As most of you know, most of my blog articles are about Call Center Industry or BPO, maybe it's because, I spent my last 7 years with my previous employer, working as a Senior Tier 2 Technical Support. Yes, it is such a lucrative job, but, despite of that, most of us are still living from paycheck to paycheck.. I only realized how important to INVEST for my future when I quit my previous job. I have seen so many people waste so much money in travel, for dining in expensive restaurants, and drinking all night without thinking about their future. It is shocking how they spend their money to buy a brand-new car, new gadgets, drink expensive coffee, jewelry, shoes, clothes, and etc. Yes, It's your money, you can do whatever you want. It's not a sin to reward yourself from time to time, so, don't get me wrong on that. What I'm trying to say is, put a little something for the "FUTURE YOU"... Before we continue further, let's watch the story of PING and PONG, this one is from Pesos and Sense:
Life is so short. As the time goes by, you won't notice that your hair would start turning gray, and as we age, we will be getting weaker each day. It's not a bad thing to grow old, and also, It's not a sin to be born poor, but, it is your responsibility to yourself not to die poor. The Company's obligation is to pay us for the services that we have rendered. And, it is our obligation to ourselves and family to invest for our Retirement. Let me explain why. When my father died back in October of 2008, I was already working at that time. But, since his death was very unexpected, we were not able to prepare for it. Unfortunately, both of my parents failed to prepare for this event. They do not have savings or insurance...
It was the saddest day in my life. I never imagined that my dad would die so soon, he was just 61 years old when he went to the Lord. So, the first thing that I did is, after his burial, I got myself and my loving wife a Burial and Memorial Plan. I know it is weird and creepy! But, believe me, when my father died, we did not even have the money to pay for his burial and memorial. I had no savings at that time, as well as my brothers, it was really a huge burden. That's why I promised to myself that I would not let my family experience this horrible situation when my time comes. This is our very first investment. I paid P30,000 for each policy, which will cover our burial and services once we pass away. And, if we are still alive after 10 years, they will return the premium or that money that we paid for the policy; and the Burial and Memorial service becomes FREE. Since, then, I tried saving some money in the bank, but, it didn't work. I always end up using my ATM card to buy something. I was a failure. I woke up one day, and felt the urge to change my mindset.
I dedicate this article to those who work in the Call Center or BPO Industry. I personally admit that our jobs are really stressful and soul sucking. Before you get upset, let me just clarify that this is not an attack to this very fast-growing Industry. As a matter of fact, I'm still in the BPO Industry, the only good thing is, I was able to find a Back-Office type of work, where I don't have to be on the phone 8 hours a day, 5 times a week, for me, it is less stressful. I know how difficult it is to work in this Industry, I actually wrote an article on WHY YOU SHOULD NOT CONSIDER WORKING IN A CALL CENTER. Take it from me, it's not as easy as you think. That's why I have very high respect for my fellow Filipinos who work in the Call Center or BPO Industry! I know how difficult and unsafe to travel at night or wee hours alone, we always have to put our lives at risk. And, when at work, we also have to deal with angry, racist and irrational customers, while maintaining a good scorecard just to keep our job. Believe me, with the constant change and high expectations, it is not easy to maintain a passing score. We also can't plan ahead, since, work schedules can be changed without prior notice. Let me add, most of us are required to work even on Holidays like Christmas, New Year, and etc. With all of our hard work and sacrifice, still, most companies won't even care if there's a typhoon or heavy rains, it's all about the numbers. That's why after working for more than 7 years in BPO, I decided to give myself a break. Then, this is the time when I realized that I have missed a lot! I did not save for events like quitting or losing my job. I had no emergency funds, savings or any knowledge about Investments. I guess, I got so comfortable and felt assured with our company given HMO (Health Insurance) and Life Insurance. Imagine, I spent the last 7 years without preparing for events like this, plus, the burden of paying for our food and monthly bills just to continue with our lives. It was really a wake-up call for me! This was not actually I expected. Retirement should be calm, peaceful and full of happiness...
I told myself that I don't want to grow old begging for food or medicine from my loved ones. I want to be a good provider and achieve Financial Freedom before I retire. So, I started reading blogs and articles on-line about different Investment methods, and proper way to save money, and how to get out of debt, and start Investing. I watched videos online by Aya Laraya of "PESOS and SENSE", I also joined the most helpful Financial Literacy group in Facebook, The Global Filipino Investors, where I met very helpful and accommodating people like Floi Wycoco, Khristian Santos, Alfonso Gonzales and many more! Here's what I have learned from the experts. In a short period time, I was able to set my own Financial goals and start my financial journey one step at a time. Let's start with the basics.
HOW TO START SAVING FOR RETIREMENT
2. HAVE AN EMERGENCY FUND - You should save at least 8 months worth of your monthly expenses as your Emergency Fund. Just in case you lose your job, or something unexpected happens, you have at least, 8 months to pay for your food, monthly bills, and etc, to continue with your life, while you are looking for another job or another source of income. This is something that you can't put in your Investment, since, its main purpose is to have it liquid just in case of unexpected events. I would suggest that you keep it in a Savings Bank, and just have it on Passbook, instead of ATM Card, so you won't be tempted to use it when you see something you like to buy. Or, put some of your money under your Bank's UITF without holding period. Here's more information from Suze Orman Show:
3. GET YOURSELF AN INSURANCE - You may have an HMO or Health Insurance, as well as Life Insurance from your Company, but, what will happen if you quit your job? Please, realize that any given benefit by our company can be taken away from us. That means once you quit your job or you retire, there would be no more HMO or Life Insurance for you, and that's the truth. So, it's always best to prepare for the unexpected. Nowadays, people get insurance for their cars, house and lot, even mobile phones and other important things. How much more for yourself! How much do you care for your loved ones? It's now cheap to secure your family's future by getting an Insurance. You can choose from either Life, VUL or Term Insurance. Don't you know that if a person pass away, his or her bank accounts and investments will be frozen, until the Estate Tax is settled? So, if you are planning to invest in the future, have someone guide you on your Estate planning. This is very important, especially for those who have kids, since, they don't have to suffer and stop schooling if something happens to you or your spouse. You can prevent this from happening, if you prepare now. Our life is too short, so, don't gamble the future of your family! Please, consult a Financial Advisor to know what kind of Insurance that will work best for your needs.
4. TEACH YOURSELF HOW TO PROPERLY BUDGET YOUR MONEY - The change should start from you! Before you start Investing, understand first how you should properly allocate your monthly salary. It's simple, but often being neglected. Look at the example below, which one is better?
a. SAVINGS = SALARY - EXPENSES
b. EXPENSES = SALARY - SAVINGS
To further explains this, here's a video from Pesos and Sense:
I guess, it's all about understanding the importance of Saving for your Future! If you want to achieve Financial Freedom, or simply to Retire early, like what most rich people are doing nowadays, then, you have to start saving. It's just like PAYING for those days that you don't have to work! Remember, allocate first for your SAVINGS from your Income/Salary, before you put it on your Expenses. It would be difficult at first, but, you will get used to it. Don't over spend or spend more than what you can afford. Always think of your financial goals!
5. START INVESTING IN POOLED FUNDS OR UITF - Whatever you save from your Income, should always go to your Investments and Savings. For beginners, this is the safest way for you to have a passive income and fight inflation with very low risk. Yes, you can put your money in the bank. But, even if you put it in a Time Deposit, it will only earn as much as 1.5% annually. If you are familiar with the INFLATION, it is a rise in prices of goods and services. If I'm not mistaken, in our country, our Inflation Rate is at 4-6% yearly. If that's the case, even if you put your money in the Bank, Inflation will just decrease its value as the time goes by. UITF or Unit Investment Trust Funds is almost the same like Mutual Fund, you can easily get this one through your Bank. Both Mutual Fund and UITF are being managed by Professional Fund Managers. But, for me, I love the idea of UITF, since, you can ask your trusted Bank to automatically transfer some of your Savings funds to your chosen Investment Funds, either bi-monthly or monthly. It's just like having a forget money! Redemption of your funds, usually within just 3-5 business days, and it can be deposited directly to your bank account, less hassle! I don't want to talk jargon, so, let's go back to Pooled Funds like Mutual Fund, here's a video from Pesos and Sense: