines, it’s basically this:

  1. 13 month pay – required by the government.  If an employee separates from a company before the year is over, he still gets the pro-rated value of this bonus.  It’s normally factored into a salary as more of a forced-savings kind of thing.  This bonus is non-taxable up to 30k pesos.  Beyond 30k is taxed.
  2. 15th and 30th paydays – most companies schedule paydays twice a month.  it’s normally the 15th and 30th of each month.  Other companies have it on the 20th and 5th of each month and others have their own schedules.  This is designed to help people budget their money for 15 days til the next payday comes.
  3. Additional bonuses – are really up to the company.  Some companies give a 14th-16th month bonus, quarterly bonus or mid-year bonus.  This is usually dependent on the financial standing and performance/productivity of the company.  It’s not mandated by law so it could be cancelled by the company at any time.

So how do you normally spend your bonus?  Since you’d already know at what time of the year it’s coming, it’s always wise to plot your spending in a chart or list so that you could maximize the benefit of the bonus.

Many people don’t have a plan, that’s why they end up spending all of their bonus without having a chance to save any of it.

Ever since I started becoming financially conscious, I’ve decided to always have a plan of sorts for any money that comes in on top of my current salary.  Even if I am fully aware that my bonus is coming, I still treat it as “extra income”.

My advantage really is that I don’t anyone to send to school.  And the tendency of people like me is basically to buy the newest electronic toy in the market.  As long as you have planned to put your money there, no problem.  Just make sure you are prepared for any other spending you might have to do.

Stick to the essentials before rewarding yourself with a big ticket item.  What do you need now?  Do you need to repair your car or home?  Make a list of what you need to spend on and what you want to spend on.  That way,  you could prioritize.

Guide questions:

  1. How much of this bonus should I put into savings? (I’d say answer this first before splurging on anything else.)
  2. How much should I use to pay for my debt? (Credit card, loans…etc.)
  3. Do I need money for my car or my house? (Unless you have established a separate fund for this, you need to ask yourself that question)
  4. Do I have enough to invest in a business?
  5. Do I have enough for my kids’/siblings’ school tuition and other fees?

and finally…

What can I reward myself with this money when I’m done allocating it to what I need?

Prioritize your spending specially when you come into a big amount of money.  This way, you will maximize the use of the most important employee you have in your life…MONEY.

Money doesn’t complain…doesn’t charge overtime…doesn’t take breaks and does all the work for you for as long as the price is right.  Make your best employee, money– work for your benefit.

April 30, 2009

Book Review: 12 Steps to Build Wealth on Any Income

Posted in books, extra income, financial decisions, investments, loaning, planning, saving tips at 1:51 pm by kimsan23

I was browsing books in National Bookstore when I came across a shelf with an abundance of books on personal finance.  What’s so great about the book market now is that there are a good number of books that tackle personal finance for Filipinos.

There used to be a whole lot of books on personal finance but all of them were written mostly for other countries.  Of coure the basics will always be the basics but what’s nice about local publications is that there are local scenarios being discussed.  So, in short, I CAN RELATE better to local books in terms of managing finances.

I found a book which I eventually bought after browsing through the pages every time I was in National Bookstore.  Every week, I would pick it up and take a look at it to see if it was worth the buy.

Book Details:

Title: 12 Steps to Build Wealth on Any Income
Author: Alvin T. Tabanag
Peso: 300+ (sorry, i took the price tag off)
Availability: National Bookstore
Rating: 4/5

———

Review:

Alvin Tabanag’s book deals with the hazards of spending, the joys of saving and the struggle one must go through in the process of balancing ones earnings with his finances.  I am impressed at how much research as well as common sense went into the creation of the book.  He tackles several topics which include:  how to save, making the right investments, saving for retirement, understanding how money grows in a bank, and a great section on credit cards.

The book is written primarily in English but has some excerpts and examples in Filipino.  You don’t have to be an accountant or finance-savvy to understand his book.  He explains personal finance in layman’s terms making the book an easy and very interesting read.

I most especially enjoyed the section on templates where he shares some simple forms on budgeting.  There is also a section with a list of banks, mlm companies, mutual fund companies and other options for investment.

Soon, I will share some of his tips and how those tips have impacted my saving and spending habits.  I highly recommend this book.  So far, I have influenced 3 people into making the investment of buying the book.  It has been a month and they are happy customers!

March 30, 2009

1/3 in 2/3 more

Posted in business, debt, extra income at 1:20 pm by kimsan23

This has been one of the hardest times, really!  Saving money has become difficult specially now that I’m paying for a lot more things than before.  One great thing going on for me is the possibility of really growing my business.  Tomorrow, I’ll be doing my “costing” for my new venture.  I’m gonna start with some small businesses first them see if I have the capacity to grow it a bit more.

My family once owned a large scale dimsum business.  This was closed in the 1980’s to give way to a new venture (which eventually failed).  I am determined to revive a part of that dimsum business to see if it can still survive despite the times.  Some of my family is trying to do their version but the problem is, they’ re not doing so well in terms of pricing and really providing great value to customers.  I intend to change that.  So, i’m doing my own thing.  Some of you guys, if you’re in Makati tomorrow will see me delivering dimsum samples to the steel “jolly jeeps” in Legaspi Village.  Wish me luck!!

***

In other news, I have officially wiped out my credit card debt!  This gives me an extra 5k per month to put in the bank!

February 10, 2009

February Financial Update

Posted in business, extra income, investments at 3:20 pm by kimsan23

Hi everyone! It’s been a tough January for me and as I write, I am looking at the possibility of doing away with a current endeavor. I won’t say what it is yet but I am determined to find other means of income!

I can already invest a good amount of money in a small consistent business which I have not found yet. So far, what’s earning for me are my investments in used car sales. I have already turned in a profit of 25k out of investing in this. What I would like to focus on now is to do more sales in terms of a food business, something that involves dimsum 🙂

Can anyone help me set up food carts? I really want to do this. Food sells specially when the product is very yummy.

I really need help with marketing. That’s my waterloo.

Right now, I am crossing my fingers at the prospects of writing books since this is one thing I did in the last month. It was fun but the profits turn in a bit late. I’ll probably be getting my cheque in June or July. You see, they’re academic books so I need to wait for the school year to start.

I really need something solid here. Am getting anxious over the economic situation.

January 6, 2009

Here’s to the New Year!

Posted in business, extra income, investments, planning at 2:24 am by kimsan23

2009 seems to be a promising year for me. 🙂  I was looking at my Chinese zodiac and it seems like this year will be fruitful in terms of finances.

Highlights for 2008:

  1. I started earning much better than in previous years
  2. My savings account bloomed during this year
  3. I was able to buy a car and move to a better apartment
  4. I exercised a lot of control over myself when it came to spending
  5. I learned how to maximize my earnings by effective budgeting
  6. I also learned how to let go of money when I had to for emergencies
  7. I made significant investments and started using eBay
  8. I made some money out of internet ad placements
  9. I made money out of what I love to do (martial arts)
  10. I offered a new type of service and was able to help some people who did not have work.

Goals for 2009:

  1. Find more freelance work to earn more
  2. Close a book writing contract
  3. Close another book editing/revision job
  4. Manage to open a “Paglingap” time deposit through work
  5. Get more involved in sports activities
  6. Get more training for professional growth
  7. Pay off car (WHEW!)

Now to the actual entry….

Today marks my first workday for 2009!  So far things are quiet at work since it’s only the start of the year.  During the long break, I managed to accomplish a significant number of things.

First, I was able to invest my money in a buy and sell car business.  So far, the first ROI cheque came in on time.  I am expecting two more installments this month.  This business pays me 20% of what I invest in a span of 3 months.  So far, my investment here is at 250k, split in two.

Second, the Chinese deli store that my dad is starting is asking me to sell our famous Tipsy Chicken.  I still don’t know if this business will really fly but so far…the chicken recipe works — it’s just a matter of selling it!

Third, my project with the security agency is still ongoing.  We are resuming classes by the 2nd or 3rd week of January.  This is something we started last October 2008 — my group and I started offering to teach practical self defense and combat skills to security guards.  The security agency got a huge discount from us but since the volume of work is a lot, we are still getting paid pretty well.  I am expecting some payments by February at the latest.

Finally, I started a book project with an academic author.  I revised an academic book on ESL for this person.  Payments though won’t really come in till the start of the school year but I am definitely expecting some good returns.

I am also considering some business options this year.  I was hoping to set-up an admin-services type of outfit like a business center.  It’s just so hard to look for a location!  Ideally, it should be very near a school but there is no more space for me!  If I put it in a mall, I’ll end up spending way too much on the overhead costs.

The baking business went very well last Christmas, we had tons of orders but I personally don’t earn from there.

One thing I really would like to do is get more book projects.  I am working on a personal one now, which is a book about practical self defense but that will be personally funded by me.  I need more book projects from other people that are willing to pay me to edit, revise or even write a book for them.  I wonder if publishing houses would be interested?

On the money side, I was good all Christmas vacation and did not over spend.  Hooray for me!  I followed my budget quite strictly.  Even though I  got sick, I was still able to stabilize my savings and even open a new account for myself in PS Bank.

The reason I’m opening more accounts is not because I have tons of cash but because I am positive that this year, I will be able to max out the PDIC limit on 2 of my bank accounts.  I intend to keep money to a maximum amount of 250k per account so that I am fully insured by PDIC in case the bank runs into some trouble.  Well, I don’t half a million yet but you know what they say: “If you open it (an account), it (money) will come.”

Happy New Year everyone!

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