I know that you knew already that when we will search “Pinay Teen Sex” through any of the Search Engines, the result will be the list of sites selling video and images of Filipina (Pinay, Filipino Women) in nude or having sex with someone.
With this, I am thinking actually of an experiment that will let the search engines refer those internet users who are looking for materials related to Pinay Teen Sex, to this blog. And this can be done of course when this blog will be listed at the top most rank when searching for the “Pinay Teen Sex“.
I actually did this before but not on “Pinay Teen Sex” but on “Millionaires Camp“. And the result is quiet successful. Look at the screen shot below. That was actually the SERP when searching for the “Millionaires Camp” using the Google Search Engine.
Of course, the technique used here is also the one used in Google Bombing.
Thursday, June 3, 2010
Pinay Video (Vedio)
Introduction
The original title of this article is “Pinay Sx Video, An Experiment” as reflected on the URL of this post. I changed it to the above title hoping that ads served by Googel will show up.When I first posted this article, ads related to video and movies were being displayed by Google. But starting on the 30th day of September 2009, no ads were being displayed.
Why?
I am not really sure what’s the reason of having no ads for this post especially that most of the words or terms mentioned here are all related to make money online by blogging.
But I also understand that there are terms mentioned here that are commonly used by the p6rn websites. And it might be true that when Google detected those terms, their system immediately blocked all the ads that supposed to be displayed at this post.
What are the terms that could trigger Google to stop the display of the adsense ads?
In the program policy of Google for the Adsense publishers, we’ll find this:
Publishers may not place AdSense code on pages with content that violates any of our content guidelines. Some examples include content that is adult, violent or advocating racial intolerance.So it is understood that terms related to prohibited content will tell Google not to show any ads on that particular page.
Remember that Google uses the terms mostly used by the p6rn websites as the hints in deciding whether that certain page is adult in nature or that page talks about violence or any racial intolerance.
Google enumerated contents that are prohibited according to the program policies:
* Pornography, adult or mature contentEven if we are not talking mature talks here, but since we are mentioning terms that are commonly used in pornography, that’s maybe the reason why no ads are being displayed by Google on this post.
* Violent content
* Content related to racial intolerance or advocacy against any individual, group or organisation
* Excessive profanity
* Hacking/cracking content
* Gambling or casino-related content
* Illicit drugs and drug paraphernalia content
* Sales of beer or hard alcohol
* Sales of tobacco or tobacco-related products
* Sales of prescription drugs
* Sales of weapons or ammunition (e.g. firearms, firearm components, fighting knives, stun guns)
* Sales of products that are replicas or imitations of designer goods
* Sales or distribution of coursework or student essays
* Content regarding programs which compensate users for clicking ads or offers, performing searches, surfing websites or reading emails
* Any other content that is illegal, promotes illegal activity or infringes on the legal rights of others
But why is it that terms used by pornography websites are used by Google in blocking Adsense ads?
You need to understand that Google Adsense is run by a computer program only. And computer programs don’t think the way human think. They only perform functions based on the instructions emphasized by the programmer inside the code of the program. And there’s no other way a computer program can detect whether a certain page is talking mature topic or anything that is prohibited by the program policies of Google for the Adsense, except by detecting terms that are commonly used by the pornography websites and other prohibited contents.
So, if in your post words or terms that are considered as hint in identifying prohibited content are mentioned, even if your content is not one of those prohibited content, Google will still show no ads on that post.
So, the best way to avoid this situation is to avoid mentioning those words or terms.
The Pinay Video
Thousands of scx vedios (video) are made available on the internet from simple p6rn video to scandal. The number of p6rn webmasters increases because the number of surfers of the p6rn materials has increased too.Among these kind of materials, the ones related to the Pinay Scandal is one of the most searched materials, particularly the “Pinay S3x Video.”
To let you know, there are hundreds of internet users searching for the “Pinay” related materials who accidentally stumbled upon this blog even if this blog is not really the most popular website in the internet in terms of “pinay Scandal” materials.
If you are one of those internet surfers who are looking for s3x videos, I am sorry but this post has nothing to do with real s3x video that you are looking for. This post is just a talk or a discussion which is related to SEO or Search Engine Optimization.
A Search Engine Optimization (SEO) Experiment
Early 2006 when I realized that the most viewed websites are those featuring nuddity, s3xcapades, and related materials. In short, these websites are p6rn websites.With that truth, I then asked my self: “Is it possible to gain p6rn lover visitors for this blog?”
I think the whole night of the answer about that question.
I was not good in SEO or search engine optimization at that time, that’s why I need to search the internet for the idea that could help me think of ways on how to snatch visitors that supposed to be visiting the p6rn website.
“Should I place and ad at their website?” I asked my self. No! Placing ads at their website is like supporting them of what their doing.
I think and think, until I realize that I can actually write a post about it. It can be a journal or a news article as long as it is optimized for a particular keywords or key-phrase.
And that was the start of writing articles or blogpost like this.
In other words, this post is a campaign aiming to top the search engine results for the “Pinay S3x Video” keywords. We will directly compete with the real p6rn websites even if the webmasters of those real p6rn websites are better SEO than me and they’re working hard to top the search engine result pages.
Actually, this is just another experiment. We’re already successful on our previous experiments such as in:
That’s why I am also positive and I believe that I will succeed on this too.
The War Against P6rn0graphy
Just like what I told you recently, the main purpose of writing articles like this is just my way of snatching visitors that supposedly visiting the real p6rn websites. However, this can also be considered as an expression of war against online p6rn0graphy selling Pinay images and video clips on the internet.But it doesn’t mean that it’s a personal war against the webmasters of those p6rn websites because some of them are my friends. This is just actually a war on SEO.
Remember that the webmasters of those p6rn websites are also optimizing their websites for the search engine. Like me, they’re also aiming to top the search engine result pages in searches related to “pinay“, “nudity” and “sex.”
So, what ever websites listed on the top position in the Google SERP or other search engines’ SERPs, the owner of that website is the winner.
And the prize for winning the war is the huge traffic that will be directed by the search engine result pages to the website.
So, if you want to join me on this war, then do the same experiments as what I did.
And what can you offer to your visitors who are coming from the sex related searches?
I have lots of things that I can offer them here in my blog. They can read my articles related to making money online and learn many things that they can use for their own way of making money online. Here’s a list of my few articles about making money online:
- Make Money Online
- Make Money with Blog Bank
- Make Money by Blogging
- Make Money by Writing Reviews
- Make Money from In-Text Ads
- Make Money with Adsense
- Make Money with AStore
- Make Money with Debts
- Make Money with Paypal
Message to P6rn Website Surfers
I understand why you love to surf p6rn websites. You’re just a man who wants to enjoy the pleasure of watching sex movies or videos. And some of you just want to know how to perform s3x.But what about earning money from websites? So, instead of spending your time and money in surfing such kind of materials, why not use it in making money online?
You can do what I did and earn money from blogs. If you want to be like me, then email me at selaplanadotcom@yahoo.com and I will teach you how.
Make Money With YouTube
This is written by Dan Snow. He consider himself as the leading internet marketer.In this article I will break down exactly how I used video, and specifically YouTube, to generate $630 today online.
But before I jump into the anatomy of this process, I want to start by saying that if you’re an internet marketer and not currently using video to either promote yourself or your business, then you are not maximizing all of the social media mediums at your disposal. Video currently represents the most powerful free marketing tool available, allowing us to share our message with thousands of people from all over the world.
Okay, so in simple terms, this is exactly how I make money with video, and more importantly, how I was able to make money with Youtube this very afternoon.
1) The first thing I did was create a quick video pertaining to successful entrepreneurship and post it on YouTube (which in this case was a video discussing the merits of the book ‘The 4 Hour Workweek’ by Tim Ferriss) as a resource to aspiring entrepreneurs. Since my target audience is comprised of aspiring online entrepreneurs, I try to make videos that are educational in nature that actually teach people how to build a business online. Subsequently, I made this video several months ago.
2) My prospect, who would eventually join my business, was searching YouTube one day from his home in Australia for information on the book ‘The 4 Hour Workweek.’ When he entered the title of the book, my video came up first on his search. He clicked on my link and watched my video.
3) After watching the video and wanting to know more about me and what my business was, he clicked on the link to my website (placed conveniently and deliberately in the description section next to the video.)
4) After visiting my website, he opted-in to my email list, and then began receiving follow-up, educational video emails from me on a wide range of internet marketing topics.
5) As his interest in online business grew, he began sending me emails wanting to know more about how I was making money online, and how possible it would be for him to duplicate my results.
6) After a few conversations, he acknowledged that he wanted to join my business. The next day (today), I received an email from my company saying that he had just joined my team and that I had generated a $630 commission.
In summary, this new teammate and my $630 commission resulted from one video that I made several months back. It was a video that took me an hour to make and put on YouTube, and that was it. Of course there were other factors that led to this sale in addition to the video, like me responding to some of his questions and me having an opportunity to offer him in the first place (i.e., the company I have been apart of for several years). But my point here is that this whole process started with video…one video that was made for free. I have many, many more videos on a wide range of topics that work for me in the same way across the internet. Remember, video marketing is a powerful thing. Once you make a video, it will work for you again and again, so don’t forget to take advantage of this free marketing strategy.
Wednesday, June 2, 2010
How to Make Money Online by Keyword Hijacking?
Keyword Hacking
Since the start of this blog, I was already targeting important keywords that I believed would gave this blog a huge amount of traffic. Usually those keywords were not related to the topic of this blog. And I called that activity “Keyword Hacking”.On the early months of 2007, I realized that the majority of the internet users were looking for porn materials like photos of the nude woman and photos or videos of couple performing sex. I also realized that most of the internet users who were looking for these materials were interested of the photos or videos of teens.
Then I immediately thought that this blog might gain traffic if I would write a blogpost related to the said materials and then I would SEO the blogpost. That’s the time that I launched my first experiment on Pinay Teen Sex. And in just 3 days after posting the said post, it already had snatched the first spot on the Google SERP (Philippines) when searching for the keywords “Pinay Teen Sex”. (Read my article, “Pinay Sex Experiment on its first stage of Success“)
And with that kind of success, hundreds of new visitors were directed by the search engines into this blog.
Keyword Hijacking
Did you know that the first blogger to call an activity in which a blogger targets a keyword which is not related to his blog’s niche as� “Keyword Hijacking” is a Filipino blogger? Yes and He’s Brother Marghil Macuha. (If not, then tell me who…)Since the time when he introduced that activity through his blogposts as “Keyword Hijacking”, other bloggers who were following his blog adopted his strategy and its name too. As proof, there are lots of bloggers who participated his call to hijack the keyword, “Pinay Scandal“.
And that’s also the time when the� “Keyword Hijacking” became popular even to those who are simply bloggers and not SEO practitioner.
Keyword Research
Actually, that activity is already popular in the world of SEO since then because that kind of activity is really part of the SEO. SEO called that activity as “Keyword Research”.In SEO, it is normal that SEO practitioner perform the “Keyword Research”. They research for the valuable keywords that they could target for their website so that one of the pages of their websites will top the SERP when searching for those keywords.
However, most of these SEO do not target keywords that are not related to the websites they are SEOing.
The “Keyword Research” is actually done not only by SEO professionals alone. Webmasters and bloggers were doing this activity also for the good of their websites and blogs. And not only that, they also tried to research for keywords that are valuable even if these keywords were not related to their existing websites, and then they would create new websites or blogs that would target those keywords.
Making Money by Keyword Hijacking
Most of the bloggers who hijack keywords are making money from Google Adsense and other PPC (Pay Per Click) and CPM ads publishing. These are the bloggers who realized already that traffic is money especially the traffic that are coming from the search engines.� For these bloggers, as long as their blogs have traffic, whether the traffic is targeted or not, they can earn money from it.What is “Keyword Hijacking”?
Now, the term “Hijack” is defined by the Wikipedia as “taking over by force”. The Wiktionary defined it as:
- To forcibly stop and seize control of some vehicle in order to rob it or to reach a destination (especially an airplane, truck or a boat).
- (computing) To seize control of a networked computer by means of infecting it with a worm or other malware, thereby turning it into a zombie.
- (computing) To change software settings without a user’s knowledge so as to force that user to visit a certain web site (to hijack a browser).
Basically, “Keyword Hijacking” has these steps:
1) Search for the blog or website that has huge traffic
You need to pick websites that really have huge traffic. You can do it by checking their traffic stats and ranking in a ranking website like “Philippine Top Blogs” at topblogs.com.ph, etc.
2) Research for Keywords
Study the blogs or websites you picked from the step 1. Try to learn what keywords are bringing huge traffic into that blogs or websites and take note of them.
3) Verify the trend of those keywords
By using the Google Trends verify whether the trend of the searches on that particular keywords is steady or going up.
Most of the Keyword Hijackers are interested only to those keywords that have steady but high, or rising search trend.
4) Verify the Competition on the SERP
Google or search the internet using Google Search Engine each of the keywords. And take note of the number of the total pages on the result.
For example:
If you google “make money online” using the Google Philippines, you see this caption just below the search box: “Results 1 – 10 of about 186,000,000 for make money online. (0.19 seconds)“. This caption tells us that there are 186,000,000 pages in the result on search for “make money online“. Which means that there’s a huge competition on that particular keywords.
Keyword hijacker are actually interested only to the keywords that has less competition like less than 500,000 pages on the search result. The fewer the competition, the better.
5) Write a blogpost
You already have picked the keywords that have better search trend and low competition.
The next step is to write a blogpost that talks about the targeted keywords. And don’t forget to perform the on-site SEO for that particular post.
6) Perform Off-Site SEO
Gather backlinks for the blogpost you published through this keyword hijacking activity. The more backlinks and the better quality these backlinks, the better.
7) Follow up
Your goal is to continuously gain traffic from the SERP of the searches for the targeted keywords. So, from time to time, check the SERP and take note of the position of your blogpost. If your blogpost is not performing well on the SERP, then do the step 6.
Keyword Hijacking Effect
Once the blogpost you wrote through this hijacking activity will top the SERP, then I’m sure your blog will gain huge traffic directed by the SERP of the searches for the hijacked keywords.Tuesday, June 1, 2010
Earn More Desire Less
Earn more and desire less. These are the words that have utmost importance when you want to achieve financial freedom. No matter how small your income is, if you desire less, definitely you will spend less and you can consider yourself to be “wealthy”.
I believe our lifestyle determines whether we will be wealthy and financially free. There are a lot of persons out there who earns a lot but still because of their high lifestyle, however how huge their income is, all are spent and nothing is put into savings.
I always say to some people whom I know that despite their huge earnings, they cannot save to remember the saying in Filipino: “Ubos ubos biyaya, bukas ay nakatunganga”. You might be lucky earning that huge income now but how sure you are that you will continuously receive it for the rest of your life? Life is full of uncertainties. Therefore, you must take advantage of that huge earnings. There are very few people who might be rich forever. There are few Paris Hilton, Tiger Woods, Ayala Zobel, Henry Sy, etc.
I remembered during the financial planning seminar I conducted in our office, there was one person who asked me: “How can I save if there are a lot of bills to pay and other expenses and my income is not enough to support these? I just answered the four words – EARN MORE and DESIRE LESS.
Earn more from its very essence means to have another source of income. You may take a second job, take a part-time job, or transfer to a job with a higher pay. But the great secret of the rich according to Robert Kiyosaki is not to earn more from active income but to earn more from passive income. For those of you who are new to these words, active income is you work for money and passive income is your money working for you. I wrote an article about active vs. passive income.
But shifting from active income to passive income requires hard work. There is no other way to go to passive income directly except if you are born rich or inherited wealth. So for most of us, we need to educate ourselves about financial intelligence especially the cash flow patterns of the poor, middle class and rich persons. Remember that for the poor and middle class, they always buy liabilities that they think are assets so all their income eventually goes to expenses while the rich only buy assets that will provide them enough passive income in the future.
It’s always us who are making our own destiny. So you choose. It’s your decision. Remember to always watch your thoughts, for they become words. Watch your words, for they become actions. Watch your actions, for they become habits. Watch your habits, for they become character. And watch your character, for it becomes your destiny.
On the other hand, desire less means “downsizing” your needs and wants and prioritizing your needs more than your wants. As you analyze your needs and wants, consider downsizing them. Do your own housework instead of employing a maid or a house helper. Keep food to the simplest and least costly but still nutritious. Lessen those eating out habits. By choosing a good but more reasonably priced school, you can cut on education costs.
Check all your assets. Chances are you can sell some of them and perhaps even reduce your maintenance expenses. Do with one TV set instead of two. Sell your car and take public transportation. Move to a smaller place to reduce you rent and the need for some of your stuff. Sell your jewelry. Downgrade your mobile phone. Unless you are a complete beggar in the street, you can do something about downsizing.
Lastly, why do we need financial freedom? If you are not yet convinced why you need financial freedom, then ponder and ask yourself the following questions:
“Will you be willing to work for the rest of your life?
“Who gets rich in the end if you keep on working: Is it you? Is it your boss? Or is it the shareholders of the company?”
“Did you ever notice that as your pay increases as you work your way to climb that corporate ladder, your income taxes increases too?”
“Did you hear stories of some top executives who committed suicide or risked their health because of too much stress they faced from their jobs?”
“Did you hear stories of children whose lives were misled because of the lack of guidance from their parents who didn’t have enough time for them because of work?”
So do you want to achieve financial freedom? Then just remember the four powerful words – EARN MORE and DESIRE LESS.
I believe our lifestyle determines whether we will be wealthy and financially free. There are a lot of persons out there who earns a lot but still because of their high lifestyle, however how huge their income is, all are spent and nothing is put into savings.
I always say to some people whom I know that despite their huge earnings, they cannot save to remember the saying in Filipino: “Ubos ubos biyaya, bukas ay nakatunganga”. You might be lucky earning that huge income now but how sure you are that you will continuously receive it for the rest of your life? Life is full of uncertainties. Therefore, you must take advantage of that huge earnings. There are very few people who might be rich forever. There are few Paris Hilton, Tiger Woods, Ayala Zobel, Henry Sy, etc.
I remembered during the financial planning seminar I conducted in our office, there was one person who asked me: “How can I save if there are a lot of bills to pay and other expenses and my income is not enough to support these? I just answered the four words – EARN MORE and DESIRE LESS.
Earn more from its very essence means to have another source of income. You may take a second job, take a part-time job, or transfer to a job with a higher pay. But the great secret of the rich according to Robert Kiyosaki is not to earn more from active income but to earn more from passive income. For those of you who are new to these words, active income is you work for money and passive income is your money working for you. I wrote an article about active vs. passive income.
But shifting from active income to passive income requires hard work. There is no other way to go to passive income directly except if you are born rich or inherited wealth. So for most of us, we need to educate ourselves about financial intelligence especially the cash flow patterns of the poor, middle class and rich persons. Remember that for the poor and middle class, they always buy liabilities that they think are assets so all their income eventually goes to expenses while the rich only buy assets that will provide them enough passive income in the future.
It’s always us who are making our own destiny. So you choose. It’s your decision. Remember to always watch your thoughts, for they become words. Watch your words, for they become actions. Watch your actions, for they become habits. Watch your habits, for they become character. And watch your character, for it becomes your destiny.
On the other hand, desire less means “downsizing” your needs and wants and prioritizing your needs more than your wants. As you analyze your needs and wants, consider downsizing them. Do your own housework instead of employing a maid or a house helper. Keep food to the simplest and least costly but still nutritious. Lessen those eating out habits. By choosing a good but more reasonably priced school, you can cut on education costs.
Check all your assets. Chances are you can sell some of them and perhaps even reduce your maintenance expenses. Do with one TV set instead of two. Sell your car and take public transportation. Move to a smaller place to reduce you rent and the need for some of your stuff. Sell your jewelry. Downgrade your mobile phone. Unless you are a complete beggar in the street, you can do something about downsizing.
Lastly, why do we need financial freedom? If you are not yet convinced why you need financial freedom, then ponder and ask yourself the following questions:
“Will you be willing to work for the rest of your life?
“Who gets rich in the end if you keep on working: Is it you? Is it your boss? Or is it the shareholders of the company?”
“Did you ever notice that as your pay increases as you work your way to climb that corporate ladder, your income taxes increases too?”
“Did you hear stories of some top executives who committed suicide or risked their health because of too much stress they faced from their jobs?”
“Did you hear stories of children whose lives were misled because of the lack of guidance from their parents who didn’t have enough time for them because of work?”
So do you want to achieve financial freedom? Then just remember the four powerful words – EARN MORE and DESIRE LESS.
What is Financial Intelligence?
Do you ever wonder what’s the cause of the break up of marriages? It’s usually the subject of money. What if the breadwinner gets downsized? What if he lost his job?
Schools usually teach Scholastic Aptitude Test (SAT). You want to know how good you are in reading, writing and arithmetic. These are very important skills. And depending on how well did you perform in SAT, the next thing schools focus on is the Professional Aptitude Tests (PAT) to know whether you’ll become a doctor, a lawyer, a fireman, or whatever you want to be.
But what schools fail to train people on is the thing called Financial Intelligence. Rarely did the subject of money was discussed in schools. So what is Financial Intelligence?
If I gave a sum of money, say $10,000 to a group of people, then 80% of them might have nothing left at the end of the year. 60% of them would have earned $10,100 at the end of the year since they could have deposited it in banks to earn interest income. And 4% would have anywhere from $20,000 to $1,000,000 or more at the end of the year because they are financially intelligent.
There are two forms that one should learn in his desire to increase his financial intelligence. The income statement which involves two things - the income and expenses and the balance sheet which involves assets and liabilities. These are the very basic information that one should know to increase his financial intelligence.
What’s the difference between an asset and a liability? Robert Kiyosaki always tell that assets are something that puts money in a person’s pocket while liabilities are something thing that puts money out of a person’s pocket. There is always the issue of the house being an asset or a liability being debated a lot of times.
Kiyosaki further said that “If I stopped working, the ASSETS will FEED ME while LIABILITIES will EAT ME.”
Another important lesson in increasing one’s financial intelligence is the subject called CASHFLOW. There is a huge difference between the cashflow of a poor person, middle class person and rich person.
For the poor people, Kiyosaki said that all they have is a job. Then income comes in from the job. It goes down to expenses to pay their rent, clothing, food and other expenses and goes out of their pockets.
For the classic middle class person, Kiyosaki said that it’s a little bit more different. Income also comes from their jobs. Then it will now go to liabilities as they may probably have house mortgage payments, car mortgage payments, etc. and then it will go to expenses and then finally out of their pockets.
For the rich person, Kiyosaki said that income comes from the their assets. While the poor and middle class persons are focusing on income, the rich person is focusing on the assets. And the assets are the great secret of the rich.
THE CHOICE IS YOURS
Everytime you have income from your job, then the choice is yours. It will now depend to you what do you want to be. Is it the poor, the middle class or the rich person mentioned above? If every income goes outright to expenses, then you chose to be poor person. If every income goes out to liabilities to buy a bigger house, a new car, or you always take a vacation on your credit card, then what you chose is a middle class person. And if every income, you chose it to go to the assets, then you make that decision to be a rich person.
MIND YOUR BUSINESS!
Kiyosaki said that if we want to be financially intelligent, we should mind our own businesses! How is that? The poor people being a professional employee are not minding their own business because they mind the business of the shareholders of the company, and not only that because they also mind the business of the government when it comes to tax payments. The middle class person being a professional employee, aside from minding the business like the poor people did, also minds the business of banks as they have house and car mortgage payments. For the rich people, they mind their own business. They trade their own stocks, buy their own properties and primarily make their decisions to invest.
Kiyosaki said that most people are in the poor and middle class because they mind other person’s business. They believe in hardwork without being financially literate. They don’t know that if their income was raised because of hard work, so their taxes too. And they buy more liabilities that are camouflaged as assets because they mind what other people tells them. So their income increased because of hard work, their expenses increased too from their tax expenses and their liabilities increased too. Suddenly, they lost their jobs! Boom! What happens next? They lose their income. But will the expenses and liabilities lose too? Definitely NOT! And this causes financial insecurity or financial struggle on their end.
The answer as Kiyosaki said lies on focusing on your own business and instead have your own money work for you so that even if you lost your job, then there will be assets that will continue to feed you. We could not ascertain the lives of companies. They may be there for 5, 10 or even 20 years but few can survive 50 years or more especially nowadays that a lot of companies declare bankruptcies as the global recession continues.
THE RICH PERSON ON TAXES:
Kiyosaki said that there is a huge difference between how the income of both the poor and middle class persons were taxed as against the income of the rich person. The poor people earns income from their jobs and gets taxed right away before they can spend what remained. The rich people earns income from their jobs and assets, they spend some of it by buying more assets and then they get taxed as they cash in these assets.
Finally, Kiyosaki devised a game simulating the real world of business and investing called the cashflow game which I already played several times. One of the foundations of learning is repetition. The more you play the cashflow game, the higher the possiblity of increasing your financial intelligence and the richer you would become.
So are you financially intelligent?
Schools usually teach Scholastic Aptitude Test (SAT). You want to know how good you are in reading, writing and arithmetic. These are very important skills. And depending on how well did you perform in SAT, the next thing schools focus on is the Professional Aptitude Tests (PAT) to know whether you’ll become a doctor, a lawyer, a fireman, or whatever you want to be.
But what schools fail to train people on is the thing called Financial Intelligence. Rarely did the subject of money was discussed in schools. So what is Financial Intelligence?
If I gave a sum of money, say $10,000 to a group of people, then 80% of them might have nothing left at the end of the year. 60% of them would have earned $10,100 at the end of the year since they could have deposited it in banks to earn interest income. And 4% would have anywhere from $20,000 to $1,000,000 or more at the end of the year because they are financially intelligent.
There are two forms that one should learn in his desire to increase his financial intelligence. The income statement which involves two things - the income and expenses and the balance sheet which involves assets and liabilities. These are the very basic information that one should know to increase his financial intelligence.
What’s the difference between an asset and a liability? Robert Kiyosaki always tell that assets are something that puts money in a person’s pocket while liabilities are something thing that puts money out of a person’s pocket. There is always the issue of the house being an asset or a liability being debated a lot of times.
Kiyosaki further said that “If I stopped working, the ASSETS will FEED ME while LIABILITIES will EAT ME.”
Another important lesson in increasing one’s financial intelligence is the subject called CASHFLOW. There is a huge difference between the cashflow of a poor person, middle class person and rich person.
For the poor people, Kiyosaki said that all they have is a job. Then income comes in from the job. It goes down to expenses to pay their rent, clothing, food and other expenses and goes out of their pockets.
For the classic middle class person, Kiyosaki said that it’s a little bit more different. Income also comes from their jobs. Then it will now go to liabilities as they may probably have house mortgage payments, car mortgage payments, etc. and then it will go to expenses and then finally out of their pockets.
For the rich person, Kiyosaki said that income comes from the their assets. While the poor and middle class persons are focusing on income, the rich person is focusing on the assets. And the assets are the great secret of the rich.
THE CHOICE IS YOURS
Everytime you have income from your job, then the choice is yours. It will now depend to you what do you want to be. Is it the poor, the middle class or the rich person mentioned above? If every income goes outright to expenses, then you chose to be poor person. If every income goes out to liabilities to buy a bigger house, a new car, or you always take a vacation on your credit card, then what you chose is a middle class person. And if every income, you chose it to go to the assets, then you make that decision to be a rich person.
MIND YOUR BUSINESS!
Kiyosaki said that if we want to be financially intelligent, we should mind our own businesses! How is that? The poor people being a professional employee are not minding their own business because they mind the business of the shareholders of the company, and not only that because they also mind the business of the government when it comes to tax payments. The middle class person being a professional employee, aside from minding the business like the poor people did, also minds the business of banks as they have house and car mortgage payments. For the rich people, they mind their own business. They trade their own stocks, buy their own properties and primarily make their decisions to invest.
Kiyosaki said that most people are in the poor and middle class because they mind other person’s business. They believe in hardwork without being financially literate. They don’t know that if their income was raised because of hard work, so their taxes too. And they buy more liabilities that are camouflaged as assets because they mind what other people tells them. So their income increased because of hard work, their expenses increased too from their tax expenses and their liabilities increased too. Suddenly, they lost their jobs! Boom! What happens next? They lose their income. But will the expenses and liabilities lose too? Definitely NOT! And this causes financial insecurity or financial struggle on their end.
The answer as Kiyosaki said lies on focusing on your own business and instead have your own money work for you so that even if you lost your job, then there will be assets that will continue to feed you. We could not ascertain the lives of companies. They may be there for 5, 10 or even 20 years but few can survive 50 years or more especially nowadays that a lot of companies declare bankruptcies as the global recession continues.
THE RICH PERSON ON TAXES:
Kiyosaki said that there is a huge difference between how the income of both the poor and middle class persons were taxed as against the income of the rich person. The poor people earns income from their jobs and gets taxed right away before they can spend what remained. The rich people earns income from their jobs and assets, they spend some of it by buying more assets and then they get taxed as they cash in these assets.
Finally, Kiyosaki devised a game simulating the real world of business and investing called the cashflow game which I already played several times. One of the foundations of learning is repetition. The more you play the cashflow game, the higher the possiblity of increasing your financial intelligence and the richer you would become.
So are you financially intelligent?
Secrets of the Rich: Active Income vs. Passive Income
I’ve been spending my time lately really educating myself on financial literacy. I admit my job has been so boring and not challenging so instead of killing myself to boredom, I’ve been using my additional time efficiently and effectively by adding additional knowledge on my financial education.
In addition to my article, “what’s makes rich gets richer?” I’ve recently watched a video of Robert G. Allen, the author of the best selling books Nothing Down and Creating Wealth as he discussed the difference between linear income vs. residual income.
I came to these two terms before when I first knew about Cashflow Quadrant of Robert Kiyosaki. To him, there are two main divisions of the cash flow. One is Active Income where you work for money and one is Passive Income where money works for you. In Robert Allen’s video, Active Income is also called Linear Income and Passive Income is also called Residual Income.
Now, how do you distinguish between the two? Ask yourself the following questions:
How many times do you get paid for every hour you work? If your answer is only once, then it’s active income! In active income, one hour of effort equals one unit of money one time. However, in passive income, you will get paid many times for every hour of effort. A doctor can only see one patient at a time so he gets paid for every patient that he has.
Do you have to be present to earn income? If your answer is yes, then that’s active income. If your answer is no, then that’s passive income. A lawyer earns active income by presently attending to his clients.
Did you get the picture? Passive income is a stream of income that you can own. It can be a “hands-off” income. It’s an automatic pilot. The secret of the rich is to increase their streams of income. This is done not by increasing their active income by taking a second or even a third job but by increasing their passive income. Now, where can we get this passive income?
Here are some of the sources:
Interest Income. Yes, we can earn passive income from the interests of our savings deposits. We can also earn passive income through the interests of our bonds.
Dividends. We can also earn passive income through our stock investments. Companies share their income to their stockholders by either giving them cash or stock dividends for every share they own. Alternatively, we can also earn it through the dividends of our mutual funds or uitfs. Or probably from insurance policies which also gives dividends.
Real Estate. Real estate investments can also earn us passive income. My ideal real estate is a self-liquidating asset. That is you buy a property, pay the down payment only not the whole contract price, and rent it out to tenants. The monthly rental income from the tenant itself will be the one paying for the monthly amortization of the mortgage to the bank. The rental income will be our passive income in this case.
Royalties. Ever wonder why even though Elvis Presley was now dead, he still earns income? Yes, that’s the power of passive income! His albums that he did before when he was still living continuously earn royalty income for him. For every album sold, he gets a royalty fee that’s why even he’s dead, he is still earning.
The same goes for the author of books. Just imagine how rich J.K. Rowling, the author of Harry Potter, has become. She might be getting pennies for every sold copy of her book but it gets multiplied a million times as her Harry Potter is a best seller book with millions of copies sold. Not only that, she also gets royalty fees from the film Harry Potter series itself.
Another source of royalty income is thru franchise fees. The original owner of the business gets a royalty income for every franchisee that he has. Just imagine how rich are the original owners of McDonalds now that it has thousands of franchisees worldwide.
Websites. With the coming of industrial age, successful internet entrepreneurs have also built passive income thru their blogs or websites. I have seen a few of them and one perfect example might be one of the largest adsense earners. His website, one of the largest dating websites called Plenty Of Fish, attracts millions of visitors per month enabling him to earn an easy US$1 Million per year.
Networking. This is also called MLM of Multi Level Marketing System. This is another form of passive income yet a lot disagrees to its pyramiding concept. It’s like building a team of sales people who will provide you with huge passive income as your group and sales increase.
So there you are the sources of passive income. The secrets of the rich is to increase the streams of income more on the passive income rather than on the active income so that if one stream of income dries up, there will be other streams to support them. This what makes rich gets richer.
Someday, if God permits, I would like to be an author of a book. I would personally want to have passive income from its royalty fees. Or possibly buy a real estate where I can have passive income through rental income of tenants. As of now, I rely on my active income from my paychecks with just a very little passive income from interests on savings and dividends from stocks.
Do you still have other sources of passive income in mind?
In addition to my article, “what’s makes rich gets richer?” I’ve recently watched a video of Robert G. Allen, the author of the best selling books Nothing Down and Creating Wealth as he discussed the difference between linear income vs. residual income.
I came to these two terms before when I first knew about Cashflow Quadrant of Robert Kiyosaki. To him, there are two main divisions of the cash flow. One is Active Income where you work for money and one is Passive Income where money works for you. In Robert Allen’s video, Active Income is also called Linear Income and Passive Income is also called Residual Income.
Now, how do you distinguish between the two? Ask yourself the following questions:
How many times do you get paid for every hour you work? If your answer is only once, then it’s active income! In active income, one hour of effort equals one unit of money one time. However, in passive income, you will get paid many times for every hour of effort. A doctor can only see one patient at a time so he gets paid for every patient that he has.
Do you have to be present to earn income? If your answer is yes, then that’s active income. If your answer is no, then that’s passive income. A lawyer earns active income by presently attending to his clients.
Did you get the picture? Passive income is a stream of income that you can own. It can be a “hands-off” income. It’s an automatic pilot. The secret of the rich is to increase their streams of income. This is done not by increasing their active income by taking a second or even a third job but by increasing their passive income. Now, where can we get this passive income?
Here are some of the sources:
Interest Income. Yes, we can earn passive income from the interests of our savings deposits. We can also earn passive income through the interests of our bonds.
Dividends. We can also earn passive income through our stock investments. Companies share their income to their stockholders by either giving them cash or stock dividends for every share they own. Alternatively, we can also earn it through the dividends of our mutual funds or uitfs. Or probably from insurance policies which also gives dividends.
Real Estate. Real estate investments can also earn us passive income. My ideal real estate is a self-liquidating asset. That is you buy a property, pay the down payment only not the whole contract price, and rent it out to tenants. The monthly rental income from the tenant itself will be the one paying for the monthly amortization of the mortgage to the bank. The rental income will be our passive income in this case.
Royalties. Ever wonder why even though Elvis Presley was now dead, he still earns income? Yes, that’s the power of passive income! His albums that he did before when he was still living continuously earn royalty income for him. For every album sold, he gets a royalty fee that’s why even he’s dead, he is still earning.
The same goes for the author of books. Just imagine how rich J.K. Rowling, the author of Harry Potter, has become. She might be getting pennies for every sold copy of her book but it gets multiplied a million times as her Harry Potter is a best seller book with millions of copies sold. Not only that, she also gets royalty fees from the film Harry Potter series itself.
Another source of royalty income is thru franchise fees. The original owner of the business gets a royalty income for every franchisee that he has. Just imagine how rich are the original owners of McDonalds now that it has thousands of franchisees worldwide.
Websites. With the coming of industrial age, successful internet entrepreneurs have also built passive income thru their blogs or websites. I have seen a few of them and one perfect example might be one of the largest adsense earners. His website, one of the largest dating websites called Plenty Of Fish, attracts millions of visitors per month enabling him to earn an easy US$1 Million per year.
Networking. This is also called MLM of Multi Level Marketing System. This is another form of passive income yet a lot disagrees to its pyramiding concept. It’s like building a team of sales people who will provide you with huge passive income as your group and sales increase.
So there you are the sources of passive income. The secrets of the rich is to increase the streams of income more on the passive income rather than on the active income so that if one stream of income dries up, there will be other streams to support them. This what makes rich gets richer.
Someday, if God permits, I would like to be an author of a book. I would personally want to have passive income from its royalty fees. Or possibly buy a real estate where I can have passive income through rental income of tenants. As of now, I rely on my active income from my paychecks with just a very little passive income from interests on savings and dividends from stocks.
Do you still have other sources of passive income in mind?
My First Financial Planning Seminar
Last July 31, I was given the chance to be a resource speaker for the very first financial planning seminar that I conducted. I was at first nervous as this was my very first speaking stint but that nervousness was slowly swallowed as I discussed my topics.
It was a success! It was attended by around 50 attendees from our company. I was first introduced as a BS Mathematics graduate from Ateneo de Manila University, mentioned my two former employment background and my feature in Good House Keeping magazine as financial expert.
A lot of thanks for that introduction. I’ve never been given such recognition in my entire life. After that, I started discussing my financial planning powerpoint presentation.
For the readers of this blog, I would present here the details of my handout given to those who attended so that at least even though you were not able to attend, it’s as if you attended my first financial planning seminar. Basically, it’s just a summary of some of the contents of this blog.
Goals:
Goals empower us. It gives us direction. Life is full of paths. We can either go in the right direction or in the wrong direction. Goals provide us the right direction. It sets our priorities. It gives us the motivation.
When you list down your goals, you are giving direction to your life. In listing your goals, list them “smartly”. S-Specific, M-Manageable, A-Achievable, R-Realistic, T-Time Bound
S-Specific. Our goals should be specified to give us direction. To set a specific goal, it must answer any one of the following “W” questions:
o Who: Who is involved?
o What: What do I want to accomplish?
o Where: Identify a location
o When: Establish a time frame
o Which: Identify requirement and constraints
o Why: Specific reasons, purpose or benefits of accomplishing the goal.
Sample: I want to become a millionaire! But a specific goal would say, “Get a job for 10 years, establish your own food business and use your network of friends and acquaintances”
M – Measurable. To determine if your goal is measurable, ask questions such as “How much?” “How many?” “How will I know when it is accomplished?” Sample: I want to become a millionaire by age of 26!
A – Achievable. When you identify goals that are most important to you, you begin to figure out ways on how to achieve them. In the process, you develop the attitudes, abilities, skills, talents and capacity to achieve them. When you list your goals, you see yourself as worthy of these goals.
R – Realistic. To be realistic, a goal must have an objective that you are both “willing” and “able” to work. If you truly “believe” that you can achieve your goal, then it is realistic.
T – Time Bound. Goal should be grounded by time frame because if there’s no time frame, then there’s no sense of urgency. If you just say, “someday” then it won’t work. By setting a time frame, you are setting your mind to begin working in achieving that goal.
ABC to achieve goals:
ASPIRE: You start with what you want to achieve. Be specific; follow the “S-M-A-R-T” goal system. You say to yourself: “I WILL ACHIEVE THIS!”
BELIEVE: After you’ve listed down the goals that you aspire, believe in yourself that you can achieve it! I already saw a lot of people achieved it, if they can do it, then why won’t I? You say to yourself: “I CAN DO IT!”
COMMIT: The next step is to commit. This is the hardest part because your patience, attitude and determination will be tested to its fullest. It’s a test for survival. You say to yourself: “I WILL NEVER GIVE UP!”
Law of Attraction: Positive Thinking + Action = Goals
- Napoleon Hill (author of Think and Grow Rich): We become what we think about
- Newton’s Universal Gravitation: Every object in the universe was attracted by every other object -> e=mc2
- WILL POWER: What your mind conceives, your body can achieve.
Examples of Will Power:
Marathon Race: At the start of the game, the runner conditions his mind. His will power says: “I CAN DO IT!” This will power pushes his body to try harder and run faster to overcome opponents. It was the soul driving the body. The power was not in the muscles but in his will! You will notice that at the end of the race, the will let up and the body will collapse.
Rags to Riches Story: They never consider their economic status to be a hindrance to become successful in life.
Roselle Ambubuyog: A BS Mathematics student in Ateneo who graduated Summa Cum Laude and got the title valedictorian of the Year! - BUT both eyes are blind.
Motivational Quotes:
- “I will do today what other people won’t so that I can have tomorrow what other people can’t”
- “When you want something, all the universe will conspire in helping you to achieve it”
- “Show me a person backed with passion, conviction and resolve and I’ll show you a winner”
- “When a team of dedicated individuals makes a commitment to act as one, the sky is the limit”
Frugality: Ways to Manage Funds in Work Life
- Pay yourself first:
Income – Savings = Expense
Pareto’s Principle of 80/20:
- In business, put most of your efforts on the 20% of things that bring 80% of income to your business.
- In saving, put at least 20% to savings.
Frugality: Ways to Manage Funds in Home Life
Save Money on Electric Bills
- Drop the temp. Lower the temperature on your water heater’s thermostat
- Change bulbs. Compact Fluorescent Lamps (CFLs) use a quarter of the electricity of regular incandescent light bulbs.
- Check filters. Remember to replace aircon filters and heat-pump filters to keep these systems running efficiently.
- Pull the plug. Remember to pull the plug for any electrical appliances that are not in use.
Save Money on Water Bills
o Get a gadget. Get yourself a low-flow faucet aerator. It uses less water while increasing water pressure.
o Fix leaks. Check for leaks in pipes, hoses, especially in the toilet.
o Recycle water. Collect rain water to water the plants. Just be sure not to stock it very long to avoid developing a breeding ground for dengue.
o Add a hose nose. Use a hose with a shut-off nozzle when you water the plants so that there will be no wasted water if the hose is not in use.
o Wash full loads. Cleaning less than a full load of clothes or dishes wastes both water and energy.
Frugality: Ways to Manage Funds in Family Life
Save Money in Dining and Entertainment
o Know before you go. Scan over your local newspaper, check radio stations and company websites for coupons, promos, and special discounts.
o Master menu magic. Drink water instead of ice teas, alcoholic beverages, and juices. Bypass that meaty main dish. Order a meatless meal or if it’s not enough, try two appetizers or several side orders.
o Get discount coupons. Take advantage of discount coupons and treats given by sales persons in different malls.
o Win your treat. Join contest that have prices for gift certificates, free movie passes, and free vacation packages. Some of these contests are held in radio stations.
o Ask to pay less. Use discount treats that come along with your credit card. Or if you are a senior citizen or a student, ask if they have special promos for you.
o Keep your fun cheap. Attend free cultural events and other low-priced entertainment. Or just watch a DVD movie at home with your friends.
Investments: Making Your Money Work For You
Emergency Bank
o Set up a minimum of 6 months up to one year of your monthly income for your emergency fund to cover up for emergency expenses such as job layoffs, hospitalization, and other emergency expenses
Evaluate Your Investments: Risk, Liquidity, Return
o Risk is the possibility of losing the amount you invested
Risk-Averse
Moderate Risk
Risky
o Liquidity is how an investment can easily turn back to cash
How urgent do you need your money now?
o Return is the interest income of the investment or ROI
The higher the return that we want, the riskier the investment
Investment Lessons You Need To Know
o Your Enemy: Inflation. Inflation is the rise of prices of commodity. It depreciates the purchasing power of our currency. Therefore, we must find a good investment that has returns higher than the annual inflation rate.
o Your Ally: Time. Time is of essence to investment because it takes time for you to reap the returns of your investment. In a simple savings account, time is beneficial as portrayed by compound interest.
o Know your investments. Be sure to know what the sources of the returns are and how those returns were made. Understand and learn in the process.
o Diversify. Diversify all your investments not only in one type of investment but also to others so that if it fails, you don’t lose everything.
o Minimize unnecessary expenses and taxes. Look for investments that have low taxes and other unnecessary expenses because it depletes the possible return for your money.
o Match your investment with your risk appetite: Evaluate each investment with risk, return and liquidity
o Start early. The early bird catches the worm. Time is essential in investment.
Investments: Where to Invest Extra Cash?
Risk-Averse:
o Savings Account
Lend money to bank and bank will invest it. In return, bank will give you low interest but you can withdraw our money anytime.
o Time Deposits
Lend money to bank and bank will invest it. In return, bank will give you higher interest but your investment is subject to a withholding period and you cannot withraw your money anytime you want.
o Special Deposit Account (SDAs)
You lend your money to Bangko Sentral ng Pilipinas like a bond and they will give you higher interest but it requires a huge capital ranging from 100K to 1M.
Moderate Risk:
Bonds – Investment Outlet Units (IOUs). You lend your money to corporation and they will pay you interest (corporate bonds)
Risky:
o Stock Market
o Real Estate
Robert Kiyosaki: Increase your financial intelligence
Rat Race – a term coined by Kiyosaki to mimic our general income-spend attitude (i.e., when you receive your pay, you expense it out right away to pay bills, buy clothes, etc.)
Cash flow quadrant:
o Employee – These are people who work for a boss and who love security. No work, no pay.
o Self-Employed – They work for themselves and don’t have a boss. They can decide for themselves. These are people who love to be independent (i.e. doctors, lawyers, etc.) No work, no pay.
o Big Business Owner – They love delegating tasks. They concentrate more on activities which produces most profits. They hire people who are more intelligent than them to make them rich.
o Investor – People who already built assets. These assets are working hard for them to make them rich. They don’t work for money but their money is working hard for them.
Robert Kiyosaki: Secrets of the Rich
Secret 1: What is Financial Intelligence?
o Income statement and balance sheet – two important simple concepts you need to know to increase financial intelligence
o Asset vs. Liability – Assets provide cash to our pocket. Liabilities deplete cash from our pocket. Asset will FEED us. Liabilities will EAT us.
o Is house and asset or liability?
Secret 2: Cash Flow Patterns of Poor, Middle Class and Rich Persons
o Poor: Every income from job goes out to expenses right away
o Middle Class: Every income from job goes to liabilities that they thought are assets, and then eventually goes out as expenses
o Rich: Every income from job, they use to buy assets that will provide them passive income in the future.
Secret 3: Increase Passive Income
Robert Kiyosaki: Good Debt vs. Bad Debt
Good debt helps us manage our finances
Bad debt is a burden because it drains our finances
Debt leveraging: Using debt to your advantage
o Take advantage of credit cards
Cashless Transaction – credit cards allow cashless transactions that are less prone to hold ups and snatchers
Emergency Cash – credit cards have cash advance facility that you can use in case of emergency
Float Advantage – buy now pay later.
Huge Discounts – credit cards companies have tie ups with several merchants for discounts
Reward Points – accumulate points in exchange of freebies
Raffle Points – aside fro m reward points, credit card companies conduct raffle promos from time to time.
Robert Kiyosaki: Game of Money
1st Quarter (25-35 years old)
o Savings should be your top priority
o Learn investment options
o Get insurance
2nd Quarter (35-45 years old)
o Plan for your children’s future
o Make sure you have enough for your emergency bank
o Have a business
HALF TIME – Mid-Life Crisis
3rd Quarter (45-55 years old)
o Allocate much of your income to investment capital – review your investment portfolio and ask if you need to transfer funds to other nvestments
4th Quarter (55-65 years old)
o Protect your capital – try to preserve your capital so that you can live with on its interest, And make sure to make your last will in order.
OVER TIME
GAME OVER
Robert Kiyosaki: Cash Flow Game – From Rat Race to Fast Track
Doodads. Doodads are simply the expensive wants that we can’t resist.
Opportunity. Opportunites serve as deals for you to grab. It is broken down into two: small deal and big deal. Small deals are deals that involves small money while big deals involve large sums of money. Deals can either be stocks, mutual fund, business, or real estate opportunities.
Market. Markets serve as opportunities for holders of assets. When you land in this option, you are offered by a buyer.
Baby. Baby depicts the real happening of raising a family. In the game, when you land in this option, there will be an additional cost that will be added to your expenses. And there will be a maximum of 3 babies in the entire game.
Paycheck. Paycheck depicts the real world of employment.
Downsizing. Downsizing also depicts the real happening of being fired or unemployed. In this case, you will lose 2 turns and lose a portion of your cash to fund your needs.
Charity. Lastly, charity relies on the concept of the law of reciprocation.
THANK YOU!
I hope you enjoyed my very first financial planning seminar!
Unfortunately, the company does not want me to post pictures or posters of the seminar so I cannot post it. But thanks to the certificate given to me and little present from the team.
It was a success! It was attended by around 50 attendees from our company. I was first introduced as a BS Mathematics graduate from Ateneo de Manila University, mentioned my two former employment background and my feature in Good House Keeping magazine as financial expert.
A lot of thanks for that introduction. I’ve never been given such recognition in my entire life. After that, I started discussing my financial planning powerpoint presentation.
For the readers of this blog, I would present here the details of my handout given to those who attended so that at least even though you were not able to attend, it’s as if you attended my first financial planning seminar. Basically, it’s just a summary of some of the contents of this blog.
Goals:
Goals empower us. It gives us direction. Life is full of paths. We can either go in the right direction or in the wrong direction. Goals provide us the right direction. It sets our priorities. It gives us the motivation.
When you list down your goals, you are giving direction to your life. In listing your goals, list them “smartly”. S-Specific, M-Manageable, A-Achievable, R-Realistic, T-Time Bound
S-Specific. Our goals should be specified to give us direction. To set a specific goal, it must answer any one of the following “W” questions:
o Who: Who is involved?
o What: What do I want to accomplish?
o Where: Identify a location
o When: Establish a time frame
o Which: Identify requirement and constraints
o Why: Specific reasons, purpose or benefits of accomplishing the goal.
Sample: I want to become a millionaire! But a specific goal would say, “Get a job for 10 years, establish your own food business and use your network of friends and acquaintances”
M – Measurable. To determine if your goal is measurable, ask questions such as “How much?” “How many?” “How will I know when it is accomplished?” Sample: I want to become a millionaire by age of 26!
A – Achievable. When you identify goals that are most important to you, you begin to figure out ways on how to achieve them. In the process, you develop the attitudes, abilities, skills, talents and capacity to achieve them. When you list your goals, you see yourself as worthy of these goals.
R – Realistic. To be realistic, a goal must have an objective that you are both “willing” and “able” to work. If you truly “believe” that you can achieve your goal, then it is realistic.
T – Time Bound. Goal should be grounded by time frame because if there’s no time frame, then there’s no sense of urgency. If you just say, “someday” then it won’t work. By setting a time frame, you are setting your mind to begin working in achieving that goal.
ABC to achieve goals:
ASPIRE: You start with what you want to achieve. Be specific; follow the “S-M-A-R-T” goal system. You say to yourself: “I WILL ACHIEVE THIS!”
BELIEVE: After you’ve listed down the goals that you aspire, believe in yourself that you can achieve it! I already saw a lot of people achieved it, if they can do it, then why won’t I? You say to yourself: “I CAN DO IT!”
COMMIT: The next step is to commit. This is the hardest part because your patience, attitude and determination will be tested to its fullest. It’s a test for survival. You say to yourself: “I WILL NEVER GIVE UP!”
Law of Attraction: Positive Thinking + Action = Goals
- Napoleon Hill (author of Think and Grow Rich): We become what we think about
- Newton’s Universal Gravitation: Every object in the universe was attracted by every other object -> e=mc2
- WILL POWER: What your mind conceives, your body can achieve.
Examples of Will Power:
Marathon Race: At the start of the game, the runner conditions his mind. His will power says: “I CAN DO IT!” This will power pushes his body to try harder and run faster to overcome opponents. It was the soul driving the body. The power was not in the muscles but in his will! You will notice that at the end of the race, the will let up and the body will collapse.
Rags to Riches Story: They never consider their economic status to be a hindrance to become successful in life.
Roselle Ambubuyog: A BS Mathematics student in Ateneo who graduated Summa Cum Laude and got the title valedictorian of the Year! - BUT both eyes are blind.
Motivational Quotes:
- “I will do today what other people won’t so that I can have tomorrow what other people can’t”
- “When you want something, all the universe will conspire in helping you to achieve it”
- “Show me a person backed with passion, conviction and resolve and I’ll show you a winner”
- “When a team of dedicated individuals makes a commitment to act as one, the sky is the limit”
Frugality: Ways to Manage Funds in Work Life
- Pay yourself first:
Income – Savings = Expense
Pareto’s Principle of 80/20:
- In business, put most of your efforts on the 20% of things that bring 80% of income to your business.
- In saving, put at least 20% to savings.
Frugality: Ways to Manage Funds in Home Life
Save Money on Electric Bills
- Drop the temp. Lower the temperature on your water heater’s thermostat
- Change bulbs. Compact Fluorescent Lamps (CFLs) use a quarter of the electricity of regular incandescent light bulbs.
- Check filters. Remember to replace aircon filters and heat-pump filters to keep these systems running efficiently.
- Pull the plug. Remember to pull the plug for any electrical appliances that are not in use.
Save Money on Water Bills
o Get a gadget. Get yourself a low-flow faucet aerator. It uses less water while increasing water pressure.
o Fix leaks. Check for leaks in pipes, hoses, especially in the toilet.
o Recycle water. Collect rain water to water the plants. Just be sure not to stock it very long to avoid developing a breeding ground for dengue.
o Add a hose nose. Use a hose with a shut-off nozzle when you water the plants so that there will be no wasted water if the hose is not in use.
o Wash full loads. Cleaning less than a full load of clothes or dishes wastes both water and energy.
Frugality: Ways to Manage Funds in Family Life
Save Money in Dining and Entertainment
o Know before you go. Scan over your local newspaper, check radio stations and company websites for coupons, promos, and special discounts.
o Master menu magic. Drink water instead of ice teas, alcoholic beverages, and juices. Bypass that meaty main dish. Order a meatless meal or if it’s not enough, try two appetizers or several side orders.
o Get discount coupons. Take advantage of discount coupons and treats given by sales persons in different malls.
o Win your treat. Join contest that have prices for gift certificates, free movie passes, and free vacation packages. Some of these contests are held in radio stations.
o Ask to pay less. Use discount treats that come along with your credit card. Or if you are a senior citizen or a student, ask if they have special promos for you.
o Keep your fun cheap. Attend free cultural events and other low-priced entertainment. Or just watch a DVD movie at home with your friends.
Investments: Making Your Money Work For You
Emergency Bank
o Set up a minimum of 6 months up to one year of your monthly income for your emergency fund to cover up for emergency expenses such as job layoffs, hospitalization, and other emergency expenses
Evaluate Your Investments: Risk, Liquidity, Return
o Risk is the possibility of losing the amount you invested
Risk-Averse
Moderate Risk
Risky
o Liquidity is how an investment can easily turn back to cash
How urgent do you need your money now?
o Return is the interest income of the investment or ROI
The higher the return that we want, the riskier the investment
Investment Lessons You Need To Know
o Your Enemy: Inflation. Inflation is the rise of prices of commodity. It depreciates the purchasing power of our currency. Therefore, we must find a good investment that has returns higher than the annual inflation rate.
o Your Ally: Time. Time is of essence to investment because it takes time for you to reap the returns of your investment. In a simple savings account, time is beneficial as portrayed by compound interest.
o Know your investments. Be sure to know what the sources of the returns are and how those returns were made. Understand and learn in the process.
o Diversify. Diversify all your investments not only in one type of investment but also to others so that if it fails, you don’t lose everything.
o Minimize unnecessary expenses and taxes. Look for investments that have low taxes and other unnecessary expenses because it depletes the possible return for your money.
o Match your investment with your risk appetite: Evaluate each investment with risk, return and liquidity
o Start early. The early bird catches the worm. Time is essential in investment.
Investments: Where to Invest Extra Cash?
Risk-Averse:
o Savings Account
Lend money to bank and bank will invest it. In return, bank will give you low interest but you can withdraw our money anytime.
o Time Deposits
Lend money to bank and bank will invest it. In return, bank will give you higher interest but your investment is subject to a withholding period and you cannot withraw your money anytime you want.
o Special Deposit Account (SDAs)
You lend your money to Bangko Sentral ng Pilipinas like a bond and they will give you higher interest but it requires a huge capital ranging from 100K to 1M.
Moderate Risk:
Bonds – Investment Outlet Units (IOUs). You lend your money to corporation and they will pay you interest (corporate bonds)
Risky:
o Stock Market
o Real Estate
Robert Kiyosaki: Increase your financial intelligence
Rat Race – a term coined by Kiyosaki to mimic our general income-spend attitude (i.e., when you receive your pay, you expense it out right away to pay bills, buy clothes, etc.)
Cash flow quadrant:
o Employee – These are people who work for a boss and who love security. No work, no pay.
o Self-Employed – They work for themselves and don’t have a boss. They can decide for themselves. These are people who love to be independent (i.e. doctors, lawyers, etc.) No work, no pay.
o Big Business Owner – They love delegating tasks. They concentrate more on activities which produces most profits. They hire people who are more intelligent than them to make them rich.
o Investor – People who already built assets. These assets are working hard for them to make them rich. They don’t work for money but their money is working hard for them.
Robert Kiyosaki: Secrets of the Rich
Secret 1: What is Financial Intelligence?
o Income statement and balance sheet – two important simple concepts you need to know to increase financial intelligence
o Asset vs. Liability – Assets provide cash to our pocket. Liabilities deplete cash from our pocket. Asset will FEED us. Liabilities will EAT us.
o Is house and asset or liability?
Secret 2: Cash Flow Patterns of Poor, Middle Class and Rich Persons
o Poor: Every income from job goes out to expenses right away
o Middle Class: Every income from job goes to liabilities that they thought are assets, and then eventually goes out as expenses
o Rich: Every income from job, they use to buy assets that will provide them passive income in the future.
Secret 3: Increase Passive Income
Robert Kiyosaki: Good Debt vs. Bad Debt
Good debt helps us manage our finances
Bad debt is a burden because it drains our finances
Debt leveraging: Using debt to your advantage
o Take advantage of credit cards
Cashless Transaction – credit cards allow cashless transactions that are less prone to hold ups and snatchers
Emergency Cash – credit cards have cash advance facility that you can use in case of emergency
Float Advantage – buy now pay later.
Huge Discounts – credit cards companies have tie ups with several merchants for discounts
Reward Points – accumulate points in exchange of freebies
Raffle Points – aside fro m reward points, credit card companies conduct raffle promos from time to time.
Robert Kiyosaki: Game of Money
1st Quarter (25-35 years old)
o Savings should be your top priority
o Learn investment options
o Get insurance
2nd Quarter (35-45 years old)
o Plan for your children’s future
o Make sure you have enough for your emergency bank
o Have a business
HALF TIME – Mid-Life Crisis
3rd Quarter (45-55 years old)
o Allocate much of your income to investment capital – review your investment portfolio and ask if you need to transfer funds to other nvestments
4th Quarter (55-65 years old)
o Protect your capital – try to preserve your capital so that you can live with on its interest, And make sure to make your last will in order.
OVER TIME
GAME OVER
Robert Kiyosaki: Cash Flow Game – From Rat Race to Fast Track
Doodads. Doodads are simply the expensive wants that we can’t resist.
Opportunity. Opportunites serve as deals for you to grab. It is broken down into two: small deal and big deal. Small deals are deals that involves small money while big deals involve large sums of money. Deals can either be stocks, mutual fund, business, or real estate opportunities.
Market. Markets serve as opportunities for holders of assets. When you land in this option, you are offered by a buyer.
Baby. Baby depicts the real happening of raising a family. In the game, when you land in this option, there will be an additional cost that will be added to your expenses. And there will be a maximum of 3 babies in the entire game.
Paycheck. Paycheck depicts the real world of employment.
Downsizing. Downsizing also depicts the real happening of being fired or unemployed. In this case, you will lose 2 turns and lose a portion of your cash to fund your needs.
Charity. Lastly, charity relies on the concept of the law of reciprocation.
THANK YOU!
I hope you enjoyed my very first financial planning seminar!
Unfortunately, the company does not want me to post pictures or posters of the seminar so I cannot post it. But thanks to the certificate given to me and little present from the team.
Subscribe to:
Posts (Atom)