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PERSONAL (PERSONNEL) EXPENSE MANAGEMENT

PERSONAL (PERSONNEL) EXPENSE MANAGEMENT. ARMAND Q. BENGCO Executive Director 17 November 2010. From CFE’s informal surveys, some data show that the great majority of working adults:  Have not started saving for retirement. “LITTLE OR NO SAVINGS AT ALL!”

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PERSONAL (PERSONNEL) EXPENSE MANAGEMENT

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  1. PERSONAL (PERSONNEL) EXPENSE MANAGEMENT ARMAND Q. BENGCO Executive Director 17 November 2010

  2. From CFE’s informal surveys, some data show that the great majority of working adults: Have not started saving for retirement. “LITTLE OR NO SAVINGS AT ALL!” Live from paycheck-to-paycheck. “BUDGETING PROBLEMS” Have too much debt. Are financially distressed or financially unfit

  3. People with too much debt of financially distressed: • Pay credit card bills late and incur huge interests and penalties. • Use cash advances to pay another creditor. • Issue checks with insufficient funds. • Receive overdue notices and telephone calls from collecting agencies.

  4. Employees use work time to deal with personal and financial concerns: • Money concerns interfere with job performance. • Some hold part-time jobs elsewhere. • Financial stress affects their health.

  5. MORE MONEYISNOTTHE SOLUTIONFOR ONE’S MONEY PROBLEMS

  6. PERSONAL FINANCE: EARNING MONEY INCOME WEALTH PLANNING SAVING SPENDING INVESTING

  7. When Are We Wealthy? • One who can continue one’s cost and kind of lifestyle WITHOUT having to work. • Wealth is very personal.

  8. Common Behavior of those who fail • FEAR • IGNORANCE • GREED • HOPE

  9. Sources of Income To achieve Financial Independence, one should have Passive Income from investments! ACTIVE Income PASSIVE Income Investment Income: Active Income: Primary: Salary/Fees Commissions Additional: OT Sidelines Business: Drawings (Own and/or Manage) Financial Assets Real Estate Direct Business Ownership

  10. How Do We Live Create Wealth? SAVE 20 From yourACTIVE INCOME SPEND 80 BUILDS LIFETIME WEALTH

  11. Start-up : 100% active income; 0% investment income Build-up : 80% active income; 20% investment income Fine Tuning : 40% active income; 60% investment income Retirement : 100% investment income Early working years : initial working years (20-30 yrs) Raising a family : providing for housing & education Peak of career : (mid 40s) highest earning active capacity Retirement (65 up) LIFE STAGES Financial Chronological

  12. Planning Your Journey Statement of Assets & Liabilities What you OWN and What you OWE

  13. Planning Personal Income & Expenses Statement (P.I.E.S.) Identifying a DESIRED LIFESTYLE “SPENDING LESS THAN YOU EARN” “Living withn your means!” “FOLLOW YOUR MONEY”

  14. Savings Your first source of capital. Paying Yourself First!

  15. Savings is an expense that buys your future! Savings Income - SAVINGS = Expenses RIGHT ON!

  16. NET WORTH PLANNING PhP 20,000 today at 5% inflation rate is: Your Target Earning Asset: (earning 7% during retirement)

  17. HOW MUCH YOU NEED TO SAVE A MONTH TO REACH PHP9.1M in 20 years? AVERAGE EARNING RATEPER YEAR IN 20 YEARS MONTHLY REQUIRED SAVINGS WITH A STARTING CAPITAL OF PHP100,000 10% PHP 11,700 PHP 12,600 15% PHP 6,900 PhP 5,600 20% PHP 3,700 PhP 2,100

  18. HOW MUCH YOU NEED TO SAVE A MONTH TO REACH PHP9.1M in 20 years? AVERAGE EARNING RATEPER YEAR IN 20 YEARS HOW MUCH NEEDED NOW W/O HAVING TO SAVE 10% PHP 1.35M PHP 556K 15% 20% PHP237K

  19. Baby Steps: • Build up 6 mos cash reserve • Find additional/new sources of Active Income • Start a business (pooling) • New employment • Consultancy • “Teach” • Start your long term investment plan: • Emergency Fund- Equal to one month income • Protect yourself - Secure term life/accident • Get out of debt * Chowking * RBC Bank

  20. Best Practices: • Financial Literacy • Seminars • Workshops • Coaching • RSIP • Regular Saving & Investing Program • Company supported (salary deduction) • People Leverage • SLAs vs. Employee Coops serving/catering to mother company

  21. “We can never control the winds…… But we can certainly learn to adjust our sails.”

  22. IT IS NOT HOW MUCH YOUEARN. BUT HOW MUCH YOU GET TOSAVE & GROW!

  23. THANK YOU FOR INQUIRIES/CONSULTATIONS/SEMINARS Text Hotline: 0917-8537333 website: www.colaycofoundation.com email: info@colaycofoundation.com Follow Francisco Colayco on twitter “handling money” Be a fan of Francisco Colayco

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