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Lessons From My Father

April 27, 2012

 Lessons from my Father

father and sonAside from giving you life, what do you think could be the next best thing that your father can give?
I certainly believe that there are many answers ranging from material things, from the tangibles to the intangibles. There are different ways for a father to give the best for his children as long as he can afford it but not to the point of spoiling them. Like our Heavenly Father who gives the best to us, being a father myself, I also want to do the same to my kids as my father was to me.
Having seen my dad work so hard during his younger years, just to provide for us was my eye-opener to the realities of life. My dad used to have hardware and the business was doing fine.  Although the business was good, the income was not sufficient to support two families. So my father had to source out additional income to be able to feed us, Because of the growing families, there came a point in time that he had to let go and leave the management of the hardware to my uncle.  The hardware was feeding a family of six (our family) and seven (my uncle’s family).  He explored the corporate world and made his mark in the Chinese community. There are many wealth principles he unconsciously taught me through his stories and experiences which are enumerated below:
1. Work hard. Nothing beats hard work in building wealth. I have yet to see a man getting financially well without putting hard work. Just think of our taipans (wealthy Chinese) that were once poor. They worked hard till they reached their dreams.
2. Be Frugal. I have learned to be spendthrift ever since my grade school years. My snack everyday consisted of two pieces “pan de sal” with Milo for recess time. My mother brings our lunch to school for economical reasons. We were not given allowances since we do not have anything to buy in school. I believe that is a good discipline on our part. Up to the present, in my workplace, when everybody buys their lunch, I still have the habit of bringing my own lunch as if I am a student. Some may feel awkward, but for me, this habit saves me P2,500 a month. Another thing is that I reduce medical cost associated with eating out everyday.
3. Save as much as you can. When I was a kid, my dad opened a joint passbook account for me to encourage me to save. I remember at age 12, I already have P10,000 in my account. That was already a big amount that time. I did part time work as a kid then. After school, I would go to the hardware and help out until 8 pm. I was given a peso before closing time. During summer, I work at my auntie’s flour business. I was given two pesos per day. All of the money I received (even Christmas cash gifts), I put in my bank account. This is another habit I keep until now. Whenever I receive extra income like bonuses, benefits, or commissions, I stash it away into my savings and investment account.  My reason is this: I was able to live within or below my monthly income; whether I receive extra money or not, I am able to live comfortably. So why do I need to spend my extra money? It is much better to invest it for growth. As a general rule, we should save 10 to 20 percent of our monthly income. A better idea is to implement that rule and save more by adding the additional income that may be received.
4. Invest in a high-interest vehicle. When the banks were giving a high return for placements, around 20 percent per annum, my father showed me how he manages his savings and put it to work by investing in time deposit placements. From his bank documents, I became aware of money can earn money with no effort at all. That is why when I add to my savings, I am always happy to see my money earn interest (regardless of the amount) because my savings worked to produce more.
5. Be far-sighted. Think and look far ahead into the future. As Stephen Covey wrote in his book 7 Habits of Highly Effective People, “begin with the end in mind”. My dad would always tell me to think and look far ahead into the future. One of his perfect examples is his decision to leave the hardware. He said that had he chose to stay, we will not be where we are financially right now.
Another example of this is getting enough protection for the family in case something inevitable occurs. Everyday we face risks. I will just focus on two kinds of riskst: the risk of living too long and the risk of dying too soon. We need to protect ourselves from both risks.
For the first one, the only antidote is to build long term assets that can sustain our lives when we live beyond our productive years. Imagine retiring without wealth. What kind of life would that be? For the risk of dying to soon, the solution is to get protection or insurance. Remember, insurance is never intended for our own benefit but for our family. In effect, insurance is leverage against risk we do not want to happen. In other words, we need to be prepared for any events that may occur. To make things plain to my friends, whenever they ask why I buy insurances, I always jokingly say I am far-sighted (since I already wear eyeglasses) to make them open to the concept of protecting themselves.
6. Avoid giving out loans. My dad always told me that it is not healthy to give loans to friends because not only do they have the tendency to default, the friendship is also put on the line. It is better not to give the loan and preserve the friendship. This principle makes sense.  I have experienced lending out to at least three friends an have not heard from them since then. It is good that the amount was not that significant. At least I did not feel too bad. One thing I learned was that my father was right in his decision not to lend money to friends.
7. Avoid gambling. My dad always had emphasized this. He told me that gambling is the worst method to make money. He always used my grandmother’s quotes about gambling. The translated line goes like this:”If you can gamble, then you can eat manure”. True enough, the hardware my dad left to my uncle closed down because of his addiction to Jai-Alai.
8. Have extra income. .In order to build wealth faster, have additional source of income, Try to check hobbies. Be imaginative and think of ideas that can help create money. Buying and selling activities is one way to generate additional cash.
9. Have integrity. This is the most important aspect of wealth building. A person without integrity will find it hard to transact business. I remember my dad who once had an opportunity to make money out of a condo unit for sale. Lacking 1 million peso in cash, he called a friend to ask for support. Since my dad has a good track record in the Chinese community, his friend did not hesitate to invest in the opportunity he is undertaking. A week later, my dad was able to dispose the said condo, at the same time, he and his friend earned from the deal. It must be noted that their internal transaction did not require documentation. Mutual trust was their basis.
The above lessons, although simple, are priceless and for me, it is the best legacy a father can pass on to his children’ children.
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