A missed opportunity is probably one of the most common regret a lot of us have. For some people, they regret missing out on things like a business idea, an investment, a career and well, even on love. If I were to enumerate those things that I missed out on, I probably will have a very long list… top of mind would probably be buying PLDT shares when I started working 20 years ago, among others.

There are a lot of people who realized that they missed out on many things that would have probably made them happier today; or they would have avoided certain things in their lives that make them unhappy today. The common cliché “there’s no sense crying over spilled milk” does make a lot of sense – but it doesn’t make our feelings of regret any easier, right?

On a personal finance note, there are many things we missed out on and if we can only bring back time, we would do things differently. If there’s anything I feel that I have missed out on, it is putting my financial life in order early enough. If I had more common sense in handling my finances earlier than I should have, I would like to think that my financial picture today will be a lot prettier. The stress that I had to endure over the years would have been lesser. I don’t have a rosy financial history not because I didn’t make enough money, but because I didn’t keep enough. I spent a lot of money on things of no value today; borrowed too much too often; indulged unnecessarily, planned poorly, invested unwisely – in other words, I was really clueless on proper financial management and that makes me a total idiot, financially speaking. My being part of the financial services industry makes it severely ironic because I should have know all of these and I did, I just did not put it into practice. My experience tells me that knowledge is great, but what is more important is what you do with that knowledge.

However, let me repeat the old cliché… “there’s no sense crying over spilled milk” – really! I can’t go back in time and I can’t undo what has been done. It is one thing to think about what was but to dwell on it really makes one a fool.

Catch part 2 of this blog, soon!

“There is no slavery but ignorance.”

— Dennis Waitley

I gave a radio interview earlier for Tony Cuevas and we had a long chat on some personal finance issues. Our discussions focused on two issues us Pinoys have with regard to personal finance — discipline and ignorance.

We all know that we have a discipline issue with regard to finance… but we also have an ignorance issue as well.

Many of us do not have a good handle of our finances because we are ignorant of the real effects of financial mis-management or at least the timely realization of it’s ill-effects. By the time there is a realization, chances are we are burried in debt or we are in a situation that is similar to a ‘financial quick sand’. It is either we are not aware of things that are to happen or we simply do not face the facts — both are ignorance issues if you ask me.

People go through life events — we graduate, we work, we get married, we have children, we purchase our home (or at least we dream to), our children goes to school, we help our parents, our kids go to college, our parents get sick, we retire, we get sick.. and so on. All of these life events require money — lots of them. Knowing that we will go through this, shouldn’t we be planning our life accordingly?

For those who do have money and invest their money, some of them becomes victims of scams or lose a lot of their hard earned money even in legitimate investments. There’s a rule I often tell people… “never ever ever ever invest in something you don’t understand’. We must be careful before we part with our money… learn, research, investigate. The power of information technology makes if very easy to find out if the investment is legitimate or not or if the investment is suitable for you. If you are not too keen on studying too much, talk to a tursted financial professional — preferably one who has the technical expertise and one who has a good track record.   You may want to check out the Registered Financial Planner Institute for their roster of financial planners at http://www.rfp-philippines.com/. At the end of the day and even when you hire a financial planner, you will still make the decisions, just make sure you made an informed decision.

We can’t let ignorance be a reason for us not to experience a victorious life. Money is not everything, but money is important and it’s proper use can determine the quality of life and even our fullfillment in life.

Let me leave you some good advice from the book that gives the best advice to victorious living — the Bible:

Therefore, prepare your minds for action; be self-controlled; set your hope fully on the grace to be given you when Jesus Christ is revealed. As obedient children, do not conform to the evil desiresyou had when you lived in ignorance.

— 1 Peter 1:13-14

“Good habits are as addictive as bad habits, and a lot more rewarding.” — Harvey Mackay

Ever considered computing for the economic value of your habits? Bad habits can bring about a financial drain while good habits can be financially rewarding.

Destructive habits like high stakes gambling takes a toll on one’s financial condition – everybody knows that. But what about ‘innocent’ habits that seem inexpensive, does that have drastic financial consequences as well? Let’s use an ‘innocent’ habit like smoking and let’s quantify.

Let us assume that a typical smoker spends P 50.00 per day on cigarettes which comes out to P 18,250.00 per year and that the cost of cigarettes will become expensive by an average of 7% a year due to inflation. Let us also assume an average annual investment yield of 7% p.a. to factor in cost of money. Let us see how it looks like.

Spending P50 bucks a day on cigarettes for 30 years will actually cost you P 4,158,621.17!

On the other hand, the same principle applies when you are investing. Even if you can only set aside P 50 a day (increasing it by 7% per year) and investing it at a modest average yield of 7% p.a., you would accumulated P 4,145,621.17.