April 30, 2009
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.
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
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!
May 13, 2008
This is an update on my first post about getting an SSS Loan.
I can’t belive I was approved! Initially, I was told that I needed to have a total of 72 SSS contributions to qualify. When I checked online, I discovered that I only had 66. I wasn’t really counting on it to happen but I’m glad it did — at the right time too! It wasn’t the amount I had expected but at least I got the money.
I discussed earlier that I would put it in a mutual fund or some time deposit. Unfortunately for me, I had to shell out a significant 6k for car repairs and maintenance. So that’s where part of my loan will definitely go. In net total, I received 13.5k.
I guess the rest of it will have to go to the purchase of our new bed as well. I will definitely deposit some of it in my account, just to ensure that I do not lose the habit of making a deposit every time I get money.
- car repairs: 6k
- bed: 5k
- savings: 2.5k
April 17, 2008
Yesterday I got to talk to the people from Human Resources at work. The conversation found it’s way into the topic of our local Social Security System. Everyone was telling me to get a loan. Of course, I’m not really interested in getting a loan but then something interesting came up.
I was told that if I qualify for a loan (I need to have at least 72 months of contributions) and I that if don’t use it, someone else will! Now what did that mean?! They explained that there have been cases when people who needed to loan applied, and all of a sudden were declined because the loan had already been taken out by someone else (rumor has it that sometimes, it’s even people from the system)! Weird thing is, it’s happened to my uncle! He tried to take out a 20k loan and was told that he had already loaned and that he wasn’t paying. I have no idea how that was resolved but I certainly hope it was fixed. Talk about identity theft Philippine style!
So, I filled out a form and will submit two IDs today to complete the requirement. My office will process the loan for me. Now of course, I’ll need to pay a 10% interest rate on the loan. I mean, the money has to go into something so that it earns more than that (10%) to make my loan worth while. The loan payment for this will be spread across 2 whole years – I have to get ready to feel that minor pinch whenever I get my paycheck.
So today, I’m looking into time deposits and mutual funds. My friends are suggesting mutual funds from Sunlife or Nippon — some of them said as much as 19% per annum. I’m gonna research a bit more about this option will definitely come back with an update.
April 9, 2008
Loaning is something I would try as a last resort. As much as possible, I really want to be debt free. From experience, I have tried loaning and I was okay in paying and in case I’d ever need the money again, I would probably look to the best loaning agencies around.
My two cents on each loaning source:
1. FAMILY: I’m not too crazy about loaning from family members unless we’re really really close and I know I won’t get tied into something I might regret someday. Money is the root of most family wars, be careful when using this avenue. Whenever I get approached by a family member for a loan, if I do give it — I consider it gone.
2. FRIENDS: If you have REAL friends in high places – they would not mind too much unless they’re sensitive about money. Make sure everything is clear when you borrow from friends. Offer to sign an IOU form with them so that they feel secure about your intentions of paying. Get a lawyer to help you with papers. Believe me, your friends will feel better about things being in black and white.
3. LOAN SHARKS (“5-6” and the like): As much as possible, you don’t want to do this. Loans sharks ask for 5-6 – that means the interest is pegged at 20% of the total amount loaned. Many of these loan sharks are shady characters, they demand payment within a very small amount of time and some of them could very well harass you if you’re unable to pay. And by harassment, we’re not talking collection phone calls and credit statements, we’re talking unwelcome house visits and threats. However, they’re also the easiest to hide from — if you can afford to go and hide among some tribe in Africa.
4. BANKS: Bank rates vary depending on the type of loan. What you need to look at here are interest rates. Annual rates, monthly rates — make sure the interest rate is clear to you and that it was explained well by the person processing your loan. The good thing about bank loans is that they can approve high-amount loans, much higher than government agencies and credit card companies.
5. CREDIT CARDS: Many credit card companies now offer personal loans that could be carried into your card bill. This is dangerous. Most credit cards charge an interest rate of 1.5-2% per month. Whereas, if you loan from a government agency, you’d only be charged about 12% interest per year. When you add your card interest all together, it could add up to about 16-24% interest per year. However, you must admit that credit cards and banks are more efficient in keeping track of payment records. They’re normally up-to-date and updated in real time. Aside from that, credit cards also have very good customer service, most of them are 24/7. The approval time is also much faster than banks or government agencies.
6: GOVERNMENT: If you loan from a government agency, you’re sure to pay the lowest interest rates in the market and at the same time, you help the government too (well, that is, if you want to). If you have GSIS or SSS, I suggest you take out a small loan, not to spend it or use it but just to make sure you’re the one using your benefit. I’ve heard stories about people who try to take out an SS loan only to find out that someone else took out a loan in their name! Talk about cheating! To be practical about it though, government is on of the best choices when considering to take out small loans. The only catch is, the process is too slow for some people who prefer quick approvals. But money wise, this is the best choice.
I have tried taking out a loan from a credit card company at a discounted rate (they gave me that because of my good credit standing). That worked for me but only because I had no other debts. Think well before you borrow money from anyone! If your expenses can wait, wait.