Monday, February 20, 2012

Feast PICC Talk Series: Talk 2 - Income vs. Wealth 021912

I am sharing to you again what I have noted on  "The Feast OVERFLOW Series Talk 2. If you were not able to read Talk1, check it here.

Bro Bo. started the talk with a short story about the ANAWIM. It is one of his foundations which  is a home for the aged people that provide senior care and home for the less fortunate. This serve as a nursing home for the abandoned elderly plus a few orphans and physically and mentally handicapped persons. He said that many of the visitors were awed by the beauty and peacefulness of the place. Many of them wished to be a resident of it. But Bo told them that for goodness sake, don't wish to be a burden to the foundation but a DONOR even at old age.

His main message is that "We need to CREATE WEALTH for our OLD AGE".

There are Three (3) Steps to Create Wealth namely:
1. RECEIVE - have a regular income (active or passive)
2. RETAIN - have a simple lifestyle
3. REPRODUCE - multiply what God has given to you

We need to have a "STEADY INCOME" / Positive Cashflow. The Goal is to have BIG WEALTH and making Jesus the Master of our Finances.

Bro. Bo mentioned one of the statements we normally hear "Money does not buy Happiness". Yes it is true. But he also said that " We need a minimum amount of money to make us happy". We need some money to put food in our stomach, to go from one place to another, to travel and bond with our family or relatives, to pay for our utilities. etc He also said that Happiness is not always directly proportional to Possession. There would come a point in our life that the more possessions we have, the lesser happy we become.

Some of the reasons why possessions can lessen our happiness are: more worries, more stress, more concerns and more maintenance cost.

He also pointed out that INCOME is "NOT EQUAL" to WEALTH. No matter how big or small our income is, if we don't live a simple life, we will end up broke in our old age. The key to becoming wealthy even with low income is by living simply. We should not give in to materialism but to simplicity.

We should also practice DELAYED GRATIFICATION to build wealth overtime. Don't be an impulsive buyer especially if you'll be buying using your credit card.

 "If you keep on BUYING things you DON'T NEED, you'll end up SELLING the things you NEED."

The advantage of delaying our gratification is that by the time we have the money to spend, sometimes we'll find out that we don't want it anymore. We can also feel a deeper joy, once we have finally bought that thing we were only dreaming of before.

Retaining our wealth is not enough. Same thing with saving our money for long term in a bank. It is like a recipe of poverty because of the risk discussed below.

Two (2) Kinds of Risks
1. Lost of Capital - This happen when a business fall.
2. Lost of Value - This is what happens to the money that is kept in our bank account.

It is okay to put our Emergency Fund in the bank for liquidity but not the money intended for our Long Term Goal. The thing  that cause LOSS of VALUE is Inflation. I can discuss this thing on my next blog posts. But I can give an example of the the effect of inflation. When I was in grade school I can go to school with only 5 pesos because the fare is only 3pesos 2-way. Today, my 5 pesos, can't bring me anywhere because the minimum fare is already 8 pesos.

Bro. Bo said, that to reproduce our wealth, we need to invest.

There are 3 BEST PLACES to INVEST our MONEY namely:

1. Paper Assets - Stock Market
2. Business
3. Real Estate

Among the three, the STOCK MARKET is the easiest, safest , most effective way of building your wealth for your old age. He even compared the population percentage of the investing public in other countries (USA = 70%, China = 60%, Philippines > 1%). Only few people are invested in the Philippine Stock Market because of the negative things we heard from the people who lost or losing in the stock market. But if we only know how to maximize the ways of earning in the stock market, we will never get lost. And can become part of the 15% will are making money in the stock market.

Two Ways of Entering the Stock Market
1. Indirectly - Equity Fund, Mutual Funds (Equity)
2. Directly - get a stock broker like

We will never fear investing in the stock market if we only know the WHAT, WHY, WHEN, WHERE, WHO and HOW. We NEED TO LEARN and invest in Financial Education.

If you want to learn the more on the stock Market, you can join his next seminar:

WHAT: How To Make Millions In The Stock Market  “Live” Seminar 
WHEN: March 17, 2012, 8:30 a.m. to 12:00 p.m.
WHERE: Mandaluyong CitySEMINAR FEE:  Php 497

I am also a STOCK Market Investor and I have been following Bo's advise to his Truly Rich Club Members. Investing in the stock market for two years already shows an average of 10% per year gain. We can't get this gain if we will just keep our money in our bank accounts. I can truly say that it is one of the great investment vehicles we have in the world.

To summarize, Bro. Bo uses a SIMPLE MAGIC FORMULA for Building Wealth. It is the 10/20/70 rule.

  • 10% of your income is a Tithe or Love Offering to God
  • 20% of your income is Invested into Paper Assets, Business or Real Estate
  • 70% of your income is spent on your daily expenses.
As our income increases, we can adjust the formula to 20/30/50 or even more.

Our prayer is that God will bless us financially  and make us rich that we can bless more people around us.

May all our Dreams Come True!

Anawim (pronounced ann-a-weem) is a Hebrew word from the Old Testament which describes the “poor ones” who remained faithful to God in times of difficulty. These humble people became known as theanawim or the “faithful remnant.”

1 comment:

investor luranski said...

Nice! same topic as mine. =)