Financial literacy means being savvy with your cash flows and understanding your financial transactions in order to make better decisions that will protect and increase your wealth. Many feel that financial literacy is no longer useful or relevant in the face of our current economic meltdown. They feel that, no matter what consumers know or do, they will be hurt in this recession.
However, financial literacy is more important than ever. Understanding your financial position and how to navigate through tough economic times will give you a leg up in ensuring your financial security.
The people who will survive and thrive in today’s economy are those who have a handle on their personal finances. They know what they own and what they owe and they know where the cash is coming from and going. Every dollar that comes in has a name- meaning they know exactly where it is going.
How can you improve your financial literacy? Set aside some time every day or every week to better understand your financial situation. Become familiar with the terms of your credit obligations. Know what you’re paying in interest every month. Know when your obligations will be paid off. Know how much you’re setting aside as a rainy day fund and calculate how long that amount of money will keep you afloat.
Once you know that state of your financial affairs, it’s time to make it better. Shop your credit around and make sure that you are getting the best interest rate possible. Ask your current lenders to lower their rates. It might not work but it does sometimes and you’ll be better off for it.
* Financial literacy is crucial to surviving tough economic times like we are seeing right now. Getting a handle on your money will ensure that you end up with more of it.
I finally found the condominium with a perfect location. It’s in posh area of McKinley Hill in The Fort Global City. It’s very accessible from all vital roads in Metropolis. It’s direct access to the Makati business district through McKinley road by passing through Forbes Park. Direct access to The Fort, Ortigas and Airport through C5 road and Edsa.
When people think of buying pamper gifts for themselves, they usually go to the mall to check out cellphones, clothes, gadgets or Make-ups. But not me, I went out and bought myself a condo unit. Not bad for 24 years old lass. It’s just that I view home ownership as a part of being a responsible adulthood.
My Mckinley Hills studio unit interior decorated by my mom..
Although, I still have my 2 existing bedrooms in my mom’s 2 houses in QC. I still want to pursue my dream of owning one. “iba kasi yung sense of fulfillment pag naisip kong sakin yun or pundar ko talaga yun” and I want to start buying home stuff in different countries then I’ll put it there.
I’m planning to stay at my condo whenever I feel like having my “Me Moments/ independence” or Every time may tantrums ako and I just want to be alone! Hehehe! Kidding aside, I just couldn’t resist the thought of wanting it, because it offers location of advantage, ease and convenience. The unit that I purchased is in front of Venetian Mall with Gondola ride in the impressive man-made Grand Canal. Parking will not be a problem.
It’s supposed to be zero down payment but I preferred to pay P500,000 downpayment to make the monthly mortgage low and the turnover lump sum on December 2012 will be less. I was about to get the unit on the 6th floor but then I’ve realized there isn’t much view on 6th floor so I chose 15th floor.
After 9 hours flight, when we reached our hotel yesterday (June 18′ 2009) where Qatar Airways crew stays. I began to write the details in my personal checks, but because I’m tired and sleepy. Some of the checks are just wasted because of date/year mistakes or my signature becomes Estretita instead of Estrellita! Hehe!
I woke up this morning having the thought of buying another property, I’ve really wanted my savings to be put in a good investment where it will appreciate or earned more but I want it to scattered, If you ‘ve been following my blog, I hope you already know what I mean-Scattered. In my opinion, it’s better to have house & lot, Savings/Checks/ ATM Account, Time deposit, a job & owned business Star Bliss Salon & Spa – The more the merrier! =)
I believed each of those mentioned above are good to have and with different purpose. Because, if you own a house it’s not necessarily mean you have to live there. You may have it rented or sell it when the value increased then inherit it to your children.
It’s also good to have lot property because someday you may use the space to/ build apartments. Yes, That is one of my future plans to have my own building of studio type apartments it doesn’t have to be luxurious or high-rise but just a decent place to rented out. I know someone who earns 80,000 pesos a month for just 12 doors of small but studious apartment in QC and they have family business as well. Wow! “Money be gets in money”. huh!
Time Deposit is also essential for emergency fund and for business purposes ATM, everybody knows where it’s for. Credit cards, I used it for online purchase and for international shopping so that Idon’t have to buy different currencies again and again.
While, Checking account! Is a must! I have Checking account since I was 12 and I can say it’s really useful for transactions! Plus you don’t need to withdraw and bring big amount. When I was a kid, I used to sign my mom’s checks and play with them! Up to this day, I can still forge her signature and she knew that! Hahaha!
Browsing some articles because I have this question on my mind if Condominiums are really worth investing for? I 19ve read this article that Mr. Colayco a financial advisor has wrote and I find it useful as it answers my question.
Two Similar Emails on Condominiums:
Question #1: 1csir, thanks for all your financial guides…i just want to ask questions about investing in condo…a lot of condo projects are coming up, their selling point is "good investment". may i ask, is buying or "investing" in this type of project is really an investment? what are promises or good possibilities of having this kind of investment? at the current situation in phils, is it really wise to invest in pre-selling condos? 1d
Question #2: 1cMoving towards financial stability that I learned from your books, I’m thinking of purchasing a condominium unit, because not only it’s much cheaper compared to a regular house and lot (here in Metro Manila), it also allows you to choose one that’s near your work.
However, I have these questions that make me skeptical. Is it a good investment? I mean, will the unit value appreciate over time? Will it be the same with the other unit of the same size or will it differ base on the location. Is it the higher the floor the better, or vice versa?
I know that you have a title and all, but is it also true that it will be demolished after 50 years? If so, what happens to your property?
My impression is like this; the floor you’re stepping is the roof of another people. Just like the wall you have, you’re sharing it with someone else. It’s like the ownership is really not established. What happens in case of fire and the building (God forbid) turns to dust? Do you still own anything? I’ve asked these questions to real estate agents but they can’t give me any straight answers. 1d
If you are buying real estate to establish your home, your parameters should be more focused on what is most convenient for yourself and your family. As a home, it should not be looked at as a financial investment. Rather, it should be considered as a life goal. However, if you just want to invest, please make sure that you have carefully analyzed a real estate investment versus other investment options based on your personal financial plan.
If you definitely want to just invest in real estate, choosing between a condominium and a house and lot would use the same parameters in analyzing its financial viability. Here are some of them.
1. location which includes convenience and attractiveness of neighborhood and security.
2. reputation for quality of development of the builder (this is particularly true for condominiums which are high-rise)
3. rules of the association governing the neighborhood and costs in relation to this association
4. your ability to maintain all amortization and maintenance (association, repair, taxes) payments.
If you intend to rent out your condominium, you need to project your income and costs and assume that there will be times when the unit will be vacant and will need repair. Rental rates normally over around 5% of the market value of the condo unit provided rental income is constant throughout the 12 months in a year. Vacancy rates therefore have a very strong impact on the effective return on the rental property. In considering buying a condo unit for rental purposes, you must assume at least a 20% vacancy rate over the life of the property.
The condominium requires you to live in closer proximity to others and that could be difficult. Atthe same time, it gives you better security because you can leave your unit and it will be more secure (if it is a good condominium, of course). It is all a matter of personal preference. There will always be a group that will prefer an individual house and a group that will prefer a condominium.
Many who have cash to invest like to buy condominiums that they will have their children inherit eventually. In the meantime, they believe that the condominium will bring them some income in the meantime plus even increase in value. However, as children grow older, more and newer condominiums will be built. Your choice may not be your children 19s choice.
As a financial investment, condominiums do not generally perform well over the long term compared to stock mutual funds or even balanced mutual funds and other types of securities. Except for a few notable offerings, the costs of owning condominium units drag down the resale value. Physical depreciation of units, monthly membership and maintenance dues plus real estate taxes imposed on condominium owners can be quite substantial over the economic life of the unit. There is also the issue of capital gains tax and the VAT applicable when the unit is sold. All these taxes have to be paid before you can transfer the ownership registration of the condominium unit to the buyer. If you include all these ownership costs and the reduced rental earnings due to the 20% vacancy rate, the percentage net return per year when you sell the unit (assuming you can find a buyer) can be very disappointing. Simply put, the cost of acquiring a condo unit is not your only cost. The cost of ownership and the cost of selling are real costs to the owner. And these generally make condo units marginal investments.
The worldwide economy might be recessing for now but no one can stop people from investing their money in the stock market or in other similar fields of
Lastly, save money. Save as much as you can. It’s one of the most essential Armour we must all keep in. Put this on top of your list and all else will follow. I’m not saying deprive yourself, of course it’s ok to spend and give some reward to yourself after a job well done but too much is not practical. Be smart to look on the cost of the goods you purchase and as much as possible, avoid spending too much on luxuries.
Many people assume they aren’t rich because they don’t earn enough money. If I only earned a little more, I could save and invest better, they say.
The problem with that theory is they were probably making exactly the same argument before their last several raises. Becoming a millionaire has less to do with how much you make, it’s how you treat money in your daily life.
The list of reasons you may not be rich doesn’t end at 10. Caring what your neighbors think, not being patient, having bad habits, not having goals, not being prepared, trying to make a quick buck, relying on others to handle your money, investing in things you don’t understand, being financially afraid and ignoring your finances.
Here are 10 more possible reasons you aren’t rich:
You care what your car lookslike: A car is a means of transportation to get from one place to another, but many people don’t view it that way. Instead, they consider it a reflection of themselves and spend money every two years or so to impress others instead of driving the car for its entire useful life and investing the money saved.
You feel entitlement: If you believe you deserve to live a certain lifestyle, have certain things and spend a certain amount before you have earned to live that way, you will have to borrow money. That large chunk of debt will keep you from building wealth.
You lack diversification: There is a reason one of the oldest pieces of financial advice is to not keep all your eggs in a single basket. Having a diversified investment portfolio makes it much less likely that wealth will suddenly disappear.
You started too late: The magic of compound interest works best over long periods of time. If you find you’re always saying there will be time to save and invest in a couple more years, you’ll wake up one day to find retirement is just around the corner and there is still nothing in your retirement account.
You don’t do what you enjoy: While your job doesn’t necessarily need to be your dream job, you need to enjoy it. If you choose a job you don’t like just for the money, you’ll likely spend all that extra cash trying to relieve the stress of doing work you hate.
You don’t like to learn: You may have assumed that once you graduated from college, there was no need to study or learn. That attitude might be enough to get you your first job or keep you employed, but it will never make you rich. A willingness to learn to improve your career and finances are essential if you want to eventually become wealthy.
You buy things you don’t use: Take a look around your house, in the closets, basement, attic and garage and see if there are a lot of things you haven’t used in the past year. If there are, chances are that all those things you purchased were wasted money that could have been used to increase your net worth.
You don’t understand value: You buy things for any number of reasons besides the value that the purchase brings to you. This is not limited to those who feel the need to buy the most expensive items, but can also apply to those who always purchase the cheapest goods. Rarely are either the best value, and it’s only when you learn to purchase good value that you have money left over to invest for your future
Your house is too big: When you buy a house that is bigger than you can afford or need, you end up spending extra money on longer debt payments, increased taxes, higher upkeep and more things to fill it. Some people will try to argue that the increased value of the house makes it a good investment, but the truth is that unless you are willing to downgrade your living standards, which most people are not, it will never be a liquid asset or money that you can ever use and enjoy.
* Just a Repost