It is not about how much money you make. The question is, are you educated enough to keep it? – Shaquille O’Neal, former NBA superstar
I remember Christopher de Leon and Vic Sotto hosting this show. It was a great one. Many won good money in just a few minutes of sitting. Wow. Sounds cool. I don’t want to be a contestant in this show, however; I just don’t have the brains and guts to do it.
Who wants to be a millionaire? I guess most of us want to. A ‘million’ of good things is always great. Of money? Sounds interesting. It catches sleepy attention. There are different ways of earning it, though.
Instant
The power of ‘instant’ excites almost everyone. Many of us desire things that are instant. Instant noodles. Instant coffee. Instant healing. Even instant child birth.
If we can get a thing in an instant, why endure the agony of waiting? This is one of the philosophies of today. That’s why ‘get-rich-quickly’ scheme is popular.
One downside of getting things instantly and easily, however, is that they also slip instantly and easily.
I remember a news from Yahoo Philippines about a guy who won P14 million (AUD$381,000) from lotto. For three months he lived a life of the rich and the famous. He bought everything he wanted. After which, he owed P500,000 (AUD$13,600). How did that happen?
It’s human psychology I believe. Easy come, easy go. The easier you get it, the less you value it.
He could have been featured in “from rags to riches” story. Now he belongs to “from rags to riches and back” story.
David M. Consunji, owner of DMCI and one of the Filipino billionaires, was once interviewed. He says, one of the characteristics of Filipinos when it comes to handling money is that when they have big money, they want to spend it right away until they have nothing left.
Parang galit sa pera ang karamihang Filipino (Many Filipinos are like angry with money).
There are some people, however, who would wait for years to get it, simply because they believe they will get more and value it more.
Long-term
I happen to attend one of Bro. Bo Sanchez’s talks about wealth. He says, most people imitate the reaping and not the planting of the rich. Once people have money, they copy what the rich buy and have. They buy nice cars and big houses.
What I know is, a farmer plants first then harvests later. It’s the natural scheme of things. It’s not the other way around. What many of us don’t realize is that businesspeople do the planting first. They do reap only after planting. They buy nice things only when their businesses are established.
Sad to say many of us want to harvest first. Most of us dislike waiting. Many hate the sacrifice of planting. Yes, planting demands sacrifice. We have to give way to planting and wait for some time before harvesting. It indeed takes patience to be wealthy.
Moreover, one of the characteristics of successful people, according to M. Scott Peck in his book The Road Less Travelled, is delaying gratification.
Delaying gratification is foregoing reward now so that we’ll have more and better reward later. We have to wait for many years in order to have better harvest.
How do we do it? Just like winning ballgames, we need to have good offense and defense.
Offense
There are many ways to make money. The one that I am trying to master is stock market investing. Yes I’m promoting the culture of investing than the culture of spending.
According to Ben Graham, the teacher of Warren Buffett, investing is foregoing consumption now in order to have the ability to consume more at a later date.
Investing is buying excellent stocks at cheap prices and leaving them there for many years. It is different from trading. Trading is buying stocks now in the hope that later, tomorrow, or next week he could sell them for a profit.
In other words, investing is long-term and trading is short-term. There have been studies that investing has far much better return as compared to trading. Warren Buffett’s wealth can attest to that.
If you ask me what will I do if I have an extra million pesos, I won’t deposit it in a bank. Rather, I’ll buy shares of great companies when their prices are marked down and I won’t touch them for many years. I did it and I will do it again.
In the stock market, it takes time to earn big, to be a millionaire. Invest, don’t trade. Yes trading can make you a millionaire overnight, but you are likely to be a bum overnight too.
Defense
According to a classic book The Millionaire Next Door, the fundamental principle of wealth-building is living below your means. A salary no matter how high counts a little if you are wasteful. Your offense is good yes, but when your defense is poor you will eventually lose.
The authors of this book also found out that most of those who have big houses and fancy cars are actually not rich. They are just living high; and they’re good as long as they receive paycheck. Once their paycheck ceases, they’ll likely be in trouble.
We’ve also heard of sports personalities who made millions of dollars while still playing. That’s a good offense. Then they buy this and that; it’s like making big holes in their pockets. That makes their defense weak.
Once their career is over, their money will start to spiral down. Their lifestyle will change. We will just hear later that our favorite athlete is filing bankruptcy. Good player, but bad money manager.
Don’t spend beyond what you’re earning then. Save and invest. Handle your credit cards well. Don’t be an impulsive buyer. Have a budget for your family’s daily, weekly expenses.
Spend but don’t waste money. Don’t waste it on items that easily depreciate. Expensive gadgets are some of these. Sorry friends but the truth is, you lose money this way.
Chinkee Tan was once a guest in Tonight with Arnold Clavio back 2012. He says, give a man with poor man’s mentality a million pesos, after a year he will lose it all. Take a million pesos from a man with a rich man’s mentality, after a year he’ll have it again and even more.
Being rich and wealthy therefore is not about possessing money; it is basically about our attitude and disposition towards it. Remember what Shaquille O’Neal just told us.
Happy New Year! May you be blessed more and be a blessing more to others this 2015!
