Tag: personal finance

What’s the difference between the rich and the poor? The rich knows how to handle money. The poor doesn’t. Now don’t get me wrong. I’m not saying the poor are poor because they don’t know how to handle money. I’m saying the poor don’t know how to handle money because they’re poor. They weren’t able to handle money much to begin with. These days, as wealth supposedly trickles (trickles!) downward from the improving economy, as salaries from new jobs come, as OFW relatives remit cash, as lotto tickets win, the beneficiaries of this money need to learn to budget, to save, to invest. Otherwise, much of the money will go to waste.

So you want to be a millionaire? I’m sure you have your own ideas how to get there. But a few more shouldn’t hurt. Here’s five that I found while randomly surfing:

1. Avoid the Earn-to-Spend Mentality:   Michael LeBoeuf, author of The Millionaire in You, points out that to increase wealth, it’s essential to emulate millionaires who view money as something to save and invest, rather than income to spend. Many wealthy people live quite simply, he points out, choosing less pretentious homes than they could theoretically afford and opting for financial independence over material showmanship.

2. Focus: LeBoeuf also counsels resisting the impulse to be scattered in your efforts and interests: “Winners focus; losers spray.” And goals that are clearly written down are easier to keep in focus.

3. Do Whatever Is Necessary to Meet Your Goal:  People who earn their millions are able not only to focus but persevere in the pursuit of their goals. One single mom entrepreneur, Melissa Clark-Reynolds, started her first business, a health and safety consultancy, when she had a young son. En route to her goal of being a millionaire by age 35, Clarke-Reynolds and her son ate lots of pizza, did homework late at night and often slept at the office. She is now a chief executive mentor for Empower New Zealand, a global business consulting firm headquartered in London.

4. Take Calculated Risks:  You have to take strategic risks to earn and grow money. And a little rebelliousness seems to help too. One interesting study found a majority of male millionaire entrepreneurs had been in trouble with school authorities or the police during their adolescence.

5. Be Generous: And why doesn’t it surprise us that millionaires are often very generous? Sometimes it’s for the tax breaks, obviously, but often it’s not. One Jewish Swiss millionaire, for instance, flew to Israel to give $5,000 in cash to a waiter at a Jerusalem café who foiled a Palestinian suicide bombing. Among the most generous of millionaires are those from North America, who are, according to a Merrill Lynch Cap-Gemini report, two to five times more likely to give to causes they value than their European counterparts.

The last one seems to be a side-effect of being a millionaire, but still it’s a good concept to live by.

Via: Bible Money Matters
Source: Monster

Maybe the skeptics’ expectations we’re really low :P But seriously, I read this article in Businessweek today which certainly brightened up my day. For decades, a lot of good people have been going overseas for work, and their remittances no doubt is one of the biggest contributors to the economy.  But there are also a lot of good people who decided to stay and directly help the economy. And because of their help, especially in the outsourcing sector, the economy has grown. Now more than ever, is a good time to stay, even go back, to the country.

Of course, one problem that needs to be addressed is the propensity of the average Filipino, especially those left back home, to consume rather than invest. As my overseas-based friends observed when they visited, it didn’t look apparent that there was a recession in the US, that there’s an ongoing debt crisis in Europe.

The sad fact is that most people don’t have bank accounts, don’t know how to handle money, don’t even know how to budget. We may be in a good position today, but if we don’t invest, we could eventually get into the same situation as Japan with its lost decade, the US with its recession, and Europe with its debt crisis.

And while from the top-level, with the government (if you trust them) can make the right economic and fiscal policies, from the grassroots level, the answer is financial literacy. Maybe it should be made part of the tertiary, secondary, or even primary education. The average home is dismal at it.