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!

one million Pinoy millionaires

the mission of Larry Gamboa, Bo Sanchez, Trace Trajano and Nelson Terrible is to create one million Filipino millionaires worldwide by 2020. this is huge! this is ambitious! but whether it's achievable or not, i want to be part of it. hehe i want to be a millionaire by that time!

the four musketeers

Bo Sanchez is a bestselling author, a powerful Catholic Lay Preacher, and the founder of many ministries that serve the poor and the Catholic faithful in the Philippines. he publishes Shepherds' Voice - the Philippines' most popular Catholic literature - and hosts his own weekly Catholic TV program and daily radio show. he's also an investor and founder of many businesses.

Larry Gamboa is the author of the bestselling books "Think Rich, Pinoy!" and "Grow Rich, Pinoy". apparently, he has applied Robert Kiyosaki’s Rich Dad, Poor Dad principles to the Philippine setting and have earned millions through real estate investing. he is now considered as the "Robert Kiyosaki of the Philippines".

Trace Trajano is a Senior Scientist at Fortune 500 company and already have 22 patents. he is also Pinoy real estate investor based in Cincinnati, Ohio USA. his passion is teaching others how to have multiple streams of income through real estate investing. he co-authored a book with Larry Gamboa entitled "Think Rich Quick".

Nelson Terrible is a Pinoy Billionaire and CEO of the Techno-Asia Construction & Development, Inc. with over 30 years experience in real estate.

they lunched the Truly Rich Millionaire Network and the Think Rich Pinoy Millionaire Network and together, they will reach their goal.

me, i'll do my share. with the help of my friends and co-sfc, we will teach financial literacy, conduct livelihood workshops, develop entrepreneurs, create businesses and jobs, and be investors ourselves.

foreclosed properties

in my previous post i said that looking for a good foreclosed property is so time consuming and very frustrating. it is a very tedious and a stressful process.

but if you are considering real estate as your investment vehicle then by all means let's explore it.

basic steps in acquiring foreclosed property

1. create a list of properties. you can get a copy of the list of foreclosed properties from sunday classified ads, buy and sell magazines, banks' website and from the banks itself. encircle those that caught your attention. have a short list.

2. prepare a set of questions. write all the things that you want to know. ask for the location map, copy of the title, tax declaration, the terms, is it negotiable?

3. call the banks. look for the asset management department and ask your questions. check if the property you want is still available. ask. ask. ask.

4. visit the property. it is really important see for yourself what the property look like since most of the time it is being sold on a "where-is, as-is basis". in other words, what you see is what you get. some are uncut diamonds while others are pure lemons. so check it out so as not to be frustrated later.

5. make an offer. you can make a bid through auction or negotiated bid.

5.1 auction. check first with the bank if there is a scheduled public auction for their acquired properties. in public auction banks requires no qualifying and no paperwork. just bring the earnest or show money, refundable if you don't win a bid.

5.2 negotiated bid. it's a written proposal that specifically details your bid. you can lower the cost but be reasonable. but unlike the auction, here expect the banks to ask for too much papers for their screening and documentation purposes.

6. learn financial and computer literacy. you must know how to push the numbers to know if you will make money out of your effort. the property may look great but if it's too expensive or the payment terms are too tight for comfort, you may end up broke if you buy it.

continue to learn more and new techniques. and always sharpen the saw.

things to consider in buying a property

1. location. this is the most important thing to consider in buying a property. the property should be a few blocks away from public places like market, school, church, mall and other establishments.

1.1 neighborhood. if you see a fancy cluster of townhouses in a workers' village, it may not be a good buy after all.

1.2 accessibility. the property should be accessible to public or mass transportation.

2. structure. it must be solid and built with good foundation.

3. layout and design. it is a must that the layout and design should have aesthetics sense and of course spacious.

4. facilities. electric and water meter must be in place and working.

5. security. the residents must feel that they are secured 24/7.

do not rush into the first house that you see, there may well be a better option around the corner. make yourself a list of things you feel your desired property needs to offer. when viewing a home tick the items on your list that meet these requirement. don't fall in love with the property. it blurs your judgment. resist the temptation to own. build your dream house later. and besides, it is the capital gains you are after.

never ever forget that you are there to buy and asset, something that adds cash into your pocket. make sure what you buy is indeed an asset that somebody else would like to buy later on.

source: Think Rich, Pinoy! by Larry Gamboa, PhD