PERSONAL FINANCE LESSONS FROM BAGYONG "PEDRING"

"Everybody is talking about the weather but nobody does anything about it" - Mark Twain

I want you to remember today, September 27, 2011, the day Typhoon "Pedring" battered the country.  This is almost exactly 2 years after, Typhoon "Ondoy" devastated the Philippines...one thing for sure, this is not the last time that strong typhoons like this will hit our land...

In my previous Internal Audit world, we identify risks and controls in companies...so please allow me to use this analogy...some risks may or may not apply depending on your circumstances...

When there is a typhoon, there is higher risk of:

• Accidents - so please be safe and better stay at home...if you're studying or working, take the day off...the cost of accident will be higher than your daily rate...
• Flooding - secure your vehicles and belongings to higher grounds.  Make sure your car insurance have that "acts of God" clause.  If you know that your area is being flooded everytime it rains, is it time to do action and start planning to move to a better place for the sake of your family?
• Brownout/Blackout - make sure you have sufficient supply of food, water, candles, batteries for radios/flashlights."Panic" buying on the day of the typhoon will just be more costly...
• Destruction of property - We live in a country that is visited by storms/typhoons XXX number of times in a year.  With regards to your houses or business establishments, your fire insurance should include endorsements for typhoon and flood.
• Loss of lives - You have car insurance and fire insurance for your house, why not have a life insurance as well for yourself and family (for the breadwinners).  Which is more important, your car/house or yourself?

Lastly, set up that "emergency" fund which is equivalent to 3 to 6 months of your salary.  It pays to be "liquid" when your house is under water...=)

"Be Prepared... the meaning of the motto is that a scout must prepare himself by previous thinking out and practicing how to act on any accident or emergency so that he is never taken by surprise." - Robert Baden-Powell (founder of Scout Movement)

Hope this helps and stay safe always...

Ge

Gerald Cantor is a Registered Financial Planner graduate and a Financial Consultant of Pru Life UK.  He is also a Certified Public Accountant and a Certified Internal Auditor.  Ge is proud to be an ex-OFW, a "career-shifter", a baller, a newby entrepreneur and most importantly, a "proud" dad of Gia (4yo) and Clarie (2yo).    

BASKETBALL FINANCE: Defensive Principles

"Great defense consists of 3 R's: read, react, and rotate." - P. Carr

“In all the research you do as a coach, studying other coaches and championship-type situations, you find that all those teams combined talent with great defense. You’ve got to stop other teams to win.” - Pat Riley

"If you dont want to get hurt in basketball, play chess instead" - Big J
 
 

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Defense! Defense! Defense!!!   
Man to man defense, no easy lay-ups, no open looks, challenge the shooter, make the point guard use his weaker hand, box-out!!!.....these are some of the defensive principles in basketball...your goal is to stop the opposing team from scoring....to get the rebound, to block shots, to steal the ball....
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When it comes to your finances, you may consider your money as the ball, your expenses/spending as the opponent, and your investments/savings as part of your offense....as much as possible, you should always have the ball (money)  for your offense (savings/investments) and  prevent the opponent (expenses) from possessing the ball...
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In the NBA, the players who won the "Defensive Player of the Year Award" include Dennis Rodman, Hakeem Olajuwon, David Robinson, Alonzo Mourning, Michael Jordan, Kevin Garnett and most recently, Dwight Howard.....one glaring fact about these players, with the exception of MJ, is that these are "big" guys who can block, rebound and stop the opponent from scoring....

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In personal finance, you need a "defensive specialist"....who will control and monitor the cash outflow or the spending?....will that be you? or your wife?....if you're married its better to assign one....if you're single, well obviously no choice but you...
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How to play defense?.....first thing is pay yourself first....every payday, determine a % of your salary that you will set aside, no matter what!!!...it could be 5%, 10%, 20% or 30%....depends on your circumstances....you may start small....the important thing is to have a mindset of saving first before spending your hard-earned money...
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Next thing is monitor "ins" and "outs" in your wallet....one good tool I learned from Mr. Efren Ll. Cruz, RFP is having a "30 day Financial Milestones Journal" wherein you record all the "sources" (this could be your salary, other income, other sources of cash) and "uses" (these are your expenses/spending) of cash for 30-days....why 30 days?...for one, this develops a "good" habit in you to monitor your spending....this also allows you to analyze your spending for 1-month....which expenses are necessary and which ones you can cut, minimize, avoid and control...this is a very simple tool....you can just use a notebook or an Excel spreadsheet to do this....
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Once you know your regular and discretionary expenses, now you can develop a monthly "budget" to further boost your savings and control your spending...for example, if my take home pay is P50,000 every month, you can set a savings budget of P10,000 (20%), P5,000 (or 10% for your tithing, charities, donations), then the remainder of P35,000 (70% for your household, fixed and discretionary expenses).....
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I know this is easier said than done...like in basketball, you need SELF-DISCIPLINE, SACRIFICE, TEAMWORK and a lot of HEART in order to win the championship....
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I'd like to end this blog with an excerpt of one of my idols,  Manny Pangilinan's (MVP) speech during a graduation in a Katipunan school.  MVP is currently supporting the Smart Gilas basketball team and has been instrumental for bringing to Manila, NBA superstars like Derrick Rose, Kobe, Kevin Durant, Chris Paul, etc.

"I was born poor, but poor was not born in me. And it shouldn’t be born in you either. You can make it. Whatever you may wish to do with your future, you can make it. It gets dark sometimes, but morning comes always. Suffering breeds character. Character breeds faith. In the end, faith will not disappoint. You must not disappoint." - MVP

Hope this helps,

Ge 

Gerald Cantor is a Registered Financial Planner graduate, a Certified Public Accountant and a Certified Internal Auditor.  He is also a Financial Consultant of Pru Life UK.  Ge is proud to be an ex-OFW, a "career-shifter", a "high-leaping" baller, a newby entrepreneur and most importantly, a "dedicated" dad of Gia (4yo) and Clarie (2yo). 

BASKETBALL FINANCE: Offensive Weapons

 “Basketball is like war in that offensive weapons are developed first, and it always takes a while for the defense to catch up.”  Red Auerbach

Before anything elses, I'd like to greet my daughter, Gianna Carmela, happy 4th birthday!!!  We love you bright eyes!!!
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Now let's talk about basketball offense as it relates to personal finance....so who's your scorer?...who is your main man in the team?...is it MJ or Kobe or The Triggerman?...in personal finance, what is your bread and butter?.....if you're an employee, its your monthly salary....if you're self-employed, its your business income or sales commission or income from fees......
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But do you have an offensive strategy?....do you just rely on just one man to score and carry the team?....like in the PBA, do you just rely on your import?....or if you're Smart Gilas, do you just rely on Marcus Douthit?....I "doubt it" if you can win championships with this ...you need to have a strategy like the vaunted "triangle offense" made famous by Coach Phil Jackson when he was coaching MJ and the Chicago Bulls....
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In personal finance, do you have an offensive strategy?....do you rely solely on your monthly salary or your business income?....well, some might say, I have some money in the bank (i.e. savings or time deposit) and this earns me interest income....how much is the interest income?....is it higher than the average inflation rate of between 4 to 5%?....if not, then this is not a good strategy...you are losing money instead....
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Your offensive strategy may include having multiple sources of income.....for example, you are earning monthly salary and then you have other "sidelines"....like selling AVON, Tupperware....or doing networking.....or offering life, non-life insurance, memorial plans....or like my "millionaire" couple-friends, they are simple employees, but they have other sources of income (i.e. vendo machine, pawnshop business)....I say they are "millionaires" because they have more than a million of Net Worth (their Total Assets is greater that Total Liabilities).....actually, they literary have "zero-liabilities"....
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Another offensive strategy is to have passive incomes....going back to my "millionaire" couple-friends, they are millionaires because they have passive incomes too...they have investments in stocks, mutual funds, bonds, unit-investment trust funds (UITFs)....these savings/investments earn them more than the average inflation rate of 4-5%....imagine your money, earning 25 to 30% per year!!!!.....simply WOW!!!...and to add, they diversify their investments, so they do not rely on just one "main-man"....
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In a basketball team, a coach determines the strengths and weaknesses of each players....some players are good outside shooters...these are your 3-point specialists like my fave one, "The Triggerman"...while some are more of inside players...like my idol, Kareer Abdul Jabbar and Abet Guidaben....some can't shoot well from the free throw line like the SHAQ....SHAQ once said that “Me shooting 40% at the foul line is just God’s way to say nobody’s perfect.” 
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 To be a good basketball team, you need these different specialists....similarly in personal finance, if you want to achieve your financial goals FASTER. you cannot be one dimensional...you need more ways to make your money work HARD for you!!!

Hope this helps!

Ge


Gerald Cantor is a Registered Financial Planner graduate, a Certified Public Accountant and a Certified Internal Auditor.  He is also a Financial Consultant of Pru Life UK.  Ge is proud to be an ex-OFW, a "career-shifter", a "high-leaping" baller, a newby entrepreneur and most importantly, a "dedicated" dad of Gia (4yo) and Clarie (2yo).

BASKETBALL FINANCE: Shoot Your Way towards Financial Success!

"I've missed more than 9000 shots in my career. I've lost almost 300 games. 26 times, I've been trusted to take the game winning shot and missed. I've failed over and over and over again in my life. And that is why I succeed." - Michael Jordan

 
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I passed by a bookstore this morning, then I saw this interesting red book:  Financial Jiu-Jitsu - A Fighter's Guide to Conquering Your Finances by Scott Ford.  Amazon.com describes it as a unique approach to personal finance that tackles money like a jiu-jitsu fighter would tackle an opponent.
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Hmm, very interesting...I said why not relate personal finance to basketball, which is still the no. 1 sport for us Pinoys....and it is and will always be "THE GAME" for me too....being a frustrated basketball superstar...(no kidding, check out my Lourdes School of Mandaluyong Grade 7 yearbook)
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According to FIBA's Official Basketball Rules 2010, "the basketball game is defined as being played by two (2) teams of five (5) players each.  The aim of each team is to score in the opponents' basket and to prevent the other team from scoring.  The team that has scored the greater number of points at the end of the playing time shall be the WINNER."
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In personal finance, the team is basically YOU....but you can have teammates too who will help you win the game...like your family (spouse, parents, kids), your banker, your accountant, your financial planner.....now it makes you think....do you need a FINANCIAL COACH in order to win this personal finance game?....or are you playing the game just by yourself?....

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Your aim is to score and accumulate as many financial points at the end of your playing or working career.....your "offensive" strategy should be either to increase your income and/or make your money work hard for you (earn you higher savings/investment returns)....are you happy with a 2-pt shot or a 3-pt shot?....this is like are you happy with low risk investments that provide low returns...or high risk investments that yield high returns.....
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Your other aim also is to prevent the "other team" from scoring....we are talking about DEFENSE here....your best defense in personal finance includes budgeting, monitoring and controlling those expenses, living below your means, avoiding credit card debt, minimizing ATM transactions.....you need a defensive specialist....would that be YOU or your WIFE?
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Each financial goal is like a basketball game or championship.....A question to ask yourself is how is your game doing in terms of the Eastern Conference final (i.e. paying off debts, saving for that dream house and car), the Western Conference final (i.e. saving up for children's college education) and finally, the NBA Championship (i.e. saving up for your retirement)

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Please watch out for more basketball finance soon...

Hope this helps.


Ge


Gerald Cantor is a Registered Financial Planner graduate, a Certified Public Accountant and a Certified Internal Auditor.  He is also a Financial Consultant of Pru Life UK.  Ge is proud to be an ex-OFW, a "career-shifter", a "high-leaping" baller, a newby entrepreneur and most importantly, a "dedicated" dad of Gia (4yo) and Clarie (2yo).

YOU'RE GOING TO DIE! (by John Williams)

I just got this email from John Williams.  He is one of great guys I follow in London.  He has a group called, "CareerShifters"....They encourage people to know and pursue their passions in life....Before you read his motivational speech below, may I add my "personal finance" note on this.  Since you know that you're going to die (and you don't know when),  go get a life insurance policy now, especially if you're the breadwinner and/or married with kids!  Do it for your family! 

JOHN WILLIAM'S GREAT MOTIVATIONAL SPEECH:  YOU'RE GOING TO DIE

I’m not your typical motivational speaker.
I’m not Tony Robbins (the big guy with the teeth and the headset) and I don’t try to be (not least because I’m over a foot shorter than him). And yet I often get asked to speak...

Earlier this year one of those invitations was from the lovely, wise, and somewhat mischievous author of “F*ck It: The Ultimate Spiritual Way”, John Parkin. John asked me to speak at his weekend event in London.

On the day, I talk for about 40 minutes to a room full of people on how to do what you love, and then John asks me,

“Do you have some final rousing words to leave people with?”

I think for a while and when no snappy feel-good messages come to me, I simply say,

“You’re going to die”

John looks at me a little surprised and with his cheeky grin, says,

“You’re going to lift them up from here, right?”

And I say,

“Well, yes. This is my motivational message. 

...Because the fact that you’re going to die (and you don’t know when) is the most powerful motivation I can think of for starting to do something you really care about as soon as possible.”

When we put this reality out of our mind, then we think we can put off our dreams for the week, or for the month, or for the year – or even until retirement. But not only is there a risk we won’t make it to that point, it’s also a terrible waste of a life.

Whatever your dream is, you can start it today.

And you don’t have to necessarily “Take massive action!” as Tony shouts at us to do. We can ease our way into doing what we love, one project at a time. We can do it our way, and focus on the part we love most.
In reality, that’s the way most people get what they want.

Fear

What holds us back is not all the practical stuff (honestly, you can always get started without money, training, offices, or a book deal, and you can google most of the answers you need). What holds us back is fear; very reasonable fear of the unknown, of failing, of succeeding (because success changes everything).
It’s really difficult to tackle that fear on your own. On your own, you have to counter the doubts and fears with the same organ that creates them – your own mind.
But… team up with enough positive, committed people and everything changes. You get to admit you’re scared, get reassurance, and get the practical advice and contacts you need.
Suddenly, all sorts of things start to look possible.

Gerald Cantor is a Registered Financial Planner graduate, a Certified Public Accountant and a Certified Internal Auditor.  He is also a Financial Consultant of Pru Life UK.  Ge is proud to be an ex-OFW, a "career-shifter", a "high-leaping" baller, a newby entrepreneur and most importantly, a "dedicated" dad of Gia (4yo) and Clarie (2yo). 

OFWs and Budgeting

Its the "ber" months once again!  Yehey, malapit na naman ang Pasko!
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I bet if you are an OFW anywhere in the world, you can't wait to go home to your families in the Philippines to spend Christmas with them....

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By this time, maybe you already bought your plane ticket to Manila for a well deserved vacation....if not yet, better hurry, the earlier you buy, the cheaper the air fare.....
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Also, maybe you started your Christmas shoppings already for your "balikbayan" boxes....kase normally it takes a couple of weeks/months for your balikbayan boxes to reach home....
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Anyway, I once was an OFW in London....the "ber" months were always exciting and happy for me....please allow me to share some budgeting tips for our "bagong bayanis"....
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Have a budget...write down all the expenses that you will incur for your trip back home...these include the following:

• Plane fare;
• "Pasalubong" to be sent thru "balikbayan" box for your families and friends;
• "Pasalubong" to be handcarried during your trip to Manila/PH;
• "Pasalubong" to be handcarried from Manila/PH going back to the country wherein you are working....(this is assuming you will give some to your officemates and friends) 
• The expenses you expect during your vacation.....ex. meet up/reunions with relatives, friends,etc., trip to Boracay/Baguio/Palawan, etc....

Of course, as financial planners would say, "live below your means"....kung this XXX amount lang talaga ang budget mo, huwag mo piliting maging "Santa Claus" kung hindi kaya.....I heard one friend in London, everytime daw umuuwi sya sa Pilipinas parang laging may "fiesta" sa barrio nila....pinapakain nya ata buong bayan...wag naman!!!

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Don't just "splurge" and charge everything to your credit card kase BAHALA NA anyway susuweldo ka naman ako sa January....this is a dangerous attitude which may lead to huge debts....also DON'T USE YOUR INTERNATIONAL CREDIT CARD IN MANILA...doble-doble ang charges (including forex charges), if you use them here.....

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Kung hindi talaga kaya, re-think on how you can save on your "pasalubong"....maybe re-assess the list of families and friends you plan to give gifts....baka mas mura kung "group" pasalubong na lang kesa individual gifts...bka mas mura kung "magpakain ka na lang" sa friends mo kesa buy them individual gifts....or baka masaya na sila sa Christmas cards (like one of my friends do)...anyway, its that thought that counts! =)

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Please don't touch your savings....if, after working so many years abroad, you are able to set aside some savings, please don't just withdraw and use them during your Christmas vacation....instead, you should go home to Manila and add more to your savings....if you are expecting a bonus, maybe you can set aside 20 - 30% of your bonus to top up or increase your savings and investments...

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Now where to save....MAKE YOUR MONEY WORK HARD for you....don't be lazy and just put them in savings or time deposits....there are a lot of investment vehicles you can use to have greater interest income....nandyan ang STOCKS, MUTUAL FUNDS, UNIT INVESTMENT TRUST FUNDS, VARIABLE INSURANCE........maybe when you go home, include in your itinerary to meet with your Financial Advisor...teka, do you have a Financial Advisor or Planner????...

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I know paguwi mo dito, there will be several trips to the MALLS....before buying left and right, ask yourself, it is a WANT or a NEED???....kailangan nyo ba talaga ng bagong TV, Stereo, Washing Machine, Kotse, Bahay, Computer???....

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Lastly, I would like to impart that SPENDING CHRISTMAS IN THE PHILIPPINES WITH YOUR FAMILIES AND FRIENDS IS PRICELESS!!!! However, it pays to budget, budget and budget as you are not Santa Claus.....

Hope this helps.

Ge

Gerald Cantor is a Registered Financial Planner graduate, a Certified Public Accountant and a Certified Internal Auditor.  He is also a Financial Consultant of Pru Life UK.  Ge is proud to be an ex-OFW, a "career-shifter", a "high-leaping" baller, a newby entrepreneur and most importantly, a "dedicated" dad of Gia (4yo) and Clarie (2yo). 

Getting Out of Debt...

"Money is worth nothing to the man who has more than enough" - George Bernard Shaw

This is a heavy and serious subject that affects a lot of people....and yes, that includes financial planning students like me...
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I remember when we were kids, my dad got into trouble with numerous credit card companies....."nasunog na daw" sya sa mga utang...gladly, he was able to get out of it....but the hard part was, he needed to sacrifice a huge chunk of his retirement pay...
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I'm trying to assess what are the root causes of this debt problem....kase nga daw, once you identify the root cause, then maybe you can cure the main problem.....btw, these are personal opinions and observations, not necessarily "expert" opinion...

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FAMILY.  Everything daw starts with the family.....good thing is I'm now a family man so I can relate....
- pag weekend, san ang favorite na pasyalan ng pamilya???....sa malls di ba?....sa Jollibee??...
- what are the first words that kids or toddlers learn to speak aside from Mama and Papa???....of course, SM, McDo, Jollibee, Toy Kingdom, ....=)
- san si Mommy and Daddy pag suweldo time....siempre kung saan may SALE!!!
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SCHOOL.  In school naman, the kids learn from other kids....so medyo nageexpand na yun vocabulary ng bata...like Dora the Explorer bag, Nike shoes, Playstation, iPads, iPods, etc....then as early as pre-school, whenever students celebrate their birthdays, the usual custom is they have to prepare something in school...like a mini-Jollibee party complete with giveaways....
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 CHURCH.  In church naman, we like to make "porma"...so kids or even adults wear their "Angry Bird" or "Green Lantern" shirts plus their cool shorts and sneakers or flipflops (reminder po, bawal ang shorts at tsinelas sa simbahan)....the Daddys are wearing their Lacoste or Burberry shirts plus their blingblings....the Mommies have their signature bags and jewelries....
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COMMUNITY/NEIGHBOR.  Wow, si Pare has a new Hyundai Tucson or Mitsubishi Montero sports....bili din tayo nun mommy!!!...Teka, si kapitbahay, nagpaparenovate or nagpapagawa ng second floor....oops, si BigTime neighbor may bagong nabiling condo or apartment na naman....
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MALLS...Laging may SALE pag suweldo time!!!..0% interest on installment!!!...Buy Now, Pay Later....pag uwi mo naman galing trabaho, wala kang choice kundi bumaba sa MRT station na connected sa Mall....can you count how many malls will you passby from QC to Makati???....di ko binilang, pero super dami....
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OFFICE...Sa opis naman....siempre pagandahan ng cellphone, bags, laptops, watches, jewelries, shirts, dresses, shoes, cars, even belts (dapat daw yun may malaking H like si Manny Pacquiao)....
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TV....how many hours do Pinoys watch TV?....what do we watch?...who do we follow?...for the artistas that we like, what companies or products do they endorse???...for the kids naman, siempre, nandyan si Barney, Mickey, Dora, Disney Jr., ...these cartoon characters sell a whole lot of products too.....
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BANKS
banks encourage us to save (at very low interest rates)....but they also entice us to borrow (at very HIGH rates)...well this is there business in a nutshell...banks also give you convenience, by having ATMs everywhere, so you can withdraw, withdraw, withdraw, withdraw and once more, withdraw.....
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I could go on and on....I just want to say that there is EXTREME PRESSURE for us to SPEND, SPEND and SPEND.....not enough people telling us to DISCIPLINE ourselves to BUDGET, AVOID DEBT, INVEST AND SAVE FOR OUR FUTURE.....
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Our vulnerable kids are also exposed early in life....not enough people teaching about GOOD PARENTING as well....
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I'd like to end with some DEBT quotes:

• Rather go to bed with out dinner than to rise in debt. - Benjamin Franklin
• If one wants to get out and stay out of debt he should act his WAGE. - Unknown source
• Running into debt isn't so bad. It's running into creditors that hurts. - Unknown source
• Debt is the worst poverty. - Thomas Fuller
• A creditor is worse than a slave-owner; for the master owns only your person, but a creditor owns your dignity, and can command it. - Victor Hugo

Hope this helps.

Ge

Gerald Cantor is a Registered Financial Planner graduate, a Certified Public Accountant and a Certified Internal Auditor.  He is also a Financial Consultant of Pru Life UK.  Ge is proud to be an ex-OFW, a "career-shifter", a "high-leaping" baller, a newby entrepreneur and most importantly, a "dedicated" dad of Gia (4yo) and Clarie (2yo).