Are you wealthy?

Our team at the Colayco Foundation for Education is focused on teaching financial literacy to Overseas Filipino Workers (OFW), regular income earners and students. Financial literacy sounds so complicated. Actually, it just means knowing how to manage your money, save and grow your savings. In the course of our interaction with our target markets, we noticed that the concept of wealth is usually equated to having lots and lots of money. In reality, having money, even lots of money, is no assurance that one is automatically wealthy and can therefore afford to stop working for money. Wealth and money means nothing unless it is matched with time and expenses. Are you wealthy if you had PhP 1 Million in your pocket? What about PhP 2 Million, PhP 10 Million or PhP 100 Million? The answer lies in your expense profile. If your living expenses are very high because of your lifestyle, or perhaps because you have so much debt, then maybe even if you had PhP 100 Million, you would still be financially short. So if you had cash and other financial assets that can support your lifestyle for say ten years, would you consider yourself wealthy? Wealth or kayamanan has to be also based on how much time you have left in this world. If you are in retirement and have ten years to go, then you are wealthy enough if you had financial assets good to support your lifestyle for ten years. But if you only have resources good for five years, then you are not wealthy enough. In this case, you still have to grow your financial assets or lower your lifestyle to match your financial capability. Savings: Your First Source of Capital Savings is your first source of capital. Kung wala kang kapital para magtayo ng sariling business o mag-invest sa negosyo ng iba, mag-ipon ka muna. First, find a job (or any source of inome) and save a portion of your salary. Ok lang kahit kakaunti ang maipon mo kada araw. Lalago ang savings mo nang mas mabilis sa inaakala mo at magugulat ka na lang na may sapat na savings ka na para sa gusto mong antas na kabuhayan. Very few of us (less than 2% of Filipinos) are born into wealth. Most of us will have to work and engage in some form of business or practice of a profession to make a living. Most of us will need to go through some form of learning (whether formal or informal education) to be able to earn some form of income. All of us depend on our ability and intellectual capital to produce the economic resources so that we can live a fulfilled and happy life with our loved ones and the community around us. Unfortunately, a majority of income earners assume a very non-productive attitude towards working and the income they derive from it. They view working as a necessity and as the only means to earn money. And earning money is simply a means to be able to spend for their needs and wants now. These are the people who earn so they can spend. If they manage to save, it is because they want to temporarily accumulate a certain amount which they intend to use to buy something they want RIGHT AWAY, perhaps a new model of a cell phone, a brand new TV, fancy jewelry, a new fad, etc. The cause of this kind of financial behavior is really short sightedness driven by the desire for instant gratification. Everything has to result in an immediate gain. We need to appreciate and be constantly aware of the reality that we have to plan for our financial future. This cannot happen overnight. It takes discipline, determination and decisiveness to make it happen. The good news is… at any income level, we can plan to be financially independent provided we learn to be financially literate, to be knowledgeable investors, to be passive entrepreneurs. Securing sufficient financial comfort is within our reach. As we earn our incomes actively as employees or professionals, we must put aside savings and invest them for long-term accumulation of wealth. SAVINGS is our first source of capital. The better news is that no matter how small an amount you can start saving, you can grow this money into substantial lifetime wealth. Making your money work for you is not difficult at all. You just need to set your financial goal, learn your options, be patient and START INVESTING. We are here to help you start. FRANCISCO J. COLAYCO is an entrepreneur, a venture developer and financial advisor. He has over 40 years of experience that covers service contracting in the Middle East, manufacturing, trading construction, shipbuilding, management consulting, banking and financial services. He is the Chairman of the Colayco Foundation for Education (CFE) and the author of bestsellers: Wealth Within Your Reach (2004 National Book Award for Business and Economics), Making Your Money Work (Nominated in 2005, National Book Awards Business and Economics), Pera Palaguin Workbook and Money for Kids. The books are available at National Bookstore, most other bookstores or directly from CFE. He joins our website blog to share with ordinary income earners, Overseas Filipino Workers (OFW) and students the simple principles to "Save what you earn and grow what you save." CFE conducts talks, seminars, and workshops. Learn more about the advocacy at www.colaycofoundation.com, email info@colaycofoundation.com, via SMS +63917-8537333 or through (632)637-3741.