My '09 Financial Goals
Warren Buffet's advice for 2009
We begin this New Year with dampened enthusiasm and dented optimism.
Our happiness is diluted and our peace is threatened by the financial
illness that has infected our families, organizations and nations.
Everyone is desperate to find a remedy that will cure their financial
illness and help them recover their financial health. They expect the
financial experts to provide them with remedies, forgetting the fact
that it is these experts who created this financial mess.
Every new year, I adopt a couple of old maxims as my beacons to guide
my future. This self-prescribed therapy has ensured that with each
passing year, I grow wiser and not older. This year, I invite you
totap into the financial wisdom of our elders along with me, and
become financially wiser.
* Hard work: All hard work bring a profit, but mere talk leads only to poverty.
* Laziness: A sleeping lobster is carried away by the water current.
* Earnings: Never depend on a single source of income. [At least make
your Investments get you second earning]
* Spending: If you buy things you don't need, you'll soon sell things you need.
* Savings: Don't save what is left after spending; Spend what is left
* Borrowings: The borrower becomes the lender's slave.
* Accounting: It's no use carrying an umbrella, if your shoes are leaking.
* Auditing: Beware of little expenses; A small leak can sink a large ship.
* Risk-taking: Never test the depth of the river with both feet. [Have
an alternate plan ready ]
* Investment: Don't put all your eggs in one basket.
I'm certain that those who have already been practicing these
principles remain financially healthy. I'm equally confident that
those who resolve to start practicing these principles will quickly
regain their financial health.
Let us become wiser and lead a happy, healthy, prosperous and peaceful life.
Thank you, world's richest man, for reminding me to be mindful of my day-to-day expenses.
You see, I've often wondered how to live within my allotted budget, the one I so carefully plan on following every 10th of the month. However, for the past three years, all attempts have gone to nada.
And so, I am listing down a couple of my un-realistic goals, and hopefully I'll be able to turn them into reality.
- Take note of every little expense. As a bestselling author once said, "It is the latte factor that adds up and before you know it, you've amassed a humongous list of little things, not-so-important, but you keep on buying them." An wouldn't you know it, that's true. I used to pass by Watson's every single day of my first 3 months at work. Every day, I bought an item of toiletry e.g. a bottle of Clairol's Herbal Essences, super cheap make-up brushes, Olay Total Effects, or just plain facial tissues! For some weird reason, I was bonding with that Watson's store since I was new. And when I saw my wallet one day, I had all these receipts from Watson's and it amounted Ps. 10,000 worth of trinkets I can't even remember today. That was my "latte factor." Today, I keep a little notebook wherein I scribble every single expense I create for the day and I happily report that when I'm not bringing the car at work, I only spend a measly Ps. 110 all day.
- Save first, what is left is for spending. The most common mistake an average member of the workforce can do is spending a huge part of their salary, living on it like walking on tightrope and save what little is left of it. The result? An almost non-existent savings that can't account for future emergencies. The thing is, I used to this. A LOT. But to my defense, I've only been working for 2 and a half years so maybe I still have hope. At present, I am trying to save 1/6 of my salary [which is not much, really] but that is on top of the savings plan I have at work and another Mutual Fund plan I have [should be topic for another post]. The reason I don't throw a really large amount of money into my savings every month is because I tend to shortchange the money I need for day-to-day, and I tend to dip into my savings pool, which is never good.
- Want vs. Need. A few days ago, I was suffering from the "Parkinson's Disease" of another kind. It's the one when the ill freezes like crazy until she gets/buys she what she wants. What did I want at that particular time? Freaking Escada sunnies which are worth an arm and a leg but is the object of my desire. I did need sunglasses, point taken. What I want were worth Ps. 7,000. And because I'm being practical, I bought a pair -- from Aldo -- in less than Ps. 1,000.
- Beef up the investments. I've jumpstarted a career (naks!) in investing last year. And though I am not really winning [ugh, equities!] anything, I am comfortable that I will be reaping fruits, in say, 30 years, just in time for my retirement! But knowing that I will reap something in time is not enough for me to leave it like that. Peso-cost averaging should be practiced, and that would mean more and more money added to my investments.
- Learn the difference between a liability and an asset. Some say that a house, if you live in it, is not an asset. Some say, a brand new car, is not an asset [I know this too well]. I say that a good pair of shoes is an asset because I am able to do my work [happily, if you must say] with those shoes, even that doesn't pose a direct relation. Ha! See? I should learn how to differentiate!
So far, these are the only ones I can think of right now. Will add more in time.
And oh, Warren Buffett is such a genius.