from the July-August 2011 issue of Moneysense

Internationally renowned balladeer Christian Bautista virtually stumbled into his current career because he was merely exploring his artistic calling. Unknown to many, Christian graduated from the prestigious University of the Philippines with a degree in Landscape Architecture.

Artistry has always been a passion for Christian but he didn’t think that he will end up with a very successful singing career and now also an acting career. His love for singing was limited to schools and church. Since he wanted to explore his musical artistry, he put his landscape architecture on hold. His father agreed to Christian’s decision but he gave his son a window of two years. If Christian will not progress in his musical career, he will focus on building a career in landscape architecture. The rest, as they say, is history.

To sustain himself during those times without being a burden to his parents, Christian endured odd jobs such as being a promo boy, doing VTRs, and being an  extra in some commercials. “I survived those trying times because kuripot ako (I’m thrifty),” Christian recalls.

Christian eventually enrolled at Trumpets for further training on musical theater. Since he was an obvious standout, it was only a matter of time before he was discovered by his current talent manager, Carlo Orosa. Christian auditioned and was selected as a finalist for ABS-CBN’s Star in a Million (which produced other great artists like Erik Santos and Sheryn Regis) where he earned the moniker “Josh Groban of the Philippines.” But the budding balladeer only ended up at fourth place.

Persistence pays off

However, Christian’s unremarkable ranking at Star in a Million did not discourage the young singer to pursue his passion and his dream.  Today, Christian Bautista is a multi-platinum recording artist not just in the Philippines but even in other countries particularly Indonesia where he is considered a superstar.

From modest beginnings, Christian Bautista is one of the country’s most notable names in the entertainment industry and continues to be more and more popular. He will soon be seen in an Indonesian-produced movie A Special Symphony where he landed the starring role and is slated for an Asian release.

Christian is currently in Singapore for the taping of a trailblazing Asian TV musical series entitled The Kitchen Musical where he co-stars with Karylle and other Asian stars. Truly, Christian has achieved super stardom that has breached other lands. “Although I will away for a few months, I am very thankful for the break I’ve been given,” Christian shares. “I hope Filipinos will not forget me that soon since I’ll be back shortly,” he adds.

A modest lifestyle

With the meteoric rise to fame of Christian, his income has soared in proportion to his success. From earning a few bucks from odd jobs, he is now being handsomely remunerated in accordance to his talent and popularity. “I don’t earn chump change anymore,” Christian muses.

While he can now afford to live a very ostentatious lifestyle, his upbringing and prudent behavior has kept him grounded and he has refused to follow the flamboyant lifestyles of the entertainment industry. Christian shares that during his earlier years of his meteoric rise in popularity (and income), “I drove an old Subic converted van.” While he could have afforded an expensive luxury SUV then, the humble and prudent superstar felt there was no need to spend good money on expensive vehicles. “I’d rather save the money for something more important,” Christian retorts.

In fact, he held on to his old van for about three years until his manager implored upon him to get a newer vehicle, citing safety and convenience issues. Episodes of the beat up old van breaking down were a cue for Christian Bautista to get a new vehicle. One would expect that the superstar balladeer would fork out a couple of millions to buy a luxury European sedan right? Not Christian. He went and bought a modest all-purpose vehicle that was not pricey and was very practical. When asked as to why he did not opt for a flashier model, Christian responds, “Why waste good money on something that loses value fast?” Certainly, the balladeer’s sense of practical thinking was not dulled by his status.

Today, Christian admits that he now keeps two vehicles because he felt the need to keep them for convenience purposes. So does he now own an expensive German sedan and a luxury SUV? No. He now purchased a pre-owned Japanese sedan and a van. With all his wealth, he still opts to remain practical and invest in money elsewhere, like real estate.

Investing right

Christian’s first investment was his home. Did he buy a penthouse unit in Fort Bonifacio or Makati? Again, not Christian. He patiently looked around for a property of great value and kept being prudent. Even if he can afford it, he did not want to spend too much money on his home. “I also don’t want to pay expensive monthly dues,” he adds. He eventually bought a nice but modest home in San Juan. “It’s small yet spacious enough for me and has everything I need,” says the balladeer.

Christian shares that he understands that his money needs to grow, otherwise inflation will just eat up his hard-earned money. He has invested in some commercial buildings in Cavite that earns him adequate passive income. His criteria before investing in any venture is that it should be of very good value, has potential for steady income, is physically accessible to him or members of his immediate family (for management purposes), and should not drain him financially.

Christian prefers repossessed properties because he believes that the capital appreciation of such will be better over the years. He also does not believe in buying anything on credit so all his investments have been purchased with cash.

He further shares that the secret to him having been able to invest the way he does and remain debt free is prudence. Christian has decided not to indulge in excesses. He wants comfort in life but his definition of comfort is very different from those in his industry. He is very practical and prudent. He maintains a modest lifestyle and understands value. One would think that Christian is a trained financial expert and entrepreneur rather than an internationally renowned singer-actor whenever you talk about money issues with him.

In the unlikely future when Christian Bautista will stop singing and acting, the balladeer will definitely not go hungry. When asked as to what he can advise other people with regards to money management, his reply: “Keep it simple.”

Practical, prudent, simple with finances yet grandiose in talent – that’s Christian Bautista.

Here’s a guest post from Melvin Esteban. Excellent writer!

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A Risky World

Filipinos are generally conservative. Surprisingly though, you’ll still hear a lot of people losing so much money on the investment that they bought. In all the talks that I had, I’ve always been asked what investment do I best recommend that will give good return without taking risk. Well, bad news is, this investment don’t exist. Even your friendly and safe “Time Deposit” or “Savings Account” is not totally risk free.

No matter how you fix your investment and regardless on how much you diversify it, you can never remove risk. To better understand, there are two kids of risk. The risk associated with your investment (as an investment or a whole portfolio) has two components.One (unsystematic risk) can be diversified away, and the other (systematic risk) cannot.

Unsystematic Risk

Good news is, this can be diversified. This type of risk is very specific to the asset you bought (firm specific).

Say for example there was a massive recall of product produce by the company you invested because they found out it was tainted with poison or say the company unexpectedly in a deadlock with his labor union or even as simple as the a warehouse catching a fire.Financial risk will also be high if the company has high level of debt and Business risk will be elevated if investment is only concentrated to few industry or asset class.

You can eliminate this by simply just adding different investments and class of investments. This risk can be reduced because the other asset in your portfolio can offset the unsystematic risk associated with that asset. If poorly set up though, you may still end have a high unsystematic risk while a well set up will eliminate this risk.

Systematic Risk

This risk cannot be removed nor diversified away. This risk is market related compared to the first one that is firm specific. Market related may be the macro economic variables.

Examples of such macroeconomic forces are unexpected changes in the country’s growth rate like GDP and GNP, consumer price index, industrial production, interest rates, exchange rate, or even the money supply. In cases like this, your entire portfolio will be affected. Though an asset may be affected more than the other, overall, there is no way for any investment to escape from the impact.

The combination of the unsystematic risk and systematic is the risk total risk your portfolio. As mentioned earlier, unsystematic risk can be diversified and removed. So if properly done, what will be left is still the systematic risk.

So next time somebody tells you that the investment that they are offering is a sure thing! You may want to think twice.

HAPPY WEALTHY LIVING!

Melvin J. Esteban, RFP, CFC, FLMI, ACS is a contributor for Income-Tacts.com, the country’s premiere personal finance on-line community dedicated to the financial literacy of Filipinos. He is also the President of Motivating Minds, a consulting company. To write the author, send e-mail to mel_esteban@yahoo.com

In my many years in the financial services industry, the most frequent question I get is “what is the best investment” or “where is the best place to put your money?”  These questions will ellicit many answers that would largely depend on the preference of the ones giving the answers. If you ask these questions from a stock broker, his answer would be the stock market; someone in the real-estate industry would probably recommend a piece of land, a house or a condominium; an insurance agent would pitch for an investment linked life insurance policy; a banker would go for one or two of their trust products; and an entrepreneur will say going into business is still the best way to invest your money.

While I don’t argue that what I mentioned are great ways to create and grow your wealth, I would say that the best investment you can even make is by investing in yourself.

There are many ways one can invest in oneself and it all starts with education. Education remains to be the best way for us to achieve our aspirations in life. Developing and enhancing our skills can be achieved through proper education, both formal and informal ways. I find it absurd that there are those who foolishly claim that education is not necessary to be successful in life and they will state a couple of individuals who became successful despite the lack of proper education.

The experience of a few notable exceptions does not mean it becomes the rule of the game. The same notable exceptions would spend so much money in ensuring their children will get a good education, something they really put value to. Further, the said exceptions may not have received proper formal education but they received some other forms of education—through other people, circumstances and their situation.

However, I do not subscribe to the belief that quality education is synonymous to cost: the bigger the cost is, the better the education. We have seen countless stories of very victorious individuals who rose up the corporate ladder or established successful businesses without going through the “expensive” educational institution. Quality is a function of dedication-—of the educational institution, the student and the parent. The student can learn the theoretical knowledge from the schools and the practical understanding from the parent, which the student must be able to apply by himself.

Education is also not limited to the acquisition and retention of knowledge. The mark of a good education is in the learning of knowledge and the subscription to proper values. Formation of values is also a function of education— in the school, in the home and in the streets.

Let us invest in good education: one that makes us improve our skills and live our values so we can be what God created us to be, with Christ as our model.