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?

Legit online job - Scribie

If you're looking for a part time job online, and a legit one, quote me on this... "Go for Scribie." Just look at the links I have provided here in my blog and click it! This all started when a cousin of mine, fresh out of school, jobless, but with a kid, asked me to click on that link, which at first, I thought to be bogus. I didn't really believe that my cousin would have found something like that. He was asking me to be part of the site's referral program, where, if I was accepted into the job, he gets a 5% referral commission for every successful applicant. I ignored it for some time, and then, I heard his mom talking about it one day. I then decided to go for it. I registered, and was asked to wait for an email for the test proper. Oh my, to my surprise, I did receive an email that said, I had to wait for 400+ days to get tested because there were so many applicants. Boom - I lost my faith right there. Probably a few weeks after, I received another letter saying that I was up for the test. There were 10 files in my queue. All you had to do is transcribe a six minute file, make sure your grade is satisfactory/passing and then you are hired! It took me up to the sixth try to submit a "worthy" file. (You have the chance to cancel a file that you think you won't be able to transcribe correctly, but you get only ten tries. Each attempt is considered a try.) Anyway, I passed! I won't drill down further into the mechanics because I would like you to read the guidelines on the website thoroughly. Haha. All I can say is that this is legit, and it's worth a try. Here are some screenies for proof:

 1. Here is how my profile looks like. (I took my name out, of course!)

 
 2. Here is a summary of my Performance for the last 30 days:

3. Here is a summary of my earnings:

 

 4. And here is the breakdown:


 

 If you have questions, just leave a comment and I will get back to you as fast as soon as I get online again. There are so many details to share about this, but at this time, I just really want to sleep. :-) 'Till tomorrow!