STEPS TO HAVE A STRONG FINANCIAL FOUNDATION

Building a strong financial foundation is not complicated as you think. It is very simple and doable. But you cannot make a shortcut. It is similar to building a house, you must build it from ground up.

First, you must have a proper health care coverage in the event of a serious problem or sickness. One major illness can wipe out your savings or investment or real estate particularly during your old age. 

Second, you must have a proper protection in the event of untimely death. If this happens, then you have instant money left behind for your family dependents. There are only two constant in this world, DEATH and TAXES.

Third, you must pay off all bad debts. You cannot sleep well at night knowing where to get payment of your debts.

Fourth, you must establish three to six months worth of emergency fund. Sale in the mall is not an emergency. This will be used during sudden loss of job or business unforeseen accidents, and house repairs.

Fifth, you can make long term investment like mutual funds or direct stock investing. 

Making a short cut or joining a scam will hurt you in the long run.

Following these five steps will help secure your financial life. 

RETIRED BUT FINANCIALLY DEPENDENT

Many people already retired but it is still financially dependent. They worked for 30-40 years and retired from their jobs at the age of 60. The company gave them one million pesos retirement pay plus the pension from the SSS or GSIS. They thought that it was already enough for comfortable retirement. But after 2 years or less, their money was gone. The pension was not enough to sustain their lifestyle.

They began to wonder. Where will we get our monthly income? 

First choice, they will rely on their children since they were the one supporting them from childhood to adulthood. Children may support their retired parents but it is not their sole obligation to do so. They also have their own families to feed. 

Second choice, they will return to work even at the old age.

Third choice, they will go their relatives to ask for help. 

Fourth choice, they will line up to the charitable institutions and ask for support.

Did you know someone like this? 

I personally encountered this type of person. He always visits his children to ask for money. He is still working at the age of 70.

During his prime age, he did not prepare for retirement. He did not save for his long term health care. He did not invest in the stock market or mutual funds or real estate.

Why? Because nobody taught him. He was financially illiterate. 

Do you want to retire like him? What is the solution? 

Be financially educated.

REGULAR HOLIDAY

What is Holiday Pay?

Holiday Pay refers to the payment of the regular daily wage for any unworked regular holiday.

What is the coverage?

Holiday pay applies to all employees.

What are the exceptions?

Holiday pay does not apply to the following:

1. Government employees;
2. Retail and service establishments regularly employing less than 10 workers;
3. Kasambahay and persons in the personal service of another;
4. Managerial employees with all the following conditions are met; a. Their primary duty is to manage the establishment in which they are employed or of a department or subdivision thereof; b. They customarily and regularly direct the work of two or more employees therein; and, c. They have the authority to hire or fire other employees of lower rank, or their suggestions and recommendations as to the hiring, firing, and promotion, or any other change of status of other employees are given particular weight;
5. Officers or members of a managerial staff, if they perform the following duties and responsibilities; a. Primarily perform work directly related to management policies of their employer; b. Customarily and regularly exercise discretion and independent judgment; c. Regularly and directly assist a proprietor or managerial employee in the management of the establishment or subdivision thereof on which he or she is employed; execute, under general supervision, work along specialized or technical lines requiring special training, experience, or knowledge; or execute, under general supervision, special assignments and tasks; and, Do not devote more than twenty percent (20%) of their hours worked in a workweek to activities which are not directly and closely related to the performance of the work described in paragraph above.
6. Field personnel and other employees whose time and performance is unsupervised by the employer, including those who are engaged on task or contract basis, purely commission basis or those who are paid a fixed amount for performing work irrespective of the time consumed in the performance thereof;

What is the payment under Regular Holiday Rule?

Every employee is entitled to the minimum wage rate (daily basic wage and COLA). This means that the employee is entitled to at least 100% of his/her minimum wage rate even if he/she did not report for work, provided he/she is present or is on leave of absence with pay on the work day immediately preceding the holiday. 

Work performed on that day merits at least 200% the daily wage of the employee.

Where the holiday pay falls on the scheduled rest day of the employee, work performed on said day merits at least an additional 30% of the employee's regular holiday rate of 200% or a total of at leas 260%.

What are the regular holidays?

The 12 regular holidays in the Philippines are the following:

January 1                          New Year's Day

Movable Date                    Maundy Thursday

Movable Date                    Good Friday

April 9                                Araw ng Kagitingan

May 1                                Labor Day

June 12                             Independence Day

Last Monday of August     National Heroes Day

Movable Date                    Eidl Fitr

Movable Date                    Eidl Adha

November 30                     Bonifacio Day

December 25                     Christmas Day

December 30                     Rizal Day

When Araw ng Kagitingan falls on the same day as Maundy Thursday or Good Friday, a covered employee is entitled to at least 200% of his/her daily wage even if said day is unworked. Where the employee is required to work on that day, he/she is entitled to an additional 100% of the daily wage.

FINANCIAL PROBLEM PART 1

Majority of the problems are related to financial. You have no time for your family because you work so hard to earn money.

You fail to do your obligation to your spouse or children because you believe that if you provide them the basic necessities like foods, shelter, clothing, education or some luxuries in life, then, it is just alright.

You suffer a lot with your health because you work up to 12 hours but again your salary is not enough. 

You are no longer happy with your workplace but you are still working because you have no other option. Delay of single day in the release of your salary, everything will be in peril.

You occupy a high position in a corporate world and with a hefty salary. You have an excellent education with a master's and doctorate degrees but still you do not have enough money, or worst no savings at all. 

Money is not the solution to all these problems because money is just a tool.

What you need is proper financial education. It will not take four years to learn like what you had been in college.

Be financially educated.

PROPER TIME TO PREPARE FOR RETIREMENT

I observe in the government that the personnel are encouraged to attend a Retirement Planning Seminar with GSIS one year or less before the actual date they retire from the service. Usually, participants are 60 years and beyond. One year is not enough and will never be enough. 

Retirement is not a matter of age but a matter of how you prepare for it. You can retire anytime if you want.

Planning for retirement should be done as early as you enter the employment world with a time horizon of 20-40 years before the end of your service. You should invest now for your retirement. Time is your greatest ally.

How about if you are 50-55 years old? You have to act right now. Don't wait you will hit 60 years old to prepare for it.

NEED OF A LONG TERM HEALTH CARE

Last week, I accompanied my son to the ENT Specialist Doctor (Ear, Nose, Throat) in a private clinic in Consolacion, Cebu, Philippines. We were five patients. The first patient was a senior citizen about 65 years of age. After her examination, she was charged with a P3,500 consultation and medical fee. She was shocked and worried since her money was only P1,000. Next patient left the clinic upon hearing the 3,500 medical fee. I was moved with pity with the two patients. I thought to myself how about in a life threatening situation? Like heart attack or bypass operation.In reality, there is a high cost of medical needs. 

However, there are two solutions to this problem. First you have a personal emergency fund to pay the medical bills. Second, you have a health care to cover your medical needs.

Today, a Long Term Health Care is now available in the Philippines to solve this problem. Just 88/day for 7 years to pay, you will have a KAISER ULTIMATE HEALTH BUILDER, a 3 in 1 product to cater your financial needs (Long Term Health Care, Life Insurance, and Investment).

SAVINGS IS LIKE A LIFESAVER

Sometime in 2014, I cannot forget this incident. My son had no more milk to drink. I pulled out my wallet and it had only 50 pesos for my fare. I borrowed money to my friends but they refused because they also needed the money. 

I inquired my Landbank ATM card but no available balance because it was 2 days before the payday. I went to my cooperative to secure a loan but I was denied because I used all the loan windows. I got stressed where to get the money to buy milk.

Then, I remembered that I had a cooperative savings passbook in my drawer. Lo and behold, I saw an available balance of 500 pesos. I went to the coop again and withdrew the 400 pesos. 

I share this story so that you can learn from me and for you to start your savings program. 

Savings is a like a lifesaver. Someday, it will save you.

FINANCIAL EDUCATION IS THE KEY TO PROSPERITY

Congratulations my dear graduates! 

15 years ago, I feel what you feel. You are now excited to see the real world and be on your own. After my graduation, I work and have a steady job. My income is growing. But I notice that my expenses are also growing too fast. I resorted to DEBTS. I experience Loan-Payment-Loan Cycle. To the point that I cannot sleep well at night thinking of my finances. I thought that after graduation, everything was alright. But I was wrong. I was so desperate to learn about financial literacy. I read several financial books.

Finally this year, I enroll in the Financial Workshop and I learn all aspect of personal finance from debt management to growing your assets.

If I knew this money principles 15 years ago, I already earn my first million and I will be financially free today. I will no longer incur debts.

Formal education in the schools is not enough. We have to attend Financial Seminars and read personal finance books and magazines.

Be financially educated now.