Wednesday, June 12, 2013

Not Because You Are An Accounting Graduate, It Does Not Mean You Are Wiser

It was an endless battle of wit whether to jot my expenses down or just let it happen and forget in total
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oblivion. My happy-go-lucky self says to simply ignore it. My responsible and logical goddess wants to keep it documented. So, how do I go about this?

Not so long time ago, a friend introduced me to books of Robert Kiyosaki and of T.Harv Eker. Then, he invited me to attend financial education classes. Those series of life-changing events brought me some realizations and lead me to where I am now. One of those realizations was the recognition of how important financial awareness is. Second, is the importance of taking control of my finances and my life. Let's focus on these two for now.

In the past, I was not that concern of my financial future. Looking back, it seems I was just living and working to survive before I get the next paycheck. I was dragging myself to work every night because I was led to think that I have to so I can pay my bills and buy myself Starbucks coffee every day. Despite of a Nice pay, I never had savings and no investment. My net worth was 0. Every time I tried to think where my money goes, I thought it just went to my basic needs and my monthly payables. It was not an educated guess of course because I do not have a basis--I never keep record of my finances.

Financial Awareness

How aware are you with your financial status? How much do you spend every month? How much do you save? In case you lose your job right now, how long will you be able to live comfortably? What's your financial goal?--These are just some of the questions that tested my financial awareness. If I had to grade myself, I would have given myself an F. Being an accounting graduate does not mean you are any wiser when it comes to money. In school, we were taught how to be an accountant for other's businesses but not to manage our personal finance.

Financial awareness is not just knowing that you will be receiving your salary on the 15th and 30th, and you will be spending this and that tomorrow and next week. It is beyond the budgeting and the cash in and out.

Identifying your old and deep-rooted beliefs about money is critical to financial awareness. It explains why we look at money the way we do right now, our spending habits, and our money management. Many of our beliefs could be wrong. While this could be hard to accept at first, our bank accounts are the evidence on how good or bad we perform.

One of the false belief that was instill to me since I was a kid was the belief that "money is the root of all evil" when in fact, it is the "love of money" that is the root of all evil. I was lead to believe that many wealthy people are mean, corrupt, greedy, and they have a hard time sleeping at night because of fear and distrust. Through books and videos, I learned that these wealthy people are not at all like that. As a matter of fact, they are telling to be less attached with money because the more attached you are with money, the lesser freedom you have and more restricted in options. The same people seek freedom through pursuing their passion, helping others, and creating opportunities--and in doing so they become wealthy. I do not see anything wrong with what they are doing. In reality, what's wrong is remaining to be financially poor and financially uneducated when we have the chance to improve our lives and help other people too.

Poor people or shall I say poor-minded people tend to define wealth as just material wealth. Some would justify that they prefer the life that they have because it's less complicated. But when you try to scrutinize their lives, they are problematic--and guess what's their problem is? It's money. And they make decisions based on money. Perfect example is going to work abroad for money. So, tell me, who is more attached with money?

Recognizing the wrong beliefs about money gives us the opportunity to correct it and develop new habits. In doing so, we need to change our poor habits and educate ourselves to the tried and tested formula of experienced and successful people.

Taking control of your finances and your life

It is quite difficult to take control of something if you do not seems to know what are the things involved and if you do not have the courage or the drive. And it is quite difficult to identify these things involved if they are not recorded. This is the reason why I record my income, expenses, and investment ( yes, I have an investment now. It is small but that's the way I should start it). My records show my financial standing and help me plan to reach my financial goals. Similar to companies, whose owners look at their financial records to make a sound financial decision, we as an individual need to do it too.

Our finances is one aspect of our life. It defines us. And like other areas in our life, our finances requires self-discipline if we wish to succeed. Sadly, it is easier said than done. Many people either abhor or dread the word DISCIPLINE same way as with the word RESPONSIBILITY. But if we do not do anything about it, we are just people who reacts to situations. An easygoing life, while more relaxed, does not give that sense of direction and pride. The moment trouble comes you'll be caught off guard and wreck your finances and life. I should know because I've been on that situation. My debt was bigger than me. Good thing I believed that God is bigger than everything else because if not, I would have killed myself.

Robert Kiyosaki teaches us to let money work for us instead of we working for money. That was quite hard to grasp at first especially if you don't have ideas about investing. Read his Rich Dad, Poor Dad book.

Once you get the habit of recording your finances, planning your financial future, and investing you'll feel more confident, happier, and stronger.

Friday, May 31, 2013

Why Join a Direct Selling Company

Direct selling or network marketing never appeal to me that much several years ago. I once thought of them as scammers. However, through time, witnessing the successes of many individuals and learning great products offered through MLM (multi-level marketing) companies, I was compelled to do a little study.

Robert Kiyosaki, the author of Rich Dad, Poor Dad and the inspiration among numerous groups advocating for financial education, believes that direct selling is the perfect business for people who are willing to work for it. Kiyosaki wrote an article discussing the benefits of direct selling. I will try my best to relay what I've learned in a concise manner.

In his book, Kiyosaki explains the cashflow quadrant.  The quadrants: E, S, B and I represents the four types of people who make up the world of business. Each quadrant is define by its source of income and its core values.

E stands for "employee". As we all know, this is for the type of people who are dependent of their salary. Whether the person is a janitor or the president of the company, this quadrant share a common core value, which is job security and benefits.

S stands for "self-employed" or "small business owners". They earn through commission, per project or per amount of time they spent in doing a job. Their core value is independence. They want freedom and they want to do things their own way.

B quadrant represents "business owner" defined as having 500 employees. Unlike S quadrant that wants to be the best in his field, B quadrant seek for the best people to join his team. People under this quadrant have powerful life mission. Concerning income, a  true B quadrant person can take a vacation or leave work yet still earning from his business.

Lastly, the I quadrant stands for "investor". They could invest in a lot of things like stocks, bonds, real estate, and businesses. Their core value is financial freedom. They let money works for them instead of they working for the money.

It is important to understand this cashflow quadrant to learn which quadrant gives more financial success. By simply looking at them it is easy to determine that the B and I quadrants gives you the best chance to become wealthy. Unfortunately, many people never realize that or they get trapped in their own values that they never move from their quadrant.

For an average person to enjoy financial success, Kiyosaki recommends starting your own direct selling company. Though he is not personally involved in one but through his study, he realized that direct selling company teaches the same business skills, principles, and mind-set similar to his "rich dad" who was actually the father of his close friend and his financial mentor during his early years.

He described direct selling as a revolutionary way of accumulating wealth. It can be a means of achieving financial freedom.

What is financial freedom? Financial freedom is different from financial security. As Kiyosaki explained in his article, people who wants financial security cling on their job or rely on their paycheck. The more secure you are, the less freedom you have. People who seek financial freedom developed different mind-set, attitudes, and skill-set. And like Kiyosaki, they show the absence of fear of being fired or worry about their paycheck because these do not matter. What matters would be opportunities and creating business.

Let me summarize the benefits of joining a direct selling company
  • Provides opportunity for all regardless of your educational attainment, work experience, how you look like, etc.
  • It teaches people to take charge of their destiny.
  • Gives real-life business training that would not experience from business schools.
  • Teaches you to build network and duplicate your efforts by training you to teach other like-minded people.
  • Provides you the support system to help you grow and succeed in business.
  • Letting you earn passive income, which is money coming in without you working on it.

Direct selling, however, only works to some people. It doesn't work for every one. At the end of the day, the decision has to come from you and your core values.

Wednesday, May 1, 2013

Listening to the Little Voice and Saving Money

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Have you ever been financially broke in your life? If you have, you probably experience that feeling of
anxiety and helplessness. You self-esteem goes down. And what keeps you sane is your belief that things will get better soon while clinging to your faith.

Did it ever came across to your mind that such thing could have been prevented? The situations we are in right now are the results of our previous decisions and actions. If you believe on that, then what we are experiencing are mere consequences. Sometimes, it is not brought down by God to try your faith but instead you've done it to yourself. Again, let's go back to the reap-what-you-sow principle. If you've sow your field well, expect to reap greater rewards. The same thing goes to our finances and to our life.

I am lucky that I don't have a family of my own yet. It gives me more time and opportunities to improve the different aspects of my life. My finances is one area that I am working on.

While working in the corporate world and living in the big city, I noticed that my savings never improved. I was living from paycheck to paycheck. I spend on many things that, oftentimes, unnecessary. Looking back, I feel that I was one heck of a disheveled person who don't know where she is going. I was lost amidst the city's commotion and pressures of the adult life. The short-term happiness I get from material things temporarily filled the void I felt.

Tired of that system, I realize that I needed to change. When you know and recognize your desire, the universe seems to align itself to your want. And that's what happened to me. I got acquainted with people who have similar aspirations. I was encouraged to leave my comfort zone and pursue what I truly want. One thing leads to another, until I found myself working as an independent contractor. I have more time developing my skills and my creativity.

The little voice

I left the big city and started living alone in the province where I found solace. Far from the noise and the influences of the city, I feel more relaxed and vibrant. I am able to think clearly without all those distractions. True enough, there is a little voice inside us that wants to speak, yet it is drowned by all those noises and distractions. If we only listen to that little voice inside us, we learn to understand ourselves better. We learn more of our passion, desires, and purpose in life. And with that, we will be able to make better decisions.

We are also spiritual beings and our body is the temple of our soul. Our soul needs food—spiritual food. When we indulge our soul with their favorite food, we are doing ourselves a favor. Not only we are making our soul stronger but it equip us with wisdom, sound judgment, patience, joy and peace—these are spiritual gifts that material things could not provide. And it all makes that little voice becomes more audible, and it manifest itself on how we make our decisions and how we act.

Saving money

Is there really a connection with my little voice and saving money? The little voice is my soul speaking. By being in touch with myself, I feel less inclined to spend for things or go to places just to fill that certain void or sadness inside me. In short, the less I spend, the better I save.

Every time I receive my money, I calculate and plan how to use it. I immediately compute for the tithes and offering, and set aside my savings. I also allot budget for projects and bills. Basically, I have to live within my means with the amount left afterwards.

It takes discipline to have a control over the finances. It was hard at first but it became a habit to me. Believe it or not, this simple thing, even if I am not managing huge amount of money, its impact is tremendous. That sense of control and discipline makes me feel confident.

Neglecting to save money when you have the capability to do so is like neglecting to plan for the future. I don't think God wants us to be people who does not care about our future. Remember the parable of a builder who built his house on the sand? Did the bible says that people without vision will perish?

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