AIA PHILIPPINES (formerly Philamlife) sponsored a free live webinar today with Chinkee Tan as guest speaker. It was a lively, down-to-earth interaction.
Chinkee Tan enumerated 6 ways how to spend wisely your Christmas Bonus (or extra money in general).
1. Pay off your debt. Even if you could only afford ₱500 a month, do it religiously and pay extra when you receive your Christmas Bonus to shorten the payment period.
2. Build your Emergency Fund. He proposed 6 to 12 months worth of Emergency Fund. It would probably take years for an ordinary employee to achieve this but if you don’t start now, it will never happen. He made a striking comparison of how the poor and the rich’s time frame in financial planning differ: 1) The VERY POOR plan their needs on a daily basis (Isang kahig, isang tuka). This got me thinking: I also belong to the “no work, no pay category!” 2) The POOR (contractual workers who receive wages every Saturday) plan their budget weekly. 3) The MIDDLE CLASS plan monthly. These are the employed who receive their salary at the 15th and end of the month. 4) The RICH plan yearly. 5) The VERY RICH plan by the decade. Hmmm . . . interesting.
3. Start your second source of income. Or if you have more talents and skills, build multiple sources of income. (Message me on this one. You can join AIA PH and/or Malayan as part-timers.)
4. Get protection money. Chinkee Tan showed a very simple formula for computing how much Income Replacement Fund a breadwinner should have: Monthly Expenses X 12 months X 10. (There are actually 3 ways how to compute this but Chinkee Tan probably picked the most convenient method for the benefit of simplicity.) We were amused when he told us that he is not encouraging us to buy life insurance. It’s because he won’t be the beneficiary! The life insurance benefits won’t be for him but for the family that the breadwinner will be leaving behind. His family should continue on living comfortably as before even though he’s gone. We laughed when he asked “who among you here are breadwinners? And who among you here are breadeaters?” He then narrated the story that they recently bought a piece of real property under his wife’s name. He insisted that the MRI (Mortgage Redemption Ins.) should cover him and not his wife. Precisely because if something happens to his wife, he could still continue paying for the mortgage. But if something happens to him, his wife would be needing the Mortgage Insurance to settle the dues.
5. Think like a wealthy person. When you have extra money, invest it. He suggested that one should invest first in Financial Education because the best combination for being scammed is being ignorant and greedy at the same time. Sadly, it turned out that some attendees were unfortunately scam victims in the past.
6. Help others. God blesses us to be a blessing to others! Christmas is the best time to share your blessings. Give to charity. This reminded me of Fr. Agustino Miguel Torres when he said “the more you give, the more you’re meant to be.”
There are 3 channels where your hard-earned money goes: needs, wants , savings/investments. Chinkee Tan stressed the need to have a positive mindset about investing. Change your mindset from having a consumer mentality to investment mentality.
I agree with Chinkee Tan that most Filipino parents urge their children to study hard inorder to land a good job when they graduate whereas Chinese-Filipino parents urge their children to study hard to continue the family business or start a new one he could call his own.
But I cannot completely agree with him when he generalized that the way you were raised affect your mindset now. It could possibly be the opposite, at least for rebellious children like me. My father tried to brainwash me since I was small to study well, get employed in a big corporation, strive to be promoted so I could help our relatives work with me in the company. I chose a different path, much to his disappointment. It’s because I chased after my childhood dream, which Chinkee Tan also mentioned. That of being true to your calling and passion when exploring other sources of income.
Someone asked if he could borrow to pay off his debts and Chinkee Tan answered “you cannot solve a permanent problem with a temporary solution. You cannot solve a problem by creating another problem.” If I were to answer this question, I would say “yes, you may borrow at 1% interest and pay off your debt that is currently charging you 2% interest.” It is simple logic. Why would you pay 2% interest if you have an option to pay at 1%? By all means grab the opportunity and slash the interest you’re paying by 1%!
Other than these two, thumbs up with Chinkee Tan’s practical tips on how to be wealthy. He presented them in a manner that people would easily understand, humoring his audience non-stop. I just loved the way he emphasized “Money you did not spend is money you earned.” To learn more, go to chinkeetan.com.
(Thanks for dropping by my blog and messaging me your comments/reactions. I appreciate them very much! Stay safe everyone.)
