Category: Life Lessons

Categories
Life Lessons Money Mindset

The Single Biggest Lie You Need To Overcome If You Want To Start Your Own Business

Ask any of your friends if they want to start their own business someday and a lot would say yes.  There’s a certain enigma to starting a business that a lot of people associate it to risk-taking and entrepreneurial individuals who overcame huge obstacles in their journey from rags to riches.  While this may be true for some, starting a business is not always as rosy as it sounds.

If you are one of those few lucky souls who want to start your own business someday, you’re up against all odds.

They say 9 out of 10 businesses fail in their first 5 years.  And out of those left standing, 9 out of 10 would have failed after 10 years.  That’s the reality you have to overcome if you want to see your own business see the light of day.

Have you ever felt that your dream of owning your business is already over even before you get started?  That’s what I felt when I heard the sobering statistics.

But why really do most people haven’t started their own businesses yet?  Their most common excuse?  Not enough capital.

The interesting is…not only is this a myth, it is a blatant lie.  It may be by far, the biggest obstacle you have to overcome if you ever want to start your own business one day.

For one, if you need a lot of money to get started, then no one would have been able to grow their business from rags to riches.  Jollibee didn’t start out in day one as 100 stores! Not even Henry Sy is good enough to have an SM Megamall when he started.  How did they start?  They started small.  Jollibee started as a small ice cream parlor.  SM was small shoe store.

Most people who make the excuse of not having capital to start their own business is making a disservice to themselves.  It’s plain old excuse.  It’s as if it’s the only thing they need to actually succeed in business.  It could be the farthest thing from the truth.  If you want to succeed, having a lot of money may even be detrimental to your business’ growth.

A lot of starting a business is solving problems.  If you have a lot of money, you have to go against the temptation of throwing money at your problem.  Without money you are forced to be creative in solving that problem.  Your creative juices is nurtured like a muscle going for an exercise.  The more you exercise, the more you become good at it.  The more you become good at it, the more your business will grow.

One rags to riches story I remember from the Truly Rich Entrepreneur’s Workshop I attended last month was about a young guy who started with PhP 100, fought against all odds and became a Multi-millionaire.  He didn’t have a lot of things, but one thing he had was his passion for cars.

One day, after having little success at school, his parents gave him PhP 100 as his last allowance.  With his back against the wall, he thought about how to start a business using only that PhP 100.  Because he was passionate about cars, he thought of opening a business around fixing cars.  The only problem, he didn’t know how to fix cars.

How did he solve this problem?  Simple.  He asked his friend who knew how to fix cars become his business partner.

With a new business partnership formed, the next problem he had to solve was to look for clients.  To solve this, he went out to the parking lot of a mall, looked for high-end cars which needed fixing.  He used a portion of his PhP 100 to come up with a flyer and slipped them into the car’s windshield.  Out of those flyers, 5 people called him up and he was able to close a deal with 2 of them.  He and his friend used the remaining money from the PhP 100 to go to their client on board a taxi.

Left without any money, they had another problem — they didn’t have the necessary tools to fix the car.  Solution?  They asked for a down payment from the client and used that to buy the tools.  And the rest as they say is history.  He was able to franchise the car fixing business system and now earns PhP2 Million peso from that business alone.

You see, it takes a lot more than just capital to start your own business. You need passion.  You need specific skills most especially sales and marketing.  You need a brilliant team around you to help you achieve your business goals.

I am not saying having money is NOT good.  What I am saying is that you need to stop making excuses and start doing what needs to be done if you are really serious about starting your own business.

Stop reading.  Go do something.  Starting your own business cannot be learned from reading books alone.  Like riding a bike, you can never learn it watching by the sidelines.  You have to actually ride on your bike, fall a lot of times, and get back up to try again..and again.  And once you learn and able to balance yourself, it will be the greatest feeling you’ve ever felt in your life.

P.S.  If you are searching for a home-based business you can start part-time with minimal risk, CLICK HERE to email me.

Powered by Qumana

Categories
Business Investing Life Lessons Money Mindset Passive Income Personal Finance

Tales of the Cashflow 101 Games Part 2 – Lessons Learned

Last April 3, I had the priviledge of hosting our second session of Rich Money Habits’ Cashflow 101 games.  This time, at The Old Spaghetti House (TOSH) Restaurant at Robinsons Forum, EDSA Pioneer, Mandaluyong City.

There were two great news in this session of Cashflow 101 game compared to last time —

First and foremost, all participants got out of the rat race.  Congratulations to the participants!  Yehey!  Granted, it took some time for some of the participants to get out.  In the end, however, when one of them finally got out, like magic, everyone followed suit and got out in no time at all.  It could be because they saw that getting out of the rat race is indeed possible.  Everyone focused on making more passive income from then on so they too can also get out of the rat race.  In hindsight, I realized that this is also true in real life.  The more like-minded people you surround yourself with, the more people will support you and cheer you on as you go for your dream of financial freedom.

Second, we had the luxury of time and we were able to enjoy the game without getting kicked out of the restaurant.  The first time I hosted a Cashflow 101 game in Tapa King Edsa Central, we were kicked out because apparently playing cashflow boardgame is prohibited inside the restaurant.  We were lucky the caretaker still allowed us to play the game if only for a couple of hours.  But when the guard saw us, the caretaker didn’t have any other choice than to request us to stop playing, even though we weren’t done yet…just when the participants were now beginning to see how the cashflow 101 game works.  I felt really bad for the participants and promised myself never to allow a similar experience to happen again.

Hosting the second cashflow 101 session had its own challenges but the fact that everyone got out of the rat race was a reward in itself.  It was a gratifying experience witnessing the participants get out of the rat race and cross over to the fast track.  Seeing their spirits come alive and become animated as they celebrate their personal victory is truly an amazing experience.

After the game, I asked the participants what realizations they’ve had while playing the game.  Here are 5 lessons they’ve willingly shared that I am now passing on to you so you too can learn from them as well.

1) It’s OK to start all over again. 

One of the players over leveraged and got into debt so much so that he was already paying more money than what he was able to earn.  In short, his expenses was greater than his income.  Whenever he passes by the “Paycheck” cell, instead of receiving income, he now shells out extra cash to pay out his debts.

Needless to say, this led to his downfall as he eventually filed for BANKRUPTCY.  After declaring bankruptcy, he had to sell off all his assets for half the price.  After selling his “assets” off and paying his debts, he finally got into a positive cashflow situation.

That means, he had extra money at the end of the month again.  The surprising thing was, after getting rid of his “asset” he was actually better off.  He had lots of cash and he didn’t have to pay every month for his “asset”.  What he considered to be an asset was actually eating him alive because of the HUGE loans, causing him to file for bankruptcy.

Does this sound familiar?  I think this is very similar to the housing crisis a couple of years back, and still being felt up to this day.

2) It’s OK to borrow money as long as your asset is paying for it.

One of the most popular advise you will get is to NEVER borrow money.  And it certainly is a wise advise, especially if you are still learning your way to financial literacy and you don’t have the discipline to pay off what you owe.

The surprising thing was, because of the law of leverage, those who bought assets turned out to be in better position to take advantage of opportunities when the market changed.  For example, in the game when someone draws out a market card, it could turn out positive changes to the players.  Someone may be looking to buy for a new house.  And because you have the property, you get to sell it to him.

Of course, it is not always as rosy as it sounds.  One time during the game, someone drew a catastrophic market card — a financial crisis, if you may.  Tenants could no longer pay rent.  Everyone who had 3 bedroom/ 2 bath houses was affected and the owner had to let go of their properties.  Ouch.

3) It’s OK if you want to play it safe, you can still get out of the rat race

One of the players was very conscious about getting into debt, even though it was only a game.  At first, she was focusing on the paycheck and wanted to earn more, feeling safe with the money that she had.  She avoided debts as much as possible and ensured she always had extra cash at hand.  She occassionally invested in mutual funds and stocks throughout the game.

In the end, even she was able to get out of the rat race.  She didn’t have to quit her job.  In fact, after getting out of the rat race, she now has the option to still do what she’s always done.  But the good thing is, she’s no longer tied to her job anymore.  She can quit anytime she wants, and the passive income will still be able to cover her monthly expenses.  Isn’t that great?

The lesson? You can still get out of the rat race even if you’re afraid of debts.  You don’t have to despair if you find out you’re afraid of risks.  You can still get out of the rat race.

Of course, while the game went on, she had to shift her focus from paycheck to opportunities.  One time, she was even complaining why she landed on paycheck instead of opportunity.  At the time, she was almost out of the rat race.  One small deal was enough for her to become financially free.  In that context, it’s understandable why she wanted to land on another opportunity instead of a paycheck.

4) It’s OK to give away what you seek the most

It is sometimes counterintuitive to give away what you seek most.  Your tendency is to keep what you have for as long as you can.  In reality, however, keeping it to yourself does more damage to you because of the feeling of scarcity that you’re telling your mind.  Instead, do what one of the players did.  Here’s how.

The same player who went into bankruptcy had the habit of donating to charities, even when he was financially struggling. The surprising thing was, he eventually managed to get up and get out of the rat race even with the bankruptcy.  The fact is, he even surpassed and got out ahead of some of the other players. 🙂

He mastered the flow of money by starting to be generous with what he had. It is truly mind boggling how things fall into place when you set your priorities straight.

5) It’s OK to be the last one to get out of the rat race

It doesn’t matter whether all other players are already out of the rat race, although I might say, it can be demoralizing sometimes.  When that happens, know that we all start out somewhere.  Perhaps, one was able to get out of the rat race faster because she had only minimal expenses.  Or perhaps, she took advantage an opportunity and the market rewarded her investments.  The important thing is YOU are able to get out of the rat race.  It is your personal victory.

It’s inevitable to compare your results with other people.  It’s just what we normal humans do.  But instead of living your life in despair, use that motivation to be inspired instead.  You can say, “if they can get out the rat race, it only means, I too can get out as well!”.  Keep the positive attitude up, and sooner than later, you too will celebrate your day of financial freedom. Cheers!

Readers, have you played Cashflow 101 game board?  What other lessons can you add into the above list?

P.S.  Ready to play cashflow 101 in real-life?  CLICK HERE to email me.

Powered by Qumana

Categories
Business Investing Life Lessons Money Mindset Personal Finance

10 Real-Life Money Tips From Playing Cashflow 101 Gameboard

A couple of weeks ago, my wife and I played Cashflow 101 game board as a special bonus to the first 10 who bought my ebook guide Rich Money Habits – 8 Ways To Shift Your Money Habits and Be Rich. I was excited because I haven’t done anything like this before in my life.  I first learned about the Cashflow 101 boardgame around 2005 when I read Rich Dad Poor Dad book of Robert Kiyosaki.  Ever since reading the book and finding out about the boardgame, I had a yearning to play Casflow 101.  The only problem — the boardgame costs quite a bit, around PhP 10,000.  And being a struggling employee facing credit card debts, I didn’t have that amount of money then.

One day, while reading through the Entreprenuer’s forum, I learned that someone is holding cashflow 101 games at AIM Makati City.  Even though the price is quite expensive (at that time) at PhP 800 for a 4-hr workshop, I grabbed the opportunity right away.  I enjoyed the game so much I played again (and paid another PhP 800).  It was a real learning experience, realizing that there’s a different world of money out there I’ve never recognized before.

When I went to the US a year after, buying a Cashflow 101 board game for myself was one of my main goals.  So when I got back from my 6-month stint in the US, I didn’t hesitate to buy the game and bring it home with me to the Philippines.  I immediately played the game with my family and friends.  Everytime I play, I learn something new —  how to analyze a deal, how the cash flows for every event that happens in your life, etc.  The most important realization I got was recognizing my own attitude about money.  Am I generally conservative?  Or agressive? Am I the type who goes into debt and takes advantage of the power of leverage? Or am I contented just watching other players enjoying making deals left and right while I am still afraid to take advantage of the small deals even though it is only play money.

It’s been months since the last time I played Cashflow 101 game. While playing the game this time around, there were many real-life lessons that came flashing through my mind that I wanted to share with you.

Here are the top 10 real-life tips I’ve re-learned while playing Cashflow 101 again.

1) Having a High Income Does Not Mean You Are Wealthy

One of the players had a profession of a doctor.  He had a hard time getting out of the rat race because of the high expense.  He had to be really be creative and financially savvy to generate a lot of cashflow to cover the high expense.  Contrary to popular belief, high income doesn’t necessarily mean you are wealthy.  Even with your high income, a high expense will leave you little cashflow (aka Paycheck) at the end of the month. Unless you turn that casfhlow into income producing assets, you will have a hard time getting out of the rat race.   What does it mean?  You need to manage your expenses and be creative if you want to achieve financial freedom.  You cannot rely only with your high income.

2) Being Creative Is More Important Than Being Knowledgable

In real-life, what you know is only potential asset unless you apply it.  And the only way to apply what you know is by being creative in using the knowledge that you have to find solutions to other people’s problems.  Getting into good debts to buy a real-estate property can be a good strategy, provided you know how to manage that property so it gives you extra cash at the end of the month.  For that to work, you need to understand your market, your cash flow and equip yourself with the necessary financial intelligence to make the deal work.  Good deals are everywhere.  However, those with creative minds have an easier time recognizing those deals because they invested the time to learn to spot those deals.  To be creative, you need time and effort.  Time to feed your mind data to recognize good deals from bad, and effort to battle through the emotional learning to make it work.

3)  You Can Be An Ordinary Teacher and Beat A Doctor From Getting Out of the Rat Race.

Sometimes, having a lower income can be an advantage, provided you also have lower expenses.  And because you have lower expenses, the less passive income you need to generate to get out of the rat race.  In real life, this is easier said than done.  One because, sometimes, even with the low income, the expenses are even higher.  You end up borrowing money from other people just to pay for the food you eat.  Other times, you are discouraged with living each day from paycheck to paycheck.  If you play the cashflow 101 boardgame, realizing this important lesson will give you hope.  If only you know how to manage what you have, you have the power to get out the rat race sooner than you think.

4) Be Careful What You Focus On

What you focus on expands.  If you focus on problems, you will see problems.  If you focus on opportunities, you will see opportunitites.  In playing Cashflow 101 board game, there’s a trap that a lot of beginners frequently fall into — i.e. focusing on your paycheck.   When you receive your paycheck, you glee in delight as you bring your token over the yellow cell.  As you accumulate more and more money, however, you begin to hunger for more opportunities instead, to the point where you no longer want to fall into a yellow cell (paycheck)…You now want to land on an opportunity everytime! When this happens, celebrate because you have just started to shift one of your core money habits. You are now focusing on opportunities and going beyong just receiving a monthly paycheck.  You are no longer a slave of the 15th or 30th days of the month.  Now, you are looking for small deals and big deals so you can build those assets that produces income.  Keep it up and soon financial freedom will be yours.

5) Every Event In Your Life Impacts Your Cash Flow

Lose your job.  Have a baby.  Go on a shopping spree.  Buy an opportunity.  Donate to charities.  They all impact your cash flow.  They either add in to your expenses, or to your income.   However, they don’t have to stop you from building your asset and minimizing your liabilities.  You still have the power to determine how it impacts you.  At the start, I pulled up a doodad card where I had to pay more than what I have in savings.  I had to borrow money from the bank just to pay for the “vacation”.  When you get in this situation during a game, it’s a bit discouraging because you don’t have any money left and you don’t have anything to invest.  You have to wait for your next paycheck to get back into the game.  The reality is that a lot of people live this kind of lifestyle in real-life but they don’t have a clue that one false move (a.k.a. losing your job) can lead them into financial disaster.

6) The More You Play The Game of Money, The More You Recognize Opportunities Around You

I’ve played the game many times, and because I’ve read and re-read the cards on deck, I know what small deals and big deal opportunity cards are out there.  I know what’s possible in terms of market going frenzy over houses, stocks or businesses.  I do believe the same applies to real-life.  The more you learn about what’s possible, the more you are able to expand your consciousness and focus on those opportunities.  By taking advantage of those opportunities, you give your self a chance to gain your own financial freedom.

7) Take Action and Take Advantage of Opportunities 

Watching others make a move doesn’t do you any good.  Take action.  No matter how small.  Each baby step is a giant leap to your dreams.  You never know when the next wave is going to hit and carry you to your goals.  I’ve played the game since 2005, and yet I am still learning.  The only reason I learned what I know is by taking advantage of the opportunities that life gives me.  I don’t always make money, sometimes I even lose some.  But the more I go through all those experience, the more I gain the confidence to move forward.

8) Luck Favors the Prepared Mind 

Opportunities are flashing before your eyes every second of every day.  You only need to train your mind to see those opportunites.  The reality is that it takes time to build your mindset to see those opportunities.  It took me years to finally see that earning money aside from your job is indeed possible.  But without the constant exposure to financial lessons, I doubt if I even had the courage to start the Rich Money Habits blog.

9)  Money Attracts Its Own Kind

Even the smallest passive income can turn into big amount if you put your heart and soul into it.  In reality, there’s only one asset you actually have – YOU.  You are the asset.  You determine whether something becomes an asset or a liability.  A perfectly viable business like Mang Inasal can be profitable if the owner knows how to turn it into an asset.  If the same asset is transferred to someone who doesn’t know how to manage a food business, and doesn’t have an inkling of an experience running a business even as small as a food cart, the same asset can turn into a liability.

10) YOU are the asset

Even the smallest passive income can turn into big amount if you put your heart and soul into it.  In reality, there’s only one asset you actuall have – YOU.  You are the asset.  You determine whether something becomes an asset or a liability.  A liability can turn into an asset, and vice-versa.  A perfectly viable business like Mang Inasal can be profitable if the owner like Edgar Siap knows how to turn it into an asset.  If the same asset is transferred to someone else who doesn’t know how to manage a food business, and doesn’t have an inkling of an experience running a business even as small as a food cart, the same asset can turn into a liability.

Keep on dreaming. Keep on learning. Keep on Believing.

Cheers!

Allan

P.S. If you’re searching for ways to practice what you learned in Cashflow 101 in real-life, CLICK HERE to email me.

Powered by Qumana

Categories
Business Life Lessons Life Updates Make Money Online Money Mindset Passive Income

5 Surprising Truths Google Adsense and Launching an Ebook Taught Me About Earning Money Online

I’ve wondered a few times whether I’d share this information to you or not.  I hesitate because the topic of earning money online invoke different emotions from different people.  One of my main goals in this blog is to be as transparent as possible but my fear of being taken negatively is getting in the way.  Today, I’m taking a leap of faith to share with you what I learned trying to earn income from Google adsense and launching an ebook to help inspire you in your own financial journey.

Google Adsense

Last week, I was able to finally claim my very first $100 Google Adsense earnings.   That’s after 1 year and 5 months.  The $100 minimum threshold was actually reached by the end of January but Google takes another month to compile everything to have the necessary payment issued.  Here’s a picture of the payment.

While trying find the yellow receive money form of Western Union, I was surprised at first because the form was a bit different that what I expected.  It’s now smaller than what it was previously.  I filled-up the new form anyway and gave it to the Western Union agent.  In less than 3 minutes, my money was handed out to me in cash.  Hassle free.  Of course, I had to bring two IDs (my driver’s license and employee ID) for identification purposes as well as print out the payment details in my Google Adsense admin page but that’s pretty much it.

Why am I sharing this to you?  Simple.  It took me 1 year and 5 months to earn $100.  Hardly exciting.  But when you think about it, this is purely passive income.  I didn’t have to create or ship any product, hire employees or even actually sell anything.  All I did is copy-and-paste an html code provided by Google upon signing-up for FREE to automatically generate Google ads.  Whenever someone “clicks” on those ads, I get an income paid by the advertisers of those ads. Google tracks and manages every part of the process.  All I do is copy-and-paste the code once and forget about it.  After reaching the threshold, I received the $100.60 amount from Google. It’s a relatively small amount, but being able to earn it passively is mind bloggling.

How it all started…

A few years ago while still working as an Overseas Filipino Worker (OFW) in Malaysia, I started writing about my thoughts on money and investing and published them here at Rich Money Habits (you can check out my old articles at the archives section).  In March 2009, I got interested in the potential of making money online and tried putting Google adsense ads into this site.  After 8 months, my Google adsense earned me a whopping total of $1.08.  🙂

For some this was a very very small amount.  And it is!  That’s just enough to buy a small burger.  But one thing that got stuck in my mind from earning that small amount is the realization that I can actually earn money online — it is indeed possible!  That helped inspire me to try to learn about how to do it more effectively.

I really didn’t know much about Internet Marketing then, so when I found out from attending Bo Sanchez’ Financial Coaching Seminar that Jomar Hilario is offering an Online Internet Marketing Mentoring program, I grabbed the opportunity right away.  From Jomar’s Online Mentoring program, I learned that you can display the Google ads in a certain way to maximize your Google earnings.  I did apply some of it and noticed my Google earnings start to grow.  It really suprised me because after a month of applying those lessons, I now earned $6.10! Still not that huge, but it is now more than 5 times what I earned in 8 months figuring it out by myself. 🙂

This could have been higher if I bombarded this blog with Google adsense to the point where you cannot read the articles anymore, but as I mentioned in one of my previous articles, I decided early on that Google ads will not be the main focus of this blog.  For as good as the “passive income”sounds, there are still some things that are worth more — that is helping you read through the articles without disctractions, so you can focus and absorb the money and investing tips better.

Rich Money Habits Guide Ebook

Rich Money Habits 3D book coverLast February 17, I launched my very first ebook guide Rich Money Habits – 8 Ways To Shift Your Money Habits and Be Rich.  Because it was my first time to publish a paid product, I didn’t know what to expect.

What if no one buys?  Am I asking for too much?  What will other people say?  I had all these fears and the more I thought about it, the more I realized that these ideas are only in my mind…they reflected my own internal struggles that I had to battle through.  I had to refocus my attention away from my own fears.

There was only one question I had to answer — “will this help other people?”  My short answer was a definite YES!  And because I created the product from beginning to end and applied the same ideas myself, I know how valuable it is.  But I still didn’t trust myself enough.  I had to go and ask other people, specifically those who have read the same information through my newsletter…and the feedback was overwhelmingly positive.  It was enough to give me the courage to actually launch the ebook.

Launching the ebook was my own little experiment.  And it’s aligned with one of my goals this year to earn $100 monthly income passively from at least 3 income streams.  I wanted to share with you the results (so far) not to brag, because there’s nothing to brag about, but to help inspire you to take your own journey as well.  Here it is.

Total guides sold: 15

Total sales: $118.38 USD

Affiliate share: $8.97 USD

I am not a best-selling author and I don’t claim to be one.  I am just like you, an ordinary person still working full time as an employee looking for ways to bring value to other people and earn income without having to spend so much of my time…because in reality the bulk of my time is still being consumed by my full-time job.

5 Surprising Things I Learned from Launching My Ebook

1) Comparing Ebook Earnings vs Google Adsense Earnings.  The $100 amount was reached in just a week after it was launched.  For a moment, I realized the same result ($100) was achieved a lot faster compared to Google adsense!  1 week vs 1 year and 4 months!  It’s hardly a comparison.  Of course, Google adsense pays only in cents while the ebook is priced at $9.95 initially.

2) The value of launch.  As expected, the bulk of the sales (80%) was made on the launch day itself and continuing on to the next day.  After that, the sales began to taper off in the next few days.  Now, it’s 1 guide sold every other day.  Which is not disappointing considering that this is now purely passive income.  I don’t have to do anything anymore.  Everything is being taken cared of by e-junkie, my shopping cart provider.

3) Being true to your customers. One buyer sent me an email asking when will the book delivered.  After receiving the email, I was surprised.  Suffice it to say, I didn’t expect it and was confused at first.  One, because I was selling an ebook, not a hard copy version.  And two, because I was totally clueless that the book description was misleading people.  I checked my site again and realized that there’s actually no specific mention that the guide is sold as electronic copy only (i.e. ebook) and there’s no paper-based actual hard copy to be delivered.  After calling the buyer, I figured out the miscommunication right away and promised to fix the problem.  Unfortunately, I couldn’t ship a hard copy book to the buyer so I decided to do the next best thing.  First, I decided to refund the payment immediately.  Also, I gave away the ebook, including the bonuses to the buyer for FREE to help compensate for the inconvenience.  Last and more importantly, I had to go and modify the description of the Rich Money Habits package to say that the buyer will get an ebook, not an actual hard copy paper-based book to prevent other people from facing the same problem.

4) Facing your fears by taking action.  One surprising thing I learned from the whole experience is that — “your fears are not as scary as you might think.”  My fears didn’t materialize.  Someone actually bought my ebook.  That alone gave me the confidence to think that this could actually work.

5) All the support that you need is nearer than you think. Some of my friends were delighted when they learned that Bo Sanchez wrote the Foreword to my ebook.  The reality is that Bo Sanchez wasn’t even paid to write the Foreword.  And I didn’t even have to meet him in person to make the request.  One night, while thinking who should write the Foreword for my ebook, I asked myself this question — “if there’s one person in this world that you look up to and would like to write the foreword to your ebook, who would it be”.  There’s only one person that came into my mind — Bo Sanchez.   I learned a lot from Bo Sanchez so to have him write the Foreword would really be the greatest thing in the world for me — a seemingly impossible dream at that time.  I hesitated because I felt my own insecurities cropping through my mind.  Thoughts like “who am I that Bo Sanchez would take the time to write to foreword of this ebook?”was making my own personal doubts stronger.  But I started writing the email anyway…and at the last second, I closed my eyes and took a leap of faith by clicking the send button.  The next day at 9AM in the morning, I got the surprise of my life.  Not only did Bo Sanchez read and replied to my email — he even wrote the Foreword and included it in his email reply right away, no questions asked!  Wow!  To say I was happy is an understatement.  I was wearing a very wide smile the whole day!  🙂

Throughout this journey of trying to learn to earn income through the internet, I’ve met a lot of interesting people and learned a lot along the way.  But my journey is only just beginning.  I am still a long way from financial freedom…but I’d like to think I am inching towards my goal each and every day.  My wish is that this article help inspire you in your own financial journey.

Cheers to your financial success!

Categories
Life Lessons Money Mindset Personal Finance

Reader Question: Where do I start?

Recently, I received this very interesting email from a reader of this blog.  While reading through it, I realized you may also be facing the same questions, doubts and fears, so I decided to share her questions (with her permission, of course) and my answers with you so you can benefit from it as well.

Sir,

Good day! I’m Jane Doe (obviously not her real name…I changed it to protect her privacy), 27, working as an accounting staff for a Pharmaceutical Company.

I have heard alot about investing and I have always wanted to give it a try. It’s just that I’m still a bit scared. It’s not as if I have tons of money to just invest on something Im not 100% sure of. I would like to earn more before I start..

Where do I start Sir? Can you give me suggestions? Do I have to join the TrulyRichClub of Mr.Bo Sanchez to know everything I have to know? Won’t I be able to make it good without joining the club? Because honestly, I’m thinking of how much I would save from the monthly membership fee. I am not rich, I would love to be though, it’s the very reason I work hard each day for me and my family.

I really hope you can give me an idea on where I should start..

Thank you so much.. 🙂

Jane Doe

Here’s my response to Jane’s questions:

Hi Jane,

I really admire your enthusiasm and your willingness to learn to start investing in spite of your doubts and fears.

And I totally agree with you. It can be scary sometimes especially if you’re starting on something you’ve never done before. What if you lose the money? What if you make a mistake? What will others say about you? How do you get started?  All these are valid concerns and definitely worth noting.

To tell you the truth, I still feel the same fears whenever I start something new. What keeps me going is the belief that in the end, everything will turn out alright.

1) Where do I start?

For a moment, a list of suggestions went through my head in a flash…until I re-read your question and noticed this — “…I would like to earn more before I start.” It made me re-think my assumptions…and realized, perhaps you already know the answer to your own question. You just need a little bit of encouragement. 🙂

It goes without saying that everybody starts out from different places. And for illustration purposes, I assume your work as an accountant is your major source of income. And you have at least a few good ideas on how you can save money by reducing your expenses or increasing your income. If that’s the case, then here are some simple ideas that may help you get started by utilizing that extra money you save each month.

1) Payoff your debts (if you have any). If you have debts, try to pay it off as soon as possible. There are different kinds of debts both good and bad, which is an entirely different discussion. But if you’re just starting out, all debts are very risky and can turn into really bad debts. So for now, just avoid any debts while you’re still trying to learn to manage your own money.

2) Save for emergency fund. If you have not saved for emergency fund yet, start saving for an amount equal to at least 3 to 6 times your monthly salary. Why 6 months? The idea is that if you lose your job or your only stream of income, it will normally take you around 6 months at the most to find another job. Your emergency fund will NOT make you rich but it will feed you and your family if something unexpected happens, like losing your job. Never use your emergency fund for investing. Just save it in a bank so you can withdraw it quickly in case of emergency.

3) Start investing, but take it one baby step at a time. Once you’ve saved for emergency fund, don’t stop. Continue saving. But now, put you savings into your investing account instead of your emergency fund. This money will only be used for investing. Learn how to invest effectively. The key is to invest only up to the amount you’re (almost) comfortable with. I say almost because if you are only investing in what you are comfortable with, you miss the opportunity to expand yourself to learn not only intellectually but emotionally as well.

It is really important to start with a good strong foundation by learning to manage your own money. The sooner you save, the more money you can use to pay off debts and save emergency fund, and the sooner you will have money to invest.

2) It’s not as if I have tons of money to just invest on something Im not 100% sure of.

This is a 2 part question — 1) not enough money and 2) not 100% sure

For the first one on not having enough money, I would say we all start somewhere. The important thing is to manage what you currently have and every income that comes to you and pass through your hands. Learn how to better manage your money. Even Henry Sy had to make do with selling shoes in a small retail store in the beginning.  I also don’t have a ton of money to invest. But I take action because I know that’s the only way I will be able to learn how to invest…and every lesson I learn will pay off big in the long run.

For the second part on not being 100% sure, the reality is that you can never be 100% sure. Even your savings account is not 100% risk free. You can only claim for up to the amount insured by the PDIC which is PhP 500,000.  Of course, if you saved less than PhP 500,000, you will still be able to get your money (after going through a tedious process). But imagine for a moment that you saved PhP 600,000. You will lose the PhP100,000 if your bank folds up. It’s not millions but it’s definitely money you cannot just throw away. It is already a BIG money for a lot of people.

The first investment my wife and I invested in is on RTBs (Retail Treasury Bonds). There’s a reason why we chose RTBs instead of stocks or real-estate. We were afraid. And we thought RTBs was the next financial instrument with the least amount of risk involved, next to savings accounts. Retail Treasury Bonds are debt papers issued by the government. In simplest of terms, it’s the government’s way of borrowing money from you. When you buy RTBs, you are essentially lending money to the Philippine government. The gov’t has to pay you the interest (quarterly) for the duration of the term specified in the bonds (e.g. 7% per year in 7 years). As you might have noticed, the interest is not that big, but it is certainly better than your savings accounts in your bank which gives less than 1%. More than the passive income we got from investing in RTBs, the really important benefit is gaining the confidence after actually investing our hard earned money. When you actually do something, you not only learn in your mind, but with your emotions as well and the experience gives you a more powerful belief that you can actually do it, something you cannot get from just reading a book.

If you’re interested in investing on RTBs, you can ask your bank’s local branch. I read in the newspaper that the gov’t issued RTBs just this week and the 10-year tenor bonds fetch around 7.37%. RTBs usually run out fast, and may already be gone after 1 or 2 weeks.  So if you’re really interested, you need to act fast.

3) Do I have to join the Truly Rich Club of Mr. Bo Sanchez to know everything I have to know?

The short answer is no. I do believe joining the truly rich club is a great help (because it helped me), but you certainly don’t have to join if your savings doesn’t allow it at the moment. You certainly don’t want to get into debts just to join the truly rich club. 🙂 The thing is, you can actually get the same financial lessons for FREE if you attend the Feast by Bo Sanchez every Sunday at the PICC. In the weekly Feast this month of February, Bo has discussed about making more money, investing in your 10% and multiplying your 20%. Last Sunday, he also gave a talk about managing your 70%. These are financial lessons that will go a long way in helping you in your financial journey…and it’s FREE. 🙂

Lastly, you have to do something to actually learn. In one of Bo’s talks, he mentioned about allowing yourself to be exposed to the same ideas over and over again, until you are moved to take action. The important part is to take action. For only when you take action will true learning begins. It doesn’t matter how many books you’ve read or financial seminars you’ve attended, the fear will always be there. And the only way to beat that fear is to take action. Push your boundaries bit by bit, until you expand yourself to become comfortable into your new situation.

Hope the above ideas help you in your financial journey.

God bless you!

Best Regards,

Allan

While the above tips may seem simple at first, they are nevertheless very valuable lessons that will help you lay a good foundation for your financial journey.  Before you can run, you need to start walking, Before you can walk, you need to start crawling.  Like a little child taking its first step you may fail many times in the beginning.  But once you start learning and applying what you learned, you will soon be running around all they long, so happy with the many places your dreams have taken you to.

Dear Readers, what are your greatest doubts and fears in starting your journey to financial freedom?   How were you able to overcome them?

Powered by Qumana

Categories
Life Lessons Money Mindset Personal Growth

Top 10 Things The Angry Birds Can Teach You About Money

If you’re like my wife who once got addicted to playing Plantz Vs Zombies, you would have heard the popular game “Angry Birds” by now.  “Angry Birds” is a popular puzzle video game where the player uses a slingshot to launch the birds to try to destroy the pigs hiding under protective structures such as wood, ice and stone. 

After a watching my wife get excited playing the game, I decided to try it myself.  Lo and behold, I got addicted to playing the game as well.  Now, my wife is waiting for me to put down the game so she can play. She’ll have to wait her turn this time around. 🙂

While playing, I realized there are some things about the game that are also applicable to managing your own money.

 

Here the Top 10 Things the Angry Birds Can Teach You About Money

 

1.  It’s OK to miss

In the game, you launch the bird by getting ready…aiming at your target as much as you can…and then releasing the slingshot so the bird can fly!  You missed your target? Try again! 

In real life, it’s also OK to try again.  You may lose money.  You may feel discouraged.  You may think your money problems are eating you alive because of a bad financial decision.  It’s not the end of the world.  You can try again.  And again, until you succeed.

 

2.  Some birds are better than others

In the game, there are three other types of birds that can destroy the hardest wooden structures when you “tap” on them.  The blue bird splits into three small birds.  The black bird explodes like a bomb.  The white bird drops explosive eggs.  Each one is suited for different instances.  But all of them helps you destroy the structures easier. 

In life, there are a lot of ways to earn money.  The most common of course is having a job.  You can sell your crap (according to Baker of ManVsDebt.com).  You can invest in real-estate.  You can invest in the stock market.  Or you can just simply find other ways to solve other people’s problems, and they will be more than willing to pay you so you can take their problem away from them. 

 

3.  Birds don’t fly with the pigs

In the game, I always wondered why the birds are angry at the pigs.  While reading more about the game, I realized they are actually trying to retrieve their eggs taken away by the evil green pigs. 

Pigs can destroy your eggs.  At least figuratively.  Pigs are people who scam people of their hard earned money without giving value in return.  Pigs are deceitful individuals who have nothing better to do other than send you a spammy text message asking for a prepaid load.   The lesson?  —- If you want to get ahead, don’t fly with the pigs.

 

4.  Protect your pigs with a strong shelter

Ok, let’s try taking the perspective of the pig for a moment.  If you know the game, the pigs are pitiful creatures.  Because of their round shape, they just roll over the structures until some wood drop on them and they die.  In the game, there are three types of shelter — wood, stone and ice.  The hardest to destroy is stone.  So it’s definitely a good idea to house your pigs made of stones.

When it comes to your money.  Be very sure where you are placing your bets on.  As some people say, put all your eggs into one basket and watch that basket.  The key phrase is “watch that basket”.  You have to protect it with all your might.  Otherwise, you lose all the money you’ve got.

 

5.  Life gets harder and harder…so you can get better and better

Since angry birds is a puzzle game, it gets harder and harder as you level up.  For instance, the higher you go, the more strong stone structures you have to destroy, and the more weird looking pig houses there are. 

In real-life you should try to learn something new every day.  You can start by learning to save your money.  Then you can learn to invest the money you saved and make it grow.  Afterwards, you can then go on to other more challenging things.  

Keep the hunger alive.  Keep on learning.  Keep on taking those challenges so you can get better.

 

6.  The more you launch…the better you get

In the game, the first time you launch the bird, you fail miserably.  The next time, you can adjust your aim so it goes a little bit nearer your target.  And you can go and adjust your aim on and on until you hit your target.

In real life, nothing beats taking action.  You’ve not really learned something until you’ve done it yourself.  You can read all the books you want about investing in real-estate, but if you’ve never purchased an investment property in your life, you lack the necessary experience to truly learn investing not only mentally but emotionally as well.

Sometimes, people are held back by their own fear.  Fear of failure.  Fear of being wrong.  Fear of being different from everyone else.  Unfortunately, the more time you spend worrying about your fear, the stronger it gets.  The ironic thing is once you take a little bit of action, the fear actually goes away.

 

7.  Don’t try to break a stone…learn to quit

At certain stages of the game, you have to deal with stone structures.  They are strong.  They are indestructible no matter how hard the birds hit the stone.  You can put everything you’ve got but as long as you’re hitting the same spot on that very hard stone, you will never be able to bring it down.

In life, it’s OK to quit.  You don’t have to go through life being miserable.  If you think that what you’re trying to do is not working, you can quit.  If it won’t take you to where you want to be, then by all means, quit.  You can be true to your dreams even if you quit often.  The interesting thing is, the most successful people quit a lot of things so they can focus on the things that really matter to them.

 

8.  Aim for the weakest spot

The trick to playing the game of “Angry Birds” is aiming at the weakest spot of the structures.  The structures may be made of the hardest stone there is, but if one spot is made of wood, you can aim your bird through that one tiny spot of weakness and you can bring the whole house down. 

This is especially true for business.  If you want to be successful, you have to stand out.  You have to be different.  You need to offer your customers a new better way to solve their problems.  If you do, it would be like hitting all your competitors in their weakest spot.

 

9.  There are a lot of ways to get to your destination

In the game, you can aim the birds high so it arcs upwards and aim straight down to the structures.  Or you can aim them horizontally so you hit the structures by the side.  No matter what aiming you want to do, you can turn down the structures as long as you keep on aiming at its weakest spot.

There’s no such thing as one way ticket to success.  Henry Sy became successful because of SM malls.  Manny Pacquiao is rich because of boxing.  Warrent Buffet became one of the richest man in the world by getting really good at investing.  No matter where you are right now, you can be still be rich by finding your own way to succe
ss.

 

10.  Have fun…no one gets out of life alive

The game is addictive because it’s fun.  It’s challenging.  It makes your mind think of different ways to achieve your goal of bringing the structures down so you can destroy the pigs.

Life should be the same.  It should inspire you to keep on dreaming.  It should give you challenges to overcome so you can tap into your inner genius and become the rich person that you truly are. 

And it should certainly be fun. 

Keep having fun.  Keep learning new things.  Keep believing in your dreams.

Cheers!

Categories
Life Lessons Money Mindset Personal Finance

How To Budget Your Money Without Feeling Guilty

One of the hardest problem I’ve encountered when I started managing my own money is the idea of budgeting.  I’ve tried to “discipline” myself by not spending more than my budget, but I have never been able to make it work.

When buying stuffs, I would feel really guilty spending the money that I would no longer be able to enjoy what I bought.  When I don’t spend at all, however, I would feel deprived thinking what’s the point of having money if you can’t even allow yourself to buy simple things you can enjoy.

Budgeting Ineffectively

In one of my attempts at budgeting my money, I purchased a mini notebook to jot down my daily expenses, and after the 3rd day, I forgot to bring my notebook with me to the office.  The next couple of weeks, I completely forgotten all about it.  I just went on and attempted to save as much as I can on anything and everything I can get my hands into. 

I also tried to create a spreadsheet to track my expenses but it was too tedious and it always seemed more of a guessing game than anything else.  I would guess how much I spent for this and for that.  And somehow, I would always find a way to tweak the numbers just so it would look good.    

Until finally, I discovered a neat trick that has not only helped me track my expenses but it’s so easy to implement I can do it in just 5 minutes a month.  Yes, that’s per month!  It is based from the Secrets of the Millionaire Mind book by Harv Eker which
was also described quite articulately by my good friend Jay in one of his articles.

How To Budget Without Feeling Guilty

Here’s the idea.  Create 5 separate buckets (or bank accounts if you can).  Each bucket or account would receive a set percentage for all income that comes into your life. 

Here’s what the 5 accounts look like for me.

1) FFA (20%) – Financial Freedom Account  
2) LTS (35%) – Long Term Spending         
3) EXP (20%) – Expenses             
4) FUN (15%) – Fun and Personal Growth           
5) GOD (10%) – Tithes

Whenever I receive any money either through my paycheck, or a gift, or anything, I would distribute it according to the set percentage by doing fund transfers to my other accounts.  Best of all, I can do everything in only a couple of minutes through online banking.  That’s it. 

Here’s the cool part.  After allocating my money to the different accounts, whatever is left in my ATM account would be my EXP (expenses) & FUN (fun & personal growth) for the month.  This money is supposed to be spent.  This fund allows me the freedom to enjoy and not feel guilty about spending.  The funds from my other accounts, serve a different purpose.

A Closer Look On Each Account

Before I proceed, I would like to take this time to explain my budget allocation so you can have some ideas on how you can apply it to your own situation.

FFA is 20%.  This is mostly for investments which my wife and I are not expecting to use in the short term (ie. in the next than 5 years).  Since I don’t have any debts, this fund is accumulating every month until we find a good investment we can invest on.  Once it goes in, this money will only be spent to be invested for future earnings.  It will NOT be spent away for any other reason whatsoever.

LTS is 35%.  This percentage is quite high because my wife and I are preparing to purchase our own home in the next 1 to 3 years.  We know that we would need a huge amount of money to pay for it.  The amount also includes money to pay for a car in the near horizon.  Note that this is separate from our FFA or investment accounts since our home is NOT necessarily an investment vehicle that give us a monthly cashflow, unless we decide to rent it out.

EXP is 20%.  This is where my wife and I are very fortunate. Our transportation expense is practically negligible since we just walk our way from our home to the office.  Our water expense is also not that much considering it’s just the two of us using the water.  The most we use it for is in doing the laundry.  We’ve also been able to bring down our electricity cost after limiting the use of our air conditioner. It turns out, we can actually make do with just the fan at night. I know these are just little things, but when you realize that we are saving a little amount each day, it translates to a relatively significant amount at the end of the year. 

FUN is 15%.  This is where the exciting part begins.  This is the solution to the feeling guilty part.  This fund is supposed to be spent for pleasure.  Take a vacation.  Go for a spa.  Buy a good book to read.  Attend a personal growth seminar.  Buy that cool phone you’ve always wanted.  The possibility is endless. And YOU CAN have it as long as it is from this fund.  Having been accustomed to saving for quite some time, my wife and I sometimes struggle to spend the money away.  Strange I know.  But sometimes, it feels like you want to get more out of it.  It’s no longer the material product that you want, but the experience.  That’s why my wife and I have been planning more vacations lately to go to places we’ve never been to before.  Nothing too fancy or expensive. Just the thought of learning new things to keep the hunger alive.

GOD is 10%.  This is one area I am still working on.  I’d be honest.  I sometimes feel like 10% is too much.  Other times, I feel I am not giving more.  At this point, the fund is still accumulating.  This is actually one part I’ve been wanting to put some time planning on.  Maybe I’ll throw everything in in one go someday.  I need practice to give more.  Maybe I’ll just take one day at a time.  Being generous with my money is still something
I’m relatively new at.

This budgeting strategy is really simple and easy to do.  However, keep in mind that this is just a guide.  You can change the allocation to cater to your own situation.  For example, if you have some debts, you use all your FFA savings to pay for your debt.  Your freedom day would be the day you completely pay off all your debts.  If you haven’t saved for emergency fund yet, you can also use the FFA to fund it for you.  Note that it is money that should NOT be spent any other way.

If you are living on 110% of your income, try to make more money so you can save some.  Or save on things you would not necessarily need so you could at least bring your expenses down to 90% and allocate the 10% to your other accounts.  In any case, start with something.  There’s nothing stopping you to make your dreams a reality.  But you do have to take action.

That’s all for now.  Enjoy budgeting your money without feeling guilty. 🙂

Categories
Life Lessons Money Mindset

Launching the Rich Money Habits Newsletter – 8 Ways To Shift Your Money Habits and Be Rich

“Join my Rich Money Habits Newsletter mailing list and get your FREE issue of the Rich Money Habits 101 Series: 8 Ways To Shift Your Money Habits and Be Rich!” 

8 ways to shift your money habits and be rich coverDiscover the 8 secret money habits that have personally helped me

 – get out of debt

– save for emergency fund, and

– start investing for my family’s future

Today, I am writing to you from Island Cove Resort Hotel in Bacoor, Cavite, Philippines, about an hour drive south of Metro Manila. My wife and I are taking our much needed vacation to spend some quality time after a year of working so hard and not getting much rest. 😉

Before I consume too much of that vacation time, I wanted to let you in on a major project I have been working on the past couple of weeks.  My project is aptly titled “Rich Money Habits 101 Series – 8 Ways to Shift Your Money Habits and Be Rich.”

For the first time ever, I will share to you the secret money habits that have personally helped me get out of debt, save for emergency fund and start investing for my family’s future. 

I don’t claim to be a personal finance expert (disclaimer) so you should take whatever I share with a grain of salt (or pepper, whatever you like =)).  You have to filter out what’s practical and applicable to your own situation.  I am just a regular guy who went through (and may still be going through) the same money problems that you may be experiencing right now, sharing the money habits & tips that have helped me solve some of those problems.  My only wish is that the simple money tips and experiences I share help encourage you in your journey to financial freedom.

Unknown to many, some of the subscribers of this blog have already gotten a taste of the 8 secret money habits I mentioned above.  Here’s one of the subscribers has to say about the Rich Money Habits Series.

“Good evening Mr. Allan. I just read your article, it’s great! I really like your writing style, good flow, well organized…” – Anthony

If you want to find out what Anthony has discovered, sign-up to my Rich Money Habits Newsletter now!  It’s totally FREE!

Categories
Life Lessons Personal Finance

What Makes You Rich

What makes a person rich?  How do you define who’s rich and who’s not?

Is it about having money? If I give you a thousand dollars now, would you be considered rich? How about if I give you a million? How about a billion? At which point do you consider yourself rich?

To answer this question, I’d like to borrow Tim Ferriss’ term “New Rich”. The “New Rich”, have 3 things in common: money, time, mobility. I like this definition because it doesn’t look at being rich as a one-dimensional goal that you have to get to. It is a combination of time, money and mobility that gives a new meaning to the phrase "financial freedom".

Money

Of course. This is obvious. The more money you have, the richer you become. At least financially. For many people, this is the only definition that they know of being rich. A lotto winner is rich. A doctor is rich. A lawyer is rich. They earn millions a year. They are what we call high-income earners.

It’s no wonder then that a lot of well meaning parents encourage their children to go to school, get good grades, study medicine or become a lawyer. After graduation, they are supposed to get a good job, climb up the corporate ladder and become rich.

There’s nothing wrong with that.

Unfortunately, in most cases, the high-income earners also face a dilemma of having to live a high-expense lifestyle. They have to drive an expensive car. They have to live in a big house. In all fairness, this is needed in their profession. Who would want to consult a doctor who is driving a truck. It doesn’t fit the image we have of a successful doctor.

Then there’s also the issue of income tax. The more income you earn, the more taxes you pay.

In short being high-earner has its corresponding drawbacks. It is not enough to earn a high income. If all the income you earn is going out as an expense. Worse, it may be that your expenses is even greater than your income, and you end up going through debts. Your debts stresses you out. You become ill just thinking about it.  You become more irritable.  Your friends abandon you.  Your world comes crashing down.

Time

If I give you a billion dollars but you need to work 24 hours a day, everyday for the whole year, would you take it? I hope not, because you’d be working yourself out, get exhausted, and basically end up not having the time to enjoy your billion dollars.

Having all the money in the world and not having the time to enjoy the fruits of your labor is not a very good idea. Unfortunately, a lot of people end up in this situation. As they get promoted in the corporate ladder, they gain more responsibilities. More responsibilities mean more time working in the office. More time away from your family. More sacrifices.

Whenever you want to take a vacation, you’d have to ask for your boss’ approval. If you get lucky, your vacation is approved. Unfortunately, while you’re on vacation, your mobile phone rings and you would have to answer your boss’ questions. Sometimes, they even require you to bring your laptop on your vacation.

Having time to be able to enjoy life and pursue projects that I would like is one of my personal goals.  My dream is to be able to take a vacation for at least a month, whenever and wherever I want and not worry about being disturbed by a call from my boss asking me to cut my vacation short.  I dream of being able to extend my vacation for a few more months whenever I want to and not worry about money or my business.

Mobility

Mobility is having the freedom to go anywhere you want to go, any time you want.  If you have a job, this is particularly hard to do.  For one, you can not just take a vacation any time you want.  You have to ask permission from your boss.  Second, you cannot just stop going to your job and go somewhere else.  At some point, you still have to go back to your job to make money to pay for your needs.

There have been countless times when I didn’t want to get out of bed in the morning. But since I had to go to the office and work, I felt helpless.  I felt forced to go to work even if I was so tired.  There were times I even have to cut my vacation short just to work.

It is especially harder if you are in debt and have to pay mortgage for your house.  If you are relying on your job for income, you are practically tied to it.  You can not resign.  Otherwise, you run the risk of not being able to pay for your debts and have your house foreclosed.

Mobility means having the choice to go on tour for months, hopping from one country to another, and not having to worry about whatever you left behind.  You can enjoy your vacation with peace of mind.

Journey To Financial Freedom

I am not yet rich based on the above criteria, but I’d like to think I am on my way there.  I have managed to pay off my debts and saved for emergency fund and insurance.  With the extra income we generate each month, my wife and I have started to learn to invest our money.  As a result, our dreams are now becoming more real each day that passes by. Yes, I am still a long way to go but each step I make is a move forward to my dreams.  It is just a matter of time before I reach my goal.

If you’re already financially free, congratulations! I’d like to treat you for lunch and learn from you. I’d like to find out how you did it so I can feature you here in Rich Money Habits blog and inspire our readers as well.

If you’re like me, working your way to achieve financial freedom, I invite you to come join me in my journey and discover the rich money habits that will take us to our dreams!

 

P.S. Last chance to get your FREE ebook by Bo Sanchez.  If you haven’t received your copy yet, CLICK HERE NOW! This special offer will be closing in 3 days (Aug 12, 2010)!

P.P.S.  For those looking to invest in RTBs, the Bureau of Treasury is doing a price-setting auction this August 10, 2010.  Inquire at your bank’s nearest branch whether they are selling RTBs within the next weeks.  You need to act fast, since, RTBs normally run out fast.

P.P.P.S.  I’ve been busy lately working on our first ever money habits article series – "Rich Money Habits 101 – 8 Ways To Shift Your Money Habits and Be Rich".  Be the first to receive the article series by subscribing to Rich Money Habits!

Categories
Credit Card Life Lessons Money Mindset

4 Money Habits That Can Lead Anyone To Debt Problems…And How You Can Overcome Them

Here’s an inspiring guest post from Jason on how he managed to pay off a total of $70,000 in debt in 3 and 1/2 years by overcoming his poor money habits and building better ones.

It is said “As you sow so shall you reap”. Same thing happened with me. I myself was solely responsible for landing into debt problems. You can read this story to know how I landed into debt problems. It would help you avoid making the same mistakes. Though I managed to get out of debt, yet I would advise you all to stop doing things that can lead you to debt problems and filing a bankruptcy.

Here are some money habits that led me into huge amount of debt.

1. Not planning a budget – I didn’t understand the importance of planning a budget. So, I used to spend nearly 98% of what I earned every month. I should mention here that I didn’ t have any extra income. My monthly earning comprised of only my salary.

2. Using credit cards for every purchase – To worsen the situation, sometimes, I used to spend more than what I earned. I swiped my credit cards with the intention of paying back the balance next month. But I was never able to repay the balance in full. Sometimes, I even missed making the minimum payments on credit cards. As a result, interest got piled up making it even more difficult for me to pay off the balances. I also swiped my credit cards for each and every purchase. Right from grocery shopping to eating outs, I used plastic money to pay the bills.

3. Lifestyle mistakes – I had a habit of eating out every weekend and shopping whenever I wanted to. A substantial amount of my salary was used to pay these expenses.

4. Not paying heed to creditor letters – I also received letters from creditors asking me to pay off bills. However, I didn’t pay much attention toward paying off my debts.
Then, one day, my brother got admitted to hospital and I had to borrow from my friends and relatives in order to pay the medical bills. That day I realized my mistakes and promised myself to pay off my debts as fast as possible.

How I was able to pay off $70,000 in 3 1/2 years

All in total, I paid off about $70,000 – Want to know how? Frankly speaking, I thought I wouldn’t be able to repay the outstanding balance in full. So, I decided to negotiate with my creditors to reduce the debt amount so that I could pay it off. The only other option left for me was to file a bankruptcy in order to get rid of my debts. Knowing that I could file a bankruptcy, my creditors reduced the outstanding balances to about 55%. After the reduction, I needed to pay about $38,500.

I managed to pay off the debts within 3 ½ years of time. To do this, I had to plan a frugal budget and follow it strictly. Though it was a bit difficult at the initial stage, yet following the budget became easier as soon as I paid off the first debt. It motivated me to get out of debt successfully.

Jason Holmes is a regular writer with Debt Consolidation Care and is also a contributory writer with other financial sites. His expertise is woven around various aspects of the debt industry and he tries to impart to people the different situations and simple solutions to get out of difficult situations through his e-books like ‘Credit Score The Quintessential Therapy for a Happy Pocket’, Take Creditors and Collection Agencies to Small Claims Court’ and, ‘My Story- From Depression To a Smile’.

P.S. Readers, what other tips can you share on paying off debts?

P.P.S. Do you want to share your own rich money habits story to our readers?  Send us your guest story using the Contact Page. It’s your time. To Share. To Inspire. To Shine.