to buy or not to buy

One of the most wonderful feelings about being a trainer is when people who know your craft start asking questions that are rather basic, but important. Two days after my talk on Practical Money Management, two people asked, on separate occasions, whether a specific gadget they want to buy is practical or not. The first asked about whether a MacBook Pro is a good buy, and another asked whether the iPad Mini on sale at 200 USD is worth buying.

Well here's how I would think my way through.

My generic answers for both would be:

• If the gadget you are buying is within the 70% or 80% budget cap that you put on expenses (remember the 10-20-70 or 30/70 or 20/80 rule?), then go for it. You should make sure that the gadget or item you want to buy is within that expenses bucket.
• If the gadget you are buying is something you can use to increase your productivity and/or generate income from, then go for it. For instance, you don't have a laptop you can use when you are doing presentations to your clients. Then indeed, you need one.
• If the gadget is reasonably priced, and I mean, a true SALE price. Imagine an iPad that usually costs around 400 USD and it is being sold at only 200 USD! However, go back to the first two items I've written here: Is the purchase within the budget? Is the gadget something you need and will be able to maximise use for?

On the whole, I would also say this in terms of purchasing some goods. Go for QUALITY over QUANTITY! We often fall prey to those SALE items that we see in malls but we often forget whether these items will last or not. A classic example: My mom saw a set of four cooking pans for sale at 2,000 pesos (around 45 USD). She bought it because it's on sale. We then went home and used the frying pan. After just one usage, the pan was deformed, and it could no longer be laid flat on the induction cooker. What a loser product, right? 

So there goes my tips for the day. :-)

The Rule of 72

Who would have known that such a rule existed?! Why wasn't it taught to us when we were kids or high school students, or even in college? Why? Why? Why?

Even our parents don't know this! As simple as it is, it is the very one thing that totally changed my perspective on banking.

So what I am ranting at anyway? It is the Rule of 72, or the Law of Compounding Interest. As you can see in the attached image (courtesy of http://www.wolnymbyc.pl/regula-72-czyli-kiedy-z-miliona-beda-dwa/), it is as simple as:

TAKE THE NUMBER "72" and DIVIDE IT BY the INTEREST RATE at which your MONEY IS INVESTED. The resulting NUMBER or the QUOTIENT is the NUMBER OF YEARS IT WILL TAKE TO DOUBLE YOUR MONEY. 

Here in the Philippines, interest rates range from 0.875% to 1.375%. Check on more details here: http://philippines.deposits.org/. So let's say we set the average at 1%. Let's do the Rule of 72.

72 / 1 = 72 years.

Yes, 72 years! It will take 72 years for my money to double when invested in the bank. Since I am 34 now, I would be 106 years old when that happens. Wow! Good luck to me!

So, all this time, our parents have been teaching us to save money the wrong way. (And they were doing it wrongly too!) Initially as kids, we put them into piggy banks, and when we grew to legal age, we were then advised to keep our money in the bank so as to earn interest unlike when in the piggy bank.

This is one big financial practice boo boo, eh?!

So now that you know the Rule of 72, where are you taking your money? To the bank, still?

no such thing as too much information

One of the lessons i have learned from my boss while he was here last week is that it's okay for information to be seen in different places as long as that information is indeed important. That being said, I thought of just putting up another blog, just for anything I want to discuss regarding finances. How different will this be, compared to the others that exist out there? Well, I don't want to play hero or superstar and declare that I am unique and that this is the best financial blog ever, but the things I will be writing here are guaranteed to be true to life and just based on my own personal (and probably my husband's) experience/s.

I hope people learn from this, and comment/ask when necessary.

Church Etiquette...

My husband and I started going to church again around two years ago after a life changing event (but this is not what I am writing about here) and we've come to conclude that the Philippines, despite being the only Catholic nation in the ASEAN region, has lost (or probably didn't ever have) its church etiquette.

We try as much as possible to really focus on the mass and to be "holy" (at least during the mass) by no thinking negative thoughts, but there are several things that really just distract us and we can't keep ourselves from rolling our eyes or nudging each others elbows, or, worst case scenario, literally talk about it while at church.

Here goes the list:
1. Kids running around during mass. (rolls eyes) It is good parenting to take your kids to church and to teach them the importance of hearing mass, but please make sure you let your kids know the importance of staying put at church. RESPECT for places of worship and for solemn events is the key here.

2. Adults chatting with each other during mass. Oh really? Why did you even go to mass? Need I say more?

3. Couples showing too much PDA while in Church. Get a room!

4. People falling asleep in mass. Oh well, this is debateable and I am guilty of this sometimes too, especially if I don't understand, or worse, hear the priest during homily. However... There are times when, even when the priest of the day has such a loud voice, some individuals still fall asleep. I believe that if you are intently listening, you won't ever fall asleep.

5. People not singing or participating in mass. There's a reason why there are things called: responsorial psalms, prayers of the faithful, hymn of praise, the Lord's prayer, etc. There's a reason why it's called a church - because people gather to worship and praise. So, what are you doing there just standing/sitting down? Killing time?

6. People who don't put their phones on silent mode.

There seems to be more, but for now I'll put my top 6 pet peeves while at church.

Why is church etiquette so rare? Does it exist in the Philippines? Does it even have to be taught or blogged about?!