the doubling method

here's a post i've got from jerry's email which he also got from the site of:

Ready To Be Rich

Become A Millionaire Using The Doubling Method

Posted: 13 Nov 2008 07:32 AM CST

I was waiting in line at the bank the other day when a thought came into my mind. How fast can one peso turn into a million through doubling?

Yes, the geek in me came out and I decided to while away the time doing some mental math. And so I counted each step: 1, 2, 4, 8, 16, 32.. until I reached 1,048,576. Did you know that it takes only 20 steps to become a millionaire?

Anyway, seeing that I was still far from the bank teller, I took my thoughts further and came up with ways on how to become a millionaire by using the doubling method. The process was quite interesting and here’s what I discovered:

How do you start? From zero to one peso
I thought it would be cool to say that before I became a millionaire, I started with nothing in my pocket. So I said to myself, how do I earn P1 from nothing? Of course I could simply ask a friend for it. Immediately, a financial lesson came to mind: Leveraging on OPM or Other People’s Money. You might be interested in learning how I discovered the power of OPM in my article entitled Checkmate.

Turning P1 to P2, P4, P8 and P16
I can continue asking other friends for a peso until I have P16 but that wouldn’t be so nice. So assuming I was able to get P4 from friends, what can I do now to double my stake? And then I thought - I could perhaps buy some candies and sell them for profit. Steps 1 through 4 done!

P16 to P32, P64, P128 until P256
Fresh from the idea of buying and selling candies, I decided to expand my venture to snacks and junk foods. Now that I have higher capital, I can purchase more marketable items such as snack foods and sell them to friends. I remember an officemate who used to sell these stuff at work and he made good income out of it.

Making P256 grow into P512, P1,024 and P2,048
As the amount of my stake grows, more and more income opportunities come to mind. I’m sure you have your own list of things you can buy and sell. If you were to ask me, at this stage - I’d go for selling cellphone credits or eload. It’s a sideline business with very low capital and readily available market. You can even do it online through websites like Load.Com.Ph. My brother earns a net of around P2,000 a month just by selling eload in his office.

From P2,048 to P4,096, P8,192 and P16,384
So far, I’ve been doubling my money through selling online and offline. What else can I do to make money? And then I thought, freelancing is always a good idea. I can use the money to perhaps learn a new skill or hobby that I can turn into an income opportunity. This was what I did back then when I first bought a book on Visual Basic programming and started making custom applications and softwares.

Going from P16,384 to P32,768, P65,536, P131,072 to P262,144
As you go further, doubling money actively would become too exhausting and time consuming. I believe that the financial strategy should change at this point. This means considering low and medium risk investments to passively make the money grow. Aside from acquiring paper assets, I can also leverage on multi-level marketing companies and direct selling networks.

Doubling P262,144 to P524,288 and finally P1,048,576
At this point, my train of thought was interrupted by the fact that I’m already next in line at the bank. So I had to somehow let go of my thoughts and attend to my errand. But now, I’d like to ask you, if you had more than a quarter of a million, what would you do to turn it into a million? I remember a few years back, I bought a business with this amount of money. It hasn’t doubled yet but I’m optimistic it will happen soon.

In conclusion, I’ve realized that doubling a peso until it becomes a million cannot just happen instantly. It takes planning and a good amount of consideration of your personal abilities, skills and level of tolerance against risks. I believe that only through this slow but sure process can one assure himself of long-term wealth.

Also, if you’d noticed, I didn’t actually doubled my money through one transaction but really used my stake to earn small profits until I reach the next step. I simply used the doubled figure as my objective. Doing so made it easier for me to make more realistic plans.

Lastly, I learned that every stage requires different strategies to achieve the goal. This proves the importance of continually educating ourselves. I believe that our level of financial literacy is the prime factor that determines how much we can achieve financially in our lives.

Don’t miss the next article and learn more ways on how you can become rich by subscribing to Ready To Be Rich.

but subconsciously don't

"the first giant reason why people are poor is because they don't want to be rich. because subconsciously, we don't think it fits us." - Bo Sanchez

for the second time, we conducted our Financial Literacy Seminar last sunday for the Singles for Christ (SFC) members in Taguig. and for the second time only few members of our chapter, most specifically our unit, came. again, we started late because people also came in late.

i told them that maybe Bo Sanchez was right. that consciously we want to be rich but subconsciously don't. i think if they really wanted to be rich no matter what time of the day they would have come with excitement but surprisingly they don't have the fire.

my unit head partner, girlie, said, "i think the members are not yet ready or shall we say doesn't understand yet the need to attend this kind of activity. we should continue this advocacy because this is very important. we just need to be patient."

my only consolation is, i just hope that they would find time to read the seminar talk outline that i sent them through our egroup. at least they have an idea what they've missed.

i thought evangelizing is the most difficult task on earth. but i was wrong. i think it's easier to evangelize other people to believe and trust God than to convince your families, relatives, friends, that financial ignorance is expensive.

one example is when i lend my book, the 8 Secrets of the Truly Rich by Bo Sanchez, to my brother and cousin just to share to them the same inputs that i gained from reading it but unfortunately it doesn't interest them.

well, let's try again next time. and i hope next time more people will come.

i thank my partners, co-speakers and supporters for making the seminar last sunday somehow a step forward toward our dreams of making it big for our God, our country and our families.

acknowledgment: Charyl Apuyan, June Cuenca, Marilyn Dacanay, Che Dela Cruz, DK Durian, Shen Echavia, Girlie Golipapa, Marlon & Tina Hernandez, Jerry & Levy Madrigal, Aisha Mua, Jing Ramos, Mavie Villanueva

financial literacy

this is actually the second part of our financial literacy seminar outline. the first part is the financial stewardship.

the Cashflow Quadrants

according to Robert Kiyosaki of the Rich Dad Poor Dad, there are only four ways how to earn.

1. be an employee. work for somebody for 8 hours a day, 5 to 6 days a week. they are oftentimes forced to render an overtime. sometimes rendering overtime is without pay. their own initiative to meet the deadline or because they cannot cope up with so many pending work. most of the times they have bosses that is so demanding and so irritating. their monthly income is secured but they have no control over their time. they have no freedom and they work for money.

2. be self-employed. they are their own boss. most people in this group are the professionals: doctors, lawyers, architects, accountants, etc. some works at home or have small businesses like tailors, sari-sari store owners, balut and taho ventors, taxi owners who drive their own taxi, among others. though a little higher in status than the employee, a self-employed person still needs to wake up early, do their routine and stuff and work or else they don't earn. meaning, they still work for money.

3. be a businessman/entrepreneur. this is much better than the other two. businessmen/entrepreneurs create businesses and jobs. they create money and wealth. they hire people who are competent enough to run their businesses. they hire experts that require less supervision. their business is in autopilot. this will give them enough time to look for more opportunities and time for their families.

4. be an investor. they make their money work for them. they use their money to earn more money. they create passive income. they invest in other peoples businesses, they invest in real estates, stocks, bonds and mutual funds. they don't need to wake up early. they control their time. they can spend their month-long vacation and still earn. this is freedom--financial freedom.

the first two groups, the employed and self-employed, are placed at the left side of the quadrant. while the remaining two, the businessmen/entrepreneurs and the investors, are placed at the right. Kiyosaki called the left side as the "rat race" while the other side as the "fast tract".

financial literacy is the key for people to move from the rat race to the fast tract. they need to be prudent, disciplined, and the will to save and invest. it takes a lot of hard work and guts. dream big but start small. learn from failures and improvise.

source: Robert Kiyosaki, Rich Dad Poor Dad and Larry Gamboa, Think Rich, Pinoy!

average Pinoy has low financial IQ

average Filipino has financial IQ of 48, says American bank. this was headlined by Inquirer.net last friday, january 18. the 400 respondents only scored 47.8, less than half the maximum score of 100, according to Citibank.

the score was derived from the American banking giant's Fin-Q survey, a study across the Asia-Pacific designed to measure the financial quotient or financial intelligence of consumers aged 18-40, who have at least a bank account or a credit card.

the survey showed that 62 percent of Filipino respondents belonging to the middle-income working class had a score of less than 50.

no retirement planning

based on the results, only 1 out of 10 Filipino respondents is consciously saving up for retirement. the rest have some savings but don't know if it will be enough. others have no idea at all how much they need or have not started planning.

lack in savings

if they lost their jobs tomorrow, or suddenly fall ill and cannot work, their savings would last only for nine weeks (about two months) before they run out of money. a comfortable buffer in case of a sudden sickness or loss of job is to maintain liquid savings equal to three to six months worth of current earnings.

my advocacy

i'm not an expert in financial matters but i want to advocate the teaching and propagation of financial literacy among Filipinos especially the youth.

Robert Kiyosaki said in his book, Rich Dad, Poor Dad, that there are no formal education, not even a school, that teaches financial literacy. and besides, more and more Pinoys are becoming out-of-school youths at the early age because of poverty and lack of financial support. so where then, they can learn that?

with the help of my friends and co-SFC, we will start with our community in CFC Singles for Christ. actually we already had organized one seminar last year. me and my friends were the resource persons. i came up with an outline based from the CFC-SFC Expanded Talk Outline for Financial Stewardship and the 8 Secrets of the Truly Rich authored by Bo Sanchez.

i'm targeting another seminar this first week of february. this is part of our service so we gave it and we will give it for free. then we will open it to other chapters, ministries, organizations, parishes, barangay, etc.

while doing this, we will look for possible sponsors who will shoulder some expenses like snacks. if we can pool enough money we can get the services of the experts in this field. we will give him/her honorarium for his/her services.

if possible, i will ask for partnership with Bo Sanchez of Truly Rich Millionaires Network, Joey Concepcion of GoNegosyo, Larry Gamboa of Think Rich Pinoy Millionaires Network and other Pinoy advocates.

if you happen to be interested in supporting this endeavor please don't hesitate to contact me. my email address is richchard28@gmail.com

thank you in advance and God bless!

diskarte, Pinoy!

who wants to be a millionaire?

i can almost see everyone raising their hands saying "me" in exclamation. e sino nga ba ang hindi? we all want to be millionaires and taste what it feels to be one.

but according to Bo Sanchez, author of the 8 Secrets of the Truly Rich, even though we want to be rich, subconsciously we don't. how come? kasi marinig lang natin ang mga salitang: selling, marketing, business, networking, and other related terms e lumalayo na tayo dun sa nagsasalita. as if he's carrying a contagious virus.

e paano nga ba yumaman sila henry sy ng sm, tony tan caktiong ng jollibee, lucio tan ng pal, at iba pang mayayaman dito sa Pilipinas? simple lang... nagbenta sila. may nagbenta ng sapatos, burger, sigarilyo, at iba pa. they started small and now they are billionaires in their own rights. as senator manny villar always say, "sipag at tiyaga lang 'yan."

diskarte, Pinoy!

saan nga ba kilala ang Pinoy? saan pa eh di sa pagiging madiskarte! Filipinos are known for being hardworking, intelligent, creative, innovative, friendly and joyful. Filipinos excel in almost any field and in any part of the world if given the right opportunity. so, if you want to be rich, you can do it!

money problems are most of the times mind problems, says bo. just use your coconut shell. if we take it literally, here's an example: a man brought with him a stand, a chessboard and a sign that reads "checkmate black in 2 moves". those who will try to solve the puzzle will bet for P50, P100 or even higher. it depends on their agreement. one loss try is automatically instant money for him. though i'm not sure kung meron ngang solution dahil kung wala eh he's cheating. hindi ko naman sinasabi na gayahin nyo 'yun. ang gusto ko lang i-emphasize na pwede kang kumita kahit walang puhunan. diskarte lang.

another example is the story of Butch Salvador. one day, he found out that he's broke with only ten pesos (P10) in his pocket. he came up with an idea, made a leaflet, photocopy it for ten (10) copies and then distributed it. when he got his first costumer and received his payment amounting to P2,000, he crumpled the money, held it tight and promised to himself, "i do not want to be poor ever again". he started with ten pesos and now he's Car Magic is franchising and he created more companies in his name. again, diskarte lang.

how to look for a business?

1. identify people's need or simply create a need
2. check out your core gifts/interests
3. sell a good/new idea
4. buy an existing business or franchise a business
5. buy and sell or networking
6. foreclosed properties

delay self-gratification

Filipinos are also known for their festivities, celebrations, parties, etc. likas daw kasi sa ating mga Pinoy ang pagiging masiyahin kahit puno ng problema. and when something good comes up, like receiving a bonus, most Pinoys call their barkadas and start celebrating. they celebrate until all their money are down the drain. some will buy new high tech gadgets, appliances, a new car or a new house to fulfill their dreams. these people are called "one-day millionaires".

i'm not saying that it's bad. but, our people should learn, first and foremost, how to save and invest their hard-earned money before enjoying the fruits of their labor. buy assets. create passive income. this is called "delaying self-gratification".

Financial Literacy

another key to become a millionaire is to become financially literate. ito ang kailangan nating mga Pinoy and this is also one of my advocacy. i want to teach financial literacy to young Pinoys, especially the underprivileged. the new generation of Pinoys should learn the basic cashflow, learn how the money works, the income statement, the difference between an asset and a liability, the difference between good debt and bad debt.

everyone should learn how to invest, how to look for successful mentors and partners, how to be responsible and committed to their dreams, how to apply what they learn and move.

attending seminars and reading books also helps. below are highly recommended books:
1. 8 Secrets of the Truly Rich and Simplify and Create Abundance by Bo Sanchez
2. Think Rich, Pinoy and Grow Rich, Pinoy by Larry Gamboa
3. Rich Dad, Poor Dad by Robert Kiyosaki

have a plan. simple, measurable, attainable, realistic and time bound plan. and the most important thing is action! "nothing happens unless something moves". kaya let's do it na! now na! kaya natin 'to!