The Best Time to Buy Life Insurance

The Best Time to Buy Life Insurance

by: Kendrick Chua, the Wealth Warrior

Just recently, one of the moms I interviewed for my blog post, Super Single Mom has been diagnosed with an enlarged heart that had her confined for several days. Fortunately, she has been discharged and declared out of danger but the risk of collapsing any time is imminent.

Unfortunately for her, she doesn’t have any life insurance and even if she decided to take out one for contingency purposes for her family, there is a great chance insurance companies will deny her case.

She’s only 31 and has four children.

Her case is just an example of how illnesses can creep up like the Angel of Death, striking silently and without warning, all too often leaving his (or probably her) victims, flat-footed and aghast.

With that, why is it a lot of people, who believes in the importance of life insurance, still doesn’t get one?

My theory: It’s not important now. It might be in the future, but not at the moment. They couldn’t be more wrong.

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Tags: life insurance

How to solve the greatest financial mystery

How to solve the greatest financial mystery

(as published in Business Mirror http://www.businessmirror.com.ph/home/opinion/15936-how-to-solve-the-greatest-financial-mystery.html)

For all corporate employees, the feeling of seeing your ATM (paycheck is so old-fashioned) account filled with your salary is so empowering. The surge of endorphins gives you that sense of jubilation for the next two weeks (or until you receive you next pay again). You start to think about buying those clothes, shoes or gadgets that you swear you really need. And so even before that money is withdrawn, it is already spent.

This applies to all levels of income. That is why a mystery as enigmatic as the Loch Ness Monster, Big Foot and the Easter Island Statues haunts young professionals, two weeks from the payout-”Where did all my money go?”

Just like any other mystery, this one has its own variations. At times, it is “Why haven’t my savings gone up despite my salary increase?” or “Why did I end up short this month?”

Sounds all too familiar?

Fortunately, while it seems like money is just disappearing out of thin air, there is a way to solve the enigma, and it doesn’t need complex mathematical formulas or scientific equations. It just takes common sense and discipline.

1.) Spend for savings. Treat savings as if they are another item to spend on. They are, in fact, a luxury that you all are entitled to. Once you get your salary, immediately deposit that into another bank account because leaving it in your payroll account would just make it be easily withdrawn and spent. If you have none, entrust that with someone for the time being until you open one. If possible, arrange an auto-debit transaction with your bank to link the savings account to an investment account.

The point is if you can’t see it, you can’t spend it, and treating the savings as an expense means you just spent on it. It is now gone! Remember the income-less-savings-equals-spending approach? This is just another way of applying it.

2.) Clearly classify priorities. Expenses are classified as either necessities or luxuries. The two are often used interchangeably. My advice: Don’t! There is no concrete definition for the two. What can be considered as a necessity for one is a luxury for another. The hint: If you can live without it, chances are it is a luxury.

Naturally, necessities take the first bite out of your salary sans the savings. After that, you’re entitled to luxuries. A word of caution, though-luxuries that are bought often tend to become necessities (a mocha frap in Starbucks is not a necessity). Don’t fall into that trap.

3.) Collect and list all purchase receipts.  Keeping track of your purchases mentally can be easily forgotten either on purpose or not. The solution is to collect all the receipts and list them at the end of the day or the week. The key here is to determine the amount being spent on miscellaneous items, which can easily run to thousands of pesos. You want to avoid that.

What you want is to know how much the miscellaneous items are costing you. Then make the conscious effort to curb them down to a more manageable level.

4.) Save the money saved from discounts. Discounts are great! They are designed to help you save money but did you really save it, or were the savings used to buy other items? Chances are it is the latter.

Savings on discounts can be tricky if they are stashed inside your wallet with all the other bills. Instead, put them in another one (an envelope can also do the trick) which will house your savings from discounts. Accumulate them and deposit them in your other savings account. You’d be surprised at how much you saved from all the discounts.

5.) Apply daily rewards. At the end of each day, you normally can assess how you fared. Then, rate and reward yourself accordingly. Monetary rewards can be as low as P5 and as high as P20. Put this reward in a coin bank and leave it there.

The amount for daily rewards should be small enough so that you won’t miss it but big enough that it can accumulate to something significant. That is why P5 and P20 are good amounts to set as the minimum and maximum, respectively. Just do the math, if on the average you reward yourself P10 for the next 365 days that will immediately total to P3, 650. You can spend this any way you like it.

The road to financial freedom is not a difficult path to take. Oftentimes it even gets easier as you go along. The most difficult is to take the first step. And that first step is debunking all myths and solving the greatest financial mystery, which you just did.

Tags: published article

Frugality of the uber-Rich

Frugality of the uber-Rich

by: Kendrick Chua, the Wealth Warrior

These people may be perhaps the most unorthodox humans ever to roam the face of this planet. You’d think that because these uber-rich have almost unlimited supply of cash, bottomless pockets and fat bank accounts splurges on practically everything their heart desires.

Guess again.

They are perhaps the most frugal people you’d ever come across and its not because they are stingy as what most people think of them but because they just knew the value of money than most people.

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Tags: Wealth

How to think like a Billionaire

From Early to Rise newsletter. I take no credit for this article.- The Wealth Warrior

How to Think Like a Billionaire

By Michael Masterson

In his thoroughly entertaining book The Prime Movers, Edwin A. Locke gives this example of the way entrepreneurs think:

An average person observes evergreens growing along the roadside and thinks that they look pretty, especially when partly covered with snow. At this point, his thinking stops. An entrepreneur observes the same trees and thinks, “These trees would look good in people’s living rooms at Christmas. I wonder what people would pay for them?

And he would continue to ask such questions as:

* How hard is it to grow evergreens?
* What investment is required?
* How big should they be before being cut?
* How difficult would it be to cut and transport them?
* How much would it cost?
* How long would they keep before losing their needles?
* Where would they be sold?
* What would the competition be like?
* Could I make other, related products – e.g., wreaths?
* Can I make money in such a seasonal business?
* How much?
* How can I get started?

This kind of active, directed thinking is one of the things that separate entrepreneurs from the rest of humanity. In fact, the most successful entrepreneurs in history – all of them mega-billionaires by today’s standards – seemed to have dynamic, pragmatic minds.

Locke gives plenty of examples, including these:

Thomas Edison: He was a “virtual thinking machine. Almost until the day he died, his mind poured forth a torrent of ideas, and he might track as many as 60 experiments at a time in his laboratory.”

Steve Jobs: He bombarded people with his ideas – his investors, his board of directors, his customers, his subordinates, and his CEO John Scully.

Henry Ford: “He threw himself into every detail, insisting on getting small things absolutely right…. But he never lost sight of the ultimate, overall objection. He had a vision of what his new car (the Model T) should look like. From all the improvisation, hard thought, and hard work came a machine that was at once the simplest and the most sophisticated automobile built to date anywhere in the world.”

You may be thinking, “Hey, I’m no Thomas Edison or Steve Jobs or Henry Ford.” Well, neither am I. And I could rattle off a dozen multi-millionaire entrepreneurs I know who don’t have that kind of brain capacity either.

Raw intelligence is not the issue. If it were, Einstein would have been wealthy. What matters in the world of commerce is how you think.

Some people, whether because of their upbringing or their DNA, have a natural billionaire mind. But just about anyone who is smart and ambitious can learn to think like a billionaire.

You can transform your mind completely and permanently in a matter of a few short months by making small changes, one at a time. It will take some effort, though. As Joshua Reynolds once said, “There is no expedient to which a man will not resort to avoid the real labor of thinking.”

Begin by vowing to talk to every successful person you know or meet. Tell them how much you admire what they have accomplished and ask them how they do what they do.

You may be amazed at how open they will be to such inquiries. Nine times out of 10, they’ll be eager to tell you just about everything they know.

Unfortunately, many of the twentieth century’s greatest entrepreneurs have been disparaged by historians and the media. As Locke points out in The Prime Movers, if you mention the names Andrew Carnegie or John Rockefeller or Cornelius Vanderbilt to most people, they think “greedy robber barons who took advantage of their circumstances.” They know nothing about their accomplishments. What they know, for the most part, is based on persistent myths that prevent them from learning from these men and prospering.

Locke says:

“It is often claimed that the Prime Movers have been viewed with suspicion at best and with distaste or repugnance at worst…. The most basic motive [of those who envy them] is… hatred of the good for being good… it is hatred of the Prime Movers because they are intelligent, successful, and competent, because they are better at what they do than others are.

“The ultimate goal of the haters of the good is not to bring others up to the level of the most able (which is impossible) but to bring down the able to the level of the less able – to obliterate their achievement, to destroy their reward, to make them unable to function above the level of mediocrity, to punish them, and, above all, to make them feel unearned guilt for their own virtues.”

When you become super-successful, you’ll have to learn how to handle the people who are going to resent you for achieving what they themselves have been unable to do. But first, you have to get yourself into that enviable position. And you do that by practicing the thinking of the great entrepreneurs who thought like billionaires and so amassed billions.

I’ll be writing more on this subject in the future. But for right now, here are eight characteristics of the billionaire mind that you can emulate:

1. A “normal” person is concerned with protecting his ego. When dealing with a problem he doesn’t really understand, he pretends he understands the contributing factors and doesn’t try to find out what anyone else thinks. A person with a billionaire mind asks questions incessantly. He has no ego when it comes to learning. He knows that knowledge is power.

2. A “normal” person has a consumer mentality. He looks at a hot new product and thinks about how he would like to own one. A person with a billionaire mind has an entrepreneurial mentality. He looks at it and thinks, “How can I produce this or something similar in my own industry?”

3. A “normal” person is wish-focused. He daydreams about making gobs of money. A person with a billionaire mind is reality-based. He is always analyzing his own success and the success of others and wondering how he could learn from it.

4. A “normal” person, when confronted with a challenging idea, thinks of all the reasons why it might not work. A person with a billionaire mind sees the potential in it and disregards the problems until he has a clear vision of how it might succeed.

5. A “normal” person resists change. A person with a billionaire mind embraces it.

6. A “normal” person accepts the status quo. A person with a billionaire mind is always looking to make things – even good things – better.

7. A “normal” person reacts. A person with a billionaire mind is proactive.

8. A “normal” person looks at a successful business owner and thinks, “That guy’s lucky.” Or “That guy’s a shyster.” A person with a billionaire mind thinks, “What’s his secret?” And, “How can I do that?”

Start by being humble and asking questions. Do this until it becomes a habit. Then take on another characteristic of the billionaire mind – like looking at a successful new product and thinking, “How can I do something like that?”

Go through the list, mastering one characteristic at a time, and within three months you will be able to create new businesses almost automatically. You will become a natural leader. Money will flow to you like water coming down a hill. And then you’ll be ready to deal with all the “normal” people who are jealous of your incredible success.

Tags: billionaires