With the money you have right now, there are basically three things you can do: spend, loan, own. I’m going to discuss each one and at the end of this article, I hope you can take better control over the direction of your money’s movement.
1. Spend It a.k.a. Buy Liabilities
It is very unfortunate that so many of us only think of money as something to be spent. That is, we work to earn so that we can spend it later. Sometimes we even spend money which we haven’t earned yet.
Of course, spending money is very enjoyable indeed.
Who doesn’t want to stroll around the mall especially when they say you can grab up to 70% discount on selected items? “Up To” 70% sale? Who can resist that one!
And if chronic stress is one of your Sossy Problems, you don’t simply go and buy Alaxan to relieve the pain — only PacMan is doing that. Instead, you go shopping… that’s the secret relief. Big-time retailers know about this little secret much better than the medical professionals do.
But as fun and enjoyable as it may be, spending money is not without its problems. And financial problems are nasty little annoyances that start to surface when there is no more money left to pay for things you needed the most.
Visayan-speaking Filipinos are all very familiar with the saying, “One day millionaire. 30 days mantiner.” It refers to the practice of spending all your money during pay day and then going broke again ( mantiner ) for the rest of the days until the next pay day.
“Too many people spend money they haven’t earned, to buy things they don’t want, to impress people they don’t like.” –Will Smith
If you are really concerned about your financial future (and that of your children), you have to put an end to this Earn-Spend Cycle. But the first thing to do is to recognize that this problem exists.
You have been running for a long, long time already and yet you are still in the same place. Did it ever occur to you that you are running in the treadmill?
2. Loan It
You may not know this, but if you have money lying in the bank in the form of a Savings Account, you are actually loaning your money to the bank. In turn the bank promises to keep your money safe and give you some fixed interest since they will be using it also in running their main business, which is, ironically, loaning money to someone else at a higher rate.
One of the most stupid ways you can do to your money is by becoming a small-time money lender to your friends and their friends’ friends. It’s stupid because it’s so risky. And filing a case in court is really so much of a hassle.
Believe me, I’ve been there. I’ve done that.
Did you know what they say about the fool and his money? Well, I’ve been that fool already. I’ve lost, not only my hard earned money, but my friends as well — they are nowhere to be found now… not even the ubiquitous Facebook can trace their whereabouts. 🙁
A Personal Note: On a positive side, there are two good things that resulted from that incident:
- I learned not to do it again. Someone once said, “If your friend betrays you, that’s his fault. If he betrays you again, that’s already your fault.”
- I found, thanks to my bankers, better ways loaning my money safely and legally — by investing it in a Bond Fund.
- My interest in all aspects of money grew even more. I’ve been a self-taught student of investing ever since it happened. And there is no signs of stopping me from learning and sharing what I’ve learned about this thing called money.
In the up-coming articles you will discover that one form of investing is lending your money. I will show you some of the best ways to do it so that your money is safe and you can monitor it.
3. Own Stuff aka Buy Assets
You can also use money to own assets. Here are some things you can literally own:
- A piece of real estate
- Shares that invest in the Philippine Economy (which is bullish at the time of this writing)
- Gems and precious metals
- Works of art
- Run a business
- Invest in a Mutual Fund
This is only a short list of things you can on own.
Savvy investors know that over the long term, taking “ownership” is the best way to grow your money.
Did you know that when you invest in a mutual fund, you also become a part-owner of that investment company? It’s true and you will experience it first hand the moment you start investing.
If interested to know more about FAMI Mutual Funds, please get in touch with us and send your inquiry.