Click here to load reader

Financial Literacy

  • View
    1.864

  • Download
    7

Embed Size (px)

DESCRIPTION

Financial literacy intended for Overseas Filipino Workers

Text of Financial Literacy

  • 1.FINANCIAL LITERACY Anne A. AlbanFamily Welfare Officer Albanne_10

2. REALITY CHECK 3. ANG PERA, PARATING PA LANG PAALIS NA! 4. NABUBUHAY A-KINSE,A- TRIENTA 5. RASON:Culprit Instant Gratification 6. PERSONAL FINANCE & FINANCIAL LITERACYIs nothing but knowing How to keep whatYOU earn and do More with what you Keep FINANCIAL LITERACYis understanding how you can build your personal wealth 7. What is Financial Independence?What do you mean by financially literate?What is Wealth?Kailan ba maituturing na mayamanna ang isang tao? 8. Where does yourMoney come from? 9. CASHFLOW QUADRANT(Four ways that money may come your way)Work for somebody else Go into business Work for yourself Make your money work for youRAT RACE ROBERT KIYOSAKI Author, Rich Dad, Poor Dad 10. CASHFLOW QUADRANT(Four ways that money may come your way)Work for somebody else Go into business Work for yourself Make your money work for you FAST TRACK 11. CASHFLOW QUADRANT(Four ways that money may come your way)Work for somebody else Go into business Work for yourself Make your money work for you ROBERT KIYOSAKI Author, Rich Dad, Poor Dad 12. CASHFLOW QUADRANT(Four ways that money may come your way)Work for somebody else Go into business Work for yourself Make your money work for you ROBERT KIYOSAKI Author, Rich Dad, Poor Dad 13. CASHFLOW QUADRANT(Four ways that money may come your way)Work for somebody else Go into business Work for yourself Make your money work for you ROBERT KIYOSAKI Author, Rich Dad, Poor Dad 14. CASHFLOW QUADRANT(Four ways that money may come your way)Work for somebody else Go into business Work for yourself Make your money work for you ROBERT KIYOSAKI Author, Rich Dad, Poor Dad 15. Where does your Money go?Accountspayable/ INCOMEOthers SavingsSupport forParents, Re Insurancelatives PremiumsYourChildrensHouseholdEducation Expenses 16. FACING THE REALITIES 17. Where are you now? Prepare your Personal FinancialStatements or Statement of Assets &Liabilities (SAL) 18. Personal Income/ExpensesStatement SalaryInterest Income from Savings and Time depositsIncome from Investments in Government Securities & stocksIncome from Other AssetsLess:Expenses Food Rent Monthly Amortization for housing, car & other loans Utilities Insurance Premiums Allowance of children tuition fees Other expensesNet IncomeLess: Personal Income TaxNet Income after tax 19. FINANCIAL PLANNING The benefits of having a sound financial plan: It can help you avoid mistakes/ sidetracks Helps you make smarter decisions Can insulate you from the turbulence in the economy Makes money work for you! 20. INCOME EXPENDITURES CAN BECLASSIFIED AS FOLLOWS : Consumption Protection Savings Taxes 21. Statement of Assets & Liabilities ASSETS Cash (Cash on hand, bank deposits,Coop deposits, etc) Properties that you own (House, land, car, jewelry, etc) Receivables (mga pautang) Investments (T-bills, T-bonds, shares of stock, Coop Capital, etc.) Insurance & pension and academic plans. LIABILITIESLoans you owe your relatives & friendsHousing loancar loancredit card debtall payables & other loansTotal Assets Total Liabilities = Net Worth 22. The CASHFLOW GAME INCOME EXPENSESASSETSLIABILITIES 23. CASHFLOW 1Job orProfessionINCOMEEXPENSES ASSETSLIABILITIES- Larry Gamboa Think Rich, Pinoy! 24. CASHFLOW 2Job orProfessionINCOMEEXPENSES ASSETSLIABILITIES- Larry Gamboa Think Rich, Pinoy! 25. CASHFLOW of the RICHJob orProfessionINCOMEEXPENSES ASSETSLIABILITIES- Larry Gamboa Think Rich, Pinoy! 26. FINANCIAL LIFE PHASE4Retirement3Fine tuning 2 Build-up Where are you now?1 Where do you wantto be in the future?Start-up 27. KALAYAANSAKAKAPUSAN(KsK)RULES 28. SIMPLE RULES IN FINANCIALFREEDOM Rule 1: Pay yourself first. YOU is your first source of Capital SAVINGS 29. SAVE!!! 30. Redefining Savings It must be defined as an EXPENSE. It is an expense that BUYS your FUTURE. 31. SAVINGSSaving is a consciousand deliberate way ofsetting aside a portion ofthe personal income. 32. EQUATION Y- Income _ S - Savings ______________________ C Consumption 33. EQUATIONY- Income_C Consumption______________________= S - Savings 34. KsK Rule #2 Define your Financial Target @ each Lifephase 35. RULES IN SETTINGGOALS SetState itPut itspecific in Monitor intotimetablepositive progresswriting for each termsgoal 36. OBSTACLES TO SAVINGS Procrastination - delaying savings or putting savings off for another time; Poor Spending Habits includes spending on unnecessary items; Impulse buying; hedonistic lifestyle 37. OBSTACLES TO SAVINGSCulture of Dependency -- Beingoverly dependent on othersLack of Financial Literacy spending on liabilities or itemsthat decrease in value overtime; not knowing how yourmoney will grow or work foryou. Culture of Dependency 38. Stop spending on things thatdiminish in valueKnow the difference between Assets & LiabilitiesPoor Spending Habits *Impulse buyingUso kasiToo muchentertainment 39. Know the differenceYourYour NEEDS WANTS 40. Protect your greatest IncomeGenerating Asset, YourselfALERT #1 Health is WealthHealth and Protection are very muchinterrelated. If you are not healthy and you donot take care of yourself, you can get sick, meetan accident, get disabled, or die. 41. GOD HELPS ONLY THOSEWHO HELP THEMSELVES 42. GROW WITH THEECONOMY AND BEATINFLATION 43. An Illustrative Formula of 80/20 43 44. Trust the Power of Time and CompoundingPeriod 1Period 2Period 3 YourMoney Your +MoneyInterest Earning Your Your MoneyMoney + InterestYourYour Earning InterestInterestEarningEarning+ Interest Earning 45. Power of CompoundingSimpleInterest CompoundYear Principal Total Principalinterest TotalEnd of 1 yr1000 10011001000100 1100End of 2 yr1000 10012001100110 1210End of 3 yr1000 10013001210121 1331End of 4yr 1000 10014001331133 1464End of 5 yr1000 10015001464146 1611End of 6yr 1000 10016001611161 1772End of 7yr 1000 10017001772177 1949End of 8 yr1000 10018001949195 2144End of 9 yr1000 10019002144214 2358End of 10 yr 1000 10020002358236 2594 Difference594 46. Rule of 72(DOUBLE YOUR MONEY)For example, you are being invited to invest in a financialtransaction that offers a 20% return per year.Simply divide 72 by the rate of return, or 20%, and you willget the number of years it would take to DOUBLE your money.That is, if you do not withdraw the earnings. 72 No. of years == 3.6 years20 % 47. INVESTING & INFLATION INFLATION Is the economic condition of sustainedprice increases. Money is an asset thatcontinuesly losses its value. 48. Rule of 72 (DOUBLE YOUR MONEY)On the other hand, if you want to DOUBLE your money inthree (3) years, at what rate of return should you invest yourmoney?Simply divide 72 by the number of years within which youwould want to double your money, or 3 years, and you will getthe required rate of return to DOUBLE your money within thespecified period. That is, if you do not withdraw the earnings. 72 No. of years == 24 %3 yrs. 49. ASSESS RISK & OPTION Note: The higher the risk, the higherthe return. Always investigate 1st beforebelieving UNDERSTANDINGLOANINVESTMENTVS 50. When do banks or lenders lend? The ability of the The borrower has more than enoughborrower to provesustainable incomethat he will use the to pay for the loanproceeds of theplus interest;loan in an activity The lender doesthat will producenot mindsufficient income to foreclosing on orrepay the loan.taking over the collateral 51. Make Money work for you: thePower of leverage Borrowing leverage in finance(Analyzing Good Debt) People leverage 52. INVESTMENTSInvestment is the commitment of funds madein expectation of somepositive rate of return.If the investment is properlyundertaken, the return willbe commensurate with the risk it assumes. 53. INVEST & DIVERSIFYINVESTMAKE YOURMONEY GROWInvest your savings inmoney-making assets. MAKEYOUR MONEY WORK FORYOU.Dont put all your eggs in 1 basket 54. Evaluate InvestmentReturn/YieldLiquiditySafety/Risk 55. Eight Simple Ways to Invest Invest in debt and gambling reduction Lending investments: Govt/corporate Bonds Banks Pension Plans 56. Eight Simple Ways to Invest Real Estate Stock Market Mutual funds Engage inBusiness 57. ALERT #2 When Buying RealEstate Property Do a canvass on the location, area, total cost, downpayment and monthly installments for house and lot and getinformation for several houses from which your family canchoose your desired home; Take your time; Dont be in ahurry; Make sure the property you are buying is properly titled andhas no claimants clean title other than the owner. Checkwith the registry of deeds where the property is located; If the property is newly developed, check with the HLURB ifthe seller is accredited and has license to sell property; Get a document in exchange for every payment youmake, whether it is an official receipt, a contract to buy andsell, deed of absolute sale or the original title itself; If you can easily afford to pay in cash, ask for a big discountbecause you are doing the owner a big favor. 58. INVESTING IN YOUR OWNBUSINESS Remember that not everyone has what it takes torun a successful business; If you think that you have what it takes to become asuccessful business person, then its time to planyour business; Think about what business you can engage in; Look around you and identify businessopportunities and evaluate each options; Do a situational analysis; identify thestrengths, weaknesses, opportunities and threatsto your proposed business. 59. Negative Mindsets I do not have enough money I do not have good enoughideas Distrust of people mandarayasilang lahat Fear of failure 60. The case for Would-beEntrepreneurs They lacked the business & management skills They may have had enough money in the beginning but miscalculated the working capital requirements & were thus unable to raise the correct financing when they needed it They seriously mismanaged the operations of the business. They did not see the value of competent staff or of consulting advisors in the areas of marketing, production, technology, legal aspects, personnel & importantly leadership 61. Make use of the Power of One: Strength in NumbersSaving together provides more & variedopportunities to earn higher returns as well as secure better benefits for all. Cooperativesare a good way to avail of the power of many. 62. Learning to say NO! ispart of Discipline In good or bad times, Never give up! Remember, Winning is a habit Make it yours! 63. THE IMPORTANCE OF SHARING Walang sinoman aynabubuhaypara sa sarili lamang.Tayong lahatay may pananagutansa isat isa.Sharing always brings moreblessings 64. You have not lived a perfectday, even though you have earnedyour money, unless you havedone something for someonewho will never be able to repay you-Ruth Smeltzer 65. Albanne_10