Dear Mister Kiyosaki,

Dear Mister Kiyosaki,

You've written such a great book about financial literacy and entrepreneurship and I admire you for that since Financial literacy is not taught so much in schools and parents rarely discuss about finances at home with their kids, thus many are uneducated about money in that sense; But it really drives me nuts whenever you or somebody else would quote the part where you said:

Over the last couple weeks, all across our country, school has been starting for American youths. The start of school is a hectic and exciting time for parents, and a proud one. All good parents want to give their children an advantage in life, and the conventional wisdom is that doing well in school is one of the best advantages you can give a child.

Rarely, however, do we stop and ask, "Why?"

What are our schools teaching our kids? Is it really the information they need to succeed in life? Are they being taught to think for themselves and to solve problems? Or are they being taught to take orders and follow rules? Will they really have an advantage in life? ( and then you go on inviting people to read you blog)

The downside I see about it is that, yes you did quote that going to school will not make you rich, and to some other people like yourself it may be true, but to others it isn't. The sad part is, most people only get the part where the emphasis of not going to school is being mentioned. They did not get the other part as you explained that there is another education someone has to take besides the academics, and that is financial education.

Instead of discouraging parents in sending their kids to school, why don't you just encourage them to inject Financial Education at home, on top of their academic subjects? Instead of discouraging your readers to go to school and get an education, why don't you just try to make a movement that will encourage schools to add Financial Literacy as a part of their curriculum in class? For sure there are a lot of kids out there who only knows how to ask and spend the money that their parents are making, whether from business or from they salary from employment.

Mister Kiyosaki, not every person who quits school are always successful like you Sir. There are some people who needs to invest more on themselves and that will need the aid of getting good education that the school can offer. Not everyone can be an entrepreneur, each individual has different skills and while not everyone can earn so much money like you do, they can still save so much money and reaching their dreams by getting themselves educated financially.

Mighty Change of Mind: A Personal Finance Paradigm Shift

This may be a late update but, I just want to jot down the success of our Saturday's activity, June 9, 2013:

 

Our guest speaker being Mr. Tom Tandog, an Associate Financial Planner and Senor Marketing Director for IMG - Wealth Academy. Part of the lecture was also conducted by Bong Sanchez, President for The Academy for Creating Enterprise, Angeles Stake Chapter. 

From there, we learn about how to change our mindset about money. Now, why is this important? It is because many people though that getting rich can only happen if you get to be lucky in terms of heirloom or hitting a lottery jackpot, other think its investing but they don't know how and where to invest their money. This often leads to being scammed. During the said event we were taught the right way of budgeting which leads to proper saving and investing of our money in legal entities that can guarantee us our return on investments. 

The program was also in line with the letter of the First Presidency for this year, regarding sound investments:

Everything in the announcement agenda has been covered during the seminar, including some introductions to legal publicly listed investments such as bonds, mutual funds, insurances and stocks. What a great way to be taught and refreshed on what were suppose to do in order to achieve self sufficiency and reliance the way our Father in Heaven wants us be. It's one of the ways to build Zion.

Stock Market - It is Gambling! It's not Gambling!

"Stock market?"
"Wait we're not allowed to get into stocks. It's gambling! Isn't it right?"
As an LDS living in the Philippines, this is what I usually hear when some of my fellow church members would hear about engagement in the stock market of another. 

When I first heard about the stock market it wasn't explained to me like it was explained in the first paragraph above. It was explained to me this way by my grandpa: When I buy shares of stocks of a company, I become part owner of that company. And that the company I am a part owner of, can give me dividends that will serve as profits. When the time comes, I may sell your shares of stocks and make more money. I can buy more stocks also to get more shares. That way I will be contributing investments to the company that I buy. I will allow the funds I contribute be taken care of by the company's bigger boss(Board of Directors etc...) and it's employees. The business runs without me having to be actually there. I become an investor!

As I grew up I began to attend a company seminars that teaches more about stocks and other financial stuff. I began to realize that I want to study more and invest more stocks for my future and children's future. Very excited, I went to my dad and told him about the idea. He laughed and said that I can't join the stock market because it's gambling. 

Though it may seem like it, I don't mean to put my dad in a bad light here, he's been a good dad to me. His idea of things sometimes is more dominated by fear than by really trying to understand the all the logic behind it. Just my thought...
Anyway, let's get back to the topic. Is stock market really gambling or not? My answer is, it depends! 

First off, let's make this simple. Investing is the word used by businessman and entrepreneurs when they are trying to build a company that they'd want to stand through time. So when a person invest, that simply means that it has to be long term and not a fly by night activity, or a one time event. There is home work to be done, such as proper company research, and forecast about a company's projects etc... 

Let's define gambling. Gambler is the word we use for people who are just trying to make their bets through luck. This usually happens in a casino or when we... say, buy a lottery ticket.You go into a casino, to try your luck, you can either win or not, the same thing with lottery. Though you don't know if the numbers you pick will win, you still try your luck, and speculate on choosing what numbers might win. In short, if you are just speculating, then you are gambling.

Now, wanna get into stocks? Let's place some guidelines: 

1. When we want to invest in the stock market, we make sure we do our homework. Also, we must remember that businesses needs to take time to grow.

2. Time and not timing is our ally there. If we withdraw too soon then that is our loss. If you want to invest and consider yourself an investor, make it long term.

3. Sometimes, some investors forget the real essence of investing into the stock market. They would get into the stock market today and then tomorrow they sell their shares, and never come back, and consider themselves investors already. They made one trade and then never again, and then they'd tell you that stock market is gambling! 

4. If investing is our goal, we do not buy businesses that we do not understand. This way we can keep constant investment to companies that we can benefit from for a long time. 

Just because it's high yield and doesn't mean it's gambling. Simple as that! Otherwise, go gamble and good luck with that!

Financially Stupid

Nope, I'm not trying to be judgmental, but if you think I am after reading the first few paragraphs, then it is either you whose judging me wrongly or I may have to repent later after writing this blog. But first, let me tell you a true story.

After one of the Financial Literacy Seminar he was teaching, a certain attendee went to approach the speaker, he is a CEO and Marketing Directors of a prestigious financial institution. The man said to him, "Sir, you gave a great lecture however, I want to attest to you that my wife is an asset and not a liability. Look at her, she is very pretty."

Mr. CEO just smiled and said,  "My friend, the definition of assets are people or things that helps put more money into your pocket."

"Tell me, does your wife help you put more money or savings into your bank account or does she spends most of them?"

"Well," the man said, "She buys a lot of nice expensive things, like make-ups and stylish clothing using my money."

"Then my friend," said Mr. CEO, "You have to talk with your wife and discuss how you will turn around your finances, because according to your story she doesn't sound like an asset to me."

---0---

On the next seminar schedule, the same man approached Mr. CEO again and said; "Sir, thank you for your advise. My wife now is truly an asset. We've spoken and she now started to be frugal. Also, she manages to save some of the money to our bank account every time I give her money from my salary." 

--The End--

End of the story now on to my blog. In one of the talk show videos I keep watching on you tube there is this episode I came across with, on which the main topic is the stupidity of women when it comes to finances. The guest of the show a financial expert said this about women; "Many Women are Peso smart but Million foolish." 

We'll, I believe that not all women are financially stupid, but most are... and men too! I didn't get to finish watching the whole episode but I have my own presumptions I have my own presumptions and here are just a few:

1. Women know where the latest mall bargain is but they don't know which companies of the stock market are on sale. 

Men, may or may not know where the mall sales are or they wouldn't even care; but they also don't know when the stock market is cheap or they don't even care about the stock market, period.

--
2. A hair re-bond session that charges a fee of not less that Php 1,000.00 is not so much to pay for, not knowing that 1,000.00 at 12% interest will turn into 1Million in 24 years.

What is a car loan when he can show off a brand new Porsche to his friends and dates.

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3. They'd rather date a handsome guy who likes to spend his money more than he earns them, instead of dating the one who has potentials.

Men, would date a pretty girl instead of dating the smart ones who can make sense about money. 

After all is said and done, both of them are living in financial disaster!

In reality, most men and women of all sizes and shapes, many are still lacking in Financial Literacy. People still make unnecessary purchases and get scammed in wrong investments, which just proves that in this day and age; People are financially stupid. According to an anecdote I've once read, there are two kinds of people.

"The One who is rich, and The Other who wants people to think that he is rich. "

The other use to love fancy-schmancy things. To die for shoes and apparels,  Expensive perfumes, cool phones and gadgets and other branded items. In short, 'the must-haves that they don't really have to have.' They are lured into the world of consumerism. They feel they don't want to do anything with savings and financial investments since they feel that it's (1) only for the experts, (2) they just simply don't care about their financial future. 

I'm not saying that buying nice things are bad stuff. To be honest I like those kind of stuff too. I would love to have those if only they are given to me as gifts, I would appreciate it. Otherwise, I will have to make a way to afford it, otherwise... I can do without it for now.

If we try to secure our financial future by living frugally at our present status. We can rest assured that we can be comfortable in our old age. In short we can delay our instant gratification for a long term return of our investment. 

Others would contest, why study Financial literacy when "money is the root of all evil."? If that's the case, I who wrote this blog should have been cursed now? and if not now then maybe later in my life.

My take on it though, is this; We are stewards of God's creation, and as children of God, we can try to be abundant as much as we can in order for us to help build Lord's Kingdom on the earth. Money is Not the root of all evil. Take note that in 1 Timothy 6:10 the exact words were, "For the love of money, is the root of all evil." see the difference?

There is a need for a change of mindset if we'd lime to build a strong financial foundation. Discipline also, instead of spending money on useless stuff, we can still consider the difference our money makes as investible funds.

So, instead of upgrading your cellphone every month.Why not invest them on assets that can generate you more income in the future. There is a cost of course. It may affect our lifestyle a bit, and social life a bit but trust me, you'll survive without what you thought you can't live without. 

The question of so many of us then is this; Is it possible that people can really study and get into, Stocks, Bonds, Mutual funds and or UITF's to improve their financial status in life?

Why, yes! and if you ask why... then why not?

Kickstart Your Kids

Can You see it? I hope you can, I say yes to this!

Not In Our School Curriculum

When I was young, my grade school adviser would sometimes lecture us  the importance of studying well. She mentioned that we need academic education so that later in life after graduating college I can be able to land a good job that will pay me well. She was right, but she was not able to deliver what I want in life and that is financial freedom.

It often makes me wonder how the rich live. How it would feel like to not ever able to work for money. As I grew up, things begin to change a bit for me. I'm still not there yet but the things I learned from school still aren't any bad at all. 

In addition, there are now two kinds of education that we can do in order to succeed in life. 

First is to learn the importance of Personal Finance. Finance may be a subject in colleges and universities but Personal Finance isn't. The sad thing is, many people want to be successful financially but  they do not want to invest time to educate themselves about it. The solution is to learn of Personal Finance in theory and in technical. They are what I have  NOT learned in school and most families DON'T talk about. At home all I hear from my parents when I was growing up is how hard it is to earn, thanks to my grandfather, (may he rest in peace) he taught me at the same time that money can work for me, instead of me working for it. Starting from saving to emergency funds, entrepreneurship and investments.

Second, learn that Academic Education is important as well. Academic Education may or may not bring you too much money, but mostly will lead you to the latter part. I later learned in life that the main reason why we still need Academic Education is so we can get the DISCIPLINE that the school provides. Second reason is is the technical aspect learning to professionally do what you love to do, whether it be vocational or a complete college curriculum.

So which of the choices above is better? You decide!

I'm grateful for the opportunity of learning from good mentors other than my family members. I realize that anyone can achieve anything want in life. The only limit is... one's imagination.