Let’s turn our focus towards the topic of FINANCIAL LITERACY. This is very dear to my heart because if there is a pinnacle of my adulthood, I’d turn to nothing else but this. It’s easy to call oneself independent but to be able to tell yourself: ‘I know how to manage my money.’ That is a huge turn-on for me – Not the wealth itself but the ability to grow one.
Clarity, a moment of realization – one perhaps I have regretted working overseas in the mid-2000s is my conscious ignorance towards building a healthy financial mindset.
The road to Financial Literacy
Math is one of the things that I’m not good at. Exactly tied in to money and number is a formula that I get lost in. However, I learned that just because your bad at math, doesn’t mean it’s a good excuse to recklessly spend your hard-earned salary. I wish I was taught at an early age how important it is to learn how to manage finances. Whether you are single or a family-(wo)man or even a breadwinner as most cases in the Philippines. Financial Literacy is the biggest takeaway of my year 2015. Not only did I co-founded a start-up that time but it opened my mindset into many different arenas that I thought were unimportant. Turns out, I’m a foolish girl who knew nothing.
Another “crabby” aka toxic Filipino mentality that I noticed is the ‘mantinir’ mindset. I’m bisaya and I don’t even know how it translates to English. But in Napoleon Hill’s book Think and Grow Rich, I quoted:
” There are millions of people who believe themselves “doomed” to poverty and failure, because of some strange force over which they BELIEVE they have no control. They are the creators of their own ‘misfortunes’, because of this negative belief, which is picked up by the subconscious mind, and translated into its physical equivalent. “
You are what you think. I think therefore, I am – Rene Descartes. So many of us are still inside the bubble of believing that it’s pointless to do better. That we are victims of our circumstances, or our government or our fate – that is such a shameful mindset because we can always do better if only we change our self-destructive mindsets.
That is when I started educating myself about the important financial steps you should take before your 30s. I wrote this article in 2016 and by happenstance got a way to discussing it over with a friend last week. Five years later and it’s still relevant. Now in my mid 30s, I’m grateful to have friends turned mentors who are selflessly sharing their knowledge and wants everyone to be financially able to live their dreams and not be tied up to the poverty of their ignorance for the most part.
One of Warren Buffet’s famous advice to anyone who wants to be rich is to never put ALL your eggs in one basket. You have to diversify!
I’d like to share with you the four types of investments that you can start as early as tomorrow if you’re in the verge of diversifying your investments. These are also my personal recommendations, one that I really believe in my heart to be true because I’m doing it myself – not just relying on hearsay. Here, take a look:
UITF – Unit Investment Trust Funds
(UITFs) are financial instruments managed by professionals who will help you make the most of your money. They do not earn through a fixed interest rate but grow in value depending on the assets it carries and the market. – the first result in google when I search the meaning.
Basically, this option is offered by bank institutions and what it simply means is instead of just putting your money in a regular savings account, you can open a UITF account where your money is managed and invested in the stocks market by expert fund managers. 50% risky and aggressive in my opinion but yields high quality returns given time and consistent top-ups. I got mine from BPI and their initial fund investment is 10,000 PHP. You can augment your account every month after that according to your preference. You can even do this in the convenience of your mobile app if you have one, anytime anywhere. Even if you are not in the Philippines. Good thing about BPI is that their mobile banking extends to other parts of the world.
Stock Market
The stock market consists of exchanges or OTC markets in which shares and other financial securities of publicly held companies are issued and traded. – by Investopedia
By this year and age, I sure hope everyone is already familiar with this even with just the term itself. My 22 year old self would have never imagined in a million years that I would know how to be trading stocks let alone know about what a ‘blue chip company’ means. It is with profound amusement that I find myself wanting to learn more and more about stock trading. In layman’s term, instead of fund managers doing the bidding for you. You yourself will buy the stocks yourself. You are free to choose whoever you bet your money into. You can buy ‘shares’ of a company and hope that in due time it will grow and double up. But personally I think it’s 80% risky and aggressive but anything worth it never comes easy. Just because it’s hard doesn’t mean it’s impossible. So before you consider stocks trading, educate yourself about how you can go about this thing. I started with Marvin Germo’s books and I swear he is the original guru of trading in the Philippines. He knows how to explain the most difficult term into munchable, bite-sized information that even a 12 year old will understand.
I do recommend using Philstocks as a platform if you decided to trade on your own. Their customer service is fast and approachable as well. Initial trading investment is 5,000 PHP. For more information on how you can teach yourself about stocks is to go to Investagrams and watch their step by step tutorials.
Pag-ibig MP2
The Modified Pag-IBIG II or MP2 is an optional savings scheme for members who want to save more and earn higher dividends on top of their regular Pag-IBIG savings. The HMDF invests the funds collected from the Pag-IBIG MP2 mostly in its housing loan program, as well as its short-term loan programs.
I knew about this long before and it is with deep regret that I beat myself up for not availing of this program as soon as possible. Generally, the interest rate for your investment is 6% up-to-date and you can have the option to cash out annually or after 5 years. It’s also a secure investment because you will get EXACTLY the amount you put in + the interest it earned. I do not have the legitimacy to explain how amazing this investment option is but Marvin Germo will in this youtube crash course that I also learned from.
Cryptocurrency
A digital currency in which transactions are verified and records maintained by a decentralized system using cryptography, rather than by a centralized authority.
Crypto trading has this infamous, bogus reputation. You can either be a believer or a hater – there’s no in between. Bitcoin was the first crypto currency in the market and back then, people thought of it as a scam and that it won’t catch up but guess what? At the moment, 1 bitcoin = 2,350,764.97 PHP. The major concept of crypto is to buy and hold. Maybe one day in the future it will be the currency that all will abide from. 100% risky, volatile and sporadic so as my mentor would say, only invest what you can afford to lose.
