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Live simply to simply give.
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Retire with MILLIONS & make your money work for you. Ask me how at The Wise Living now.
12-Step Guide
to be a
20-SOMETHING
MILLIONAIRE:
*FREE Version*
The 12-Step Guide to be a 20-SOMETHING
MILLIONAIRE *FULL Version* will be available on
October 2013.
Copyright © 2012-2013 - Lianne Martha M. Laroya
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DID YOU GET THIS FROM
A FRIEND?
My friend, this e-book is written for The Wise Living readers.
If you're not yet a reader, please come and join me!
I post regular articles to help you work on your money,
control your cash, inspire other people and ultimately become
a 20-something millionaire emotionally, financially and
spiritually.
As a budding financial advisor, I give FREE financial
consultations as well. Just go on and drop me a line at
[email protected] for any financial concerns,
money questions, investment queries, advertising proposals and
relevant messages.
Also, please buy the full version of the 12-Step Guide to be
a 20-Something MILLIONAIRE book this coming October 2013.
It'll be the perfect read during your vacation!
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Dedication
To the working student who is trying to juggle his job and his studies at the same
time… You are truly admirable.
To the college student who is extremely afraid for his future because he thinks
that he will be poor for the rest of his life since his family is poor… You,
together with God, can control your life.
To the undergraduate who has low self-esteem because he wasn’t able to finish
his formal education… Don’t you lose hope just yet. A lot of successful
individuals did not even finish college.
To the young adult who has so many dreams (traveling the world, starting a
restaurant, living in a foreign country, having a condo unit personally…) but so
little money to accomplish those dreams… You can get there if you start
owning your life.
Friends, this guide is a living reminder that you will be successful.
Read it.
Laugh at it.
Cry during reading it.
Above all? Live it.
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Table of Contents
Preface.................................................................................6
Introduction……………………...……………………..……..10
Priceless: The Millionaire Mindset...…….……………….....12
One Peso: Barriers to Wealth.............................................16
Five Pesos: Be Responsible For Yourself..........................22
Ten Pesos: Make Saving A Habit.......................................25
Twenty Pesos: Create A Saving & Spending Plan............31
Fifty Pesos: Frugality & Priority
Purchasing..........................................................................37
One Hundred Pesos: Increase Your Cash........................40
Two Hundred Pesos: Protect Yourself & Your Loved
Ones....................................................................................43
Five Hundred Pesos: Get Started With Investing..............46
One Thousand Pesos: Grateful? Give Back.....................50
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Preface
“Bayaan mo na.” (“Let it be.” )
This is what my grandfather, Tatang, used to tell me all the time. My laid-
back, carefree, gentle grandfather was a loving soldier. He loved my grandmother
like she was the only woman to ever exist. He loved cooking and he loved his
children. Most of all, he loved playing the lottery just for kicks – he even had
enough money to share with others and give back to the community.
Needless to say, I loved Tatang.
I loved my grandfather not because he cooked delicious ginataan.
I loved my grandfather not because he would ask me to place his lottery
bets for him and I get to keep the change!
I loved my grandfather not because he would often mistake the titles of the
soap operas but memorize the names of famous basketball players.
There really is no specific reason. I love my grandfather. That’s all there is!
“Bayaan mo na. Okay lang yan.”
Whenever I complained about our rather loud neighbors, he would smile
at me and tell me to let it be. I’d feel okay afterward.
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Whenever I told him about the storyline inconsistencies in the soap operas
we used to watch, he would laugh and tell me to let it be. I’d feel better afterward.
However, when he got his second heart attack and we rushed him to the
hospital…
When he was struggling to consume every last piece of oxygen available
because he couldn’t breathe properly anymore…
When his vital statistics became uglier and uglier…
When his body eventually gave up on him, when the monitor dropped to
zero and when I felt my soul leave my body…
“Di ko kayang pabayaan. Hindi ito okay lang.”
I couldn’t just let it be. It was not okay at all!
Deep down, I was really blaming myself for everything that happened. I’m
a registered nurse, for Pete’s sake! I was supposed to be calm, prepared,
informed; I was supposed to know everything!
I felt like a complete trash: I didn’t have enough knowledge to control the
situation. I also didn’t have enough experience to acknowledge the severity of his
condition.
Do you know what the worst part was? Do you know what was it that I
regretted the most?
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I didn’t have enough money to send him to the nearest hospital!
That’s why for me, Tatang’s death was not okay and it was not fine – I
couldn’t just let it be.
Here I am, trying to open my heart for you, my new friend, to see. Sharing
my feelings has never been my forte. There is just something very risky and
fearful about exposing my vulnerable side to people, may it be my family or my
close friends. The thought of vulnerability used to frighten me to the core.
However, I soon came to find out that the thought of losing a loved one,
just because of a lack of money, is so much worse.
Money is a terrible master: As long as you work for money, you can’t
simply ask for money to appear whenever you desperately need it. I’ve learned
this the hard way.
On the other hand, money is a terrific servant: As long as you let money
work for you, you can control it to appear whenever you want it to.
Hi, I’m Lianne, the founder of TheWiseLiving.com and the author of
this book. I’m here to help you convert your money from being a terrible master
to a terrific servant.
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I hope you join me on this inspiring, rich and empowering journey to
being a 20-something millionaire.
Let's start!
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Introduction
“Money is only a tool. It will take
you wherever you wish, but it will not
replace you as the driver.” – AYN
RAND
This book is written with the
young adult as the market in
mind. Who better to talk to
about your finances than with a
fellow colleague, yes?
This book won’t be a “I’m-better-than-you-sermon” – this is a “I-know-
dude-so-I’m-trying-to-help-you-narrative”. I know what you’re going through
because I’ve been there myself!
Many adages say that the future of the country depends on the hands of
the youth, but seriously, how can we handle the country’s future if we can’t even
save up for our future?
How can we lead the nation if our debts are the one leading us?
How can we be masters of our own soul if money makes us who we are
right now?
We’re clueless when it comes to these things! After graduation, no one told
us that we needed to save a percentage of our income; no one said that we should
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start investing for our retirement; hey, no one even told us to avoid credit cards if
we’re not disciplined enough!
My friends, it’s time to take control of our finances now that we are young.
If you’re already old, that’s cool, too! You’re still young at heart! At least you’re
actually taking some time off to learn about money management, right?
Let us not be slaves to creditors. Let us not pay interest.
Let us take control of our finances because no one else can do it for us.
We have the power, friends. We WILL be able to do it!
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Priceless:
The Millionaire Mindset
“Money isn’t everything but it sure
keeps you in touch with your children”.
— J. PAUL GETTY
Do you want to be a
millionaire? What kind of a
question is this? Of course you
want to be one!
We all know that being a
millionaire is great! With this status, we can buy what we want, where we want,
when we want to. It’s liberating – it is the ultimate definition of financial
freedom! And who wouldn't want that?
YOUR DREAM LIFE
Just think of this scenario for a while:
You wake up and eat your breakfast of organic fruits, newly prepared
pancakes and freshly squeezed orange juice. You take your time because you’re
really not in a hurry to rush for work. You exercise for a while and bond with your
family.
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After these, you prepare for work – although it’s not really work for you
since it seems more like playing as you enjoy what you do. You’re not worried
about money because your passive income is already enough so that you and your
loved ones can live comfortably.
As you read a book, you sip on your favorite brew of coffee as produced by
your coffee machine just because you can. You end the day with a prayer to God.
Life is good. You never have to worry about money again.
Boom! Time to wake up now!
BACK TO REALITY
I have to give it to you straight – being a millionaire is no picnic, though.
Unless you were born with ultra rich relatives who have taught you awesome
habits, then being a millionaire is tough.
Being a millionaire, after all, is more of your attitude than your actual
income. In a nutshell, being a millionaire boils down to your mindset, and
adopting a millionaire mindset is very important.
“YES. I will be a millionaire!”
This is easy to say but hard to do, right?
Let’s start this guide by defining what wealth means to us. I mean, you
can't know how to reach a dream if you can't even specify what your dream is. It's
a basic thing.
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Remember that your definition is very subjective. Just as my definition
of an ideal partner is different from others, my definition of wealth may be
different from yours as well.
Do you value your family? Your friends? Your loved one? Do you value
your relationships? If that is the case, then, you can say that your wealth is
people.
And I agree! My wealth is people, too! I love people and my interaction
with them is always the highlight of my day.
I need money, though. I can't just let my parents have their semi-
annual check-ups with love! I can't say, "Doctor, here is my super love for you.
Would you care assessing my parents so that any medical condition they have
would undergo early detection and prompt treatment?"
I need money. I can't fund my little brother's college education with
love. "Oh, hi principal. Sorry I can't pay with money. I love you so much, though.
Would you care allowing my brother continue his education? Remember, we all
love you!"
I need money. I can't settle down with the person I love with just love!
"Hi, person I love, could you please not take a bath anymore? The water bill is
high. I love you, though. Oh and please don't bother turning on the appliances.
We don't have money to pay them. I love you, though. Let's not eat anymore! Let
us feed on each other's love!"
These are extremes but you get what I mean, right? I consider people I
love as my wealth.
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But money assists me in caring for them to the best of my
abilities.
After defining what your wealth is, create your very own Millionaire
Mindset. I tell myself to repeat this mantra everyday:
“I will become a millionaire because it is my life purpose to care for my
loved ones. It is my mission to let people experience God’s love through
my writings and through my actions. I sincerely desire this so that I can
inspire and help my colleagues into changing their lives for the best.”
I know, this sounds incredibly cheesy right now. Yes, I’m blushing. Laugh
all you want. Email me joking messages and sarcastic replies. Some of you may
even be laughing at me for being so OA (overly attractive). I understand what
you’re thinking – “Like, seriously, is Lianne actually serious?!”
The main point of the Millionaire Mindset is that it should be meaningful
to you. It should be customized according to your life.
Therefore, my mantra is different from yours!
What is your Millionaire Mindset?
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One Peso:
Barriers to Wealth"Too many people spend money they haven't earned, to buy things they don't want, to
impress people they don't like." - WILL SMITH
Now that we already
have our Millionaire
Mindset, we should make it
a point to repeat this to
ourselves every single day.
Don’t do it loudly, though,
unless you want to receive weird
stares from strangers.
Now you might be telling yourself – I’ve been repeating this mantra every
single day! I’m full of positive energy! I can do everything! I’m going to
accomplish this now!
But then you find yourself in the same cycle again.
What’s wrong? Where did all my energy go? Why am I still not doing
anything?
5 COMMON STAGES OF CHANGE
1. Pre-contemplation: “I don’t have a problem with money! I’m doing just
fine! Mind your own business, Lianne!”
During this stage, you’re not yet fully aware of your financial problems.
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Maybe you’ve never thought about managing your finances before or
maybe you’ve already tried once but failed – either way, it’s important for you to
get out of this stage and move on to the next one. Stop denying and start
acknowledging!
2. Contemplation: “Okay, Lianne, I think I do have a money problem. I don’t
know how to solve it, though.”
You’re typically unsure during this stage – you already know that you have
a problem but you don’t really know what to do with it.
Maybe you’re scared of being ridiculed by your “friends” or being stressed
out with your budget – accept those feelings of contemplation! It’s crucial that
you deal with your feelings of hesitation first before committing. Once you’ve
done that, you’re ready for the next stage.
3. Preparation: “I’ve already done research so I think I’m willing to commit to
doing these action plans.”
You’re half-way there, believe me! In this stage, since you’ve already
thought about changing, you go ahead and do some research of your own.
You read books, magazines and blogs; ask experts for advice; and make a
list of substantial action plans that you’re willing to do.
4. Action: “Hey, look at me! I’m actually starting to manage my money! ”
At this point, you might be feeling eager, energized and enthusiastic. Keep
going!
5. Maintenance: “Woah, this being a millionaire thing is hard. But I will keep
on going!”
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Honestly, this stage is going to be difficult. It’s going to be hard. It’s going
to test your self-discipline and motivation. Most of all, it’s going to make you send
me “I don’t like you, Lianne!” emails just because of the hardship that you’re
going to go through.
It is at this point that I would recommend you to go back to your
Millionaire Mindset mantra. Remember the reason you’re doing this.
Are you willing to take on the road to be a 20-something millionaire? Do
you think you have what it takes to make money your slave, and not your master?
Well, you need to deal with these seven barriers to wealth first. These 7
scenarios P-R-E-V-E-N-T you from being a 20-something millionaire!
7 BARRIERS that PREVENT YOU FROM BEING
A 20-SOMETHING MILLIONAIRE
1. P-ROCRASTINATION:
“Oh, I’ll wait until I’m much older to do this. Come on, I’m still young. It’s
not like I’ll need this, right? I have all the time in the world to save up when I’m
in my 40s!”
The Barrier: You’re procrastinating because you have this false security about
your age.
2. R-ECKLESS SPENDING
“OMG. I NEED to buy this dress. I look great in this! My crush would
definitely look at me now! Maybe I’ll include the shoes, too! And this pretty pink
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ribbon! Nice, I still have some money left. Better save it for the time when he
actually asks me out on a date!”
The Barrier: You buy practically everything that you want simply because you
have the money for it.
3. E-RRONEOUS EXPECTATIONS
“I can get rich quickly and easily by joining this program!”
“Dude, it's the government's fault that I'm broke right now. It's a
conspiracy, I tell you! That's why they should provide all my needs.”
The Barrier: Your head is filled with all these false expectations that you simply
can't find the motivation to work on your finances.
4. V-ACUUM PEOPLE
“Don't even bother trying in convince me, Lianne.”
“Why bother? Nothing will work anyway.”
“Oh man, you're so weird for saving up early! You're still young – let's go
shopping instead!”
“Wow, your retirement fund is in the stock market? Loser!”
The Barrier: You know what the word “vacuum” means, right? It's vacant and
it's void – just like vacuum people. Vacuum people are those kind of people who
bombard you with negativity and suck out all your motivation up to the point
when you'll have nothing left.
5. E-FFORTLESS LIVING
“I really really really want to be a millionaire, believe me! I just don't
want to do all the hard work that comes with it. Meh.”
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The Barrier: You've written your Life Dreams – but you're not making any
effort to actually turn them into reality.
6. N-EGATIVE MONEY BELIEFS
“Money is evil.”
“God hates rich people. He doesn't want them to enter Heaven.”
“Hey, if God intended me to be rich, He should have given me a signal.”
The Barrier: Growing up, these money beliefs are deeply ingrained in your
mindset: You think that money is pure evil so you're not really putting any effort
towards achieving financial freedom.
7. T-OTAL FINANCIAL CLUELESSNESS
“I can’t save money because I don’t know what I should do first!”
The Barrier: I know this one: I've met this troublesome barrier before. You
want to budget your take-home income but you don't know where to start first.
You want to invest a part of your income but you don't know which account to
open.
Learning financial wisdom takes up a lot of time as well. Just like how you
can't cram four years of college into one year, you can't just instantly expect
yourself to be a personal finance guru in one month. That will just be crazy!
A lot of people say that “beauty is pain”, right?
I have a similar saying: “If beauty is pain, then knowledge is gain.”
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I'm actually so very proud of you because you’re taking a huge step by
reading this book. Congratulations! (And please don't forget to buy the more
detailed version of this book this coming October 2013!)
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Five Pesos:
Be Responsible For Yourself
“I have enough money to last
me the rest of my life, unless I
buy something”. — JACKIE
MASON
Do you remember the
times when you used to
cry and then your mama
would immediately give
you your milk?
How about those times when you would just need to wail loudly and
disturb your whole barangay so that your papa would be forced to buy you dirty
ice cream?
Remember those embarrassing moments when your grandmother used to
bathe you in public and take pictures of your naked self? (Oh, Lianne, you were
so small...)
That's right! These times are parts of our childhood. When we were tiny
and cute kids, we used to depend on everyone around us to take care of us, to
provide for our needs and to keep us alive.
Well, now that we've all grown-up, the days when we were dependent on
others are now gone! If you don't believe me, then, try asking your mother to feed
you now, try “forcing” your father to buy you dirty ice cream now, or even try
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asking your grandparents to bathe you in public now. They might look at you as if
you were crazy!
What happened, you ask? What changed?
Newsflash, my friend: We grew up!
Can you imagine what would happen if you're already grown up and yet
you're still dependent on others?
CENTER OF CONTROL
You're familiar with the Wheel of Fortune, I assume? (If you're not, then,
stop living under that rock and step into the real world!)
The Wheel of Fortune relies on luck and on pure chance. When they get
lucky because they can depend on others, they rejoice. But when their luck turns
against them, they blame others for their bad fortune.
The Wheel of Control, on the other hand, is what you should be holding
right now! You see, “control” is another personal finance concept that you need to
fully understand before we proceed to the technical details.
This guide is geared towards young professionals. And as such, we should
keep in mind that we alone are responsible for ourselves. We are the author of
our lives, with God as the editor. We are accountable for our actions.
We hold the Wheel of Control in our hands! God is the GPS.
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We should not be dependent on our parents, relatives, or friend. Our
financial status should not be dependent on the government as well. I know how
easy it is to blame other people for our mistakes. After all, I was once someone
who used to blame the government too. I would hate them, call them foul names,
glare angrily at them and mock them.
What good did blaming do to me, you ask?
Nothing! Blaming and being dependent on other people is foolish. It's
counter-productive. And most of all, it's a bit childish. (And no, I don't mean that
in a cute way.)
Holding the Wheel of Control made me realize something important that
changed my mindset altogether:
Hey, I have the same government with the other millionaires in the
Philippines, yet they prosper and become richer every day.
Why is that?
It was because these millionaires decided that they are to be responsible
for themselves. They realize the fact that we make our own lives. They took
action, and they are willing to answer to it.
Only when we follow their examples will we be able to put a step forward
financial freedom as well.
I want to be a go-getter. I don't want to wait anymore. I am going to do it.
Are you responsible enough to join me?
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Ten Pesos:
Make Saving
a Habit
“The safest way to double
your money is to fold it over and
put it in your pocket.” –KIN
HUBBARD
Many people often frown upon the very idea of saving. It's like
vinegar, you know? If you don't believe me, try saying “saving” in front of your
friends: I'm sure they're either going to make a sour face at you or get away from
you as soon as possible.
It's such a negative concept for a lot of Filipinos because they equate
saving to being forced, to suffering and to depriving oneself of life's pleasures.
This is so far from the truth!
Saving actually gives you access to life's pleasures!
Imagine if you started saving when you were just in high school. Oh, just
remember all the money that you wasted!
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A STEP-BY-STEP GUIDE TO SAVING
Friends, saving doesn't need to be a chore. Consider it as a rewarding
system instead! It's like receiving double pay: after your boss pays you, you then
pay your future self!
Here's the saving guide for your reference:
A. REMEMBER YOUR REASONS.
You need to stop this mindset right now and save starting now. Go back to
the Millionaire Mindset chapter now to refresh your memory. Come on, you've
gotten this far! It's time to continue!
After that, remember that saving is truly important because:
• You're right! You did earn this money. You worked for this money.
You deserved this money – that's exactly why you should save a part of this
money so that you can use it in the future!
• Remember, you can't take care of the most important people in your life if
you don't have any money with you.
• You are entitled to your salary because you worked hard for it! Therefore,
with every pay day, you should first pay yourself. (After giving back to
God, of course!)
Think of it this way: Because your past self labored and worked so hard
for your money, your present self should save a part of it, so that your future
self can use it accordingly!
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B. FOLLOW THE FANTASTIC FORMULA.
This is a self-development and personal finance book but we're only going
to focus on this fantastic formula. Ready? Have you taken your Calculus,
Trigonometry and Organic Chemistry lessons already? Is your scientific
calculator calibrated for this? You sure you can take this?
The “fantastic formula” is:
Income - (Tithes+Savings) = Expenses.
Where “income” is the money you receive after working for long hours,
experiencing heavy traffic and discreetly browsing Facebook during your lunch
times;
Where “tithes” is the money you give back to God and to the community to
show your gratitude and to let other people experience the generosity of God.
Where “savings” is the money that you will be stashing for your emergency
fund, future business fund, pending vacation fund and retirement fund, among
others.
And where “expenses” is the money you use to pay your bills, to buy a frilly
dress once in a while, to attend a concert sometimes, to purchase a life-changing
book, to pay for your transportation and baon and to hang out at a cafe
occasionally, among others.
This “fantastic formula” simply means that you immediately subtract
your tithes and savings from your income so that the remaining
would be your expenses!
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C. SAVE FOR YOUR S-E-L-F.
If you're unsure of what things you should be saving up for, it's helpful for
you to remember to always save for your S-E-L-F:
D. TACKLE THESE TOP THREE SAVING MONEY TIPS
Save money now.
Some 20-somethings are so complex up to the point that they have this
need to over-analyze everything. For me, I prefer to keep things simple.
I'm not going to bore you with minutiae about how the color of your tie
influenced today's market crashed, how the President's current girlfriend affected
the country's inflation rate or about how you should wait for 3.706074 days
before saving to optimize the value of your pesos.
Friends, there are only two best times for saving: yesterday and right
now. And because you can't travel back in time yet, you only have now. Save
money now.
Save small amounts regularly.
It's so much better to start now and save small rather than to start later
and save all.
Build your own saving & spending plan.
Failing to plan is planning to fail. Building your own plan is beneficial so
that you have a system on how much to save and where to save your money every
month. (We're going to tackle this in-depth in the next chapter.)
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BONUS: If you have debts and the interest on your debts is higher than
the interest in your savings, pay your debts first. So if your debts' interest is 20%
annually and your savings account is earning 2% annually, pay your debts first as
high-interest debts will drown you in the future.
E. FOOL YOURSELF INTO SAVING MORE MONEY
Don't force yourself into saving money.
Fool yourself instead.
How? These are 5 ways:
1. Picture your old self. Find a photo-aging program online, upload your own
photo and see your old self looking right back at you. A study done by Stanford
University found out that by enabling the young adults see their older selves, the
young adults' urge to spend today can be affected by their urge to save for
tomorrow.
2. Don't sign up for “deals”. You'll save more by signing up your email
address on group deal websites because you'll be getting all the huge discounts,
right? Wrong. I don't know about you but getting my inbox spammed by 50% off
on restaurants, gym memberships, bars and hotels isn't really going to help me
save money.
3. Set up a specific retirement date. Saying you'll retire “early” doesn't have
any impact at all! What about saying “I'll retire on June 26, 2053” instead? This
specificity would definitely persuade you to save more because you're going to
have this sense of urgency with you.
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4. Bring only big bills. Do you really want your P1,000-bill to be broken down
just because you're only buying a cup of tea latte that costs P120? Also,
sometimes, establishments don't prepare enough change so they might not even
entertain you! (Proceed with caution with this one, though!)
5. Use the 2-week rule. When you see something you really want (not need),
put it in your 2-week rule and leave the store. Think about it for 2 weeks. Chances
are your desire has already faded when you realize that you're actually better off
without it.
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Twenty Pesos:
Create a Saving &
Spending Plan
“Why is there so much month left at the
end of the money?” — JOHN BARRYMORE
The word “budget” may mean a lot of things to a lot of people.
Some view it as a nuisance while others think of it as something that is needed to
be strictly followed.
I view it as a guide. It is very difficult to maintain a budget when the
figures in that budget are idealistic. Let’s say you earn P10,000.00 per month. Do
you think it’s realistic for you to be able to save P5,000.00 per month? I don’t
think so!
The key to making a budget is basically viewing it realistically. It shouldn’t
be constricting – it should be comforting.
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6 COMMON MYTHS ABOUT BUDGETS
a. “Budgets are boring and complicated and they just make my head
hurt.”
With all the advanced technology, all the apps and calculators and all the
savvy personal finance tips around, budgets can actually be fun and easy!
b. “I don't need to make my own saving & spending plan. I can just use
my intuition.”
Intuitions are great for determining if your long-time lover is cheating on
you or if your boss secretly dislikes you – these don't particularly work for you
when you're trying to find out how much money you have left at the end of the
month.
c. “I failed at Math in high school. This means I can't budget.”
My friend, you don't need to be a super genius in Math! Unless you're a
complete Math rock star, I seriously doubt that your lessons at Calculus, Organic
Chemistry or Trigonometry would help you in your saving and spending plan.
d. “I'll just start budgeting when I earn more money. It's way too early
for that.”
Let me ask you a few questions:
Are you going to start exercising once you lose a few pounds?
Are you going to start working once you get promoted?
No way, right?
You don't have to be great to be started – you just have to start to be great.
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e. “Budgets are constricting.”
This is so far from the truth. Budgets aren't constricting – as a matter of
fact, budgets are there to allow you to live comfortably. Without budgets, you're
going to be spending all your money on your fun and borrowing money to pay for
your committed expenses. How awful is that?
f. “Budgets? Ha, aren't budgets for losers only?”
I'm not really sure where you got this myth from. But, I'm pretty sure that
a responsible 20-something who has the money for giving, for saving, for basic
living and for playing is not a loser.
THREE BUDGET TEMPLATES YOU CAN USE
To guide you in setting up your first ever saving and spending plan, I've prepared
three templates for you:
1. Signal #1: Even preschoolers can start practicing this plan because of its
sheer simplicity. You can start with this one to ease into the planning habit.
Brother Bo Sanchez gives this simple template. You can handle your take-home
income with your saving and spending plan that can go like this:
Category Percent
Giving back to God and to the community 10%
Savings and Investments 20%
Committed Expenses 70%
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Here is a template you can use to get started.
Now, take a moment to absorb what you've just read. Do you feel
overwhelmed? That's normal.
Do you feel scared? That's normal.
Do you feel like you can't do this anymore? That's normal, too.
Feeling discouraged in making changes in your life is a normal reaction
simply because we dread the unknown. However, don't let all these feelings bog
you down. You hold the Wheel of Control, remember?
You're doing this for yourself, for your loved ones and for the betterment
of the world, remember?
I'm serious – the more people become financially free, the more inspired,
motivated and educated other people will be too.
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WHY BUDGETS F-A-I-L
Here's a secret: You will fail, at first. You will think what you're doing is
useless. You will think that you're going nowhere with this. Hey, you might even
send me a message on my Facebook account or on Twitter just to blame my book
for everything that's happening in your life right now.
F (Fun Factor is Not Included)
Your budget doesn't have any fun factor in it: you think that all of its
categories should only be limited to the basic spending and the core saving. No
wonder your budget is failing: you're bored out of your mind!
A (Automatic Gratification)
You don't like budgeting because planning for your future prevents you
from wasting your present. Hm? Am I getting this right? You like to automatically
feel happy so you're resorting to reckless spending.
Do something:
• Friends, take a long good look at your life right now. Is something
missing? Does something feel empty? Believe me: that something is not
stuff.
• Go back to your Millionaire Mindset. Refresh your memory as to why
you're doing this. Motivate yourself. Talk to like-minded people. Love the
fact that you're investing in your future and enjoying your present at the
same time!
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I (Inflexible and Idealistic)
You think that your budget is the extreme rule. You spent P3,500 for your
basic expenses when your budget is only P3,478? Punishment! You did not plan
for your mother's birthday gift so you're not buying her any gift anymore?
Punishment! You got sick for a week so your initial budget is less than you're used
to? Punishment!
L (Low Estimation of Committed Expenses)
You always assume that your committed expenses will be lower so that you
can allocate more for your savings and for your fun money. So, when the bill
comes and your expenses are actually higher, you feel bad and kick yourself in
your head once again.
A NOTE:
Whenever I receive extra money, I don’t believe in saving all of that
money. Hey, we are still young! I suggest you cut that money (not literally,
please), give 10% back to the community, save 60% of it in your emergency fund
or in your investments, and then spend the remaining 30% for you fun!
Do what works for you.
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Fifty Pesos:
Frugality & Priority Purchasing
“The real measure of your wealth is how much you'd be worth if you lost all your money”.
– ANONYMOUS
Frugality.
Sigh, this word gets such a bad
reputation simply because
people equate it to being
cheap, being thrifty and being
kuripot.
I will illustrate its meaning and
its correlation with “priority
purchasing” through a story.
FIONA AND CHIONA
To differentiate the meaning of these two, let's talk about Fiona and
Chiona, okay?
Fiona and Chiona are twin sisters. They both love saving, budgeting and
giving back to God. They both adore frilly dresses and pink fingernails. And they
both have a crush on Daniel Padilla, yes, even though they're already 20-
somethings.
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One day, Fiona and Chiona have gotten their salary. After tithing, saving
and paying for their bills, they decided to spend their fun money by going
shopping (for dresses, not for Daniel Padilla!)
After browsing the stores for a while, they both take got their picks and
went in line. Their conversation went like this:
Chiona: What dress did you get? I got this one even though neon orange
is not my favorite color and even though this doesn't fit me that much. It's the
cheapest! Only P299!
Fiona: I got this P899-worth dress because I love pink and because it fits
me perfectly.
Chiona: Well, fine, maybe this dress's materials are poor. But they're
cheap anyway so I can just buy again next month.
Fiona: The materials of this dress are high-quality. I think this can even
last me for one year.
Do you get the difference between cheap people and frugal people, then?
Cheap people care about the cost. Frugal people care about the
quality.
Cheap people are concerned about getting the lowest price, whether or not
they really like the item. Frugal people care about getting the reasonable
price for an item that they deeply care about.
Cheap people practice cost-centered spending.
Frugal people practice priority purchasing.
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My friends, as a fellow 20-something, I understand your spending habits.
Therefore, I know what items you spend on, what items you care about and what
things you don't really think of.
I'm so not telling you to be cheap. No way. No one likes cheap people
anyway.
I'm telling you to be frugal. Practice priority purchasing with me.
WHAT PRIORITY PURCHASING IS
It's simple, really: it's basically spending money on your priorities!
The keyword here is “priority”. Priorities are the things that matter to you
and the things that you care about.
If you're willing to sacrifice other expenses just to spend money on it,
there's a high chance that it's your priority.
What are your priorities? We've already touched saving for your
investments and giving back to God when we discussed the saving and spending
plan.
I'm asking about your spending habits. Which are you most likely to
sacrifice in order to gain something else?
It's your money. Therefore, you'll only be spending it on your priorities.
Make priority spending personal.
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One Hundred Pesos:
Increase Your Cash
“A bank is a place that will lend you money if you can prove that you don’t need it.” – BOBHOPE
I've decided to include this chapter in the latter part of this
guide. I don't think that earning more is the key to financial freedom – I think
your Millionaire Mindset is.
It's not how much you make; it's how much you save and invest that
really matter. This is why I've included saving and prioritizing in the first few
chapters.
THE 5-STEP STAIRCASE
Everything starts with your belief. If you believe that you can earn money,
then you will earn money. If you believe that you can't, then you won't. It's as
simple as that.
Let us take this 5-step staircase framework into consideration, shall
we?
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Mastery
Progress Habits
Pursuing Action
Powerful Attitude
Positive Beliefs and Thoughts
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Everything starts in your mindset. The quality of your life is dictated by the
quality of your thoughts – this is why you need to fill your mind up with
inspiration, motivation and positivity in order to keep you going.
Once you believe these wholeheartedly, the way you respond to your life
changes for the better. This new life view then encourages you to start pursuing
action and own your life.
After starting and researching and experimenting, you'll then familiarize
yourself with the actions that you need to repeatedly do: your habits. Once you
dedicate enough time, determination and passion into doing these progressive
habits, the only road left for you to encounter is the road of mastery.
INCREASE YOUR C-A-S-H
However, there are times when even though you have immense amounts
of self-control and even though you have a strong conviction on your Millionaire
Mindset, you're still far away from being financially free because you simply are
not making enough money.
This is where increasing your cash comes in.
Now that we've covered beliefs, attitudes, actions and habits, we can finally
talk about increasing your cash naturally.
C – lear out the clutter in your closet.
Do you really need all your clothes in your closet? Yes, I’m talking about that old
sweater that you only wore once because your parents told you to.
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A - dopt a part-time job online.
Adopting a part-time job wherein you don’t need to leave the comforts of your
own home is great! You can be a virtual assistant, a freelance writer, a business
blogger or a graphic artist! The Internet is your friend!
S – ell your services.
There is nothing wrong with testing your talent in the service-based profession.
Just to be sure that we're on the same page here, I'm talking about moral, decent
and wholesome services, okay? Come on, you're not that desperate.
H - one your knowledge & skills and get promoted.
If you never ask, you will never know the answer. “Ask and you shall receive”,
yes? Don’t think that your boss will randomly ask you if you want higher pay! Be
responsible for yourself, remember?
A word of caution, though: there is nothing worse than a person who
works hard but never pays attention to his loved ones. Keep it in moderation!
You’re awesome. Everyone is. This is why we all have the capability to
produce more cash.
Go out there and make things happen.
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Two Hundred Pesos:
Protect Yourself & Your Loved Ones
"You don't have to die in order to
make a living." - LYNN
JOHNSTON
Life is a huge and
unpredictable adventure,
guys. Today, you can be eating
gourmet food while tomorrow
you can be surviving off of
instant noodles for your
breakfast, lunch and dinner.
Now, you can be enjoying the products of your hard work while later, all these
earnings may be wiped away in an instant.
This is where security comes in.
A WALK IN THE PARK
Let's say that you love walking in the park to exercise, to brainstorm and
mostly to stalk on your long-time crush in real-life. So that you won't be too
obvious, you brought your little brother with you during your walk.
You heard that it was going to be a nice weather – not too sunny and not
too rainy as well. However, before going out, you still applied sunscreen lotion
and brought your lotion bottle, rain coat and umbrella with you.
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Upon going out, you were shocked to know that the sun immediately
intensified its rays. Gasp! It was a sunny day! Good thing you applied sunscreen.
After 3 hours, though, your crush is still nowhere in sight. Also, the sun is
still angrily glaring at you and your protection from it is deteriorating! What you
did was apply sunscreen again. Thank God you brought the bottle with you!
Your emergency fund is your sunscreen lotion:
- It's worth 3-6 months' of your monthly expenses.
- It's supposed to be accessible and liquid so that you can easily tap into it for
emergency situations.
- After using it all up, you're supposed to fill it up again.
After waiting for an additional one hour, your Daniel Padilla-look-alike
crush appeared. He's still as attractive and as suave as ever.
Suddenly, you felt a hint of wetness – you noticed that light rain was
drizzling. It's umaambon! What you did was put a raincoat on you and your little
brother for protection.
Your rain coat is your health insurance.
- You need it for sudden medical emergencies.
- Your hospitalization and medical expenses are covered so you don't have to
watch your life savings be swept away.
- There are many types of health insurance but you have to shop around and get
the best fit for you and for your dependents.
“Blast this rain”, you thought. Now where was your crush? Oh there, he's
there and walking... Walking away! He's holding hands with someone? Who? Oh
my gosh, was he holding hands with your best friend?
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Your best friend and your crush are going out? To make matters worse, the
rain even got stronger.
Heartbroken and panicking, you opened your umbrella and gave it to your
little brother so that he could cover himself. Then, you run after the couple while
crying in pain and laughing at the irony of it all.
And your umbrella? It's your life insurance.
- When you become disabled or when you pass away, your life insurance would be
left to your dependents.
- Your dependents will then rely on your life insurance to stand as your income
replacement.
- Life insurance makes sure that your loved ones are protected even after your
death.
I'd like to remind you that life insurance is meant to be as an income replacement
or as a family protection, okay?
• TERM Life Insurance is perfect for:
◦ Twenty to thirty to forty-somethings. It protects your dependents while
you're gone.
• PERM (Whole) Life Insurance is perfect for:
◦ People who sell insurance. It protects your dependents while you're
gone and makes the agent who sold it to you lots of money. Boom
boom pow.
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Five Hundred
Pesos:
Get Started With
Investing
“Inflation is when you pay fifteen dollars
for the ten-dollar haircut you used to get
for five dollars when you had hair”. - SAM
EWING
Inflation is a bad thing. It is the reason why putting your long-term savings in
a bank is not a good idea.
INVEST TO PROGRESS
Rule of thumb: Your investment money should be in investment
vehicles that beat the inflation rate.
The inflation rate of the Philippines is recorded as 2.80% as of June 2013.
And how about the time deposit rates in your banks? Usually, they’re between
0.875% to 1.85% only!
This means that your money which is stuck in the bank is
actually losing its value over time.
The only way to combat inflation? Invest.
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Investments are available for people of all walks of life now. Gone are the
days when investing is only for the rich. Now, we can all invest with the initial
amount of either P5, 000 to P10, 000!
We as young professionals owe it to our older selves to invest.
You should remember that the best way to prepare yourself with investing
is through self-insight.
Simply speaking, know your goals.
Short-term goals: (1-4 years): You will need the money in a few years’
time so you need to invest in something where the possibility of losing money is
very small. Examples: Retail Treasury Bonds.
Medium-term goals: (5-9 years): This is where there’s a chance that
you will lose some money although there is also a chance wherein your
investments will yield a substantial profit. Examples: balanced mutual funds
and bond mutual funds.
Long-term goals: (10 years and beyond): This is where there is a chance
that you will lose a portion of your money within a short period of time, say,
losing 10-30% in a span of two months. This is also where there is a chance that
you will earn huge profits, provided that you keep the money in for the long term.
Examples: equity mutual funds and the stock market.
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TIPS TO KEEP IN MIND:
1. Invest NOW. Compound interest working for you for a very long time is
your best friend. Later you will see that when you start investing early, you
will be able to get a huge amount of money just by investing a little
amount.
2. Diversify your investments. Don’t just bid everything on one
company. This is because if one company folds, then you will be sure that
the other company’s got your back.
3. Make investing your habit. Treat is as one of your bills. Make your
money work for you. Invest consistently and regularly so that you will
make it as your habit as time goes by.
Let’s say you invest in a mutual fund company with an average annual returnof 9%?
Your AgeNow
To have 1 Million Pesos at a specific age, youneed to SAVE & INVEST the following amountsmonthly (9% Annual Return)
At age 30 At age 35 At age 40 At age 45
21 6,400.00 3,202.76 1,810.87 1,085.21
22 7,556.20 3,630.55 2,017.69 1,198.49
23 9,057.54 4,137.56 2,253.85 1,325.42
24 11,076.65 4,745.56 2,525.00 1,468.05
25 13,924.37 5,485.01 2,838.24 1,628.87
26 18,222.39 6,400.00 3,202.76 1,810.87
27 25,421.23 7,556.20 3,630.55 2,017.69
28 39,872.41 9,057.54 4,137.56 2,253.85
29 83,333.33 11,076.65 4,745.56 2,525.00
30 13,924.37 5,485.01 2,838.24
31 18,222.39 6,400.00 3,202.76
32 25,421.23 7,556.20 3,630.55
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33 39,872.41 9,057.54 4,137.56
34 83,333.33 11,076.65 4,745.56
35 13,924.37 5,485.01
36 18,222.39 6,400.00
37 25,421.23 7,556.20
38 39,872.41 9,057.54
39 83,333.33 11,076.65
40 13,924.37
41 18,222.39
42 25,421.23
43 39,872.41
44 83,333.33
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One
Thousand
Pesos:
Grateful?
Give Back!
“One of the strange things about life is that the poor, who need money the most, are the
very ones that never have it.” — FINLEY PETER DUNNE
Giving back to the community is such a wonderful feeling.
I want you and your loved ones to be able to experience this wonderful
feeling, too! And so for today, I am going to enumerate some perks of donating:
1. It makes you content!
This is my main reason for donating. Donating feeds my spiritual
hunger. God must have given us our own versions of spiritual hunger. Some
people mainly cope with it through religious rites. Others sing songs of worship.
Personally, I choose to give back.
2. It gives you more time to appreciate God's goodness.
Donating gives me the mindset that I am indeed blessed by God in so
many ways. I think sometimes, God gives us more than enough so that the excess
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can be given to other people. Let others feel God's love through you and feel good
about yourself.
3. Practically speaking, it helps clean out the clutter.
Obviously.
4. It promotes bonding.
I've said it before and I'll say it again: doing something together promotes
familial bonding with your relatives and romantic bonding with your special
person. Take a group of people who feel good about themselves (See #2) and let
them experience that feeling together.
Instant satisfaction guaranteed!
Now that we are on the subject of giving back, let me ask you this: have
you heard of tithing?
A WORD ON TITHING
Tithe means one-tenth of a something. It can usually be translated to 10%
of a something.
Don't feel bad about tithing – you can actually start with 5% of your money
and then work your way up to 10% or even more. What matters is your
intentions. God won't judge you based on the amount you give!
This tithe is then given as a voluntary contribution to support
something that manages to give us "spiritual food".
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Here are some Frequently Asked Questions regarding tithing:
1. Why should I tithe?
You should be able to tithe to be able to give back to God. God is the source of
everything that we have right now, and tithing adds conviction to that belief.
2. Should I tithe only to the Church?
Everyone has different views regarding this one, so I believe that answering this
objectively can be deemed difficult. If you believe that other religious
organizations are also able to provide you your "spiritual food", then go ahead!
3. When should I tithe?
A person should tithe upon receiving his monetary blessings.
4. Can I tithe in other religious organizations as well?
Like I have said, tithing is up to you. If other organizations can also help you find
more meaning in your life, then by all means, go ahead.
If you want to show to God how grateful you are, tithe!
You can even use your tithes to giving back to non-profit organizations or
charitable institutions.
Make your money mean something meaningful.
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WHAT'S NEXT?
How did you find this book? Helpful? Inspiring? Bitin? :) Here are 4 quick
offers to you:
• A FREE REPORT: “50 Things You Can Do Right Now to Prepare for
Retirement”
◦ Just send me a review of this e-book to my email at
[email protected] or post your review on your
blog and email me the link to get the FREE report!
• A FREE SUBSCRIPTION
◦ Join us at TheWiseLiving.com and get free posts on controlling your
cash, improving your income, managing your money and being a 20-
something millionaire!
• A FREE HELPING HAND
◦ If you find this e-book helpful, please share it to your friends by
giving them the link to my blog at TheWiseLiving.com Who knows?
They might even thank you for helping them open their eyes and own
their lives!
• A FREE CONSULTATION:
◦ Like what I've mentioned, I'm well on my way to being an official
financial advisor. For your money questions, budgeting basics,
investment inquiries, insurance queries and basically, financial
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planning needs, feel free to go and email me at
[email protected]. I'd be happy to guide you!
Stay tuned for the detailed, comprehensive and full version of the “12-
Step Guide to be a 20-SOMETHING MILLIONAIRE” this October 2013.
This book will contain more lessons like:
• A “Did you learn” section at every end of the chapter;
• Making your own Millionaire Mindset to motivate you to be a
millionaire;
• In-depth explanations of 5 Common Stages of Change to empower
you;
• Solutions for 7 Barriers to Wealth to help you overcome these
obstacles;
• Relatable anecdotes that make you realize you are not alone;
• Complete Step-by-step Guide to Saving to systematically guide you
into making saving your habit;
• Complete 3 Saving & Spending Templates – with actual
percentages! (including the template that works for me) to guide you in
making a budget that works for you;
• How to get started with Priority Purchasing to make sure your
money only buys the things that matter to you;
• How to compute for your own life insurance coverage to know if
you're insurance coverage is enough to provide for your family when
you're gone;
• The simplest definition of inflation to make you understand why it's
foolish to put your long-term savings in the bank;
• The 3 Basic Types of Investments to let you know which investment
type is right for you;
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• How it's possible to invest only P300,000 and get almost
P20,000,000 in returns to motivate you to invest now;
• The 6 Key Rules to I-N-V-E-S-T to retire with tens and hundreds of
millions along the years;
• The Importance of Giving to give you a more abundant life; and,
• The 5 Money Beliefs that can Change Your Mind to overhaul your
financial mindset and help you think like a millionaire and be a 20-
millionaire;
Excited? Me too!
Right now, feel free to email me at [email protected] for
your money questions, insurance advice and investment queries. I'd be waiting
for you, my friend!
Live wisely,
Lianne Martha M. Laroya
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