by ERNESTO T. SOLIDUM
Some 300 members of PTA Infant Jesus Academy (IJA) Andagao on March 10, 2012 attended a very enlightening discussion on family financial management. A young lady financial analyst and author, Ms. Sha Nacino from Metro Manila was the guest and resource person. She discussed “Five Steps To Financial Freedom” considered lofty but achievable with the right preparation and opportunity.
The five steps are: 1) Begin with the end in mind, 2) Live within your means, 3) Accumulate assets and eliminate liabilities, 4) Develop the habit of saving and 5) Expand your means of income.
Ms. Nacino defines financial freedom as the stage when one have a choice whether to stop working (for money) or not because money is no longer an issue. Monthly passive income is greater than monthly expenses. Passive income is money that one earns while on vacation or while he is doing something else. Examples of passive income are rentals, royalties, proceeds from e-sales of merchandise while on vacation and others.
People are often confronted with the concept of the American dream of starting a small enterprise, slugging it through and making it big in the end. Success stories abound in free societies where there is less government regulations and more of incentives. Yes, the Filipino can achieve financial freedom as long as he has the right motive of stewardship in mind.
It is pertinent to cite common misconception that “money is the root of all evils”. There is nothing wrong with being rich, in fact God gives wealth, possessions and honor (Eccl 6:21). The sad truth is that “the love of money is root of all evils, in other words greed. Strive to make money your slave instead of one being a slave of his money.
Live within your means is basic whether one is working in big government or corpo-ration. Thankfully, the job of keeping the purse in a Filipino family is the wife’s, unlike the Chinese. Balancing the budget is an all consuming passion because it is not how much one earns but how much he saves.
Assets are needed to boost income especially those having potential positive return on investment. Liabilities are those purchases on luxury goods like mink coat, SUV, jewelries, and others.
Developing a systematic way to save has the simple formula of income minus savings equals expenses. Ms. Niceno is very insistent on the urgent need to save for a rainy day. Depending on one’s capacity, it can range from 1 to 25 percent of total income automatically deducted before paying household expenditures like light and water, food, house rental, tuition fee, medicine, and others. The old maxim is a penny save is a penny earn.
Expanding means of income is to create other sources of passive revenue. This entails financial savy as to where to invest one’s hard earned cash. In all cases, passive money gains proportionately to the amount of money invested and financial strength of the institution.
Ms. Nacino attributes her present life and positive outlook to painstaking dedication of her parents to age-old wisdom of being honest, hard working and God fearing. She says the family is blessed with abundant food supply coming from the backyard. They raise and market poultry and swine, fruits, and vegetables boosting family health, bonding and income.
Warren Buffet, 82 the world’s third richest man with $45 billion is willing to share 99 percent of his fortune as part of his advocacy to mitigate what he calls culture of selfishness and loss of opportunities in society. Specifically, he is for imposing higher taxes for the rich who often pay extremely low rates on income by moving money around.
King Solomon mentioned that wealth and fame are fleeting hence vanity. His admonition is “Fear God and Keep His Commandments for this is man’s all. (Eccl. 12:13) St. Josemarie Escriva says, “If riches abound set not your hearts upon them. Strive rather to use them generously and if necessarily. Be poor of spirit”.
Road to financial freedom involves critical decisions in life like being passionate, goal oriented and trusting God, virtues that the majority of social welfare recipients of today have no desire to do. /MP
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