Tuesday, May 18, 2010

Basic Cash Flow (An eye-opener to everyone)

The basic is. What pattern do you see if you will get a P100.00 bill and monitor where and how it is transferred from 1 possessor to the other? How does it flow? The pattern for a typical Filipino is. You earn from your work, you spend it on food, gadgets, clothing and other basic needs. Before you reach the next payday, paubos na yong pera (run out of money). But that's ok payday is just a few days ahead and it doesn't matter if I run out of money, I am expecting money again any time soon. This cycle goes on and on and you make some sidelines or create other ways to earn but it seems that money was never enough.  So you can't leave the job that you have because a week without work would affect the cash flow you have to support your family and needs. As much as you wanted to accept another job, the gap would make you pay less for a couple of days, which makes you a slave to your boss . At least, you have a job to support your needs. 

So to illustrate.. ..Cash is flowing inside your pocket. 

Years have gone by doing your monotonous routine.

Question... what if you get fired? Or you were forced to retire because there are new and younger people ready to take your place. What would you do?

As an OFW, Makati Executive, Top Salesman, Engineer, Attorney, Teacher, etc...  What if it all ends? The sweet cash that enters your pocket every 15 th and 30th suddenly comes to a halt.
There are two things you can buy with your money...  An asset and a liability. To describe each... An asset brings money inside your pocket; a liability takes money out of your pocket. Another way to see, it is that an asset if you buy one, will bring the money you spent for it back to you 2 or 3 folds. A liability, when you buy it will not give your money back at all. Sa ilocano... idjay ti kwa... djak maawatan...  (joke, lang po, seryoso na kayo eh.you're too serious lol..)  Sa madaling salita... kapag asset, maibabalik ang pera , pag liability, goodbye sa pera...  (simply, if it is an asset , money comes back..if it is a liability - money's gone and never comes back)

Ang problema kay JUAN DE LA CRUZ, habang may trabaho ipon ng ipon at bili ng bili ng liability! (The problem of Juan dela Cruz, while he has a job , he keep saving and buying a liability)

I have seen OFWs get back to the country with gold chains and if it is possible to wear 5 shades at the same time, they'll do it..dvd, component, jacket,clothes, drinks for party and they cannot even walk because they got a lot to carry.

And of course, employee in our country, that almost every week they own new cellphone and extragavant cars, to place for clothes in the closet then the next morning they said I have nothing to wear.. Guys, we have to think and think... what you bought... will it bring money back to you? I know what you have in mind... you have to enjoy what you worked hard for. That's right, but think of something that will last.... think of your future. I have seen the worst of people who were a family lawyers, executive secretaries of top rank business men, people who worked for big companies, earned a fortune and got a big retirement pay by the millions... Now.... Wala na.(gone) Why? Because of their cash flow... went in... went out. 

I need not to mention basketball players, actors, singers, etc... Check what is their career path... next after acting, singing and playing... POLITICS. Kasi, 'yung million na kinita nila, puro liability ang binili.(Because the million they earned , they all bought a liability) .Going back... all the liability they bought, ibinenta ng mura! Example:  I'm wearing a gold chain now, which I got from a seaman.... he bought it for P35,000 and sold it for 8,000 to me.  Hindi po asset ang alahas( Jewelry is not an asset)! Bakit?(Why?) Totoo na tumataas ang value n'ya pero kapag gutom ka na, kahit palugi ibebenta mo!(Its true that the value appreciate but what if you are starving?) Cell phones... dvd players etc. pati bahay at kotse...(even houses and cars) that's the cash flow of most OFWs...

The question is ... " WHAT IF THE INCOME STOPS?" 

Sa Pinoy, ganito: anak... mag-aral kang maigi, at pag tanda namin... ikaw na bahala sa amin ha.... ( With our culture parents will said.. Oh my lovely child , you have to study hard so that when we get old, you will take care with us, Is that right?) You have to establish something today that will take care of your future. Teka, teka... eh ano ang dapat gawin para hindi mangyari yan? 
 (Opss, what we should do so that it will not happen?)

You must create a source of income that will continually make money flow inside your pocket. Start a business! While you are working as an executive or an OFW, or a professional. ..   START A BUSINESS and MASTER that business   till you get out of that company. So, if income stops, you still have money to support yourself until you get old
Now don't tell me to invest my money on pensions and plans... NO WAY ! Maybe you've heard it .... That those who paid , never got a chance to claim it...Don't depend your future to others, Make you own well of money , even if it is small amout , its yours and you never depend from other.

Imagine yourself when you reach an older age. You have money that the company gave you as your retirement pay... what will you do? You can consume the money till your old.... what if it is not enough? Masamang damo ka pala... at hindi ka kaagad kinuha ni Lord. Eh pang age 65 lang yung naipon mo na budget.

Or maybe, you can start a business and use the money for capital...Brothers and Sisters... 9 out of 10 businesses, FAILED... yung isang magsa-succeed,(one is successful) gagayahin pa ng kapitbahay mo instead na mag-franchise sa 'yo... think! At age 50, you are struggling trying to make a business work! What if it fails?! Eh ano nga ba ang sagot?  (What is the answer?)

The answer is, stop buying liabilities and instead buy assets now. I don't care if it is a banana-Q store, balot, ice candy or a sari-sari store, etc... start now! Because, your experience here will teach you what to do in the future.  It's so hard to struggle in business when you are 60 yrs old.
You have to create a source of income separated from the source of income from your work. That when the time comes that you have to stop working, you will have your own source of money! Create assets, start a business that will be there to support you and your family. I AM NOT TELLING YOU TO QUIT YOUR JOB!  I'm telling you to start a business while you're working and stop spending your money on liabilities and start putting them on assets! Ang pera kapag pinambili mo ng LIABILITY... hindi na babalik... ang ASSET... BABALIK.  (MOney will never comes back when you buy for a liability, but if you bought an asset surely it will double and comes back to you)

Opss, it is bad to buy dress? NO,  its not bad to buy dress or shoes just make sure that the money you use to buy such things  came from your asset. The business has to be prioritized! Even you lose your job, you still have business to taking care off.

If before, nabubuhay ka naman ng iisa sapatos mo, huwag mo baguhin 'yun... dati, nagdyi-jeep ka lang... 'wag ka na munang mag-FX...(If before, you used only to have a 1 pair of shoes, don't change it, if before you ride a jeep, don't buy an FX yet)
Create assets and lessen liabilities. Invest and learn now... and do BUSINESS

Hmm, What business? Any, as long as you think it is work and doable!

The author of this article is anonymous but runs/own a franchising business. It is a forwarded emailed and some words are omitted and re-written by me.


Carmen Araneta said...

Hi Charmie, How true about the typical Filipino earner. They want to look good on the outside even if they cant' save for a rainy day. Well, we can also invest in real estate which will never depreciate. Thanks for visiting my blog. God bless.

charmie said...

Hello, thanks Ate.. Yeah you are right.. Property investment is very good..

Rose said...

sis charmie totoo to kaya ndi umuunlad pilipinas ehh..nabasa ko to sa rich dad poor dad ni robert kyosaki...and my isang thought na ok do not say i can't afford it..instead say How can I afford it :)

charmie said...

Agree sis, sinabi na di ko magawa yan , papaano di magawa di pa nasimulan. The problem, nagreklamo na di kayang gawin , instead hanap ng paraan paano gawin. :)

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