ILMISOR MP COOPFinancial Wellness Advocacy

ILMISOR MP COOPFINANCIAL FREEDOM FOR FILIPINOS

HELP PEOPLE (INCLUDING YOURSELF) DEFINE THEIR FINANCIAL GOALS IN LIFEAND MAKE IT INTO REALITY!

Financial Freedom Is simply having the means to maintain the lifestyle you choose to have without having to actively work.

How do I get there? Investment income is key to financial independence

Without it, you will never achieve financial success

PEOPLES BEHAVIOR ON MONEYWHICH ONE ARE YOU?

Cash Flow Pattern

Cash Flow Pattern of a Poor ManINCOMEEXPENSEASSETSLIABILITIESJOBPAYCHECKTAXFOODRENTCLOTHES

INCOMEEXPENSEASSETSLIABILITIESCash Flow Pattern of the Middle Class JOBPAYCHECKTAX

FOOD

RENT

CLOTHESMORTGAGE

LOANS

CREDITCARDS

CASH FLOW PATTERN OF THE RICHINCOMEEXPENSEASSETSLIABILITIESJOBPAYCHECKSTOCKSBONDSINVESTMENTSDIVIDENDSINTEREST

GOLDEN RULE:INVEST!

Can Php 50 GROW INTO Php 1 MILLION ?

HOW VARIOUS AMOUNTS PER DAY CAN GROW INTO Php 1 MILLION!

Einstein Rule of 72 (The Power of Compounding)THE POOR AND MIDDLE CLASS WORK FOR THE MONEY.THE RICH HAVE MONEY WORK FOR THEM.

Ways to invest your savingsInvestment 1: Time Deposit at 1% annual rate of return

Investment 2: Government Bonds at 5% annual rate of return. Coop time deposit at 5 to 9%

Investment 3: Mutual Fund at 8% to 12%

Investment 4: Stocks at 12% to 20%

Phil. Stock Market Performance

Phil. Stock Market Performance

The Financial Pyramid

Hierarchy of Financial Needs:Protection: Emergency Fund, Health care, Life Insurance Accumulation and Growing Wealth: Savings deposits, Time Deposits, Variable insurance, Mutual Funds, Stocks, Real Estate assets.

Distribution and Wealth Preservation: Retirement Income and estate planning.

Institution Available to HelpProtection: - Insurance, Health care, Cooperative Accumulation and Growing Wealth: Cooperative, Banks, Insurance, Mutual funds, Investment trust Funds, Stock Market

Distribution and Wealth Preservation: Insurance

Helping you Plan for your Financial Priorities

When to start to InvestAge 18 to 25 - Im just getting my education. You can't expect me to be able to invest now. I'm young and I want to have a good time. Age 25 to 35 - I've only been working a few years. Things will be looking up soon and then I'll be able to invest. Age 35 to 45 - "How can I Invest now? I am married, have children to care for, I have so many expenses in my life. When the children are a little older, I can start thinking about investing."Age 45 to 55 - "I wish I could invest now, but I just can't do it. I have two children in college and it's taking every cent and more to keep them there. Age 55 to 65 - "I know I should be investing now, but money is tight. Age over 65 - "Yes, it's too late now. We are living with our eldest son. If only I had invested when I had the money.

*So ano ba yung Financial Independence?

Simply lang: you have the means/resources to maintain the lifestyle you want w/o having to work. Its a well-planned lifestyle where one is no longer required to work for money.

Of course we need to work to earn, to survive, to address basic needs (food, clothing, shelter) but it will come to a point that you will stop working. Hindi mo puedeng sabihin na mag tatrabaho ako hanggang 88 y.o..Sooner or Later, hihinto ka rin.

The BIG question is, when you stop, ARE YOU STILL OK? May puhunan ka pa ba to continue with your life? Maybe??????

It is a state of economic well-being where your savings are generating investment income sufficient to cover your expenses.Ex. boarding house business (c/o cary) FX business (c/o bhong)

Theres a way for you to earn money (passive income) even if you are not working.*When it comes to financial independence, INVESTMENT INCOME is the KEY.

Its placing some savings in a BASKET (financial tool) while your are still working. Without it, you will never achieve financial success.

- You have enough income to cover for expenses - You have enough money that can be liquidated over time. *Lam nyo ba na people have 3 behaviors when it comes to MONEY: Di ba sabi nila, when we receive our salaries, the proper way to do is save first and spend whatever is left. But take a look of the ff behaviors:

Behavior #1 Eto yung ugaling, pag sweldo, gagastusin agad. Nagiging automatic ang GASTOS. Sige lang habang may pera. Why is it like that? because, thats how we are programmed. Tapos he will realize, oopss may sobra pa (savings), in the end, gagastos sya uli hanggang sa maubos na ang pera. Ang tawag sa ganitong tao ay ACCIDENTAL SAVERS. Why? Kase by accident, may na-save pa syapero gagastusin rin nya. Im sure isa sa inyo nasa behavior #1. Lalo na pag may sale, gusto agad gumimik, may bibilhin na bag, shoes, manunuod ng sine etc..

2. Behavior #2 This is the worst. Welcome to the world of PLASTIC MONEY also known as credit card. Credit card does not increase your money, it only increases your spending power. Theres the lack of discipline and will power to resist temptation. Wala ka pa ngang pera gastos ka na agad. Ang tawag dito ay SPENDING TO FEEL GOOD. Sakit natin yan mga pinoy. Theres nothing wrong naman with this as long as hindi ka nababaon sa utang. Gastos ka ng gastos kaya ka nababaon sa utang. Youre experiencing a hard life: 1. Hindi ka makatulog; 2. Pag may tumatawag baka credit card company or law firm or minsan pinapasagot mo sa ibang tao at sasabihin na wala ka.

Heres the thing: Use credit card wisely. Use it if its a NEED. Huwag kang gagastos kapag kaartihan lang, Pag ipunan mo ang kaartihan mo (think about it).

3. Behavior #3 Dito natin gustong dalhin. Save first before spend. This will help you build fianncial foundation. It takes out stress, pressure, anxiety of personal finances. It puts buffer between you and danger. At the very least mag ipon kahit 5% lang of your monthly income. Kung kaya ba 10%, 15% max of 20%. Then live on the remaining 80%. Pagkasyahin mo. Work within your budget.

Question? Can you go beyond 20%..YES basta may iba kang source of income. At least may passive income ka. Like me, I get money from my boarding house business. So at least I can afford to save beyond 20%.

Let remind you again, the ability to save has nothing to do with the size of your income.

One example is PONDO NG PINOY by the cardinals. The concept is put your 25 cents in a used bottled water, then ibigay mo lang sa simbahan sabihin mo pondo ng pinoy. In their 3 yrs existence, they were able to generate a total of Ps. 100M. Ano mensahe ng project nila, kahit maliit, basta malimit, patungong langit.

Now given the 3 behaviors, WHICH ONE ARE YOU?

Kung nasa behavior #1 ka, the good news is at least nakakaipon ka kahit konte pero tendency, gagastusin mo rin.Kung nasa behavior #2 ka, please stop it. Its a vicious cycle. Dito tayo sa behavior #3. The habit of setting aside, the value of saving.*There are 3 CASH FLOW PATTERN

Tatlong klaseng tao: May POOR, MIDDLE CLASS and RICH..saan kaya kayo dyan? Of course majority ay nasa middle class. They have the money, but they dont know how to use their money. They normally buy liabilities they think are assets. Mali minsan ang mindset nila. Normally 40% of their income goes to debt servicing and liablities.

Ang mga RICH naman, bumibile ng ASSET. For them, ASSET is something that brings in money to their pocket. Bumibili sila, pero yung binibile nila, nag ge-generate ng income.

So saan kayo dyan?

Depende sa income na pumapasok..which leads me to the next slide..*Lets review the cash flow pattern of a POOR MAN..

Ano mas malaking box? Income or expense?.EXPENSE

How does it work? Ganito dilemma nila..Trabaho sila, pag kumita ng pera, labas agad ang pera (gastos agad)..TAPOS..you will really end-up POOR.*Lets review the cash flow pattern of the MIDDLE CLASS

Ano mas malaking box? Income or expense?.EXPENSE PA RIN

Same, Trabaho sila, pag kumita ng pera, pero they buy something (liabilities) they think are assets. Tapos pag may sobra, bibile pa uli yan. Mali ang pag manage ng money.

At the end of the day, palabas din ang pera.

*Ano mas malaki? Income or expense? THIS TIME INCOME naman..

How does it work?

Trabaho sila, pag kumita ng pera, they buy ASSETS para lalo pa sila kumita. Ang expense nila ay CONTROLLED, SCHEDULED, RATIONALIZED. Pinagiisipan muna nila bago sila gumastos.*Now, Lets review the cash flow pattern of the RICH

A simple GOLDEN RULE: BUY ASSETS. Anything that can put money in their pocket.*Who has a Ps. 50 bill? can I borrow it?

Pag iniwan ko ba yan sa lamesa, will it earn interest? Will it become Ps. 50M? Syempre hindi di ba?

By the way, to put it simple, INTEREST is the price of borrowed money. Para mas madali nating maintindihan.

But if I were to put the Ps. 50 in a BASKET that will give me 3% interest rate, will it become Ps. 50M?..YES in 468 yrs.If I put it in a BASKET at 5%, it will take you 284 yrs.If I put it in a BASKET at 10%, it will you 145 yrs..the good news is umiikli na yung years; the bad news is the oldest recorded human being is 142 y.o. patay na ata sya. Its a japanese female.If at 15%, it will take you 99 yrs. Yun lang dapat alagaan mo sarili mo.

Whats my point, the idea is MONEY GROWS! *Ngayon, gawin nating mas realistic. Gawin nating araw-araw..

Lets put your Ps. 50 in a BASKET that will give you interest.

Simulan mo sa Ps. 50 araw araw, at 10% it will take you 56 yrs; at 15%, 40 yrsKaya pa? Gawin nating Ps. 100 araw-araw, at 10% - 49 yrs; at 15% - 36yrsDagdagan pa natin. Ps. 200 araw-araw, at 10% - 42 yrs; at 15% - 31 yrs

And so on and so forth..

Nalalakihan ka ba? Hindi naman kelangan malaki ang dapat itabi mo. My point is at least nagiipon ka kase MONEY GROWS.

Its how much you KEEP of what you earn is important. Kahit magkaano pa yan, do it blindly, religiously, automatic.*****