A couple of weeks ago, I had a conversation with our landlord here in Dubai and found out that his finances are in tatters. Mired in debt with no clear solution. He even owes money to relatives, friends and some people in church. I’m not talking about 5 digits of debt; he owes the bank and other people a total of AED 365K (PHP 5.152 Million)! That’s a staggering amount especially for someone whose income is not even enough to cover the monthly payments.
During one of our weekly Life Group meetings, one of our fellow LG member, Harvee talked about the life of Joseph the dreamer. Most of us are familiar with the story of Joseph the dreamer, right? You know, Jacob’s son with the multi-colored robe who was sold to slavery, worked for Potiphar in Egypt, sent to jail on a false charge from Potiphar’s wife, and while in jail, he interpreted the dreams of his fellow prisoners and then that of the Pharaoh’s and was then made second in command of all Egypt. It was during this time that Joseph helped to save Egypt and many other nations from the great famine that came later.
When I first read about Joseph in the Bible I didn’t really get a lot from it, but after a more thorough reading and discussion last night, I learned that there’s actually a thing or two we can learn from Joseph’s story specially in the area of planning and preparing for the worst. Lessons from 1600-1700 BC that helped save Egypt from the great famine, and can still help save lives today and in the coming years.
In a few week’s time, it will be my fourth year here in Dubai. Four years of working in a foreign country and enduring the scorching summers and pleasant winters in the Middle East.
Out of those four years, I spent half being neck deep in debt. Credit Card debt. Just like many other OFW’s who came here, I too fell into the debt trap not long after I started working and getting my salary. After filling out my bank forms, I was also given a credit card application form which I was more than happy to sign. They gave me a good credit limit. I thought to myself back then, I can handle this. I will not use this for anything other than emergencies. I didn’t know any better.
After going on a 3 week holiday with Tricia to Bangkok, Singapore and Laoag, I was back to my usual weekend grind of attending Financial Literacy seminars on a Friday, a weekend.
Randell Tiongson, one of the country’s most respected experts in Personal Finance, and the Director of RFP Philippines was the first speaker during the seminar. During the seminar, Randell reminded us once again about the basics of investment planning, and how to properly plan and select our investments. I know a lot of people who want to invest but are clueless as to which investment is right for them and how to get started; but they are also not willing to spend time to learn and hear from industry experts. Instead they go to social media and ask in different Facebook groups for advice where they get trolled, or scammed. Every day I see people asking the same questions; “What is the best investment?”, “Where should I invest my 100K with a potential to earn X amount in 1 month?”, “Should I invest in Real Estate?”, etc. Despite the fact that there are a LOT of other financial advice and posts where they can freely READ information on how to plan investments and where they can go to seek professional advice, some people still prefer to just get spoon fed. Too lazy to do the necessary work. They would rather have someone else do the thinking for them.
One of the Key points that Randell discussed during the seminar was that one should select investments based on his or her Risk Tolerance, Objectives and Timeframe. If you’re a person who is about to retire 5 years from now, investing in the Stock Market is probably not the right investment for you. Stocks may have been great when the market was bullish a couple of years ago, but now that the market is bearish and with no clear signs of reversal yet in sight, you might lose sleep and leave this mortal plain early due to the anxiety if you invested in stocks today. If you are in your 20’s or 30’s then by all means go all-in on stocks because you will have more than enough time to recoup your losses and wait for the market to reverse in case the market stays bearish for a long time. If you’re planning on saving for your child’s education 10 years from now, investing in Time Deposits will not help you achieve your target amount. We need to remember that there is no such thing as BEST INVESTMENT. It all depends on what is suitable for you. Investing is never a One Size Fits All solution.
Even after you have already selected your investment, the work does not stop there. Once you have begun funding your investment, make sure to monitor it periodically. If for example you invested in the Stock Market a couple of years ago, your portfolio right now will be in the red or close to it because the recent drop has wiped out all of the gains from 2018. Analyze your positions and determine if you should add more. If you are an investor and have 20-30 more years before retiring, then you might want to add to your positions now that the index heavyweights are cheaper. If you are a trader, then you might want to avoid the market for now and put your funds somewhere else or remain in cash. After you’ve done your analysis, and studied your options make the necessary adjustments and re-balance your investment portfolio accordingly to ensure that your investments are still able to beat inflation significantly and that you are able to make money. I remember early this year during Money Talks 2018, one of the people I follow, Tony Herbosa said that we need to be like water. Don’t be too rigid. Adjust to the situation accordingly.
If you want to learn how to invest, and pick the right investment for you don’t just go to Social Media and ask questions in forums. 90% of the time you’ll only get trolled or flooded with answers that don’t make sense like, “PM me”. Go to a Financial Advisor. Ask a Financial Planner and get professional advice. Attend a Financial Literacy Seminar. Be informed so that you can make an informed decision and not just follow anyone’s advice and end up making the wrong decision, or worse- scammed. Financial Literacy seminars will only cost you anywhere between AED 100-250 depending on the topics discussed, and some are even free; but I guarantee you that the amount you’ll lose to scammers and wrong investment decisions because you didn’t have the right information are going to be way higher.
If you think education is expensive, try ignorance. -Jeff Rich
Just recently while I was on holiday, I heard a friend’s husband died in his sleep. They said he died due to “bangungot” or in actual medical terminology, Acute Pancreatitis. He was about 33-35 years old if I’m not mistaken. Before he died, he managed to put up a successful rolling store business in Mindoro. The business was successful enough for him to afford buying their own house, and own car, and even a few gadgets for his two sons. I am not sure if my friend knows how to manage or operate the business since she was more focused on the kids. She’s a teacher by profession. This sudden and unexpected death prompted me to finish this blog.
The first time I went to an IMG (International Marketing Group) Seminar in the Philippines was around 2012. The speaker at that time was Benj Santiago. Unlike the other attendees and members who were very enthusiastic and receptive, I was rather- indifferent. After the orientation was the Financial Check-up with one of the IMG associates. Again, I was not really interested and gave the usual canned reply- “I’ll think about it and get back to you.” I left the IMG office thinking that I just went to “another MLM group” that doest not serve my needs. Fast forward to the last quarter of 2017, and I realized how wrong I was and somehow regretted not signing up sooner.