How to dispose off your money

Had just attended our annual convention for internists and the three days had been quite a stretch with all the lectures & sessions presented. I made it a point to attend some sessions which are non- medical in nature. Two of such were this lecture from Ms Susan Bigay, a very astute yet feisty CPA practitioner who shared some tips on how to build your finances & Dr Sanjiv Chopra, a medical practitioner who became an international hit with his numerous publications on success and leadership.

I would like to share some highlights of their lectures. Mrs Bigay reminded the audience, many of which were also young doctors, not to rush into buying expensive flashy cars and building their dream house in the first 10 years of their practice. Well aside from it would certainly attract our friendly government revenue collectors, it is not a wise decision in the long run since you would only be working HARD to pay your debts to something which will just let you lose more money ( the car and house maintenance costs, the gasoline, the decoratives/ fixtures you have to add to your house, the food and time expenses you let out being the gracious host that you are since your house will be a magnet for reunions, meetings, etc.).   That would be stressful just to maintain that lifestyle early. Kiyosaki calls them doodads or liabilities in his book "Rich Dad, Poor Dad".

For the first few years of your earning life, build assets (things that will help you earn money) so that after a decade or two, you have them assets (e.g., rental properties, stocks/paper investments,  businesses manned by others) to help you EASILY build that dream house/ buy that yearned car. Live it simple and do not rush...







Mrs Bigay, on another point, emphasized the idea that we should not keep all our money and savings in the banks. The time deposit interest which goes to about 2-3 % per annum is substantially less than our current inflation rate which is about 5%. So in the long run, you are literally losing money ( the buying power of the money you kept in that TD is slowly dripping away). What more in case of bankruptcy, the bank thru the Philippine Deposit Insurance Company (PDIC) can only guarantee P500,000 to each depositor no matter how many accounts or TDs he has with the bank. And to make it more inconvenient, the time frame to retrieve the lost money is about 6-8 months.

She advised to keep only your emergency fund in the bank ( like the amount equal to the basic family expenses you would incur in 6 months assuming you lost your job and you're without any pay in the same time period). Money in the bank should be mainly for safekeeping. She recommended diversifying your investment portfolio into UITF, mutual funds, stock market, stocks in time tested companies and promising businesses and real estate. Relative to this what came to my mind was this very useful video resource series "Pesos and Sense" by Mr Aya Laraya which I strongly would recommend to the average Filipino saver/investor.

On my next post, I would share Dr Sanjiv Chopra's talk on leadership and steadfastness to a dream.


The greatest invention the world had ever known is compounded interest  -  Albert Einstein