Archive for the ‘Financial Wellness’ Category

My attention was caught by video while I browsing for any opportunities to earn extra income. The video is about buying or renting a home. It is available in two parts:

• Part 1
• Part 2

The person talking is actually proving renting is better than buying your own home. He argues that he’s almost completely convinced that savings when renting is higher than that of buying your own residence.

I am also renting, so I also experienced listening to others’ opinion about the benefits of having a home.

“Home ownership is an excellent path to build wealth.”
“If you rent, you’re throwing away your money.”
“Owning your own home is a forced savings plan.”
“Having a home is a major milestone in anyone’s life”

There are other resources around that tackle the same issue in the video. Tim Ellis made a post in Get Rich Slowly blog, and again stated some proofs that renting is better.

What’s amazing is that there are mixture of ideas from all those who made comments in the video and the blog post. Some of them are in favor of renting while others are in favor of buying. People have different point of view, and their reasons are valid.

In favor or home-ownership:

I hate it when PF Blogs let someone post about how renting isn’t such a bad deal. Renting sucks. How much do the renters benefit when property values rise? They don’t.
If you own, you have a stake in a market that consistently rises.
I purchased a condo for 62K, and continued to pay mortgage and taxes consistent with what I would have paid to rent it. Sold that condo 5 years later for 148,500.
Even if the market had not gone up, I would have walked away with thousands in equity.
If I had just rented it, I would have had walked away with nothing (except maybe my damage deposit).
Yeah owning requires some investment, and anyone can put together a graph showing how renters pay less, but the market changes and when it does, owners have an opportunity to benefit, whereas renters never do.- Jeff on Tim Ellis’ post

In favor of renting:

As a late-blooming homebuyer (I waited until age 48 to buy my first home), I do find myself a bit nostalgic for the relatively carefree renter’s life. I went from renting a three-bedroom apartment for $550/month to a three-bedroom house (not much more room but we now have a basement) for which I’m paying $2600/month (15-year mortgage), so the biggest impact on me has been cash flow. There are also lots of expenses that I don’t think we’d be making if we moved to another apartment, like new (better) furniture, curtains, a lawnmower, yard tools, etc., none of which will add to the value of the house but do improve our quality of life. However, those may be offset by the headaches of having to deal with and pay for all the repairs ourselves…it was so nice when you could just call the landlord and say, “sorry, but the roof is leaking.” – Brad on Tim Ellis’ post

My Opinion

I’ll use the safe answer – it depends. I am not against renting because I do so at present. Neither am I against buying a home, because I really plan to do that in the future. That has been my dream ever since I started to work.

I know somebody who is a home-owner, but he rents a condo unit for his family. Why did he make the decision to rent? He travels daily from home to office and that costs him a lot because his house is tens of kilometers from where he works. On top of that, he wastes around three hours a day on commute because of the heavy traffic, causing him stress and fatigue.

His home now is being rented out, producing additional income that can provide extra money for the rent that he pays his landlord and the monthly amortization for his home. He saved on travel expense and parking costs because he lives just a block away from his workplace.

As proven by the different cases stated above, everyone has different circumstances, and there are many factors that will help you decide which is better for you. The point is you have to assess and understand your financial condition very well. You can listen for advice, but in the end, it is you who should make the final decision based on the result of your own evaluation.

Nowadays, more and more full time employees feel the need to have other sources of income, especially those who have family to support. It’s a fact that for some people, the monthly income can barely sustain the expenses for their basic needs, and most often than not, no extra cash can be spent on wants. Some of the questions that usually linger in your thought are as follows:

“How can I earn extra money?”
“What are the possible sources?”
“Who can help me?”

I myself ask these kind questions. Luckily, I found some means to earn extra money, which I’m glad to share. But before anything else, there are several concepts to you should be aware of.

Understand 8-8-8 model

I mentioned this model in one of my posts. This basically states that a full-time employee generally has the following time distribution during the 5 day workweek:

8 hours of sleep
8 hours of work (full time job)
8 hours of personal time

The 8-hour personal time is usually spent on activities like:

• Lunch break
• Transportation
• Preparation for work (taking a bath, making meals)
• Rest and recreation

The main idea here is to maximize your 8-hour personal time. If you spend your time to do overtime work in the office, especially if there’s no extra pay, then you might want to think again. Yes, your boss might notice your extra effort, but you should be aware that if you do it more often, you’re losing the chance of making extra money. Among the three eights of your time, this is the only one that has the potential of making extra money since a) you do not want to shorten your sleep so much, otherwise you won’t have the energy to do all of your work and b) your 8-hour job is still your bread and butter, at least for now.

There is no such thing as time management

When some people hear news like, “Hey, I got an idea that can make us $100 or more!”, they become very interested. But upon knowing the details on how to achieve it, especially if the work requires an hour or two everyday, you’ll hear them say, “I don’t have enough time” or “I’m too occupied in my work now”. This kind of mindset is true for many people.

You should understand that all of us get the same 24 hours a day. If you want to earn extra money, the key is to manage your activities. Some people would spend up to 5 hours just playing computer games. Others would spend extra hours for their full-time work. To beat the feeling of overwhelm and the ‘not enough time’ mentality, you need to overcome procrastination. Again, the solution is to manage your activities. This will help you clear some space in your day to spend on your other money-making efforts.

Spend your weekend wisely

Weekends are supposed to be spent with the family. No question about that. But a few hours spent to earn extra money should be justifiable. After all, all the proceeds will be used by the family. If you are single, your extra income can be used to pay for the bills, buy some gadgets, or invest in some income generating assets.

Act now!

Of course, you can’t realize the potential of your thoughts unless you put it into action. Ideas are useless if not applied. And when is the best time to do so? Now!

Here are some suggestions:

Do freelance jobs
Depending on your skills and interest, you can find work that fits you. You can do services like article writing, programming, tutorial, health & fitness advisory, consulting, etc. Jobs like this can be found in the internet or in your local area. You just have to put some effort to look for it.

Sell something
Businesses gain profits through the sales of services or products. As a businessman, you can earn using the traditional way of creating your own product and selling them. If you don’t have products to sell, you still can earn money through commissions by selling other’s goods. Sometimes, you can even earn a cut by just referring buyers to merchants. Activities under this include the sale of real estate, insurance, books, computers, gadgets, etc. Again, the venue for this can be online of offline.

Earn extra money online
The internet has introduced lots of ways to earn extra money. These include but are not limited to blogging, article writing, affiliate marketing, advertising, internet marketing, freelance jobs and buy-and-sell businesses. You just have to focus and understand the different means, then find which are appropriate for you.

First things first. If you are really serious about making money on the internet, you have to understand that it really takes time and effort. Making money online is neither a get-rich-quick scheme nor a get-rich overnight or in x-number-of-days system. Anything that requires you to shell out substantial amount of money and promises to give it back to you in tenfold within days is definitely a scam.

When you read about people saying that they earned thousands of dollars in whatever number of days, it only means that they have good method of doing so. They did not stepped into the business and started to make a hundred dollars on their first day. It took them weeks or months to establish a dollar-generating process, then reap the rewards within the number of days that they claim. You won’t harvest an unripe fruit, would you?

Now, to begin, the first step is to get ourself doing something! There are many, many ways of earning online, so you have to get your feet wet on those ways and try to determine what fits your style. Here are some of the tips.

Read articles about the making money online

There are countless articles out there (including this), about how to do this. Just read few articles to get your brain working. I don’t recommend reading hundreds of articles in a week without you knowing what your focus will be. Just read a few ones and let the idea sink in. If it doesn’t interest you, then just stop and proceed to the next one. I’m sure you’ll encounter stories like ‘I earned $10,000 in 15 days and you can to’ or maybe ‘Learn how I came from $0 to $10,000 a month’. Just go on and read, but DO NOT forget to keep notes. The goal is to arouse your interest in the making money online and find something that will motivate you.

Subscribe to blogs that gives exclusive offers

Most of the ‘top-secret’ information is not readily available. There are sites that will require you to register to gain access to their open-to-members-only materials. Others will even charge you certain amount. I would suggest registering for the free ones for now and try to learn as many as you can. No need to get into details. Just have high level ideas of the ways of making money.

Know how other people did it

Learn by experience – be it yours or others. Some people narrate their experiences well through e-books, articles and audio-videos materials. I recommend Yaro’s podcasts for this. For every material you hear, read or see, take a few notes. You will notice that once you compile them, there are some similarities in their methods. Just keep track of the key words and their systems since these are will be your choices later on.

Research on ways recommended by the successful ones

Still got all your notes? Now it’s time to categorize and do further research. You might have logged terms like blogging, affiliate marketing, advertising, and a lot more. Take time to have a deeper understanding of these concepts.

These are some ways to get you started. It will give you slight hint on how to earn in the internet. The next obvious step is to ACT! Try to devise a model that you will implement. Again, it will take considerable amount of time and effort, so you should be willing to sacrifice and ready to face the challenges that lie ahead.

Ever since I attended a financial wellness seminar years ago, my interest about financial freedom has grown exponentially.  I went on to read books about the topic and engaged in different money-related activities.  I came up with a high-level model that I’m trying to use now in my quest to achieve financial independence.

There are 3 key points to emphasize here:

1. Increase your income.  This is a no-brainer.  The fastest way to fill-up your financial bucket is to boost your earnings.  If you only have one source of income, you can do this by aiming for higher salary (a promotion perhaps).  But a better way is to have other sources, and this depends on your skill set and interests.  Some tips include professional services such as tutorial, article writing and programming.  You can also buy and sell some goods and properties.  There are a lot of possible sources of income out there.  You just have to stop being lazy, and have a positive mentality towards financial independence.
2. Lessen the ‘holes’ in your bucket.  Of course, all your income doesn’t mean anything if most of them is spent on worthless items.  There’s no use of having more income if your expenses increase at the same degree.  We had this situation before when our income grew for about 40% because of salary increase and some sideline works.  However, we felt oftentimes that there’s not enough money left at the end of each month.  We started to keep track of our expenses found the culprit – dining on restaurants REGULARLY and shopping REGULARLY.  We had to change some habits for us to save more money.  I suggest you keep a listing of your daily expenses and summarize it at the end of each month.  For sure, you’ll find areas where you can save.  Remember, even big companies have cost-cutting or cost-saving initiatives to make the company in a better financial position.  We, as individuals, should do the same.
3. Put your money in investments that will provide more income.  I define an investment as anything that requires a capital and provides returns over a period of time.  These include mutual funds, time deposits, real estate and stocks.  I consider a business under this category since generally speaking, you have to shell out some capital in order to have gains in the future.  To be financially independent, this is where you should focus your energy on.  The goal is to have our income from your investments be able to sustain your living, such that you don’t have to be dependent on your salary.

What I learned from all the books and articles that I’ve read is that there is no perfect way to achieve financial independence.  Most authors will relay high level ideas and suggestions, but won’t provide exact details.  You will notice that people suggests different ways to manage your money.  This is because the financial situation of a person is unique, and each person’s attitudes and way of thinking are not the same.  You should find a way that best works for you, and you can do this through some research and actual experience.  Once you have that process that you believe will work, then execute your actions.  Remember, don’t just work hard.  Work smart.

Last Sunday, we were invited to attend a seminar about “best investment opportunity ever” (That’s how the person who invited us described it).  We arrived at the site early, so we decided to look around.  What we saw are lots of different micro-business franchises, ranging from food carts to laundry and ink businesses.  We thought the seminar is totally about franchising.  Minutes later, our sponsor brought us upstairs for the actual seminar and to my surprise, it isn’t totally about franchising.  The company’s bigger business is actually its own variety of products – glutathione, soap, lotion, coffee, etc.  I’m not totally into selling these items.  We were sitting in the front row, and I just thought that it would be impolite if I leave without listening at all, so I stayed.  My consolation at least is to learn anything from the talk, and I did.

Here are some of the tips I got which I think can be useful for anyone.

The Empty Cup. Whenever attending a seminar, training or just plainly talking to a person, offer an empty cup and let the speaker fill it.  You never know what that person will say, just give him a chance to voice out his ideas.  Listen because those words could be for your success in the future.  Nobody’s too smart to know everything, right?

Maximize the 8 your 8-8-8. This is a typical man’s lifestyle – 8 hour of sleep, 8 hours of work, and 8 hours of personal life.  The point is you get to choose what’s important to you, and allot you at least 8 hours for that, be it money making activities, your family or hobby.  It’s for you to decide.

8-5 or 5-8 work? When asked, most people tend to say I work for 8 hours a day, from 8AM to 5PM.  Here’s the catch.  In that 8-5 job, you actually wake up 5 in the morning, do necessary preparations and commute to the office.  After work, you leave, run some errands and commute back.  Last thing you know, you actually wasted about 6 hours of your personal time, and that’s quite a lot.  Think and try strategize.  Remember, time is gold.

There you go.  They’re just a few new things, but I’d say they’re quite useful.  I’ll write more about the business soon.

A lot of us have experienced talking to insurance agents. Most of these experiences are forgettable, since the common perception regarding insurance is a bit negative. Some say it’s just a waste of money. Others say it’s useless. However, a number of us understand its value. What could be the difference between the two points of view? I can discuss this based on my experience.

I am not totally in favour of life insurance ever since I started working. I got numerous calls from agents representing different companies trying to set appointments to explain their products. The moment they tell me their company, I always say ‘no’. My mindset is fixed. I do not need insurance. It’s morbid to talk about my own death at this early stage of my life. I will just buy when I grow older. My girlfriend has the same outlook. She even asks why get an insurance when you’ve already got an insurance in your company?

All of these changed when we attended a Financial Wellness Talk in our company. The speaker mentioned that before you even invest, life insurance should come first. This is what most of financially independent people do. They value the concept of protection, both for their lives and their wealth. Life insurance can be considered a need for those who have dependents, or at least for those who plan to have a family in the future. The earlier you start the better since the price tends to be cheaper when you are younger. But then again, the needs differ based on a person’s situation – financially, physically etc.

Reference: www.lincolninvestment.com

Having the ideas we got from the seminar, we explored some investment vehicles. We tried stocks, mutual funds, time deposits and even 5-6! But somewhat, we felt something was missing. What if something happens to us in the future, especially when we have kids? Just thinking of that situation made us restless. We did further research and came across a product generally called a Variable Universal Life Insurance (VUL). It’s an insurance + investment type of life insurance. The investment portion could generate funds for us at a later stage in our lives. This can be used as a retirement package, an educational plan, or a business capital in the long-term future since we plan to grow the funds for 15 or more years. This perfectly fits our requirements! The amount may not be enough, but definitely, it is better than not saving at all. The best part, we are started at an early age.

Days after the seminar, we called up the Sun Life Agents who happens to be the parents of our officemate in our previous company. We were presented different options. So we decided to limit our coverage to what we believe is adequate. We got a plan called Sun Flexilink, the VUL product of Sun Life and decided to go for a Balanced Fund (med-high risk).

The biggest factor in our decision on how much coverage to take is our budget. We do not want to fuse all of our investment in one basket, and we do not want to spend so much on insurance. We just thought of what we think is sufficient for future use, and how much we can allocate for that. In addition, we included benefits that can provide financial assistance in case we have serious illness. This is a great add-on benefit since you’ll be covered when you’re faced with a critical illness listed in the policy. We just felt the need to be prepared because after all, who knows when and who the unwelcome diseases like cancer wants to strike on. A year’s savings won’t be enough to cover the hospital bills. Even your healthcare coverage in the company is limited.

In summary, our needs for protection, funds for critical illness and other needs for future funds are addressed. These are the benefits of having the product we chose.

I am now a Sun Life agent, with the goal of helping people realize the need for financial wellness. If you want further explanation, feel free to drop your comments. I’ll try my best to assist you.