I haven’t been writing for quite a while because of too many business engagements and I really miss doing this! Writing makes me alive. Sharing what I learned is a must for me especially after attending Chinkee Tan’s event, “How to Retire Before the Age of 50”. I realized, I have to share this. Financial Literacy is a must for all virtual assistants, parents and entrepreneurs alike so I hope you’ll enjoy reading as much as I enjoyed writing it.
I believe this should be in the school’s curriculum from their first grade up to their last year in college in order to appreciate the value of time, money, hard work, values, perseverance and dreams. Only when people fully understand all of these will they be able to explore entrepreneurship without getting scared of what awaits them.
Let’s start from the 4 things I learned about money from Chinkee Tan himself in his previous speech that I attended and kept on repeating. These are the things we should always remember, no matter where we are in the “Financial Statute”.
Save – according to Chinkee Tan, “money NOT spent is a money EARNED”. Cut down on those things that you don’t need and start saving. May it be a bottle of water that you buy everyday or a cup of coffee. Make it a habit. Make a list of these things and mark those you can sacrifice to save. Share to a family or friend, too! Who knows, you might be inspiring others to do the same, right?
Create – he reiterated Robert Kiyosaki’s 4 ways of earning money. Aside from your regular source of income (employment), add more BASKET, as they say. Learn to start self-employment, build a business and invest. Having more than one source of income will make sure you won’t go into debt.
Grow – the growing part is a bit tricky. Because you have to keep the income going in a steady and growing manner. This would mean mastering your marketing, networking and other skills pertaining to your business.
Protect – once you have it, protect it and make sure you have back up plans in case something happens. As much as possible, teach your partners, children and everyone around you to treat the business the way you’re treating it.
The above lessons are great but getting into specifics is even better! What I mean is, where do you bring your money after saving a certain amount?
Save enough for contingencies. If anything happens, it’s better that you have extra cash that you can get from time to time.
Save for your Health insurance. Most of us, because of too much savings and thrift forget about saving for their health care. We’re not getting any younger and let’s face the fact that as we grow older, our bodies become weaker. Just like a car that needs regular maintenance, we also need to have ourselves checked from time to time and if we really can’t avoid to be admitted in the hospital, there’s something to back us up with the bills.
Life Insurance is next on the list. Accidents happen and if it does, we can be sure that our families will have a little something to start with.
This last one is my own addition to Chinkee’s list, hope you agree. Many people forget or fear the thought of dying including preparing for it but since it comes unannounced, it is also better if we set something for it. There are a lot of burial and memorial plans available. This will also save our families a lot of trouble looking for funds and they can concentrate on grieving and letting “us” go. Agree?
In funding a business, it is always important that you know what you’re dealing with. If these businesses require training, invest in it and equip yourself first to reduce your chances of failing. The more you know, the better you can succeed at it.
Start-up investments is a must after educating yourself. Make sure you have enough and that the amount you’ll invest is NOT the last money you have or you may end up taking loans when things aren’t going the way you expect it to be. I remember Susan Mershon, the techie mentor once said that if you’re resigning from your regular employment or starting a business, make sure that you have enough funds to last you for at least 6-12 months. Sounds a lot at first but it pays to have funds when you need them, right?
I can say that almost if not all of us experienced saving in a piggy bank in whatever shape or form. Next to this is in banks with very little interest, less tax deductions, take note (eyes rolling). Needless to say that saving this way doesn’t bring much profit so I suggest you keep on reading.
UITF and Mutual Funds. These are good ways to start investing in stock market when our funds are still low. Just make sure to check your broker’s license and accreditation before giving anything and again, research and learn more about it.
Stock Market when the funds are enough. Not the trading part, (unless you’re really good at it with more time to spare) but the “invest and forget” way. This is passive but has a greater chance of earning bigger amounts rather than learning the whole thing and trade. If you’re more aggressive than I am, get yourself a broker and try it with minimal amount. Make sure you’re investing money that you DON’T NEED and willing to lose. That way, it won’t hurt much in case it disappears. 🙂
Watch out for more bits and pieces of Financial Literacy advice from me as we go on. Share your comments below and tell us what you think! How many BASKET of EARNING do you have at the moment? What do you plan on adding next time?