Are You Ready?

I was asked what kind of small business would I suggest given this sum of cash savings, etc.  The amount is really not important as the sincerity of the question raised. It is quite a common question found in various investment forums online as well as offline.

And the straight answer is this: ask someone who’s not selling anything or at least has the time for sharing stuff related to the subject.  The fact is, many sales people, if you’re unlucky to approach one, asking them such questions means you’re up for a serious trap.

This is not a problem if you don’t have difficulty rejecting a proposal or just plain saying ‘NO’ when you don’t have enough information or for whatever reason.  It doesn’t mean you have to be less nice of a person but most of the time, salespeople, if not all of them are just up for a commission.  The moment you notice them running a pitch instead of asking you a sequence of questions about you and what you really are looking for, then you know you’re in big trouble.

This reminds me of two insurance companies in SM City Cebu and another in their corporate building around Ayala Business Center in Cebu that I approached during my vacation to the Philippines this year.  All of them just ran a pitch straight through and my only defense was I didn’t have any credit card, checkbook, etc. with me.

The same is true in many MLM companies.  I almost thought these guys just want to flash SUVs and some Mitsubishi Pajero sport to lure you into recruiting for their sign-up bonus.  These guys may teach you the best they can how to recruit and then they’ll show you how to loose all of your earnings and go massively broke by getting into so much debt from a car or housing loan just for you to look good as some type of testimonial to your so called ‘new found success’. Freaking stupid.

In my opinion, the best way answering these types of questions has to do with readiness.   Are you really ready to invest? How financially fit and educated are you?  How much regular savings do you have in your savings and investment accounts?

When you know how fit the person is financially then you know you got a real prospect and not just someone wasting your time.

If you want to invest or build a business then I would hope taking the risk and losing all the money you put on the line would not mean you don’t have food to eat in the following week, or you’ll be in debt for the next 2 to 3 years, etc.

I suggest reading Dave Ramsey’s the Total Money Makeover in order for you to set up your financial life ready to attract more of the good stuff instead of disasters in case you fail.  The following is a simple flow chart just to give you an idea how it should be the financial planner’s way.

In this diagram, you don’t start investing or building a business without an emergency fund.  This is 6 months to a year of your regular expenses in cash in case of an emergency: losing a job, getting sick, or having an accident and other surprises around the house and family. This fund covers you without you taking out a bank loan or bothering / borrowing from your friends and relatives.

For couples, a 6-months worth of your expenses in cash is fine. For singles, single income households, this is equivalent to 12 months.  It is much bigger since losing a job, for example, means a 100% loss of income when something like that comes up.

Maintaining an emergency fund in cash actually goes in line with the principle of asset allocation taught by many financial planners.  I heard this from Tony Robbins as well as in Dave Ramsey’s books and audios.

It acknowledges the fact that emergencies of all sorts do happen and this is normal.  Anyone who don’t think about this reality is of course naïve and stupid.  Disasters come as well as upsets and you might as well grow up and be prepared because everyone isn’t.

I can’t tell you enough how important an emergency fund is as it once saved me from the recent Great Recession that hit the world’s markets.  I was in Dubai in 2009 and this once fabulous city was one of those hit hard by the collapse.  If it wasn’t for my emergency fund, I wouldn’t be in Qatar at the moment. I would have missed many other opportunities and more! I can’t tell you more lols

So, are you ready to invest? 

Successions and Transitions

I’m amused and grateful at what happened today.  It’s in the news that the Qatari leadership just handed over power to his son to replace him as Emir of the rich state. It is amusingly out of this world especially in this region where power seems to be so scarce everyone wanted it til death do they part. Meanwhile, I know a lot of folks, especially expats, are grateful for the unexpected non-working holiday today. It’s just awesome!

I’m sure many of those politically inclined folks are excited to see a little change in the way power transition is done in countries still run by monarchs.  In many ways, it is a paradigm shifting experience for everyone around.

So, who’s going to be next? I’m still in doubt if everyone’s favorite Sheikh Mo of Dubai would do the same.  It is not impossible though in spite of him being notoriously workaholic and his inspiringly ambitious tendencies LoL.  The guy knows nothing about retirement for sure.

In my opinion, monarchy where significant economic development is consciously pursued and seen to be apparently beneficial to its people will continue to be accepted.  Many of those other governments where economic activity and expansion are weak, and people around see more of the negativity such as corruption have for some reason been threatened by last year’s so called Arab Spring, and more. It’s quite ugly and horrible.

I am extremely grateful for the opportunities Qatar has somehow provided for myself within the Emir’s term.  These are opportunities some might think is just luck.  Of course, not everyone is happy here.  There are a few whom would rather complain for petty reasons.  But for those whom have gone overseas with a plan, it is a real blessing.

Like the Emir, it requires a transition person to do such selfless deed.  As mentioned, this rarely happens in the Middle East.  And as for expats, especially Filipino expats, in this day and age, it takes a transition person to be an OFW with a plan, an exit, a vision of a meaningful transition into the next phase. 

We may no longer follow those whom have gone without a plan and cannot come home for apparent reasons.  Some might just stand up and act like grown ups to look at reintegration into Philippine society a “must”. 

It just takes a transition person to do so: a person not ruled by tradition and default thinking, someone far bigger than his own fear of criticism of others. No one told it's easy. Of course it's doable using leverage. It takes leverage from those with the discipline, skill, and results left for those determined to accomplish the same.

Test

The quick brown fox jumps over the lazy dog.