Question: Hi Randell. I’m a mom of two kids—a 3-year-old girl and a 4-month-old baby. I know that they’re still too young to understand what money is, but my husband suggested that we already start teaching them the value of money. I think this is a good thing. Soon, they will be in school and I want them to use their allowance wisely. What’s the best way to do this?—Dina, from Facebook

Answer: Dina, I’m glad you’re already thinking about how to pass on important money lessons to your kids—especially since money management is not part of the typical school curriculum. As a parent, your kids will look up to you for these important financial lessons. In fact, research says that kids start inheriting money habits from their parents as early as 7 years old. Early childhood is a great opportunity to pass on healthy attitudes towards saving and investing.

Your kids are indeed young, but if your 3-year-old is old enough to count, then she is old enough to start learning about money. Start by sneaking in some money lessons in a playful manner. For example, nursery rhymes are a great way to start instilling a money mantra. Create a simple rhyme like, “See a coin? Save a coin!” and mimic the act of putting a coin in a piggy bank. Your little girl might not understand what this means right now, but just like “Mary had a little lamb,” this could stick with her for life.

Storybooks are another great way to pass on positive financial habits. I recommend Rose Fres Fausto’s The Retelling of the Richest Man in Babylon, which is a story and activity book that teaches kids the basic laws of money. Go through the activities with your daughter—it’s a great reminder to adults just how simple these laws are.

By the time your kids are old enough for kindergarten, they can already have their own bank account. This will be important in terms of teaching them how to save, and teaching them that money should be protected. At this age, kids don’t understand abstract concepts like mobile deposits. So you need to make the lesson stick by having them do tangible interactions.

Bring the kids to the bank and encourage them to hand the money to the teller while making the deposit. Show them the bank book and explain that this money can grow if they leave it in the bank and don’t withdraw anything. Help them understand that these are savings they can someday use to buy a car or go to college.

Once your kids are in grade school, you can build upon these financial fundamentals by setting mid-term goals—the kind that requires a bit of discipline and teaches sacrifice. For example, if your child wants to buy a bike, explain that she needs to set her allowance aside for a few weeks in order to afford it. To boost her motivation, you can track progress with a visual graph.

Bringing the kids when you do the groceries offers great opportunities to teach smart financial decision-making. For example, you can compare several brands of cereal, and show that the imported ones taste just like locally made ones—but costs twice as much. And that’s why you won’t buy it. When your kids are older, you can give them a budget and a grocery list, then divide and conquer supermarket duties.

Introducing the benefits of charity and tithing is also a good way to teach healthy money habits. Encourage your kids to donate part of their allowance to a charity or non-profit. You can also volunteer your time as a family, or hold a birthday party in an orphanage. Doing charity work at a young age develops the core value of sharing their wealth to others in need, while teaching them to appreciate the material goods they have. Tithing also teaches them about stewardship and that money is really the Lord’s — they are merely managers. Teaching kids the true purpose of money is a great way for them to see and appreciate its real value.

For these strategies to be effective, you and your husband need to be good financial role models to your kids. Your words and actions should not contradict each other, especially while your kids are young. For instance, if you tell your daughter she can’t buy a toy because it’s too expensive, and you turn around and buy something for yourself, it sends her the wrong message.

Besides teaching your kids how to save and budget, it’s important to pass on a healthy attitude towards money. Giving the impression that you’re struggling to feed the family can instill a fear of money in young kids. Avoid sighing when you open your credit card bill or complaining when you take your wallet out to pay for something. Choose your words carefully. Emphasize that when used carefully, money can be a valuable tool to a good life.

It’s never too early to start teaching kids the value of money, and I’m glad you and your husband are already thinking of how best to do this. I’m confident that you will do a fine job in raising money-smart kids.

“Train up a child in the way he should go; even when he is old he will not depart from it.”—Proverbs 22:6, ESV

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On May 18, the Philippines Securities and Exchange Commission issued an alert concerning the firm Hyper Program International and its affiliates, warning investors to stay clear. But what are the reasons for the worries surrounding Hyper Program International (HPI)?

It helps to know some background information about the company. The firm began in Quezon City in 2014 as a direct marketing operation selling collagen-based cosmetic products. This includes face masks that claim to revitalize the skin, collagen soap, a drug called Gluta Colla-C and Collagen Coffee.

Its founding statement promised investors that HPI would be “creating business to build people and change life and to provide infinite growth and possibilities to its members.” HPI claims to use a common direct marketing strategy to sell its products. Using social media networks on sites such as Facebook, HPI recruits investors to join its Rewards System and then claims to pay them a bonus due to their customer loyalty.

According to the SEC, this had entailed promising returns of between 35 and 40 percent within 40-45 days. As the SEC also reports, investors in HPI are paid their bonus if they then recruit other investors. Investors are also rewarded, in theory, if they recruit customers to purchase the collagen products marketed by HPI.

However, the Commission warns investors that HPI has not been issued with a securities license, making any investment potentially illegal. The SEC warning notes that the firm may be in breach of Sections 8(8.1) and 12 of the Securities Regulation Code. The penalty for participating in an unlicensed securities operation can be between P50,000 and P5,000,000 – and a 7 year prison term can also result from prosecution.

Unregulated securities scams can result in investors losing all of their capital, which is why the SEC attempt to issue licenses to officially approved firms. Because HPI has been refused a license, anyone thinking about making an investment in the firm would be advised to think twice. It seems likely that the company has an unsound business model that seeks to exploit online investors.

Direct marketing is a common source of employment in the Philippines, with around 4 million people involved in the sector across the archipelago. However, there is sometimes a small difference between a genuine marketing network where all sellers are rewarded for their work, and a pyramid scheme which only enriches a few criminals at the head of the organization.

The SEC clearly suspects that HPI has been acting as a pyramid scheme, where investors are rewarded solely for recruiting others (who pay for the privilege), instead of for their sales activity. That’s why the Philippines SEC issued its strongly worded warning to anyone thinking about making an investment in HPI which, on the surface claims to be a forward-thinking, dynamic sales operation. Anyone still considering investing or offering investment opportunities with this companies has been warned and may face prosecution if they take part.

You can view the warning of the SEC at their website or click HERE

We have been reading a lot of positive news about the Philippine economy. Despite the cynicism of many, our economy continues to grow and has been attracting a lot of deserved attention. For 2015, we are poised to continue to grow and not only are we expected to perform well, we are expected to outperform our peers.

In a recent article by the Business World, it stated the we are to outpace our peers. Click HERE to read the article.

Bloomberg, a leading finance media also reported that the Philippines is expected to place 2nd in terms of economic growth, just below the economic behemoth China. To read Bloomberg’s article, click HERE

Despite the bullishness, the Philippine economy is not without any threats:

• Poverty and high un/underemployment
• Rising inflation
• Power deficits
• Natural disasters
• Logistic problems – port congestion, truck bans, etc.
• ASEAN – more competition from foreign companies (for market share and skilled labor and professionals)
• Political uncertainties (going into 2016 elections); continuation of economic and governance reforms

However, the economic threats are shadowed by opportunities:

• Transiting to higher levels of economic growth
• Sectoral and regional growth drivers)
• Increasing GDP per capita
• Peace dividends – expanded markets in Mindanao
• ASEAN integration – larger market for expansion and FDI attraction
• ASEAN – lower import prices for inputs
• Demographic Sweet Spot (majority of population now in the working/productive age)

I grew up always hearing that there is little hope for the Philippine economy, that we are buried in debt and that we are the ‘sick man of Asia’. Today’s ‘millennial’ generation are hearing another story and I pray that they will pass on the nation to their next generation in an even better shape.

Let us continue to honor the Lord for what He has been doing to our nation…

“Blessed is the nation whose God is the LORD, the people he chose for his inheritance.” — Psalm 33:12, NIV