Are you truly independent – or are you still a slave to something?
Today, we’re celebrating Independence Day (or Freedom Day) because this marks our Philippine declaration of independence from Spain. We consider June 12 as the country’s National Day.
We celebrate it. We miss work and school because of it. And we do this again every year simply because we take pride in its commemoration.
We simply love this special occasion because it makes us feel astig. It’s us saying “We have a right to freedom and independence!” Independence Day empowers us because it makes us believe that we’re free – that we’re truly independent of anything.
But, is this really the case?
Sure, we’re not enslaved by another country anymore.
Yes, we have our own national flag.
And that’s true, we have a Philippine government that… well, we have a Philippine government, okay?
But then, even with all these factors in play, I still can’t fully believe that we Filipinos are independent. I can’t see us being really free right now.
In a way, we’re still slaves to something.
– We’re still trapped with these Filipino money mindsets. We still think that money is evil, we think we can never be rich and most of us still believe that poverty is God’s will.
– We’re still trapped with inflation. We know that the prices of goods and services go up, but we don’t make an effort to keep up with it.
– We’re still trapped with the illusion of control. We think that no emergency will happen to us, so we never save up for our emergency fund!
Money is enslaving you in a cycle of worry, anxiety, frustration and financial dependency.
How do I know this? According to a survey commissioned by Sun Life Financial Philippines and conducted by Social Weather Stations, here are the facts.
Out of 1,200 respondents aged 18 and above and earning level A, B, C, D and E income, it’s discovered that:
9 out of 10 Filipinos experienced shortage or kakapusan in the past 12 months.
7 out of 10 say it’s because of inflation.
“It’s not our fault, it’s because the prices go up?”
4 out of 10 say it’s because they’re earning less.
“It’s not our fault, it’s because my company’s kuripot?“
3 out of 10 say it’s because of unexpected expenses.
“It’s not our fault. We didn’t know that we were going to have an emergency?”
And only 1 out of 10 acknowledge that it’s their fault because they didn’t plan well.
You may say it’s expected because part of the respondents earned salary from level E income, but it’s not.
Out of 800 respondents aged 23-85 and earning level A, B, and C income, it’s discovered that:
– 24% of them are short on money at the end of the month;
– 59% of them have only enough; and,
– only 17% of them are able to save!
Out of these high-income earners:
– 35% don’t budget and 65% do.
Out of these high-income earners:
– 39% try to save regularly;
– 32% have a saving habit;
– 5% save for things they want to buy;
– 12% do not save at all;
– 10% don’t believe in saving since they think their income isn’t enough; and,
– 2% think saving is not something that they need to do.
Can we still break free of our money slavery?
The answer depends on you. But for these respondents, 49% still want to learn about personal finance while 51% don’t.
Since you’re reading this, I’m assuming you’re part of the 49%, right?
Of course there’s still hope for you! Here are three of the highly critical steps that you need to take in order to be financially independent:
Protect. Attack. Claim.
1. Protect your greatest asset – you!
It pains me to see people who are already investing even when they don’t have their protection yet. They’re already attacking inflation but their defenses aren’t solid enough to actually be financially independent!
Think: when you encounter any of these financial emergencies, what will happen to your investments?
Set up an emergency fund.
– If you suddenly lose your job and your only money is invested in stocks, you’d need to sell at a loss just to use that money to pay your bills.
Get health insurance.
– If you get ill or your loved one’s sent to the hospital and your only money in invested, you have to redeem your shares just to pay for hospitalization.
Insure your property.
– If you encounter a natural or man-made disaster and your only money is invested, you have to withdraw them just to pay for repairs and losses.
Open a life insurance account for yourself. It can be term or it can be VUL or it can even be both!
– And if you pass away without any warning and your only money is invested, your family can’t even access your investments because they’ll be frozen. Your family has to pay taxes first before anything else.
1. Protect your greatest asset – you!
It pains me to see people who are already investing even when they don’t have their protection yet. They’re already attacking inflation but their defenses aren’t solid enough to actually be financially independent!
Think: when you encounter any of these financial emergencies, what will happen to your investments?
Set up an emergency fund.
– If you suddenly lose your job and your only money is invested in stocks, you’d need to sell at a loss just to use that money to pay your bills.
Get health insurance.
– If you get ill or your loved one’s sent to the hospital and your only money in invested, you have to redeem your shares just to pay for hospitalization.
Insure your property.
– If you encounter a natural or man-made disaster and your only money is invested, you have to withdraw them just to pay for repairs and losses.
Open a life insurance account for yourself. It can be term or it can be VUL or it can even be both!
– And if you pass away without any warning and your only money is invested, your family can’t even access your investments because they’ll be frozen. Your family has to pay taxes first before anything else.
2. Attack and fight against inflation.
If your money is just in the bank, it’s just sleeping.
Your money in your savings account is just resting – that’s why you get super low interest rates.
Once you’ve managed to protect yourself adequately, it’s time for you to invest.
If your money is invested, it’s working for you – that’s why you get higher potential rates as compared to banks.
Invest in knowledge:
– Attend the Money Summit and Wealth Expo this July
-Read the free version of the book, “OMG! Where Did Your Sweldo Go?”
-Read No Nonsense Personal Finance by Randell Tiongson
Invest, NOT Trade. There’s a difference, especially if you’re still a beginner.
Invest indirectly, if you’re still a beginner:
– Mutual Funds
Mutual Fund NAVPS: Compute Your Mutual Fund Earnings in 3 Simple Steps
Investing in Mutual Fund in the Philippines: Newbies Welcome!
If your money is just in the bank, it’s just sleeping.
Your money in your savings account is just resting – that’s why you get super low interest rates.
Once you’ve managed to protect yourself adequately, it’s time for you to invest.
If your money is invested, it’s working for you – that’s why you get higher potential rates as compared to banks.
Invest in knowledge:
– Attend the Money Summit and Wealth Expo this July
-Read the free version of the book, “OMG! Where Did Your Sweldo Go?”
-Read No Nonsense Personal Finance by Randell Tiongson
Invest, NOT Trade. There’s a difference, especially if you’re still a beginner.
Invest indirectly, if you’re still a beginner:
– Mutual Funds
Mutual Fund NAVPS: Compute Your Mutual Fund Earnings in 3 Simple Steps
Investing in Mutual Fund in the Philippines: Newbies Welcome!
-Variable Unit-Linked Solution (VUL)
Variable Unit Linked (VUL) Life Insurances: Are They Perfect For You?
3. Conquer and claim your financial independence.
Once you’ve protected yourself and accumulated enough assets, next step would be to start with estate planning. In estate planning, you want to claim your financial freedom and even plan to transfer it to your family when the time comes.
Plan your estate so that you, your family and others for whom you care receive the greatest possible beneficial enjoyment of what you own.
Your estate will still be subject to taxes even if you make a will or not.
Some clients get life insurance for their estate planning also. This way, when they die and their assets are not accessible, their family can use the lump sum from their life insurance policy to help pay for estate taxes.
(We’ll cover estate planning comprehensively in the next posts.)
Plan your estate so that you, your family and others for whom you care receive the greatest possible beneficial enjoyment of what you own.
Your estate will still be subject to taxes even if you make a will or not.
Some clients get life insurance for their estate planning also. This way, when they die and their assets are not accessible, their family can use the lump sum from their life insurance policy to help pay for estate taxes.
(We’ll cover estate planning comprehensively in the next posts.)
It’s important that you accomplish these steps chronologically. Do not skip!
Don’t attack yet if you don’t have enough protection.
And don’t claim financial independence if you haven’t even fought inflation yet.
There’s a reason why skipping a step may get you into an accident: protect, attack, and then claim.
The fight against money slavery is now in your hands.
Will you just sit and let it trap you?
Or will you start being financially independent?
You decide.
Don’t attack yet if you don’t have enough protection.
And don’t claim financial independence if you haven’t even fought inflation yet.
There’s a reason why skipping a step may get you into an accident: protect, attack, and then claim.
The fight against money slavery is now in your hands.
Will you just sit and let it trap you?
Or will you start being financially independent?
You decide.
Image c/o ThemeRetroArchive
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Want to get started managing your money/budgeting/investing? Contact me, your trusted financial advisor, through the following:
Email: liannemarthamlaroya@gmail.com
Twitter: @MsLianneLaroya
Mobile: 0916 737 8741
And we can even meet personally for a FREE financial planning session! Let me know so we can finalize a schedule that works.
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Live wisely,
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