Money Multiplier

by Akhilesh Tilotia, PARK Financial Advisors

A book was cast in stone more than 3,500 years ago in Babylon and was found by a British professor late last century. What impressed him — and helped him come out of a debt crisis — were the inscriptions on how to manage one’s finances. The book is now available as The Richest Man of Babylon. It’s a very small book, but with some very profound thoughts.

1. Pay yourself first

When we think of budgeting against our income, we typically look at our expenses: how much do I have to pay my landlord, my grocery bills, my medical expenses, my entertainment bills, et cetera. Once we have decided on our expenses, we find out what our savings will be. Financial advisors and many credit card companies (or banks) today help clients in estimating their lifestyle expenses and help them understand where their money is being spent.

The old book turns this theory on its head: it says ‘pay yourself first.’ Before you pay others for the services that they give you, you should save money for yourself. You are working for yourself and not just for paying your bills and, hence, you should receive a fair share of your income for yourself.

The Richest Man of Babylon decrees that you should pay a minimum of 10% of whatever you earn to yourself. And the best thing is: once you have paid yourself, you will realise that your lifestyle does not change at all!

In today’s consumption-driven world, this simple philosophy takes a back seat. It is important to nip the temptation of over-spending at the bud. With facilities like ECS available today, it is easy to transfer money to investments as soon as income is received.

For the clients that we have done that, they say that after the first couple of months, they have become used to the lesser disposable income, and do not feel the pinch in their life style at all.

2. Make your money work harder

The Richest Man of Babylon says that the only way for your money to grow is if it procreates. Using a wonderful analogy, it states that the money saved — and invested — is the father and it should bear children. The joy — and the secret to financial independence — lies in seeing the children grow bigger than the father.

It is very instructive to learn the difference between savings and investments. Indians typically ’save’ a lot — as demonstrated by the savings to GDP ratio of around 30%. However, in many cases, savings do not translate into investments, which earn returns.

Leaving money in the savings account for a rainy day is not investment. Such savings are like impotent people, who are progressively eaten away by age — and inflation.

With the development of the financial markets, there are many avenues in which savings can be easily invested to procreate. Depending on your circumstances and requirements, you can invest in equities, real estate, long-tenor fixed deposits, etc. The idea should be that the children (the interest or dividend or capital appreciation) is so large that they can support their original father — you.

Once your passive income is enough to sustain you, you are out of the rat race.

3. Take calculated risks — but do take them

It is not always that the best intentions produce the best results. After having saved for one year as decreed by The Richest Man in the book, his disciple gave all his money to a merchant who was to go into far seas in search of the spices. Neither the boat, nor the man returned and all the savings of the disciple were lost.

While it is important — rather it is a prerequisite — that you need to take some risks to earn returns on your savings, you need to be careful in evaluating the risks that you can/should take. The first thing that you need to understand is the amount of risk that you are able and willing to take. It is easy to confuse between the ability and willingness — and this is where you will need the assistance of your financial advisor.

Depending on your circumstances, you should define the amount and nature of risks that you can take. If you are nearing your retirement and have painstakingly built your nest-egg over your working life, it is important for you to ensure safety of your principal.

Conversely, if you are young and without responsibilities, you can risk your savings for higher returns.

4. Be persistent

After losing the money with the sea merchant, the disciple wanted to give up on saving and investment, saying that it is an illusory game leading to losses and pain. The Richest Man warned him not to lose heart and to continue the process year after year throughout his life. When the disciple invested — more cautiously — the second time, he not only received his principal back, but also received handsome interest. 

It is easy to be lost in the maze of headlines and advisors who talk about the uncertainties in the markets and their abilities to time and make more money out of it. While one can try to get that extra return by tactically optimising on the portfolio allocations, what should not be lost sight of is that the mantra to investment success is to be disciplined.

There will be shocks on the way, but it is important that your savings are working for you.

It is surprising how the logic of wealth-creation written down millennia ago is still relevant today. The British archeologist who found these stone tablets was in a debt crisis, with credit card companies knocking at his door daily. By following the simple dictates above, he not only made his life debt-free, but set out on a path to financial independence!

The author is Director, PARK Financial Advisors Pvt Ltd, Mumbai. He is an IIM-Ahmedabad alumnus. He can be contacted at info@parkfa.com

Happy Easter!

I have attached here an article from Philippine Star
about latest trend in savings and investments. You
might want to check it out.

Mag promote lang ako ha. =) I’m connected
with Philam Life and if you wish to explore our
investment programs feel free to send me an email. =)
I can present to you. =)

Earnings from our equity fund recently ranged from
40%++ one year earning pa lang yun. I can present this
in detail if ever.

If you’re also interested in insurance, educ plans,
and pension, I can also present them sa inyo. If you
know of anyone na interested din, pls refer me.

thanks thanks. God Bless.

Retail investments seen shifting to mutual funds
By Des Ferriols
The Philippine Star 03/28/2007

Bank regulators said they expect a large shift of
retail investments to mutual funds and other pooled
investment instruments but deposits would remain the
primary investments of retail investors.

The Bangko Sentral ng Pilipinas (BSP) said that
declining inflation rate would push the shift from
existing investment instruments such as government
securities but the liquid character of deposit
instruments would continue to draw small investors.

BSP Deputy Governor Nestor Espenilla Jr. said the
decline in the interest rates of government securities
combined with the decline in inflation rates has
narrowed the options of investors.

"The decline in the interest rates of government
securities, specifically, does not appear to be
cyclical," Espenilla said. "It’s more structural,
primarily because the government is now better able to
support its production of goods and services through
taxation."

Because of the declining borrowing requirements of the
National Government, Espenilla said interest rates
would continue to decline as it borrows less and less
from the market in the form of government securities.

Since inflation rate was also going down, Espenilla
said investors would be looking for instruments that
would give returns above the prevailing inflation
rate.

"This is making it necessary for banks to be more
creative in mobilizing funds," he said. "That’s where
mutual funds and other pooled investment instruments
would come in."

According to Espenilla, since deposits earn only a
small interest, there would be a natural tendency to
shift to mutual funds and instruments like unit
investment trust funds (UITFs).

"But at the end of the day, there will always be a
need for liquid assets like deposits," he said.
"Consumers are not willing to lock in all of their
wealth in long-term investments. So there will be a
mix."

Over time, Espenilla said households would make a
decision to save. "Their options are either stocks,
bonds, deposits, mutual funds or UITFs."

In this sense, Espenilla said depositors were slowly
evolving into investors.

"Having said that, I don’t think funds will all go
into mutual funds or UITFs because there will always
be need for the liquidity that deposits provide," he
said.

"It will be big though," Espenilla said, referring to
mutual funds and UITFs. "Basically because the period
of high-yield government securities is gone and banks
have to be creative."

It was estimated that over P300 billion was currently
invested in mutual funds and UITFs compared to total
deposits now estimated at around P2 trillion.

Espenilla said, however, that although deposits would
remain stronger than other instruments, the magnitude
of shift to mutual funds and UITFs would make massive
public education necessary.

"We will be seeing a surge in investments where even
the relatively unsophisticated depositor will start
considering these other more complicated instruments, "
he said.

According to Espenilla, the public would have to
realize that unlike deposits where their principals
are protected from gyrations in the market, the same
was not true for UITF-type instruments where investors
could lose even their principal investments.

The BSP has already started to put subtle restrictions
in the sale of UITFs, requiring banks to submit a list
of their trained marketing agents who handle UITF
accounts.

The idea, according to Espenilla, was to eventually
register and license UITF marketing agents to make it
easier for banks and the BSP to ensure that they were
properly disclosing all the risks attached to UITFs to
their clients.

Retail investments seen shifting to mutual funds (The
Philippine Star, 28 March 2007

This was written by my Lingkod sister and dear friend Atty. Karreen Ballesteros.  She wrote about our dooper unforgettable trip to Siargao Island in Mindanao.  This is a mega fantastic recount of our ultra fantastic trip. Galing ni God promise! He alone can create such paradise.

It was effectively a six-hour trip from Butuan - two hours by land,
three and a half hours by slow-as-a-turtle ferry and another thirty
minutes by land. We were already tired to start with from the week-
long NLTC (Lingkod’s National Leadership Training Conference) that
just ended. Our last meal had been breakfast at 8 AM. Worse, we had
to endure a Jackie Chan and a Van Damme movie throughout the ferry
ride. So when Alett, Sheila, Tess and I reached the resort at 430PM,
we immediately plopped down on the beds and thought if it was worth
all this trouble going to Siargao. "Lord, please make this a good
vacation" Since we only had whatever was left of the day and the
next on the island, we psyched ourselves to stand up and check out
what it had to offer. Tess stayed behind as she was still feeling
queasy from the ferry.

We decided to check out what the island was famous for - surfing -
and took a habal-habal, a motorcycle which can seat a maximum of 8
people (go figure) and which was their common mode of transportation,
to Cloud 9, the surfing site. On the way there, we struck a
conversation with our habal-habal driver, Kuya Joseph, asking him
why the surfing site was called Cloud 9 (because the wave was shaped
like a 9 and 9 of such waves would usually come one after the
other). When Sheila asked why this was so, he answered "Kasi yan
talaga ang pinagkaloob ng Diyos (Because God made it so.)" Oo nga
naman. Somehow, despite being on unfamiliar territory with a
complete stranger showing us around, that reply put us at ease.

At Cloud 9, we bumped into his cousin, Eloy, who incidentally was one
of the Top 12 surfers in the country. Eloy was willing to give us
lessons the following day for an acceptable rate and guaranteed that
we would be able to successfully stand up on the surfboard; otherwise
we won’t have to pay him a cent. He also volunteered a friend for
the banca when he learned that we also wanted to go island-hopping.
We checked out the waves, which were a considerable length from the
shore. To get there, one would need to traverse the wooden
footbridge that had been set up for that purpose. Our timing had
been perfect. The sun was already setting, casting a a reddish amber
glow on the sky and waters. The giant crashing waves, the beautiful
night sky and the promise of an exciting day for the morrow erased
whatever tiredness and doubts we felt earlier. If we had a guitar,
we would have done an impromptu worship in the middle of the sea.

Kuya Joseph then took us to the boulevard by the bay, located in Gen
Luna (GL) municipality proper, for dinner. It was lined with small
carinderias serving freshly grilled seafood, chicken and pork, each
equipped with a videoke machine where aspiring singers belted their
hearts out to "I Will Survive" or "Inspector Mills". We enjoyed our
dinner al fresco, under a millions stars, for a cheap PHP150 (This
was already for the three of us).

The following day, we were fortunate to wake up early enough to catch
the rising sun. Kuya Joseph fetched us and brought us to Cloud 9
for our "class" with Eloy at 6:30 AM. After a brief lecture on the
techniques and some sample moves on the footbridge, we were ready to
hit the waves. Eloy delivered on his promise. All four of us were
able to stand on the board, with Sheila and Alett standing the
longest. The professional surfers watching us were quite
supportive and surprisingly affirming. They would encourage us to
stand, clap when we were able to do so and afterwards remarked, "Good
surfing, girls".

Two sisters and a brother from Ligaya - Avic, Maila and Jojo - joined
us for the island hopping tour. Kuya Joseph and Eloy - now our
friends and official "tour guides" - helped us to purchase fresh fish
and fruits for our lunch and offered to cook it for us on the
island. Kuya Joseph even went back to his house to get plates,
utensils, tupperwares and glasses for us to use. We met Bibit, the
boatman, on the beach beside the boulevard. They took us first to
Guyam (Ant) island,which was small enough for one to make a complete
walk around. We had lunch on Daku (Big) Island. Kuya Joseph, Eloy
and Bibit grilled the fish we had bought, using whatever materials
they could find on the island for firewood. They even made fish
sinigang, which was quite tasty despite the lack of vegetables. We
were so full after lunch that we couldn’t bring ourselves to stand up
and swim. We just rested in the cottage, enjoying the sea air and
exchanging stories. After resting, we went to Naked island, a bare,
treeless strip of white sand, for photo-ops and then to another
surfing site near Daku Island, upon the insistence of Eloy and Bibit,
because they wanted to show us their champion surfing moves. That
was how comfortable they were with us already. We stayed on the
boat, cheering them on while they maneuvered the big waves on their
surfboards, ending with a showbiz wave at our direction before
plunging into the sea.

We headed back to GL when the sun was about to set (see picture
below). We invited our three new "berks" for dinner - our way of
saying thanks for a wonderful time in Siargao. We ate, we laughed,
we sang (of course, for how could any Siargao experience be complete
without doing our own renditions on their videoke machine).

We couldn’t help but smile (and maybe skip a little) on our way back
to the mainland. Whatever doubts or anxieties we had when we first
arrived on the island took a complete 180 degree turn. Our blessing
cup was filled to overflowing. From masterpiece after masterpiece of
scenery - the sunset, the sunrise, the white sand islands, the clear
blue waters, the giant waves - to the thrilling experience of surfing
as taught by a real pro for a very reasonable price. Most
importantly, we were very much blessed because of the people that we
met - Kuya Joseph, the daddy figure in the group who made sure that
all our needs were taken cared of and who was extremely conscious of
our low budget vacation (in Daku Island, he initially refused to get
a cottage because there was a PHP150 fee and insisted that we just
eat on the ground); Eloy, our philosophical surfing teacher ("Ang
surfing parang buhay yan. Hindi lang basta bastang tatayo.
Kailangan may plano") who kept his word on a successful lesson;
Bibit, the boatman who willingly gave us a cheap rate for the island
tour; Aling Nilda, the public school teacher/ bakery owner who shared
with us stories about the island and gave suggestions on what to do;
Ate Gina, who was Avic/Maila and Jojo’s initial tour guide (she took
it upon herself to also bring them around on our first night there).
Each of these people had their own sob story to tell - a broken
marriage for Kuya Joseph, an early marriage for Eloy which forced him
to stop his college education, a daughter who recently passed away
for Aling Nilda; and a philandering husband for Ate Gina. Yet,
despite this, they still went out of their way, beyond the service
that was expected of them, for us seven strangers new to the island
in order to ensure that we had a very enjoyable time in Siargao.
Unknowingly, and probably unintentionally, these people witnessed
God’s love to us.

Karreen

Friends, I would like to ask for your prayers. 

Last August 28, Monday, in Houston, Texas, my cousin Jeanette Gonzales,23, died due to severe head injuries that she sustained when she was either pushed or jumped from her car after it was apparently carjacked on Sunday, August 27. 

According to the Houston police, witnesses saw Jeanette fall from her car east of the intersection of Westheimer Road and South Kirkwood Road at about 7:30 p.m. on Sunday. They said she left church at about 7 p.m. and headed alone in her vehicle, a 2001 gray Mitsubishi Eclipse, to a Teahouse restaurant next to the Hong Kong Food Market on Bellaire Boulevard near Boone Road.

A friend followed Jeanette in another vehicle. She parked on the east side of the parking lot and saw Jeanette drive toward the west side. The friend walked into the restaurant, but Jeanette never showed up. Jeanette’s car was later found abandoned in a gas station in the 10000 block of Beechnut.

The police are still searching for suspects and clues and are urging witnesses to come forward. The carjacking happened at a crowded shopping center and at 7 p.m. they said it was still daylight. They are confident that somebody saw something and they badly need to hear from them.

Please help us pray that witnesses to this crime come forth soon. Help us pray that those responsible will be brought to justice. Help us pray for the repose of the soul of Jeanette. Help us pray for healing for her family. More importantly, help us thank God for the strength and faith He is giving her parents uncle Ady and Ate Luming and her siblings Jeffrey, Janno, Joy Anne, and Joy Mae, at this very trying time. 

Thank you and God bless.

There is truth to the saying that life is short. And I never thought I would realize this only a few days after complaining that I am already growing old. I celebrated my 28^th birthday recently.  Well, I have this crazy notion that 27 is old already, so just imagine what I feel about 28. =)

Last weekend, I was with a group of marine scientists at Batangas.  I joined their coral taxonomy seminar. We went to this resort in Calatagan for their field work a.k.a. snorkeling. =) To be honest, I have always been afraid of the big water. I panic everytime I swim.  But because I really love the feel of water on my skin and I am totally fascinated with how clear waters look, I’d force myself to swim everytime I have the opportunity to do so.

Our group was greeted by a stretch of white sand beach and a clear blue sea.  It was really so beautiful. But it was not inviting at all.  Big and loud waves were hitting the coral reefs that were supposed to snorkel in. I had second thoughts in joining the group but I just couldn’t let myself miss swimming in this sea and see for myself the riches it is home to.

The group I was with was kind enough to lend me some diving essentials: wet suit, booties, snorkel, mask, and fins. I sure looked like a real diver, but man, it was all looks.  Minutes after going into the water and putting on my fins, I started to panic.  I fell facedown underwater. Water went inside my mask and snorkel, and I was taking in way too much water.  I just could not lift my face above the water’s surface to get some air.  I knew I was not in deep waters yet, but I was having a hard time getting up. It was so scary and so frustrating. 

When I was finally able to bring my face above the water, I saw the group that I was with was already far from me.  I think I shouted help to get their attention but I think the waves were just too loud for them to hear me.  Then I tried waving my hands.  I think I saw someone looking at my direction, but he just stood there looking at me. Frustrated, I just gave up in trying to get them to help me.  I decided to go back to shore on my own.  But when I looked at where the shore was and realized how far I was from it, I decided to give up in trying to reach it. 

I kind of accepted already that I will drown and die.  Then I remembered what one of the marine biologists told me that I can try swimming on my back.  So, I did a lot of flipping underwater and found myself face-to-face with the waves but in fairness, I was floating and my face is above water.  God is good, I was able to reach shore.  But when I was asked by our drivers and my dive mates why I went back, I just told them that I can’t do it. I was panicking big time.

It was such a scary experience and it made me realize that life can be snuffed out of me any moment. Actually, I can’t stop thinking about it because I really don’t want to miss the lesson as to why I had to go through it. I feel that God is giving me a second chance at something, and I am praying that I’d be able to act on it before my time is up again.

Several Sundays ago, I went to Mass with my Lingkod bros Rommel and Ted at the UP Chapel. We attended the 8 p.m. celebration and yipeee!!! =) the priest presider was Fr. Favorite (well, that’s how I address Fr. Louie David).

I call him that because he’s my favorite priest at the moment because he’s really really good. Promise, his reflections are dooper galing! =) No special antics whatsoever, just straight talk, yet wham!!! the homilies just never fail to tug a couple of heartstrings.

Much like his other homilies, the homily he gave that Sunday is just CLASSIC! I am so sorry I won’t be able to give you a blow by blow account. But I will try my best to share bits of it. =)

He reflected on the Parable of the Talents. It is the story of a master and three of his servants to whom he entrusted a few of his talents. While the master was away, two of the servants were able to make the talents grow in number.

However, the third servant for fear of losing the talent his master entrusted to him, buried the talent on the ground. Upon his return, the master blessed the first two servants and got so mad with the last one that he took the talent from him and banished him from his home.

The story unnerved me quite a bit. Poor servant, he was punished just because he was not able to make the talents entrusted to him grow. I felt so sorry for him. Well, I thought, “ooops, I’m so like this servant and God is probably unhappy with me also.”

However, in his homily, Father allowed us to understand that the story wasn’t all about making your talents multiply, but the more important action, which is to at least try making use of the talents entrusted to us. We must never forget that we have a loving and faithful God, therefore He appreciates and will bless even the littlest efforts we make towards following His will in our lives. With God, every effort, no matter how small, counts.

You know, I really feel so lucky to be serving this kind of Master. He is so generous in giving me talents to enable me to accomplish many things. He is also so wise to challenge me to make good use of it, so that I may grow. And He is likewise so loving that should I fail in my quest, He will be quick to comfort me and help me attain my heart’s desire.

P.S.

Ei friends, you should listen to Fr. Favorite one of these days. He usually presides the 8 pm Sunday Mass at the UP Chapel. I tell you, He’s really good. You know, one day, I might just go after him after the Mass and ask for copies of the homilies that he gives. Pramis, ganun sya kagaling! =)

How I want to write about this.  I don’t want to forget about it.  Perhaps, at the back of my mind, one day I’d have to be reminded of the life’s lessons I learned through this story…lessons that make me want to dream without limit and believe with such passion.  I want to write about a miracle – made possible by love, faith, and courage.

I’m part of a community called Ang Lingkod ng Panginoon-Quezon City.  It’s a group of single young professionals dedicated to winning other singles to a life fully committed to Jesus Christ.    God has used this Catholic Charismatic community so many times to teach me so many things.  My brothers and sisters here taught me about commitment, love, service, faith, and apog (most of us can sing and dance in restaurants or cafes, in an effort to honor a bday celebrant).  It is also through this community that I’ve witnessed several miracles.

One miracle I want to write about now concerns healing – a gift which I think I have. Nope, I’m not the nasasapian type and I don’t use herbs either.  And siempre hindi rin ako yun nagboboses Sto. Niño. =)

Ewan ko, there are times lang when I’d have this urge to pray over sick people.  And each time I’d feel that, I’d always doubt if God will really use me to heal them.  Para kasi scary to ask for permission from a sick person if he or she wants to be prayed over.  Most of the time, I’d think baka mapahiya ako.  Baka ayaw kasi nya eh. And siempre I don’t want to keep their hopes up for nothing.  I just might break their hearts and faith in the process.

Pero minsan out of extreme guilt, I’d do it. Bahala na mapagkamalan na wacko. =)  Pero siempre may style ako.  I pray over them secretly.  (so friends beware,. Hehe) Minsan I do long-distance praying-over.  Other times I’d offer to massage them and as I knead their backs and hands, pinapagdasal ko na sila. 

Everytime I ask my victims if they feel better, they’d tell me masarap daw, ok lang, or medyo nawala backache nila or something.

I can’t explain why they feel better after every massage time with me, eh hindi naman kasi ko marunong talga. But since these people keep asking for it each time they don’t feel well, I just continue doing it. Pero I never attributed it to the idea that God might really have given me the gift to help physically heal some people.

However, some things are just so hard to continue being dedma to.

During a Lingkod activity I attended last September, we were asked to pray for one another.  I had this urge to pray over one sister in that group.  But, I had no idea what to say as I pray for her. Suddenly, I just thought of praying for healing for her.

So I approached her and told her I wanted to pray over her. She agreed. During that pray over period I remember telling her that she had been a source of so much joy to us.  “God will never be outdone in generosity.  The same joy you gave us will be given back to you a hundred fold. And right now, God is healing you.”
   
Then I heard her crying.  I continued praying for her other concerns.  When I ended the session, she started sharing something that made me cry naman. She said she wasn’t able to sleep well the night before because some parts of her body were aching. She had several lumps on her breasts and ovaries kasi. She was actually in pain before I prayed over her.  Well, she said that by the time I ended the session, the pain she was feeling was all gone.  But you see, the miracle didn’t stop there… 

A week after that session, I met her again, she shared that she underwent this ultrasound exam. Well, she said that the doctor had a hard time doing the exam because she couldn’t find most of the lumps na and she wanted to make sure that she wasn’t just missing it. Amazing di ba?  =)

I’m just so happy for my sis and just so in awe of God. You know what I learned, miracles really happen and with God with us, we can even make them. God sometimes uses us to allow some of His children to experience His love, His miracles.

Surely, we wouldn’t want these people around us to miss out on that. So if you feel God is urging you to do something for another person, hala cge, with faith just do it, you’ll see not only are you making a miracle happen for that person, but for yourself as well. Sobrang walang impossible kay God pramis. 

So pano? Tara na, let’s make miracles! =)