Posts Tagged ‘money advice’

Money Leeches in the Family?

If you have not yet read Part 2 of this article, please click here to read it now

In the last article, I talked about being aware and effectively stopping your Money Leeches!  Should a Money Leech appear who is NOT Immediate family, I recommend that you only offer P50 and not a Centavo more. Although it may seem very harsh, this is the first real step in getting your money to stay with you. Also remember, if you think you can’t do it, think about the welfare of your immediate family. Money leeches are not your burden, they are not your problem. Instead, think of them as “Money Management Tests”. If you are able to stop your leeches, you pass the test and you immediately get to the next level. Fail the test, then you will stay stuck where you are.

But what if the “Money Leech” is from immediate family? Like a brother or a sister or a parent, what then?

First, let me define what an “immediate family money Leech” is. — This is the brother or sister or parent that will habitually ask you for money. Most of the time, they even feel entitled to it because of the blood relationship they have with you. You know the type right?

Well, this is where it gets very sensitive for a lot of people. Everybody has a different opinion on this, but this is my clear cut view on it. Not all members of your immediate family have the same weight. You must prioritize who within your immediate family to be generous to first.

In my life, this is my prioritization: My first priority is to my wife and children, then my parents and then my siblings. And with that in mind, I give 90% of my money to my wife and children first, then the next 5% goes to me and the remaining 5% goes to a special fund just in case an immediate family needs it.

Side note: If you give 90% of your money to your wife / husband and children, make sure that it is not siphoned off by a relative of your wife/husband because they too may have a money leech or leeches. This is a concern of many married people as well. –Sit down and talk to your wife / husband about this if this is indeed the case with you. Your objective is to teach your spouse about money leeches and have a unified front against them.

Now, should there be a money leech in my immediate family the maximum amount of cash I or my wife gives is only the 5% of whatever we have at the time. Now depending on how much money you have right now, that can be very little or that can be very big, the point is, even if it is immediate family (outside of my wife and children) our cash generosity is budgeted, controlled and managed.

Another side note: If you are single, I do not suggest offering 90% to your immediate family unless you plan to never marry, still budget it to 5 to 10% because of 2 reasons: 1.) If you give more than that, you might not have a money leech now, but if they get used to it, you would have created a money leech down the road; And 2.) You need money for when you get married someday. If there was a major regret I had in my life, it was that, I didn’t plan financially when the time to marry the love of my life came along. Even though it worked out in the end, I could have planned so much better.

Make no mistake; my life’s wealth is meant for my immediate family. Everything I make and have is meant to be shared with them, and to give them a better life BUT if I have a Money Leech problem and do not budget, and control it. The Money Leech will most definitely bleed me dry financially as well, especially if it is family –and let me add, if you are married, a money leech in the immediate family, if not managed will DESTROY your marriage. Trust me; I’ve seen it happen to those very dear to me. This is why I urge you to understand what I am sharing. If nothing else, I want all of you to have a great and happy marriage.

Be Generous in the Right Way

Now some of you who have read up to this point might be having a violent reaction right now saying “I can’t just abandon my brother, sister, parents and just give them 5% if they desperately need the money??? If I do, I am not being a good son/daughter/ brother/sister, I am a Filipino, they are my blood, I must give!”

Okay, calm down before you decide that I am a heartless scrooge.

Remember that we are just talking about Money Leeches in the immediate family who “habitually” ask for money and even feel entitled to it. If they are not “leeching” you dry and they desperately need help and you can afford to do so then give what you can. But I suggest that you only do so once because if you give more than that, you are creating a money leech down the road.

I am a very generous person by nature. The problem that I had before was that I was generous in the wrong way.  Being overly generous with money, especially if you do not know how to manage it, is extremely dangerous and is a clear recipe for money running away from you instead of towards you.

So instead, what I learned to do, and what I want you to learn to do as well is to be extremely generous in the right way, and that is to be generous in “kind”. To explain this further, I will give you 2 assignments today.

Assignment 1: Read my past article entitled “Business Reciprocity”. Click Here To Read That Article. Then Comment on either that article or this one. Complain to me about the problems you have in completing the assignments. Believe me, I will read every single one — even yours and I promise that I will not ban you or even get mad at you when you do. It is all part of the process.

Assignment 2: Set a budget for your Family Leeches and stick to it. Create a script on how you will say it to them. You can email it to me if you want. Email to: markso@zerocapitalclub.com

Good luck and see you in the next article!

Author Box:

Mark So is a fervent businessman, Investor and educator.  He is the Chairman and CEO of Businessmaker Academy—a business, finance and corporate training center.  He is the founder and Chief Forex Trainer of Forex Club Asia, A Trading club of Forex Traders across Asia. He is also the Founder and Chief Trainer of the Philippine Franchise Institute which specializes in training and growing existing Franchise businesses.  A sought after speaker for business, investing, You may email your comments and questions to: mhso@businessmaker-academy.com or call the office at 6874445 / 6873416 / 6874645 for a schedule of his seminars

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In Part 1 and 2, I explained how to simplify managing your money. If you have not read them yet, please Click Here to read up on what you’ve missed.

In this article, I will finally explain how to increase your “take home” per month without adding any additional bad expenses for you!

Let’s begin. For this article, I’m going to start calling “Take Home Money” =  “Income Streams”. The end goal is to increase your income streams so that it will be more than your expenses. Look at the diagram below:

So let’s focus on Income Streams. Simply put, there are really only 2 kinds of income streams that you have to understand and concentrate on to increase the money flowing into your lives. These are

1.) Your Main Income Stream – What pays for the Necessary Expenses

2.) Your Additional Income Streams – What will get you from scenario 1 to 3


For those who have No Income Stream at all, then good news, this article will help you get started on your first income stream.

Now for those who have a Main Income Stream already, you must Keep and protect your Main Income Stream (at all costs) and keep on adding Income Streams to it.

Today, I will give you two of the most doable ways to start or add an income stream and explain how to do it step by step. By the way, you are not limited to doing just one of them, you can actually add both streams at the same time!

Additional Stream 1: Turn your “Good Expenses” into Income Stream(s):

Step 1: Make an inventory of all the items that you already own and classify them into either of 2 columns “Can be sold” and “Can be rented out” like below:

Can be sold Can be rented out
Ex. 1. Wedding gift Toaster Oven Ex. 1. Play Station Game Console
2. Old Cell Phone 2. Chocolate Fountain (Or any other

gadget)

3. Old Comic Books / Collectibles 3. Re-usable College / High School

text books

Etc… Etc…

Step 2: Create a price list. Here’s a quick guide on how to do that.

  • Come up with a reasonable price for each item. If the item is new (you never got to use it) then sell it or rent it at current market price (it can also be lower than market price, just make sure that you still make money from it), if it’s slightly used, sell it or rent it 10% – 50% lower again, just make sure you still make money on it.
  • If it’s for rent, you may ask for a refundable security deposit. The refundable amount would ideally be how much the item cost you or an amount that the customer is willing to give and would want to get back. (Just make sure it’s realistic)
  • Add delivery costs if you will deliver it. Or you can say prices are by pick up only if you can’t deliver it.
  • Include a nice quality photo of the item whenever possible and remember to make it look presentable.
  • Then place instructions on how they can pay for it. You can use this line: “Hurry First come. First served, contact us now at (your telephone number). For your convenience, you may deposit payment at (Bank Account Number) Or you can use G-Cash (Globe) or Smart Padala (Smart).”

Step 3: Advertise it for free by holding a “Virtual Garage Sale”.

-A “Virtual Garage Sale” is very easy to do: Email the list in step 2 to all your friends and tell them that you are selling your stuff and would like them to check out the items that they want to buy. This saves you the trouble of organizing a Physical Garage sale especially if you do not have the space to do so.

-You should also try selling your items on www.Ebay.ph , Facebook, even Multiply. Go to the respective websites, open a free account by following instructions and start posting. This is also free.

Now, don’t be limited to just these ways, there are lots of other places for you to advertise your list for free, all you have to do is go to http://www.google.com and type: “Free Directory Listing” then start posting in those sites.

Additional Stream 2: Turn your Skill into additional Income Stream(s):

Step 1: Make an inventory of all your skills like so:

My Skill I can offer:
Ex. 1. Good in Math and loves kids Ex. 1. Freelance Tutoring Services
2. Good with Computers 2. Freelance Computer Repair Services
3. Good with cooking 3. Small Scale Catering Services
Etc… Etc…

Step 2: Pick one skill, test the market, and gain experience by offering to do your first 3 to 5 jobs for free. Here are a few guidelines to doing this right.

  • Start by offering your services to family and friends only and say that you want to try this out first with them. Limit the “Free” service for 3-5 clients / projects and see if this service is something that you would enjoy doing for a fee.
  • Ask for honest feedback from your family / friends about your service and if they would be willing to recommend you to their friends. Get their honest inputs and improve based on that.
  • If within the first 3-5 jobs you feel it’s not for you, go back to your list and pick another skill and test the market again. Do this until you figure out what you are passionate about. Once you figure out what skill you are willing to sell, proceed to Step 3

Step 3: Price it, and advertise it for free by word of mouth and through the Internet.

-Let your Family and Friends be your advertising machine. Word of mouth is always the best advertising there is.

-You should also start advertising yourself on Social Media Sites like Facebook, Multiply, and possibly even start your own Blog to highlight your skills and who you have served.

Now these are just 2 ways to start increasing your income streams as soon as possible. There will be more to come in succeeding articles of mine. Stay tuned for that. In the meantime, I hope that you learned something from me today and start building your income streams now. Good luck and all the best!

Author box:

Mark So is a fervent businessman, forex trader and educator.  He is the Chairman and CEO of Businessmaker Academy—a business, finance and corporate training center.  He is also the Chief Forex Trainer of Forex Club Manila. Mr. So and his wife Jhoanna Gan-So regularly teach their straff to manage their money responsibly and have created a money coaching club for their employees. If you would like to start a money coaching club for your company, email Mark directly at markso@zerocapitalclub.com. To read more of Mark’s interesting and life enriching articles you can go to his blog at http://www.markso.wordpress.com


Last March 23, 2010 I spoke at the Manila Bulletin Job Fair at the Glorieta Activity Center in Makati and in that talk I mentioned how job seekers can stretch their cash while searching for a job. I had a great time that day and I hope that my simple advice will go a long way for those still searching for that career.

In this article, I want to expound on this topic to include not just job seekers but literally everyone who is having a hard time in managing their money. I call this article Money Management Simplified because there are really just a few things you need to know if you really want to manage your money well. Like my experience in the job fair, it is my hope that this article will finally help you in getting to where you want to go faster with just a few key action points to do right now.

First, start with a blank sheet of paper and in the middle, write down how much money you have at this very moment. If you are married, I suggest you do this exercise with your spouse and combine both of your money right now.  Your piece of paper should look like this:

Good, now, I want you to write on top of that number, how much money (and your spouse if applicable) you take home every month. (Take home money is the actual money that comes in every month, whether from a job, a business, an investment, etc.). Your piece of paper should now look something like this:

Okay, now, I want you to write below, your total expenses per month, again, if you are married (and with kids), if you have loan payments, add everything up then right down how much expenses you have every month. Your piece of paper should now look something like this:

Great job! Now, the reason why I asked you to write down these three things is because this will be the simplified framework of how you will manage your money from now on. I want you to imagine that you are a cup of water, your “money right now” is the water level in the cup, your “take home money” is the money “pouring” in to you. Look at the drawing below:

Now, you are a very special cup of water because you have “holes” in your bottom, these holes represent your expenses. So here’s the complete picture below:

So, let’s analyze a bit,

Scenario 1: if my “take home per month” is smaller than my “expenses per month” then my money right now will eventually become zero or in other words, you become “bankrupt”. Yikes!, we don’t want that right. To show you what I mean, let’s go back now to what I asked you to write on that piece of paper.

Ex.

P15,000

P25,000

P30,000

Now here’s the simple money management formula that you will have to do to know if you are managing your money well

Take home/month + Money right now – Expenses / month = a Negative number; or a Positive Number.

In the example above, the formula will produce a Negative number and this is what happens to your money when this happens:

1st month:

P15,000

+ P25,000

– P30,000

= P10,000

(This is how much money you have left in your bank after the first month)

2nd month:

P15,000

+P10,000

–P30,000

= -P5,000

(You now don’t have money and you will need to get a loan just to cover your basic expenses. Not good.)

Scenario 2: But what if my “take home per month” is equal to my expenses per month then my money right now will remain at the same level. That’s good, but if you want to have more money, that’s not good enough.

Ex.

P30,000

P25,000

P30,000

In this example, the formula will produce a Positive number that remains the same month in month out and this is what happens to your money when this happens:

1st month:

P30,000

+ P25,000

– P30,000

= P25,000 still

(This is how much money you have left in your bank after the first month)

2nd month:

P30,000

+P25,000

–P30,000

= P25,000 still

(Your money remains intact. This is a better result, but not good if you want to have more money.)

Scenario 3: So what if my “take home per month is more than my expenses per month? Then my money right now will start to increase. This scenario is where you want to be. This is where you start to become financially smarter.

Ex.

P40,000

P25,000

P30,000

In this example, the formula will produce a Positive number and this is what happens to your money when this happens:

1st month:

P40,000

+ P25,000

– P30,000

= P35,000

(You now gained P10,000 more after the first month)

2nd month:

P40,000

+P35,000

–P30,000

= P45,000

(You gained another P10,000 This is where you want to be, this should now be your goal.)

Click here for Part 2 where I will explain how to get from scenario 1 to scenario 3. By the way, this method of money management is what me and my wife practice day in day out. This is called the “Simple Cashflow Method” which I have simplified even more to get as many of you started in managing your money properly.

Author box:

Mark So is a fervent businessman, forex trader and educator.  He is the Chairman and CEO of Businessmaker Academy—a business, finance and corporate training center.  He is also the Chief Forex Trainer of Forex Club Manila. Mr. So Graduated and is a licensed ECE, however his passion has always been in this order – 1.) Love for his wife and family, 2.) Making Money; and 3.) Teaching others how to make money as well. To read more of Mark’s interesting and life enriching articles you can go to his blog at http://www.markso.wordpress.com You may also email your comments and questions to:   markso@zerocapitalclub.com

The week before I let go of my Makati office, I wanted to say goodbye to it by taking my wife (girlfriend at that time) there for a surprise candlelit dinner. I had my one remaining staff put up about 20 candles and a soft romantic melody playing in the background before she left for the evening. I had everything planned out and when we walked in, the candles took her breath away. I sat her down in the corner of the office where it overlooked the light-filled city below us. Needless to say the evening was picture perfect and utterly romantic, until the part when I showed her what was for dinner.

Because I was still in debt at that time, we dined on 1 order of Mc Donald’s French Fries, 1 box of Chicken Nuggets and a glass of Orange Juice.

That was literally all I could afford at that time, so rather than starve, I decided to go with it and give my best smile while I gave it. And before I could even show how deeply embarrassed I was, my wife without hesitation and with the most sincere smile looked at me and told me that this was the best dinner in her life. And that was all it took to make me want to give her better food and a better life for all her life. That night, she gave me the ultimate reason to want to be a “better man”.

Within 6 months from that night, my troubled business had turned around and we had recovered 90% of my losses thanks to the virtual office that my wife had recommended and the sales coming in. However I was still not making any money because I did not have the right attitude towards money

My problem was that I never really managed the money coming in versus the money going out. Up until that point, I just concentrated on the money coming in, and never really minded where it was going. And worse still, like many men, I was never comfortable talking to women about finances. Like many men, I preferred to keep it a secret.

But my wife would have none of this “male money secret” nonsense, she told me point blank “If you really want to marry me, you’ve got to shape up your finances. I’m willing to help you, but you have to get with it.” Now, when your wife speaks like that, you never argue, you just do. Besides, I really did want to marry her.

So together we explored what I was doing wrong and found solutions that guide me till this day:

1.)    I should have given myself a salary – I used to think that the business is mine anyway so why should I salary myself? My wife’s practicality made sense, she said: “Well even if the business is yours, you still have to eat right? How can you eat if no money from the business is going to you?” So I gave myself back then a small token salary of P5,000 per month. Today, I always make it a point to give myself a salary for all the businesses that I build. Even if it is my business, I’ve learned practically what it means to “pay yourself first”.

2.)    My credit card bills were through the roof – Every time my bill came, I only paid the minimum amount due and worse I would say yes to every single “insurance” offer from my credit card. So I was paying a HUGE amount in unnecessary expenses plus interest every single month. My wife almost freaked out when I finally revealed this to her. But calmly she explained to me that insurance is good, but the terms they gave me were 10 times more expensive than others. And when it comes to paying only the minimum—that was the worst sin of all for her –“Never ever do that” she scolded, “Did you know that when you pay just the minimum amount, you are just paying in essence the interest payment and only a very small amount is removed from your overall balance?” So I had the credit card company first remove all my “card loaded insurances” which immediately lightened my monthly bills. Since I couldn’t pay the entire credit card bill all at once, I did my very best to pay 4 times more than the minimum amount every month. This drastically reduced how much I still had to pay. When I finally had enough money, I paid off the entire balance. Today, all my credit cards are debt-free.  I always pay in full and ON Time. There are no “useless” expenses on any of those cards and my credit line is extremely healthy.

3.)    I never recorded my expenses – Who has the time, right? Wrong. It’s the most important activity in managing money. My wife once again pointed out, “How will you know if you are making enough money if you don’t even record what you are spending on?” So with lots of help from my wife, I started a simple recording system where I record money coming in, money going out, and how much money I have left. It helps tremendously because it makes you more aware of how much money you have at any given time.  Today, I am very hands-on in managing my personal funds, investments and business cash flow.  There is not a day that goes by that I do not know exactly my finances. All of my businesses are debt-free and profitable.

It took me 9 years to get to where I am today. But I wouldn’t have made it if I have not learned early on that: “All of your success in making money will mean nothing if you do not know how to manage your money properly. If you do not know how to manage your money get help from someone who does, better if it is your spouse.”

 

Mark So is the Chairman and CEO of Businessmaker Academy and Forex Club Manila.  He regularly holds seminars on Business, Finance and Investments.  To read about past articles from the BIZMAKER column, you may visit www.markso.wordpress.com.  For more information about his seminars, you may contact Tel Nos. 6874445, 6874645, 6873416 or visit www.businessmaker-academy.com or www.zerocapitalclub.com.