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

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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!

July 14, 2008

Buying a Car

Posted in financial decisions, obstacles at 1:55 pm by kimsan23

Fuel prices have gone up pretty fast since March of this year.  I currently drive an automatic gas guzzler which costs me an arm and a leg to gas up every week.

Crazy thing is I’ve decided to buy a car.   This is going to affect my savings but I think it needs to be done.  Currently, my car runs at 5-6 kms. per liter of unleaded gas.  I’ve decided to get a car that will run at 17 kms. per liter. I save a lot in the long run plus I get a new machine.

I did all my computations and found out that this transaction will not cut out my saving habit too much.   I just need to buy a car that will fall under the 300-350k range.

This is a big decisoon for me since I still am racing to get my 1 million.

June 3, 2008

Why I Have More Than 1 Bank Account

Posted in financial decisions, planning, saving tips at 8:04 pm by kimsan23

Saving money is a discipline. Discipline with saving up isn’t something I automatically developed as my parents taught me the ins and outs of personal finance. Truth is, I took after my dad who has almost zero skills in saving money. It was my mom who really knew how to handle finances and save for a rainy day. She helped me open my first bank account, which I ended up closing just because I used up all my funds. Mom would literally nag me into opening new accounts but I was always short of cash and could not maintain a bank account’s minimum balance. When I started my own business, money kept going out of my checking account but not in. I lost again. I was spending exactly what I was earning with absolutely no concept of trying to turn a profit out of a business or saving a small portion of a salary. Everything cash went somewhere else — away from any bank account or even piggy bank for that matter.

Just about this time last year, I had decided to start saving up. Seriously saving up. Even if it meant putting away just 200 pesos every payday, at least I was getting somewhere. The company I was working for closed and gave us all separation pay. As soon as I received mine, I immediately decided on the different ways I could use it. A good portion went to opening a bank account with a maintaining balance of 10,000 pesos. The other good portions went to credit card debt and of course, a few splurges — after all, it was my money.

At that time, I already had 2 bank accounts in different banks. One of them was a joint account and the other was a personal one. Recently, I bought into a time deposit — my 3rd account.

So why in the world do I have all these accounts? Simple. Since I do not have the discipline to maintain a plain bank account — I opened several with limits.

1. Joint Account – Since it’s joint, I could not spend the money in it without informing my co-depositor. I keep tabs on the account, checking what money goes in and what goes out. So far, we’ve maintained pretty well since January of this year. No money goes out unless it’s needed and is mutually agreed on. This account is the one we use for emergencies. So the money here is pretty much temporary– meaning it could be withdrawn any time.
2. Time Deposit – This one’s locked up for 7 years. Hence, no touching unless absolutely necessary.
3. Personal Account – I opened this one as a passbook account with no ATM access. I made sure that it was easy to deposit (inter-branch with no fees) but hard to withdraw. I could only make a withdrawal at the main branch which is technically hell to go to.

So far, it’s been 5 months since I started fixing my financial set-up and I am proud to say that I have been able to ably discipline myself. My savings are consistent — I keep track of all deposits and withdrawals. I have been able to develop a savings-only mindset which allows me to allot a fixed amount for savings every payday.

Next thing I have to work on is…how to stop taking money from my piggy bank!

May 23, 2008

(Un)Expected Income

Posted in extra income, financial decisions, saving tips at 9:47 pm by kimsan23

One thing I like about being employed is the that money comes in every month, without fail.  I had just received my mid-year bonus and I am happy to say that it has contributed greatly to my savings account.  I immediately put aside one half of it to go to my savings account.  The other part will be used as a revolving fund for our business and the remaining balance will go to driving lessons.

I knew that this money was coming but wasn’t able to make plans for it until today.  I kind of liked it thought that it came quite unexpectedly because when I used to look forward to receiving it (from my old company), I always ended up spending the amount BEFORE I get it.  I’d swipe my credit card knowing that I’d have money to pay for my purchase in a few months!  That was just plain dumb.  After accumulating debt over spending without the actual money on hand, I decided to stop my “I’m gonna have $$$ anyway” attitude and decided to be realistic.

Things to remember when you’re expecting extra income:

  1. DO NOT spend money you do not have.
  2. If you are unsure about the amount, make a conservative estimate and plan.
  3. If you are sure about how much it will be, go ahead and plan.
  4. Your plan must not, as much as possible include paying for something you bought because you were expecting.  Pay for old debts without making new ones!
  5. Set aside a “fun amount” — reward yourself with something so that you do not feel deprived.

What to do when you get unexpected income:

  1. Verify the source to know if it’s legit (most of the time, it is).
  2. Make a priority list of expenses you may want to use the money for.
  3. Set aside and amount for savings (you can even save it all).
  4. You can also use it to go to a business fund you had previously set-up.  Or you can start a fund just for that.
  5. Reward yourself!

April 26, 2008

Cupcakes…and everything nice!

Posted in business, financial decisions at 11:21 pm by kimsan23

I’ve never really been a great business person. The first business I started was re-selling cupcakes that I bought from the neighborhood bakery. I was 11 years old. After that, I started a mini-siopao distribution in school which did make a lot of money BUT I graduated and that ended my siopao stint. A few other tiny businesses happened but were not sustained.

After the humongous failure that I was setting up a gym and a martial arts company — I decided to take a hiatus from any form of business and get my ass back into the corporate rat race. Today, a little over 30, I’m trying again. My partner and I have gotten into baking. A lot of people have told us to sell our food items but we never really got around to planning for it. This time, we’ve decided to try our hand at it– to see if it works out.

I’m a little nervous but also excited. I’ve looked at the prospects of distributing to small coffee shops as well as to some restaurants. We know that most coffee places don’t really bake their own goods, so we’re taking advantage of it.

All in all, the investment will total about 15k. That includes equipment, sampling cost (Hey bloggers!  wanna get invited?  Just let me know.) and initial buying of ingredients. Good thing is, we have a financial partner! We still have to contribute our share but at least we won’t have to shoulder the full investment.

We’re hoping to get an ROI within the first 2 months of full-swing operations.

Note: Oh but hey, I am not quitting my job. That’s far too radical a step for me. If I had been able to do it before, I can’t do it now. I no longer live with my parents and I have bills to pay!

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