Cash Flow - Pinoy Reality

This one’s just forwarded to my mail inbox. It’s an article which I think is really useful, and helpful, especially to those who are employed and how they handle their cash. I decided to post it here to give this article more exposure as to benefit anyone or everyone in the same state as targeted by the article… the email message ha the subject: CASH FLOW ( funny but true)

Here’s the article, sana makatulong sa inyo ito:

There are those who e-mailed me asking about the basics of cash flow. I’m really sorry that I assumed everybody already understands it. Anyway, by demand … here it goes…

May isang bata… joke lang.

The basic is. What pattern do you see if you will get a P100.00 bill and monitor where and how it is transferred from 1 possessor to the other? How does it flow? The pattern for a typical Pinoy is.

You earn from your work, you spend it on food, gadgets, clothing and other basic needs. Before you reach the next payday, paubos na yung pera mo. But that’s ok payday is just a few days ahead and it doesn’t matter if I run out of money, I am expecting money again any time soon.

This cycle goes on and on and you make some sidelines or create other ways to earn but it seems that money was never enough.  (I am tempted to explain further pero usapan… basics lang).

So you can’t leave the job that you have because a week without work would affect the cash flow you have to support your family and needs. As much as you wanted to accept another job, the gap would make you pay less for a couple of days, which makes you a slave to your boss.

At least, you have a job to support your needs.

So to illustrate.. .Cash is flowing inside your pocket.

Years have gone by doing your monotonous routine.

Question… what if you get fired? Or you were forced to retire because there are new and younger people ready to take your place. What would you do?

As an OFW, Makati Executive, Top Salesman, Engineer, Attorney, Teacher, etc…  What if it all ends? The sweet cash that enters your pocket every 15 th and 30th suddenly comes to a halt.

There are two things you can buy with your money…  An asset and a liability. To describe each… An asset brings money inside your pocket; a liability takes money out of your pocket. Another way to see, it is that an asset if you buy one, will bring the money you spent for it back to you 2 or 3 folds. A liability, when you buy it will not give your money back at all.

Sa madaling salita… kapag asset, maibabalik ang pera , pag liability, goodbye sa pera…

Ang problema kay JUAN DE LA CRUZ, habang may trabaho ipon ng ipon at bili ng bili ng liability!

I have seen OFWs get back to the country with gold chains at kung pwede lang limang shades ang isuot ng sabay-sabay gagawin nya eh… dvd, component, jackets, clothes, inuman, pulutan, party, pabango… hindi na makalakad sa dami ng bitbit…

At s’yempre mga empleyado natin dito sa bansa na lingo-lingo bago cell phone at mags ng kotse.. hindi na nga magkasya ang damit sa aparador, tapos pag umaga sasabihin… . wala na akong maisuot.

Well, konting isip… what you bought… will it bring money back to you? I know what you have in mind… you have to enjoy what you worked hard for. That’s right, but think of something that will last… think of your future.

I have seen the worst of people who were abogado de kampanilya, executive secretaries of top rank business men, people who worked for big companies, earned a fortune and got a big retirement pay by the millions… Now…. Wala na.

Why? Because of their cash flow… went in… went out.

I need not to mention basketball players, actors, singers, etc… Check what is their career path… next after acting, singing and playing… POLITICS. Kasi, ‘yung million na kinita nila, puro liability ang binili.

Going back… all the liability they bought, ibinenta ng mura! I’m wearing a gold chain now, which I got from a seaman… he bought it for P35,000 and sold it for 8,000 to me.  Hindi po asset ang alahas! Bakit? Totoo na tumataas ang value n’ya pero kapag gutom ka na, kahit palugi ibebenta mo! (wala bang aaray?) Cell phones… dvd players etc. pati bahay at kotse… that’s the cash flow of most OFWs…

The question is … " WHAT IF THE INCOME STOPS?"

Sa Pinoy, ganito: anak… mag-aral kang maigi, at pag tanda namin… ikaw na bahala sa amin ha….  Hindi po ba maling-mali. ..

You have to establish something today that will take care of your future.

Teka, teka… eh ano ang dapat gawin para hindi mangyari yan?

You must create a source of income that will continually make money flow inside your pocket. Start a business! While you are working as an executive or an OFW, or a professional. .. START A BUSINESS and MASTER that business till you get out of that company. Para kapag tumigil ang income mo sa kanila… may susuporta pa din sa iyo hanggang pag-tanda mo!

Now don’t tell me to invest my money on pensions and plans… NO WAY ! Narinig n’yo na siguro yung …. Naku ayaw ko na magbanggit.. .. ‘yung mga nagbayad at hindi nakapag-claim. .. sila pa ang dinimanda at nag-piyansa! !! HUWAG MO I-ASA ANG PAGTANDA MO SA IBA! GUMAWA KA NG SARILI MONG BALON NG PERA!  KAHIT MALIIT PA ‘YAN, SARILI MO AT HINDI KA AASA SA IBANG TAO…

Imagine yourself when you reach an older age… (aruy ko,,, baka yung iba sa inyo about that age… tabi tabi po…Ako po sa mga nagtatanong. .. I’m 37 years old. Naabutan ko pa si Michael Jackson at hinele po ako ng nanay ko sa mga kanta ng hagibis…). You have money that the company gave you as your retirement pay… what will you do?

You can consume the money till your old… eh kung hindi umabot?  Masamang damo ka pala… at hindi ka kaagad kinuha ni Lord. Eh pang age 65 lang yung naipon mo na budget.

Or maybe, you can start a business and use the money for capital… Kapatid… 9 out of 10 businesses, FAILED… yung isang magsa-succeed, gagayahin pa ng kapitbahay mo instead na mag-franchise sa ‘yo… think! At age 50, you are struggling trying to make a business work! What if it fails?!

Eh ano nga ba ang sagot?

The answer is, stop buying liabilities and instead buy assets now. I don’t care if it is a banana-Q store, balot, ice candy or a sari-sari store, etc… start now! Because, your experience here will teach you what to do in the future.  It’s so hard to struggle in business when you are 60 yrs old.

You have to create a source of income separated from the source of income from your work. That when the time comes that you have to stop working, you will have your own source of money! Create assets, start a business that will be there to support you and your family. I AM NOT TELLING YOU TO QUIT YOUR JOB! I’m telling you to start a business while you’re working and stop spending your money on liabilities and start putting them on assets!

Ang pera kapag pinambili mo ng LIABILITY… hindi na babalik… ang ASSET… BABALIK.

Teka… masama ba bumili ng mga magagandang gamit? Hindi! Siguraduhin mo lang na ang pambili mo nun ay galing sa asset mo. The business has to be prioritized! Mawalan ka man ng trabaho, may negosyo kang palalaguin.

If before, nabubuhay ka naman ng iisa sapatos mo, huwag mo baguhin ‘yun… dati, nagdyi-jeep ka lang… ‘wag ka na munang mag-FX…

Create assets and lessen liabilities. Invest and learn now… mag-negosyo!

Eh anong negosyo? Any, as long as you think it is work and doable! I am still looking for partners for my HOME MASSAGE SERVICE! SPA MAGIC! And my business CAR MAGIC is still franchising. .. (joke lang … baka sabihin nyo nag pro-promote lang ako eh…But I AM PROUD TO SAY THAT ALL MY BUSINESSES ARE ORIGINAL AND ALL ARE GRAND ASSETS!

I started all my businesses with a very small capital. If I used that money to buy a gadget, new shoes or any liability… baka wala lahat ng negosyo ko at wala na akong makain ngayon.

Again, I hope that this BASIC CASH FLOW article helps…. I wish all of us become financially free!

FROM AN UNKNOWN AUTHOR

PAKIPASA…
MAGANDANG EYE-OPENER ‘TO!!!

Sosyal di ba? May eye-opener na, noon can opener lang…

Buying rental property, is it a good buy?

On buying such rental property, how do I know really if it’s a good buy or not? How much is it going to hurt my budget? Is it going to have a big impact in my lifestyle? There are lots of things I need to know. To narrow them down, I made a lists that I think I need to consider:

Economic values

• affordability, first thing first, will I be able to afford it, downpayment, monthly mortgage, to be safe, allow an emergency fund of 3 months vacancy, meaning not being rented for the months
• market value, do search for comparable properties for sale or recently sold in the area, search from local newspapers, internet, the real estate agent
• appraised value? (get appraisal report from bank or appraiser, this cost around P3k)
• zonal value as dictated by BIR Zonal Values
• comparable rentals in the targeted area? (to get a ballpark figure how much you'll charge for the rent
• how much is my target profit? determine if the property is worth investing on

Property condition

• age of the building, how structurally sound it is, will this last for another ?? years enough to recoup my lost
• curb appeal, as what most realtors say, location, location, location
• exterior, paint, more often than not, you'll have to repaint, consider how tough if it has the second floor, third, etc
• cracked walls, you may want to get a second opinion from carpenters, builders
• watermarks, leaking roof
• termites, especially for a structure made of wood

Location

• accessibility, most tenants wants closer to public transportation, convenient stores, markets, mall
• security, you may want to do an unscheduled visit especially at night to look for any illegal activities, crimes about to happen
• water, there are areas now where water supply may it be from water company or natural ground supply
• rentability, comparable rental charges within the vicinity
• squatters, for sure this will affect the property value, rental charges, prospective tenants will get this first impression

Buying Our First Property

Buying property is stressful and takes a lot of time and research. With the hard earned money that we’ve been saving through our entire life, who would want to take that risk and have it land in the hands of the manloloko?

Since this is our first investment property, our goals in acquiring passive income, me and my husband took awhile to decide if we should go through this type of real estate investment. Part of this learning process is taking advice from our friends and relatives, surfing the internet, attending meetings with real estate gurus. Once we established our ideal location (yes location) and found our deal, we did our homework.

We checked the physical location of the property, ensuring that no one is squatting in the area, and no other structures. We made sure that the sellers are the real owners. If you are buying from an individual property owner, ask for identification papers like passport or driver's license. It is also a good idea to talk to the neighbors or the Barangay Captain to confirm the identity of the sellers. You might as well ask some history, the reasons why such property is up for sale. There was a time when we had to drove by at night just to get acquainted with the location and observed for illegal activities around.

To ensure that the Transfer Certificate of Title is authentic I asked the seller for a photocopy. I went to Register of Deeds to search and requested a stamped Certified True Copy of the Title. In my case, this was in Trece Martirez City, the capital of Cavite.

To confirm that Title is very clean, that the property is not mortgaged, no liens and encumbrances on the property, see the back of the Title with the heading "Encumbrances". This page must be empty if you are told that the title is "clean". But sometimes the space for the technical description of the property on the front page of the title is not enough and the description of the property is continued on the "Encumbrances" page, this should be fine.

Make sure that the land described on the Title is really the land that you are buying. Have it validated at the Register of Deeds or by hiring a private land surveyor or a geodetic engineer. Land titles don't have any street name and number to pin point a property. It is a must to confirm that the actual property you are buying matches the technical description on the Transfer Certificate of Title.

The yearly real estate taxes are paid. Ask for certified true copies of the Tax Declaration and original Tax Receipts to confirm that real estate tax payments are up to date.

Once we agreed on the payment of the property, the payment for the capital gains tax (usually the seller shoulder this), and the agent’s commission (if there is one involved), the owner then prepares the Deed of Sale. Our residence tax certificate or cedula or driver’s license, and tax id number are needed to prepare this document.

The "Deed of Sale" or "Deed of Absolute Sale" is the document showing legal transfer of real estate property ownership. The deed of sale is then taken to the Registry of Deeds to be officially recorded after paying the documentary stamp, transfer tax and registration fees. Always verify from the Registry of Deeds the authenticity of a Transfer Certificate of Title before buying a property. If the seller only has a tax declaration, be extra cautious and check with neighbors, the Barangay captain or anyone in the know in the community to verify the seller/owner's true identity and the property's history. When in doubt and be safe, hold on to this transaction until documents are cleared.