CAUTION! Be Careful Who You Listen To

There are a lot of financial speakers out there trying to influence people's minds. I repeat: CAUTION! Be careful who you listen to.

I've been into finances for 3 years now and I have met a lot of people who are into sales and marketing. Admit it. Money comes from sales and marketing. There is nothing to be afraid of these people because in reality they are the best resource speakers when it comes to money matters.

I encourage everyone to attend seminars that will teach you how to handle finances. That is where I started. But be very careful about the information you are getting from them. They may seem to know what they are doing but if you digest what they are saying you will realize they really don't understand what they are talking about.

I heard one "financial resource person" who is not an insurance believer. The irony of it was he admitted that his father and his sister are into the insurance business. He told everyone in the room that, "If you plan you actually don't need insurance." How can a resource speaker on finances don't recommend insurance? His opinion, if you can do it with investments then you don't need insurance. He also followed his statement with, "I cannot take it when I die." I want to follow up my question with, "What if he is the breadwinner of the family? Shouldn't he get one?" But I decided to shut up.

My advise, get insured before you start a family or if you are the breadwinner. The insurance coverage is not for you but your family. Remember, life is uncertain. And mind you, insurance is not a religion you need to believe in to.

I asked the speaker another question on where should we invest our savings. He said it depends on how much you have. He recommended that we look at the products of the banks. He told us we can do time deposits, bonds, and equities from INSURANCE PROVIDERS. So much irony.

My advise, it depends on your goal. We have the short term goals, mid-term goals and long-term goals. These goals should be matched with the right investment facilities. Adjust your lifestyle and set your mind to achieve these goals. Don't go t the banks if you want to invest. Go directly where the banks invest. What should stay in the bank is your emergency fund. Build your financial foundation right and seek mentors that will help you along the way. Don't just settle for one mentor. You need more mentors who are 2 levels higher than you. And if you want to open a mutual fund account, investigate first at icap.com.ph. Mind you, the ones he mentioned are not the top players in this game.

Disclaimer: We are all entitled to our own opinion. This is just my review.

~Till then.

On Income Replacement

Let me ask you. What usually comes in to your mind when you hear the phrase income replacement? Do you think of another work to replace your current job? Do you think of other person to replace you? Or do you think of a magic pot full of gold?

Income replacement is more than those. Actually, income replacement is what we usually term as insurance.

Accept it. DEATH is the most certain event in life. It is not a question of "What if I die?" but a question of "When am I going to die?"

You don't have to fear death. It is just our gateway to be with God in eternal life. The only time you fear death is when you are not able to live by God's law. Many will rebut about my discussion on wealth and God's law. But let e ask you, "Is your misery caused by God? Do you think God wants you to become miserable? Do you think God doesn't want you to become wealthy and to enjoy life?"

Here is a trivia. Did you know that leaving an inheritance to your family is a responsibility? "If anyone does not take care of his own relatives, especially his immediate family, he denied the Christian faith and is worse than an unbeliever." - 1 Timothy 5:8 God also wants you to take care of our family. And taking care doesn't only mean while you are still alive. The best care you can give your family is when they can feel your presence even if you are physically absent.

Always remember this. "The amount of insurance coverage you have simply reflects your love and affection for your family."

~till then

Insurance as seen by Filipinos

Many Filipinos are philosophers when they talk about income replacement.

A driver may say, "Insurance? Meron na ako nun sa TODA namin. Ok na yun. Gastusin pa yan e."

A new college graduate may say. "Kailangan ba nun?"

An employee may say, "Ahente ka? Takot ako sa mga ahente e. Tsaka meron na kami niyan sa kumpanya bakit ko kailangan ng isa pa? Gastos lang yan."

It really makes me sad every time I hear those comments. Common Filipinos are really illiterate on wealth building. Sorry to say but it's true.

Insurance is a thing that you buy when you don't need it. It is not a right but rather a privilege.

I'll tell you one story. Sir Joen dela Penas, my mentor, once courted a friend to buy insurance. Almost everyday he called his friend reminding him that insurance is a great investment facility. The friend refused every time. Then suddenly the friend was hospitalized because of stroke. Luckily he survived. Upon release from the hospital he called sir Joen begging him for insurance coverage. Did sir Joen give him? Actually, NO! Because his friend is no longer insurable.

If you have one study your policy again. Do you understand it fully? Do you know how much you are covered?

Sometimes people are arrogant. (Sorry for emotional outbursts.) If you talk to them about insurance they will shrug you off and say "I have already." But when you ask them how much coverage they have, they will tell you that they don't know because it is a company benefit. They don't fully understand the terms and conditions of the policy. Others will tell, "I have 100,000 insurance coverage. I'm fine with that."

Let us analyze your income replacement. When you die you will be replaced by 100,000pesos. Teach your family to invest and put the money on an investment facility earning 10 percent each year. 10 percent of 100,000 is 10,000pesos every year income replacement. Divide it by 12 (we have 12 months in a year) then your family will receive 833.33pesos every month. This illustration is true provided that your family knows how to invest and where to invest. What if they don't? 100,000 pesos will be soon a history.

The right way

Here is how we compute income replacement or insurance coverage.

Annual income times 10.

Example, you are earning 10,000pesos per month. Your annual income is 120,000pesos. Multiply it by 10 to get the insurance coverage you need. What is the logic? The answer in the example is 1.2M. Your family should learn how to invest it in a 10 percent facility that will allow the principal to earn 120,000pesos per year. divide it by 12 and get 10,000pesos income replacement.

NOTE: 1Million coverage is leInsurance as seen by Filipinos tha 10,000 pesos per year. Just to give you an idea on the price. :)

~till then