Feature: Thrift and no vices, secrets to prosperity

By Alex Romeo R. Fernandez

Thursday 23rd of August 2012

Is it your savings that should determine your expenses or is it the other way around?

This is just one of the questions posed during the "Discover and Learn the Secrets of Becoming Rich" lecture at the Dagupan City People’s Astrodome on Monday.

The lecture on the techniques of making money and the proper way of handling it was delivered by Ferdinand Tan, and initiated by the Dagupan City government for its employees, barangay volunteer workers, business people and private individuals.

Popularly known as Chinkee Tan, the actor, businessman and author, related to an audience of more than 500 that he experienced extreme financial difficulties during his youth that he was not able to finish college.

But this did not prevent him from becoming successful, if at least financially. The goal to prosper, to becoming rich, he said, should begin with the right financial mind set.

Some people, he pointed out, seem not keen on getting rich for fear of getting ridiculed and dubbed “mata pobre” if they do.

Trying to get rich should not be construed as greed. The Biblical phrase, “money is the root of all evil” should not be taken literally. Instead, “it is the love of money, not the money itself, that is the root of all evil,” he said.

Gaining wealth grows simply out of necessity. After gaining the right mind set, one should start keeping away from harmful habits and building helpful ones. Harmful habits include vices, culture of debt and lavish spending.

Vices, such as smoking and drinking, could cost a minimum wage earner more than a month’s worth of salary in a year.

Rushing to buy sale items and frequent meals to the restaurant constitute lavish spending.

The biggest problem, however, is the culture of debt embedded in the Filipino society. Filipinos have the bad habit of borrowing money in order to have it borrowed by someone else, he pointed.

This is particularly true in extended families where a couple, who instead of spending for their immediate family alone, must support their relatives and in-laws.

This goes way too far sometimes that the couple start spending more than they earn, putting them in debt instead of having them save some money.

“It is not how much you earn but how much you save,” he said, adding that it is better to have a low salary without debts than to have high salary with debt.

He advised that, in such cases, one should instead give out money and not expect it to return. One should limit the amount of money that can be given off, however. Helpful habits, meanwhile, consist of being thrifty and saving.

Being thrifty means avoiding buying commercial products that are readily available at home.

As to saving, Tan said that it is a habit that should be cultivated. When making a budget, an amount should be set aside for savings to determine future expenses. Savings should determine what one has to spend and not the other way around.

Additionally, he advised couples not stick to the stereotypical thinking that it should be the wife that should handle the budget. Between them, it should go to the one who handles money better.

After developing the right mind set and good financial habit, one should also know how to effectively make money. Tan divided this into four sectors, namely: employment, self-employment, business and growth.

Initially, one depends on his or her employment as the main source of income. Even at this stage, one should already cultivate good financial habits. To expand, one must use his or her talent, by taking sidelines, particularly related to one’s regular employment. Sidelines, sometimes, exceed one’s salary to become the major source of income.

If this happens, one should not be tempted to let go off one’s regular work so easily. “Never kill the goose that lays the golden egg,” he advised.

He cautioned that there were cases that employees resigned from their jobs to concentrate on self-employment only to find out that they did not have any work to fall back to when their ventures failed.

If the venture becomes big enough, however, one should further expand it by hiring employees until it becomes a business of its own.

Lastly, if enough profits have been gained from these income generating sources, then one can invest already in other business ventures.
This phase is called “growth,” according to Tan. This is the point where you make your money work for you, he told his audience.

Tan’s lecture was essentially a story of himself, from his humble - often struggling - beginnings, becoming not only a well-known TV personality but especially a respected book author and a businessman.

It was his secret of how he became rich, or more accurately, or how he extricated himself out of difficulties.

Similar to his experiences, many people face today's difficulties due insufficient income.

Tan even said more than 50 percent of marriages fail because of financial reasons, while there are some senior citizens who failed to save enough money then find themselves needing to work beyond the retirement age for food and maintenance medicine.

These difficulties should have been avoided, only if they had found this secret.