The Harsh Reality

Last December, I browsed National Bookstore in search for Larry Gamboa's "Think Rich, Pinoy!" book. I learned about the book through Shepherd's Voice Publications and wanted to give it to a friend as a Christmas present.

It never reached its intended destination. I read the book and it opened up a plethora of ideas and convictions that led me to believe that there's a more sensible way to earn money. This blog is a chronicle of my journey to financial freedom!

The year 2006 was a turning point for me. Up until then, I had always relied on the belief that once Tommy graduates from his surgical residency, I won’t have to think about money and just concentrate on my family. How wrong I was! When he finished his training, he had to build up his practice and that takes a lot of time. I was a full-time mom by then and we had to scramble to find a steady source of income.

I really thank the Lord that He provided me with a job offer at exactly the right time. Needless to say, I grabbed the opportunity and became the administrative officer for Rockford Marketing Corporation. But still, after a few months, there’s this nagging thought inside my head that something is not right. It took Larry’s book to make me realize the reason for my discontent.

Here’s what I realized: I knew that I was earning a little bit more than the minimum wage earner, but I was also spending all my salary for my basic needs. It was a hand to mouth existence although I was eating from a bigger hand and eating yummier food.

I do have a lot of savings that I never touch as much as possible. But around this time, I was having difficulty breathing and the possibility of imminent death wasn’t far from my mind. What will happen to my family when I die? No matter how much money I have saved, medical expenses and Lance’s continuing education will deplete it for sure.

That’s where Larry came to the rescue. The answer is Earn Passive Income. I learned that passive income is different from the income you earn from your salary. It is income generated from your investments. That means I have to use my savings wisely instead of just putting it in a time deposit to earn tiny interests.

I read and learned all I could to improve my financial literacy. I also took stock of my current investments. I was shocked to find out that the interest rate from time deposits have gone down to 4+% while I was assuming that it was still somewhere around 7%. My US stocks was worse because I was down 17%. I was losing money and didn’t even know it. I know, it’s really irresponsible, right?

I moved my time deposit to mutual funds which will yield a higher return. I divided it equally between bonds and equities because I figured this will lessen my risks while still getting all the benefits.

Instead of letting my “broker” handle my US stocks portfolio, I searched for a company that I wanted to invest in for medium to long term and moved all my shares into it. I really hope this will work out much better.

All in all, I’m much happier with my investments now but there’s something more that I learned from Larry. What’s probably the best investment in world is Real Estate. He found a formula that works really well for him which he generously shares with his readers. I so so so want to learn how to apply it! He also set up a mentoring program and I really hope to be a part of it.