A simple system to achieve Financial SecurityA Philippines example

by Sky SalanioFinancial Coach

How many people retire with enough money to enjoy life and be financial secure?

3% will retire rich

22% will continue to work

75% will retire poor and will depend on family members for support

How much is the average monthly pension?

Php 8,000 per month

What can we do?

We need to radically

change our beliefs

which will change our habits which will

change our destiny

We need a system to help us

change, not willpower

The SYSTEM:

1. Increase our

income

&

2. Decrease our

expenses

Increase in Value = Increase in Income

Increase in Income

Skills = Education +Coaching + Time

Increase in Income

Delete Debt (budgeting activity)

Decrease in Expenses

Do these now:1. Sell TV (cut cable)2. Find new friends3. Cut non-essential expenses

Decrease in Expenses

Meet Jose.

He is a 35 year old salesman earning Php 60,000 per month

He has a non-working spouse and 2 young children.

Jose’s household Budget:Balance Sheet:

Assets: Php 0

Debt: Php 45k

Net worth: Php - 45k

Meet Boss Peter.

He is Jose’s boss and company owner

He is always looking for ways to earn more via more sales, increased efficiency or decreasing unit costs.

Story for illustration purposes only

However, he can’t find good employees

1. Increase Sales2. Efficiencies 3. Decrease unit costs

And hindi maarte =)

Proactive employee meets helpful boss

The only way salary and bonus will increase is if company net revenues will increase

From low value to growing value After a 3 month management course offered by TESDA which increased Jose’s skill, Jose is able to close more sales within 6 months. After which he was promoted to supervisor with a salary of Php 80,000

Jose is able to deliver more sales due to his greater skill

See a short video on Alberto’s story

With an extra Php 15k Jose is able to pay down debt in 6 months and is debt free.

Only 1 out of 10 Filipinos are consumer debt free

Source:

Jose’s household Budget after 6 months:Balance Sheet:

Assets: Php 45

Debt: Php 0k

Net worth: Php 45k

With an extra Php 15k per month Jose is able to save 90k in 6 months which is 3 months worth of living expenses

This is called emergency fund

8 out 10 Filipinos do not have 3 months worth of living expenses saved

After 6 more months Jose has Php 90k saved for investmentsJose’s Balance Sheet

Assets:

Emergency Fund: PHp 90k

Cash in bank: Php 90k

Total Assets Php 180k

Liabilities: Php 0

Net Worth: Php 180k

DO NOT SPEND MORE as your Salary Increases

Milestones

1st half 2017 2nd half 2017

January 2017Joses starts Skills training

Net worth: - Php 45k

June 2017Jose increased salary

Net worth: - Php 45k

Oct 2017Jose does not increase spend for 3 months

and uses funds to pay debt

Net worth: Php 0

Dec 2017Jose continues to not spend

Net worth: Php 45k (half

of emergency fund)

If Jose invests 90k and invests 15k per month 10 years at 8% compound interest;

At age 46 He will have Php 2.8M!

Php 2.8M to “retire” with at 46

Remember the system:1. Increase skills = increase salary2. Weekly budgeting and goal setting3. Drop TV, facebook, friends etc.4. Do not increase spending 5. Remind yourself : visit my website skysalanio.com

Did you learn something today?

More resources at:skysalanio.com