Tag Archives: success

Starting To Work On Your Success pt. 3

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Goal Setting 3

 

In the previous column, I asked you to compute how much your present lifestyle costs you. We are now on the second and third questions of eight questions you need to ask yourself to help you set your financial goals.

 

2) If you want your lifestyle to improve, how much more improvement do you want?

 

Since we are planning for many years ahead, it is normal that you want a better lifestyle.  This means that you will be spending more for the better lifestyle.  You have to write the kind of improvement you want in terms of your budget.  Knowing what you are already spending today in your present lifestyle, you can have an estimate of how much you have to be spending also today if you have the lifestyle that you want.

 

You will probably wonder and think that in the coming years, the cost of what you buy today will be so much more so why am I asking you to compute in today’s cost.  You are correct and you should consider that factor which is called inflation when we go into the actual preparation of your financial plan.  We will do that later but it is good enough to know how much you would need today for the improved lifestyle that you want.

 

 

  • How much risk can you take?

 

Taking risks with your savings is dependent on your personal orientation as well as your age and the kind of investments you already have.  The general principle is that nobody can be correct one hundred percent of the time.  Everybody makes mistakes.  Therefore, it is very possible that you may choose some wrong investments.  The key is to be able to rise and learn from failure and in effect, turn the failure as a success. And you can always rise from any kind of failure.  Unfortunately however, when it comes to money or business failure, it is only possible to recover if you still have time and energy left.

 

If you are young, you can take more risk because you have the time and energy. However, just because you are young does not mean that you should only invest in risky businesses.  You still have to balance your investments so that if some fail, you will have the chance to recover faster. As they say, never put your eggs in one basket.

 

As you grow more wealth and gain more experience, you can invest in higher risk opportunities only if you can really afford to lose your investment completely.  This means that you have enough investments that, if you lose the risky investment, you can still meet your financial goals. It is almost like gambling.  When you gamble, you know that you can lose that amount completely.

 

Remember, THE HIGHER THE RETURNS, THE HIGHER THE RISKS.  It is easy to be attracted to high returns especially when so many friends and relatives tell you stories about how much money they have made.  So, study your risk options well.

 

Starting To Work On Your Success pt. 2

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Goal Setting 2

 

In the last article we started to talk about the need to set personal financial goals or objectives.  Before, making your plan, here are some tips on what you should be ready to do:

 

1)    You have to put it in writing!  There is a study that shows that people who succeed write their plans.  You must have a written plan for each goal.

 

2)    You can have different goals but you must state it in positive terms.  It is not enough to say that you want to save or that you want to cut expenses.  You have to know what it is that you are saving for and specify each goal in terms of amounts.

 

3)    You must have a specific timetable for each goal.  If you have a timetable, you will not procrastinate because you know when you have to reach it.  At the same time, you will realize how realistic your goals are based on your timetable.

 

4)    You have to be ready to monitor your progress.

 

Now and in the coming columns, I will present you eight questions that you need to ask yourself to be able to set your financial goals:

 

1)  What level of lifestyle do you want?

 

Each person has a dream of the kind of lifestyle he wants.   What is meant by lifestyle?  Lifestyle is the standard of living.  This is usually defined in terms of the expenses needed daily/monthly/yearly.  The higher the standard, the higher the expense.

 

The highest standard is that of the “rich and famous” normally equated to being in the society pages of the newspapers, driving around in expensive cars, having a big house, regular travel, hosting big parties regularly etc. However, you will be surprised that sometimes these people are actually not as rich as they are portrayed to be.  Many of them are deep in debt that if they suddenly die, their heirs might be left with so many problems instead of inheritance.

 

Many people will say that they just want lots of money to spend without any idea of what they want to do with it.  If they don’t know what they want to spend for, any amount of money can very quickly disappear.  What is important is that you have a good idea of how much you would like to spend every day/ every month/ every year that will make you comfortable.

 

You can start with your present lifestyle.  You know how much you spend regularly.  If you are regularly in credit card or other kinds of debt, you can estimate how much more income you really need over what you are actually receiving, to maintain your present lifestyle.  If you are unable to earn that additional income, you have to downgrade your present lifestyle or go to the next question next week.

Starting to Work On Your Success

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And here is how we want to help you get it!  Follow the coming articles that will help those who want a refresher course…

Goal Setting  Part 1 

It has been more than eleven years since I started teaching how to care for your personal financial matters.  From the many feedback I have received from readers, it is very clear that so many ordinary earning Filipinos do not know how to save and grow their money.  The questions I receive are varied and detailed but the most frequent can be summarized into three:

1)    How can I save?

2)    How can I get into a business?

3)    How do I invest in mutual funds?

Before even asking these questions, each person should first set their goals.   The New Year is only about 45 days away, it is an opportune time to devote time on GOAL SETTING.

I always remind people that you cannot go anywhere if you do not first establish where you are and where you want to go.  My favorite example is when you go to a Mall for the first time and you want to go to a particular store without wasting time because you are in a hurry.  You can ask people around you but sometimes, they do not know or worse, they give you the wrong information.  The best method is to look at the map in the mall and locate your store and how to go there.

This is the same routine you should follow when you want to save, get into business, or invest your money.  When people realize they should save and grow their money, they are suddenly in a hurry to do it without any planning.  They start asking around from people they know.  Unfortunately, most of the time, they ask people who also do not know how but are so eager to pretend they know.  They start getting wrong advice and end up losing money without even knowing how and why.

This need not happen if they followed the rule of GOAL SETTING.  The first step is to establish a plan, which is your “map”  or your financial goal.  Note that most legitimate investments are sound investment instruments. They are all good investments.  However, what is important is to be able to tell which one is suitable or best applicable to your needs.  It is impossible to be able to discern which is the best for your personal situation unless you have your own financial plan based on your own specific timetable.   We will talk more about goal setting in the next articles.

For added information, visit  www.colaycofinancialeducation.com  www.franciscocolayco.com and www.youtube.com/colaycofoundation at www.kskcoop.com.  Tumawag sa 637 3741 o 637 3731 o 0917 863 2131.  Our next seminar is on Nov. 28.  Join it.  Based on experience, we learn more when we have immediate feedback on our questions.

Listen to Pera Mo, Palaguin Mo every Monday on DZXL 558AM from 11am to 12 noon. You can also watch us on  Pisobilities Reality every Tuesday, 8:30 pm, on Light Network Channel 33 and every Saturday on GMA News TV 11, 6am.