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Francisco Colayco

How to start from nothing

October 21, 2009 1:42pm
The day right after Ondoy, I was interviewed on television and radio and one of the questions asked was “How do you start from nothing?”

For those who never had anything, this is a common question. My answer has been and will always be that you first have to find a job.

We were all born with nothing but our parents provided us with the food, love, shelter, and education that allowed us to grow through our childhood.

As grown-ups, we cannot depend on anyone but ourselves.

We need to find a job that will allow us to provide for all the necessities. Only when we have some kind of salary can we start from nothing.

Many of those hit by Ondoy and then Pepeng still have jobs.

It is just that they lost part of their savings. Houses, furniture, equipment, car etc. are savings if these do not cause them to spend.

If they kept cash and jewelry in their house, the cash and jewelry could have been swept away by the floods. If they had invested in special décor, cars and other items believing these could be resold and considered savings, they lost those too.

If they had unused clothes and other items, those were all lost too.

The lesson learned here is to be always mindful of what we buy. Buy only those things (real assets) that we need and will use.

There are loans available from Social Security System (SSS) and the Government Service Insurance System (GSIS).

Having these special benefits are real reasons why each Filipino should be a member of either organization.

However, perhaps the loans available from SSS and GSIS will not be enough for those who lost so much.

Those who have credit cards will be very much tempted to use their cards because they will have very real needs immediately.

It is therefore a good time to remind all credit card users that your credit card statements will surely come on time even if there are floods and typhoons.

If you do not pay on due date, you will be charged with interest and penalties and your card could be cancelled.

If you pay only the minimum amount so that your credit card is not cancelled, you will also be charged for interest and penalties.

If you continue to use your credit card after having paid the minimum, you will be charged interest and penalties on the new amounts that you charge to your credit card. You might think this is unfair but it is the rule so it is better to know it.

Therefore, my advise to you is:

1) Use your credit card only if you can pay for your entire balance on due date.

2) If you know you cannot pay for the entire balance, it is better to borrow from your family, friends and bosses before your use your credit card. Or use what you borrowed to pay off the entire balance of your card.

3) If those you borrowed from charge you interest, just negotiate that the interest is not higher than what the credit card will charge which is anywhere from 3-4 percent per month. Hopefully, they will give due consideration to the uncontrollable catastrophe that has hurt everyone and reduce your cost of borrowing.

4) If you used your credit card and cannot borrow to pay for your balance, it is better to cut the card and immediately return it to the credit card company. Do not be tempted to use it at all. Better still, as you surrender your credit card, negotiate with the credit card company for a reduced interest rate and fixed amortization schedule. When you actually complete your amortization payments, you will have effectively invested in debt, earning the interest rate that you would have paid had you continued using your credit card.

Even if you cannot think of saving at the moment, do yourself a favor and register as a member of One Wealthy Nation (www.onewealthynation.com).


You will receive many tips on how to reduce your expenses and how to eventually save.

It’s free and you have nothing to lose and everything to gain with information and mechanisms to make investing easier even with smaller amounts. You can do this wherever you are in the world. It is still under construction but there are activities that are already functional.

To start again requires the same procedure as I have always been teaching.

It will be more difficult for those who have enjoyed luxury in the past.

There will have to be a change in lifestyle. The greater you lost, the more drastic the change will have to be.

You have to make a new Statement of Assets and Liabilities (SAL) and Personal Income and Expense Statement (PIES) to understand where you are after this tragic setback.

From these SAL and PIES, you need to update your personal financial objective and plans.

In taking time to complete your inventory of assets and liabilities, you may be surprised to discover that you have assets that you do not use nor need that have value and can be sold. You may even end up with more capital than you ever imagined.

As they say, sometimes if you look hard enough, you may find gold in the rubble. You can check this out in www.colaycofoundation.com and my books.

The main principle remains “Pay Yourself First.”

This means that no matter how difficult, you need to set aside a percentage of your earnings – 10-20 percent – as savings. This may mean that you will really have to strictly limit your expenses to Needs and Wants.

Ondoy made sure that we accept the reality that we all will undergo emergencies and that we should set aside savings precisely to tide us over when such things hit us.

Next is the need to be able to invest this to grow over the years at an average rate of two to four percent over the long-term average inflation rate. You can do this a little at a time.

Finally, I am sure you are already sharing like most Filipinos are.

Continue sharing…if you don’t have money, share your time and your ideas on how to help others. Be involved.

Believe Ralph Waldo Emerson when he said “It is one of the most beautiful compensations of this life that no man can sincerely try to help another without helping himself.”

For questions or more information, please write info@colaycofoundation.com.