Ready To Be Rich

Low Risk, High Yield, Fast Cycle Investments

Fitz — Fri, 03 Jul 2009 21:59:13 +0000

Looking for low risk, high yield, fast cycle investments?

Isn’t that just the ideal investment for you? Well, actually – it’s the ideal investment for everyone.

Of course, who wouldn’t want an instrument that gives high income without much risk of losing money. And to top it all off, it’s fast cycle, which means you earn in just a short period of time.

Indeed, it’s the ideal investment. But sadly, it’s only ideal but not real.

I’m writing this article because ever since I wrote about Philippine mutual fund companies, I started receiving regular emails from different people inviting me to take a look at their websites and invest in their low risk, high yield and fast cycle investments.

My curiosity got the better of me and so I went to their websites and looked around. Unfortunately, none of them appealed to me. And all the while, there’s this nagging feeling that these investment companies aren’t even real.

If you ask me, I personally believe that when it comes to investments:

Low risk investments are usually, if not all, give low yields.
High yield investments are usually, if not all, have high risks and;
Fast cycle investments are either low risk, low yield or high risk, high yield.

What about high risk, low yield investments?

I don’t even know if they exist because if you think about it, it’s the worst type of investment you can choose.

“I’m afraid to lose money, can I just invest in low risk, low yield investments?”

Sure, you can always do that, specially if you’re new to investing. But there are three things you need to know:

There is such a thing called inflation. And from observation, low risk investments, more often than not, give yields that are lower than the current inflation rate. So in the long run, you’re still “losing” money. But don’t fret, it’s still better than not investing at all.
Each of us have an investment risk tolerance. It pays to learn what’s yours. Who knows, your current financial standing could be good enough for you to invest in moderate and high risk investments.
And lastly, but actually the most important thing to know is that: before you invest, you need to first have an objective. Ask yourself why and what are you investing for? Just for extra income? To buy a car? To start a business? If you have big goals, then low yield investments will not really help you get to the finish line.

To end, always remember that regardless of what type of investment you’re planning to acquire, one should have enough due diligence to know exactly what you are investing in. Do your research and have a plan.

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Photo courtesy of thinkpanama

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July 2009 Business and Livelihood Training Seminars

Fitz — Wed, 01 Jul 2009 00:34:05 +0000

The year is going by so fast. We’re now on the second half of the year and I hope that the first half went well for everyone.

Anyway, as I usually do during the first few days of the month, I’m giving you now the list of business and livelihood training seminars from various institutions in the country, specifically Technology Resource Center (TRC / TLRC), Philippine Trade Training Center (PTTC), Nego-skwela, Business Coach, Inc. and others.

Please note that the information provided here is just an overview of the available courses this July 2009. I encourage everyone to get in touch with the respective organizations and institutions for inquiries and additional details.

Technology Resource Center (TRC) July 2009
Business Startup and Management Seminars on:
Hardware and construction supply business, trendy balloon decors, flower shop management, micro lending business, accounting and record keeping, travel agency business, restaurant business management, catering business and laundry shop business.

Livelihood Skills Training on:
Silkscreen printing, fresh flower arrangement, ice cream (sorbetes) making, tilapia culture, herbal bath soap making, how to make perfumes and colognes, breadmaking and baking, jewelry appraisal training, basic meat processing and swine production.

Philippine Trade Training Center (PTTC) July 2009

Integrated Management System Training – July 7
Food Labeling Requirements – July 9
Cleaner Production and Waste Management – July 13
Basic Costing and Pricing – July 15
Webpage Development – July 15 and 16
Food Safety Risk Analysis – July 16 and 17
Basics of the Exporting Business – July 20 to 24

Nego-skwela July 2009
Livelihood products development training on:
Fruit juices & concentrates, chocolate molding, catsup toyo & vinegar making, pizza and pasta sauces, pastillas making, dehydrated fruits & vegetables, fiberglass making, scented & decorative candle making, rice in a box and many more.

Livelihood service seminars on:
Tilapia hatchery, shiatsu massage, gift wrapping & ribbon making, bee culture, basic dress making, goat raising and others.

Business Coach, Inc. July 2009

Bookbinding Techniques and Procedures
How To Make Headbands and Fans for Profit
How to Franchise Your Business
Starting a Food Cart Business
How to Plan and Operate a Restaurant
Starting a Coffee Shop Business with Barista Training
Starting a Spa Business
Starting and Managing a Preschool or Day Care Center

If you’re interested to join in any of these business seminars and livelihood trainings, you may refer to this business training centers and livelihood seminar institutions directory to know their contact details. Thank you.

To receive more information on business seminars and livelihood trainings, please fill-up the form below:

On Michael Jackson, Debts and the Man In The Mirror

Fitz — Sat, 27 Jun 2009 22:17:48 +0000

I was online when the news of the untimely death of Michael Jackson hit the internet.

And now, countless blog posts, personal tributes and other stories are everywhere (including this).

But anyway, personally, one of the most sobering articles I’ve read about Michael Jackson is his staggering $400 million of debt.

To many, this news came as a surprise.

How can the King of Pop be so deep in debt? What happened to his wealth? Isn’t he supposed to be rich?

I don’t want to go much into detail on how Michael Jackson lost control of his finances. I will leave that for you to discover and learn.

Instead, what I do want to share with you today are some of the realizations I’ve had from the past few days about debt. There’s actually just two.

You don’t go into debt overnight.
Lawsuits, sudden and necessary home repairs, accidents and medical emergencies – these are just some of the things that could cripple our finances overnight. But what some don’t realize is that, the financial burden that these events bring could have been prevented if only they had proper financial planning years or even just months before.

Meanwhile, for those who are fortunate enough not to experience these (yet). They think that ONE unnecessary expense will most likely not affect their finances in a major way. But what do they do? They spend on one unnecessary expense EVERYDAY. And after a year, they wonder how they got into so much debt.

It’s not how much you earn, but how much you save (and invest).
Michael Jackson undoubtedly earns at least hundreds of thousands of dollars in a month. However, if his monthly expenses are at least a million, then he’s actually in a worse situation than a regular employee earning just P20,000 but lives well within that income.

Spending less than what you earn is the first step towards preventing and eliminating debt. It creates a cash surplus that you can use to invest and earn more (so you can spend more). Don’t let the scales of income of others distract you from what is more important, which to ensure that no matter how much you earn, there is always a portion that goes to your savings and investments.

To end, I’d like to share with you probably one of the most memorable live performances of Michael Jackson and my personal favorite of all his songs. This is the King of Pop, singing Man In The Mirror, during the 1988 Grammy Awards.

I’m starting with the man in the mirror.
I’m asking him to change his ways
And no message could have been any clearer
If you wanna make the world a better place
Take a look at yourself, and then make a change…

You can start making that change by subscribing to Ready To Be Rich.

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Photo courtesy of Son Marki

Blog Updates and My Votes for the Top 10 Emerging Influential Blogs

Fitz — Thu, 25 Jun 2009 21:27:29 +0000

A lot has been happening in this blog for the past couple of weeks.

It’s nothing major but it has really kept me busy.

For starters, I did some “spring cleaning” and edited a number of old posts to insert updates, correct misspellings, tweak some of the grammar and remove broken links.

I guess a blog is also like a house, you regularly need to remove the clutter and reorder things.

Furthermore, I’ve also been busy updating my Legacy Articles at the sidebar. I added a new link called Simple Personal Finance For Everyone which features my personal finance tips and advice on how to organize your money.

The other Legacy Articles were updated as well. A couple of posts were added to the Step by Step Guide To Starting A Business, two new Allies of Financial Freedom were included and Frustration became a part of the ‘enemy list’.

There were a few more additions but I’m leaving that now for you to discover.

So if you’re a new reader to this website, I do hope you visit the Legacy Articles section often because they actually contain most of the best articles I’ve written here.

It’s something you can do other than browsing through the archives, sorting through the categories or using the blog search box.

One of the articles I stumbled upon in my archives while doing my spring cleaning was The Value of Influencers on Personal Development.

This is actually my entry post last year for the Top 10 Emerging Influential Blogs. I’d like to think that I made some good choices last year for all of those blogs are still up (and have become influential in their own way).

For this year, as was in 2008, choosing the 10 blogs which would merit my vote is every bit hard and difficult. A lot of things were considered and I’ve challenged my own criteria over and over again just to finish this list.

Thus, in no particular order, here now are my votes for the Top 10 Emerging Influential Blogs for 2009:

At this point, I would like to disclose that the first on my list, The Thirsty Blogger, is actually mine.

While the second one, Patay Gutom, is a group blog which I co-write with other Pinoy bloggers.

Needless to say, I hope you consider voting for them if ever you’re joining this writing project.

Lastly, I’d like to give props to the sponsors this year which are: Absolute Traders, My Brute Cheats, Business Summaries, Fitness Advantage Club, Events and Corporate Video, Events at Work, Dominguez Marketing Communications, Red Mobile and Blog4Reviews.com.

Get more blog updates and my latest articles on money, business and personal finance by subscribing to Ready To Be Rich.

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Photo courtesy of Thomas Hawk

Success is a Continuous Journey

Fitz — Tue, 23 Jun 2009 20:26:31 +0000

If you’re a long time subscriber to this blog, then you probably know already that I’m a big fan of TED.

TED is not a person but an annual gathering of the world’s greatest thinkers and doers of our time.

TED is actually an acronym for Technology – Entertainment – Design.

More than a year ago, I featured here a 3-minute TED video by Richard St. John entitled What Leads To Success?.

In it, he discusses the 8 secrets to success.

If you haven’t seen it, I encourage you follow the link now and watch it. But don’t forget to come back here, okay?

Anyway, after 4 years, Richard St. John returns to TED to give another 3-minute talk about success. This time, he teaches us that success is a continuous journey.

What does this exactly mean? Watch the short video below and find out:

Pretty amazing talk isn’t it?

I believe that by realizing that success is a continuous journey, we will be more able to sustain and grow our wealth. More importantly, we will be able to leave behind a legacy that will continue to serve and inspire others for years to come.

If you want to receive more inspirational and motivational articles in the future, please subscribe to Ready To Be Rich.

Franchise 2009: The 17th International Franchise Conference & Expo

Fitz — Mon, 22 Jun 2009 17:04:54 +0000

The Philippine Franchise Association will be holding its 17th International Franchise Conference and Expo on July 1 to 5, 2009.

Entitled Franchise 2009, this is the biggest and longest-running franchise show in the ASEAN region.

If you’re interested to learn about franchise development or maybe looking for a franchise business to buy, then this event is for you.

More than that, this event can likewise help you discover suppliers for your business, find new and emerging business trends or find a joint venture partner for your business.

This event has three major activities. First is the Certified Franchise Executive (CFE) Program that’s happening at the AIM Conference Center in Makati on June 29 and 30.

Second is the Franchising Conference that will be held at the Crowne Plaza Galleria Manila in Ortigas on July 1 and 2.

And lastly, the 3-Day Franchise Expo on July 3 to 5 that’s happening at the SMX Convention Center in Pasay.

Personally, I’m only interested and would definitely go to the Franchise Exposition and Trade Show. The last time that I was able to attend this event was 3 years ago and during that time, my purpose was just to look for business suppliers.

But now, I’m seriously considering getting a business franchise and that’s why I’m really looking forward to this event. I’m expecting to see a wide variety of business franchise opportunities and concepts in food, retail, service and other industries.

Moreover, I know that there will be a lot of franchise consultants present during this event and I will be able to ask them a lot of questions about franchising that I can share with you in future articles.

I guess that’s it for now. If you’re interested to become a part of this event, you can go to the Franchise 2009 website to get more details.

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On Multiple Sources of Income and Working Smarter Not Just Harder

Fitz — Thu, 18 Jun 2009 09:35:53 +0000

How many sources of income do you have?

A friend of mine has about six. He works as a part-time bookkeeper, sells vitamins for a direct-selling company, owns an eLoad business, buys and sells computer parts online, works as a Math tutor and occasionally gets an allowance for running important errands for his father’s company.

I know what you’re thinking, my friend is really hard working and he must be earning a lot.

Well yes, he is hard working, but despite all those freelance work, I would say he’s actually “not earning much”. Or to put it in another way, he could be earning more if he only knows how.

And by that I mean, working smarter not just harder.

Having multiple sources of income is not bad, I actually encourage it. But this does not mean that one should grab every income opportunity that comes along without doing a proper evaluation of how it will affect you.

You see, with all the things that my friend does, he rarely gets the time out to have some fun. Worse, he’s always feeling tired and stressed. So even if he is actually earning a lot, that’s not exactly a good way to live your life.

That’s why the last time I sat down with my friend for coffee, we did a short study of what he could do differently to improve his finances, and more importantly, get rid of some of his stress.

First, we listed down all his income sources and how much time he usually spends a week doing those.

Second, I had him compute how much net income he earns with each; and divided that with the number of hours he puts on that job in a month.

Here’s what he approximately has:

The first thing he realized is that he always thought that his bookkeeping work was his highest income earner. It actually is in terms of amount, but when time is put into the equation, it seems that doing special tasks for his father’s company is the winner.

So I asked him, “Why not work for your father full time? I’m sure he’ll give you a good salary.”

He answered that he used to work for their family business and was earning enough, but he decided to leave because he wanted to make it on his own – to make his own career path. “Fair enough,” I said.

Then we talked about his tutoring, to which he answered, “My tutees are just kids from the neighborhood, maybe I could try to advertise my service to other areas in the village to get more students.”

“That’s right. Get students from middle to upper class schools so you can charge higher,” I suggested.

“What about my bookkeeping?” he asked.

“Well, ask yourself first if the work you do is really worth P100 per hour. If not, then increase your rates or at least, try to find a way to be more efficient at it so you’ll spend less time doing that,” I answered. “Either way, you’ll be increasing your hourly income.”

“Also, I suggest you spend less time buying and selling online or stop doing that if you want,” I said.

“Why?” he asks.

“Although it nets you P4,000 a month, it’s an active income that’s only slightly better than your eLoad business, which is semi-passive,” I noted. “Why not spend more time marketing and developing your business, maybe you could add more products or expand it. Ask your staff and customers for suggestions on how to improve your store.”

“The same goes for your direct selling,” I continued. “It’s not earning much right now but from what I know, direct selling can be a good source of passive income once you are able to realize its full potential.”

We continued our discussion and for the rest of the night, we were able to come up with a better plan for his finances and work out the details on how he can improve his income without necessarily putting in more hours. It was really rewarding for me to see him all excited with accomplishing his new goals.

In my opinion, there are three things you need to consider if you want to work smarter:

Take care and give more importance to your high income earners.
Study and develop income sources that can potentially become passive over time.
Increase productivity and efficiency by leveraging on technology, processes and manpower.

How about you? Are you working smarter or just working harder?

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Photos courtesy of stromberg and Isobel T

A Guide To Choosing The Right Business Structure

Fitz — Tue, 16 Jun 2009 08:53:00 +0000

When you’re starting a business, one of the things you need to decide on is its business structure.

Choosing the right type of business entity is important because it directly affects your tax payments, administrative tasks, business risks and development.

In general, you should go for a business structure that gives you the most protection and the least obligations as possible.

This means ample protection of your rights as the owner of the business, as well security of your personal assets, but without drowning in too much paperwork and legal requirements.

So how do you choose the right business structure?

First, you have to know the different types of business ownership that one can organize. Under the Philippine law, they are:

Single or Sole Proprietorship (S)
A business structure owned by an individual. He or she has full control and authority over all assets of the business. That individual will enjoy all the profits but would also personally owe and must pay all liabilities that the business will incur. A sole proprietorship must apply for a business name and be registered with the Department of Trade and Industry (DTI).

Partnership (P)
A business structure owned by two or more individuals. The owners are called partners and under the Civil Code of the Philippines, this partnership is treated as a juridicial person which has a separate legal personality from that of its members.

Furthermore, this can either be a general partnership (GP) or a limited partnership (LP). A general partnership is where all the partners have unlimited liability for the debts and obligations of the partnership while in a limited partnership, there exists at least one person with unlimited liability while the others have liabilities of only up to the amount of their capital contributions.

In the country, a partnership with more than three thousand pesos (P3,000.00) capital must register with the Securities and Exchange Commission (SEC).

Corporation (C)
A business structure owned by at least five (5) individuals, usually more. The owners are called shareholders and they all have liabilities limited to the amount of their share capital. Like partnerships, a corporation is treated legally as a personality separate and distinct from that of its shareholders.

A corporation can either be stock or non-stock. A stock corporation has a capital divided into shares which are distributed to the investors, who in turn, receives dividends and allotments of the surplus profits according to the number of shares they hold.

On the other hand, a non-stock corporation is an entity organized for public purposes such as charitable, educational, cultural or similar purposes. It does not issue shares of stock to its members.

Here in the Philippines, corporations are regulated by the Securities and Exchange Commission (SEC). Its minimum paid up capital must be five thousand pesos (P5,000.00).

What are the factors you should consider when choosing a business structure? In general, these are:

The degree of control you want to have over the business.

S – full control
P & C – control is shared with partners and shareholders

The degree of formal organization you need.

S – very simple, least formal
P – moderately complex, can be quite formal
C – most complex, very formal

The need to protect against liability for business actions.

S – full liability, there is risk to lose personal assets
GP – liability is shared with partners, there is risk to lose personal assets
LP – liability is shared with partners, no risk to personal assets
C – liability is shared with shareholders, no risk to personal assets

The ability to attract investors.

S – quite hard to attract investors
P – moderately easy to attact investors
C – easy to attract and incorporate new investors

Legal and tax requirements.

S – simple and usually straightforward, but pays the most taxes among the three
P – quite complex, reasonable tax dues
C – most complex and can be quite tedious, but relatively pays the least amount of taxes

I suggest that you give yourself enough time to study these business structures, specially the legal and tax requirements, before deciding on what to apply for.

However, based from experience, a sole proprietorship offers the best business structure for start-ups. Simply because it is the easiest to process and accomplish, which in return, gives you (and your partners) more time to focus on developing and establishing the business.

If you’re doing this strategy, do make sure that you have an internal agreement that explicitly obliges the assigned proprietor an obligation to share the profits to the partners and shareholders. But more importantly, when the business becomes stable and starts to steadily grow, be sure to migrate to a partnership or a corporation to make everyone a legal owner of the business.

In general, always consider starting with the most simple business structure that is appropriate for your venture. And then adopt more complicated structures only when there is a necessity, such as to answer concerns with authority, control and liabilities or when there is a specific legal or tax advantage.

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Photos courtesy of obo-bobolina and woodleywonderworks

The Benefits of Investing Early

Fitz — Thu, 11 Jun 2009 21:46:26 +0000

When I first started working and making my own money, it never occurred to me to invest my earnings.

At best, I would just put a portion in my savings account and spend the rest however I want.

Looking back, if given the chance to relive those times, I would have chosen to allot another portion of my income to investing.

I used to consider investing as something that old people do – old people with lots of extra cash.

What I didn’t know back then and what I realized a few years ago was that – it’s always better to invest as early as you can in your life.

To give you a simple illustration why, here’s a couple of scenarios that I came up with.

Scenario 1:

Juan sets aside P1,000 a month and puts it in an investment that earns 10% per annum.
After 5 years, Pedro begins investing P2,000 a month under the same instrument.

At the end of 10 years, here’s what will happen:

You’ll see that by year 10, both Juan and Pedro have already invested the same amount, but the gross value of Juan’s investment is more than that of Pedro’s.

Here’s another and more convincing example why you should invest early.

Scenario 2:

Maria invests P1,000 a month in an instrument that earns 10% per annum. She stops after 4 years.
At that point, Rosa begins investing P1,000 a month on the same investment and continues to do it for the next 6 years.

These are the gross value of their investments after 10 years:

Despite the fact that Rosa invested more money, Maria still has a larger investment value than her. And think how much more Maria would have if she didn’t stop investing.

I hope that these two scenarios made you realize that investing early has its clear financial advantages. And more importantly, you’re never too young to start investing today.

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Are You Eligible To Apply For A Business Loan? The Five C’s of Credit Analysis

Fitz — Tue, 09 Jun 2009 01:37:35 +0000

Whether you’re planning to start a new business or thinking of expanding your current business, applying for a business loan from the bank can help you speed things up.

Leveraging on credit is one of the best tools for business growth. Simply saving up for that start-up capital or waiting for your business to generate those additional funds can take a long time.

In most cases, capturing emerging trends is an essential part of business success. When a good opportunity comes, don’t let the lack of money or capital stop you from taking action.

So the question now is, how do you know if you’re eligible to apply for a loan, a business loan in particular? Here’s a simple guide to assess yourself.

In the world of finance, there is the Five C’s of Credit Analysis. These are the five components that banks, cooperatives and other lending institutions usually use to evaluate credit worthiness. Let’s discuss each of them.

Capacity
This is your capacity to pay the loan and is considered as the most important and critical of the five C’s. Banks will look into the financial statements and records of your business to see how it is doing. For those venturing into business for the first time, they’ll look into you income status, personal credit history and current assets and liabilities to evaluate your eligibility.

In general, owners of businesses that have been operating with consistent and high profits for the past 3 years or more are likely to get approved for a loan. There are also other factors to consider but in a nutshell, the bank is looking for “proof” that shows you have the capacity to pay the loan.

Capital
This is the money you have personally invested into the business and can be seen from your financial records. This is important for the bank because it shows the level of confidence you have for your business. Why would they risk their money if you yourself have “nothing to lose” if the business fails?

For those who really have no money to fund their business, your “capital” would be your business plan. A clear, comprehensive and well-researched business plan shows how much dedication and passion you have for the business. This is something that lenders and investors will expect from you, so make sure to prepare a good business plan.

Collateral
A secured business plan will usually have lower interest rates. That’s why you should seriously consider if you can offer a collateral for your business loan. Your collateral can be machinery, equipment and other business assets. Furthermore, you can also opt to pledge your real estate properties and other personal assets such as your car.

If you have no collateral to present, then you’ll most likely get a higher interest rate or be approved only with a small amount for your business loan. In some cases, this is not necessarily a bad thing. It really all depends on how much you really need and for what purpose you need it.

Conditions
Conditions refer to two things. First is your purpose why you’re applying for a business loan, and the second is the local economic conditions. The latter means that, when the financial climate in your industry is bad, then you’re less likely to be approved for a loan. In short, it’s not you – it’s the economy.

However, this component is really more about your purpose for getting that loan. In general, the best reason would be for business expansion – an intent to put up new branches, to purchase additional equipment and/or to increase your raw materials input and production system output. For other purposes, the bank would most likely be more critical before they approve your loan application.

Character
This is the most subjective of all the five components. Character is basically the general impression that you give to your potential creditors. They will ask themselves questions like: Are you trustworthy? And will you really pay back the loan?

To help them create a more accurate profile, they can look into your educational background and business experience. They might also ask and talk to your references. But most of the time, they’ll first and foremost, look into your credit history and check if you have mishandled accounts, delinquent credit cards and past due loans from others. Lastly, they’ll also check if there have been legal cases filed against you, your partners or your business.

I guess that’s it. How about you? Have you tried applying for a business loan? What happened? Please share your story as a comment below.

Moreover, if you’d like to receive more business tips, ideas and development strategies, then please subscribe to Ready To Be Rich. Thank you.

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Photos courtesy of CGPerry and cybertoad